Wind Power
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 98 companies in the US use wind power to drive a turbine and produce electric energy, which is provided to electric power transmission systems or electric power distribution systems. Utility-scale turbines are generally defined as turbines that exceed 100KW in capacity, but typically range from 1.5 to 7.5MW. Wind energy accounts for about 8.4% of total US electricity generation and about 55.6% of electricity generation from renewable energy, according to the EIA.
“NIMBY” Opposition
Wind farms often face opposition from local residents concerned about noise, aesthetic impacts, and harm to bird populations.
Dependence on Government Support
The Inflation Reduction Act (IRA) was signed into law in 2022 and it extends tax credits for renewable energy projects for 10 years, which the IRA’s supporters say will bring certainty to project planning instead of Congress needing to renew the credits every few years.
Industry size & Structure
The average wind electric power generator employs about 77 workers and generates about $82 million annually.
- The wind electric power generator industry consists of about 98 firms that employ about 7,600 workers and generate almost $8 billion annually.
- The industry is highly concentrated; the top eight companies account for 84% of industry revenue.
- Large firms include Clearway Energy, Energy Capital Partners, and Caithness Energy.
- Large owners of wind capacity include NextEra Energy, Berkshire Hathaway Energy, Avangrid, and EDP.
- Wind energy accounts for about 10.2% of total US electricity generation and about 47.6% of electricity generation from renewable energy, according to the EIA.
- More than 70,800 land-based wind turbines operate across 44 states, Guam, and Puerto Rico and represent more than 435 billion kilowatt hours (kWh) of electricity generation capacity.
- Texas, Oklahoma, Iowa, Kansas, and Illinois produced about 57% of total U.S. wind electricity generation in 2022.
- Alta Wind Energy Center in California is the world’s second-largest wind farm generating 1,548 MW of electricity. Block Island Wind Farm off the coast of Rhode Island was the US’ first offshore wind farm.
Industry Forecast
Wind Power Industry Growth
Recent Developments
Jul 8, 2024 - Report: Rising Renewables Costs Underscore Need for Energy Diversity
- While there wasn’t much change in the levelized costs for new solar and wind energy projects between 2023 and 2024, costs have risen significantly since 2021, according to a June report by financial advisory firm Lazard. Higher interest rates and other pressures have pushed up the cost of renewables development, making existing gas-fired generation more competitive. Between 2021 and 2024, the levelized cost of energy (LCOE) for standalone solar rose from $36 per megawatt-hour (MWh) to $61/MWh. Over the same period, the LCOE for standalone wind projects increased from $38/MWh to $50/MWh. The LCOE for new combined-cycle natural gas turbine power rose from $60/MWh in 2021 to $76/MWh in 2024. Costs for developing wind and solar projects with attached energy storage capability have grown even more. Lazard suggests that energy diversity that includes fossil fuels is needed, given the intermittent availability and rising costs of renewables.
- Local and state opposition to renewable energy projects is a growing and widespread problem, according to a recent report by Columbia University’s Sabin Center for Climate Change Law and reporting by Utility Dive. The report showed that since May 2023, there have been 55 new local restrictions on renewables development. Since 1995, nearly 400 local restrictions have been severe enough to block renewables projects in more than 40 states. The scope of the restrictions varies, but the study identified several types of limits, including temporary moratoria, outright bans, and extreme setback requirements and height limitations. The only states with no contesting of renewables are Alaska, Tennessee, and Utah, while Michigan, New York, Ohio, and Virginia each have more than 18 restrictions.
- The AI boom is expected to trigger a significant uptick in demand for electricity after a decade of flat consumption growth, according to CNBC. The accelerating power needs of data centers, AI, and an electrifying automobile fleet could boost electricity demand by as much as 20% by 2030, according to a forecast by Wells Fargo. Data centers could account for as much as 8% of total US electricity consumption by 2030, according to Goldman Sachs. Energy sector observers suggest that renewables cannot ramp up quickly enough to meet the growing hunger for power and that natural gas-fired plants will help shore up the electricity supply. Because they’re not reliant on weather, natural gas and nuclear power are better able to respond quickly to sudden surges in electricity demand. Goldman Sachs forecasts that natural gas will supply 60% of power demand growth from data centers and AI, and renewables will power 40%.
- In May, amid rising demand for electricity, the Federal Energy Regulatory Commission (FERC) approved two new rules aimed at streamlining the process of building the large transmission lines that are needed to bring more power to the US grid, according to The Wall Street Journal. The first rule will require power producers and transmitters to apply a 20-year scope in their forecasts for electricity supply and demand shifts. The planning rule also urges utilities to implement grid-enhancement technologies, including power flow control devices and sensors, which can make transmission on existing lines more efficient. The second rule deals with permitting changes for new transmission lines to clear bottlenecks that have kept new renewable energy sources from hooking up to the grid. In 2023, the backlog of new power projects waiting to connect to the grid – mainly wind, solar, and battery storage – grew by 30% compared to 2022, according to Lawrence Berkeley National Laboratory. The new transmission line rule favors projects that benefit electricity consumers and adjusts cost allocation for projects spanning multiple states.
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