Policies and market factors driving wind power development in the United States

Abstract

In the United States, there has been substantial recent growth in wind energy generating capacity, with growth averaging 24 percent annually during the past five years. About 1700 MW of wind energy capacity was installed in 2001, while another 410 MW became operational in 2002. During 2003, development activity has remained strong, with an estimated 1600 MW of capacity installed. With this growth, an increasing number of States are experiencing investment in wind energy projects: currently about half of all States host at least one wind power project. This paper explores the key factors at play in the 12 States in which a substantial amount of wind energy capacity has been developed or planned. Some of the factors that are examined include policy drivers, such as Renewable Portfolio Standards (RPS), Federal and State financial incentives; as well as market drivers, such as consumer demand for green power, natural gas price volatility, and wholesale market rules.