2016 is shaping up as a pivotal year for America's transformation to a renewable energy economy. Leading the charge is low-cost, clean wind power which set new records and passed key milestones in 2015 to advance the renewable energy revolution remaking U.S. and global markets.
Wind power posted one of its strongest quarters ever in Q4 2015. For the first time, wind exceeded 70 GW in total U.S. capacity. For the second year in a row, wind was the #1 source of newly installed U.S. power, adding 47 percent of new U.S. electric capacity, followed by natural gas (35 percent) and solar (14 percent). And on December 20th in Texas, sustained winds supplied a remarkable 45 percent of electricity to the regional grid.
These milestones and more, set the stage for an important shift in strategy, from the year-to-year tactics that have marked the industry's progress to date, to the long-term planning needed to accelerate renewable energy growth, unlock its full potential and realize America's promise for a clean power future.
Getting the most headlines was the historic climate agreement signed in Paris on December 12th. Two decades in the making, the deal committed 196 countries to ambitious targets for reducing carbon pollutants. It also sent a clear signal to energy markets and policy makers that it's time to hasten the transition from fossil fuels, and speed investments to wind and other clean power sources.
The market momentum clean energy has built in recent years was key for making the climate pact possible. Wind power, in particular, has proven not only one of most effective climate solutions - but also one of cheapest. Since 2009, the real cost of wind energy in the U.S. is down more than 60 percent. From Texas to Iowa, wind is cheaper than the coal and the other polluting fuels it is replacing. If it costs less, who wouldn't choose clean wind power?
As a result, global wind power capacity is almost 400 GW, or 4 percent, of the energy total. Solar is second among renewables, at nearly 200 GW. Much more is needed, but we've shown the path to a clean energy future is possible. The Paris pact makes a global commitment to redouble - in fact quadruple - this success.
On December 18th, less than a week later, Congress passed a 5-year extension of the PTC, helping to level the playing field for wind and solar with fossil fuels, and providing a predictable investment environment for clean-energy growth and large-scale transmission line projects to deliver it.
The Clean Power Plan announced last August was another long-term renewable-energy milestone, offering state policymakers an excellent opportunity to take advantage of cheap, readily available wind energy to meet their clean power targets. Some states, such as California and New York, wasted no time setting up their own ambitious plans to reach 50 percent clean-energy use by 2030. Most states with substantial CPP targets also have excellent wind power potential to address them.
Perhaps most importantly, the marketplace has shown it knows which way the wind is blowing - and has made its move. Major corporations such as Apple, Amazon, Google, IKEA, Microsoft and Walmart have invested in wind energy. Many businesses have made unprecedented commitments to use 100 percent renewables.
Blackrock, the world's largest asset manager, calls renewables a "fast river" for investor deals. Goldman Sachs tripled its renewables financing targets to $150 billion and says clean energy "reached an inflection point" by topping conventional energy in new installations. BNEF reports clean energy had record year for investment in 2015, attracting $329 billion in global investment for wind and solar power. Wind was on top for new capacity.
Clean energy skeptics and climate change deniers can continue expressing doubts, but they really have no place left to hide. Wind energy is now a key contributor to power grids across the nation, and industry analysts see continued strong growth at least through 2018.
The wind industry's goal calls for 20 percent electricity generation in the U.S. by 2030. I believe we're well on our way. But we still face significant challenges. It's time to eliminate roadblocks and unlock wind power's potential for all markets.
To reach 20 percent by 2030, we'll need 140 GW in new wind-power capacity. To get there, we need a long-term strategy that continues lowering costs to make wind customers' most cost-competitive energy choice. We'll do it with advances in larger rotors, higher towers and site selection. We'll also use smart data and global forecasting that can predict not just which way the wind blows, but how much power and revenue it can generate - over 20 years. Wind will continue offering a combination of low-cost and long-term certainty unmatched by any other energy source - clean or fossil.
We must also ensure the supply of low-cost wind power can get from towers and turbines, where the wind is, to towns and cities, where the demand is. To effectively deploy wind energy across the U.S., we'll need 890 miles of new transmission lines by 2030.
In 2016, we literally have the wind at our backs. We have an opportunity to make it a landmark year, and launch a long-term plan that sets a course to finally achieve America's transformation to a clean-energy future. Bottom line, it just makes good business sense and it's ready to turn on right now.
Chris Brown is president of Vestas-American Wind Technology, Vestas' North American business unit.