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Trends on the U.S. onshore wind market

There are three major trends showing throughout the U.S. onshore wind market; the continuous competitive price of wind energy, opportunities created by the service strategies used by the wind asset owners in the After-Sales market, and the Federal and State Government requirements increasing the development of onshore wind.

1. Competitive prices

Onshore wind energy can definitely compete with other sources of energy production. Compared to conventional and alternative renewable energy sources, onshore wind has the second lowest average cost.

 

 

2. Service strategies

One of the trends showing in the U.S. onshore wind market is the service strategies used by the wind asset owners and the opportunity these strategies create for new players in the After-Sales market.

 

The large asset owners often work on developing internal service teams, whereas the great number of smaller asset owners use a mix of different service strategies. Some outsource all services to the turbine OEM or an independent service provider (ISP), some have internal service strategies, and many use a hybrid of these strategies.

 

This creates opportunities for Danish service companies wanting to be part of the U.S. onshore wind After-Sales market. Danish companies are able to deliver solutions that can compete on optimization, quality and prize, creating a great potential for companies offering solutions within After-Sales.

 

 

3. Federal and State Government requirements

The U.S. onshore wind market is regulated on the federal as well as state level.

 

On a federal level there is the Production Tax Credit (PTC) giving renewable energy developers tax credit. The PTC expires in 2020 for Solar and Wind projects. This creates a market that is in a hurry to move forward, as developers are trying to construct as much as they can by 2020, after which the $24/MWh federal PTC starts to phase out.

 

Individual state incentives such as a Renewable Portfolio Standard (RPS) or Renewable Energy Standard (RES) boost market growth. RPS and RES require utilities to source a certain amount of the energy they generate or sell from renewable energy sources. The RPS varies from state to state with California and New York being among the most ambitious with a 50% target by 2030.

 

 

 

Source: AWEA, IHS Markit, Wood Mackenzie, Lazard

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Jakob Skaarup Nielsen

Team Leader

jakska@um.dk

+1 (312) 261-6000