WASHINGTON, Aug. 14 (UPI) -- New U.S. wind power installations are expected to be substantially higher in 2012 than 2011, driven by the threat of expiring federal incentives, a report says.
While facing policy uncertainty beyond 2012, the United States remained one of the fastest-growing wind power markets in the world in 2011, second only to China, a report prepared by Lawrence Berkeley National Laboratory for the U.S. Department of Energy said.
With around 6.8 gigawatts of new wind power capacity connected to the U.S. grid in 2011, wind power comprised 32 percent of all new U.S. electric capacity additions for the year, the report said.
Projections are for continued strong growth in 2012, followed by dramatically lower additions in 2013 following the expiration of key federal incentives, a Department of Energy release announcing the report said Tuesday.
Low natural gas prices and modest electricity demand growth threaten to dramatically slow new builds in 2013 and beyond, despite recent improvements in the cost and performance of wind power technology, the report's authors said.
"Wind PPA prices -- particularly in the central United States -- are now approaching previous lows set back in 2003," Berkeley Lab Research Scientist and report co-author Mark Bolinger said.
"But even with today's much lower wind energy prices, wind power still struggles to compete with depressed natural gas and wholesale power prices in many parts of the country."