'Challenges'| US Q2 onshore wind additions slump to lowest level in six years: S&P

The US in the second quarter connected 1.1GW of onshore wind capacity to electric grids, a 45% decline from a year earlier as project developers grappled with multiple challenges including component procurement, higher costs, and regulatory delays, according to a new report by S&P Global Market Intelligence.

Total additions were at the lowest level since 152MW in second quarter 2018, while those in the first half slumped to 2.87GW versus 4.78GW a year earlier.

The US installed 8.91GW of onshore wind capacity in 2022, the slowest year since 2018, according to the consultancy.

S&P said the industry has a five-year pipeline of wind projects totaling almost 80GW including offshore, “as developers look to take advantage of new tax credits enacted in the August 2022 Inflation Reduction Act.” It did not provide onshore and offshore numbers.

Onshore projects most often seek to qualify for a wind energy production tax credit (PTC) which is worth $27.50/MWh for electricity sent to the grid during their first decade of operation.

S&P data shows that 7.24GW of wind capacity is under construction, 18.11GW is in advanced development, 36.51GW is in early development, and 18.11GW has been announced.

Projects in advanced development must meet two of five criteria: financing is in place, power purchase agreements are signed, equipment is secured, required permits are approved or a contractor has signed on to the project.

A project is in early development after permitting begins. An announced project must have a listing in an interconnection queue with an accompanying public announcement or permitting action.

S&P along with BloombergNEF and Wood Mackenzie forecasts US onshore wind installations will steadily albeit modestly increase through the end of this decade to about 14.5GW annually amid competition for investment from battery energy storage, offshore wind, and solar.