Commercial, Industrial, Sourcing Renewables, Wind  -  July 29, 2016

Bolstered by Google, Dow Chemical, nonutility buyers made up 19% of Q2 wind capacity contracts

U.S. wind industry activity approached record levels in the second quarter of 2016 as utilities and other purchasers locked in record-low wind costs, according to the American Wind Energy Association, which released its quarterly market report July 26.

Highlighting the continued trend of corporations entering into power purchase agreements for wind energy, the report showed nonutility buyers, including Google Energy and Dow Chemical, made up about 19% of the contracted capacity during the second quarter. Electric utilities and cooperatives comprised the bulk of the contracted capacity at 81%.

In all of 2015, nonutility buyers, including a number of large commercial and industrial companies, comprised a much higher percentage, 52%, of all wind power PPAs. 

In a July 26 news article, S&P Global Market Intelligence reported that some wind energy industry members believe the market for corporate buyers will shift away from the large commercial and industrial organizations that have dominated the space in recent months and move toward smaller entities.

"We're reaching the end of the period where mega-companies like Microsoft Corp. and Procter & Gamble Co. signing up mega-contracts for mega-wind farms dominates the U.S. market because these companies are starting to meet their goals," S&P Global Market Intelligence quoted EDF Renewable Energy Vice President and Head of Origination Jacob Susman as saying. "The problem is the wind farms and the solar plants aren't going to get any less mega. So, you are now moving to smaller companies that need less energy. Instead of there being one customer for a wind farm or solar plant, there could be five. So those five customers aren't going to be able to pick and choose so easily where and how they get their clean energy."

AWEA pointed to Enel Green Power North America Inc.'s  400-MW Cimarron Bend wind farm in Kansas as one example of a number of projects that started construction in the second quarter to meet demand for wind energy from utilities and emerging corporate buyers. Cimarron Bend will supply half of its power to Kansas City Board of Public Utilities, and half will go to Google, once completed.

“For [Enel Green Power North America], the first half of 2016 has been marked with rapid growth, including the announcement of more than 720 MW of new wind capacity under construction," the Enel Senior Director of Regulatory Affairs Jack Thirolf said in a statement. "Not only are we seeing capacity growth, but also diversification of power purchasers as more commercial and industrial customers are attracted to the competitive pricing and long-term stability that clean wind energy can deliver."

Looking more broadly at the wind market, the report shows 18,200 MW of wind power capacity now under construction or in advanced stages of development. AWEA said in a news release that major utilities announced plans during the second quarter to develop and own up to 2,600 MW of new wind energy generating capacity.

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