Houston (Platts)--24Jan2011/344 pm EST/2044 GMT

New wind powered generating capacity installed in 2010 in the US was roughly half that installed in 2009, but there is a fairly robust pipeline of new capacity currently under construction, the American Wind Energy Association said Monday.

Developers installed 5,115 MW of new wind powered generating capacity last year, compared with approximately 10,000 MW installed in the record year of 2009, and 8,500 MW in 2008, AWEA said in its new report.

AWEA said that total US wind capacity now stands at 40,180 MW, an increase in capacity of 15% over the start of 2010.

"For the first time, US capacity fell second to China's; China now has 41,800 MW in operation," AWEA added.

The slowdown in installations last year was the result of slack demand for new power and the shortage of power purchase agreements, industry executives have said.

According to AWEA, the cost of wind-generated power is now competitive with building new natural gas-fired generation, and "utilities are moving to lock in favorable rates."

"The industry is likely to finish 2011 ahead of 2010 numbers," said Elizabeth Salerno, AWEA director of industry data and analysis.

The wind association said that there are currently over 5,600 MW of wind generation currently under construction.

Buoyed by a one-year extension of the 1603 cash grant program for renewable energy in the final days of the 111th Congress, the industry entered the new year with more power under construction than at the same time last year, according to Salerno.

"Wind's costs have dropped over the past two years, with power purchase agreements being signed in the range of 5 to 6 cents/kWh recently," Salerno said. "With uncertainty around natural gas and power prices as the economy recovers, wind's long-term price stability is even more valued."

Denise Bode, the CEO of AWEA said in the Monday release, "Now that we're competing with natural gas on cost, we need consistent federal policies to ensure we have a diverse portfolio of energy sources in this country, and don't become over-reliant on one source or another."

Bode argued that with "uncertainty over national policies still holding back the US industry, state targets for renewable energy continue to drive wind installations in many areas of the country."

According to AWEA, Texas, the leading wind power state in the US with roughly one-quarter of all wind capacity, saw its wind installations top the 10,000 MW mark with 680 MW installed in 2010.

AWEA noted that Texas achieved the mark "thanks to aggressive pursuit of renewable energy and a renewable electricity standard passed in 1999 and strengthened in 2005."

AWEA said that wind now generates 7.8% of the electricity in the Electric Reliability Council of Texas, peaking as high as 25%.

AWEA said that other states that were pursuing targets for renewable energy last year that added wind generation were Illinois, with 498 MW added, California, with 455 MW added, South Dakota with 396 MW added, and Minnesota, with 396 MW added.

Two states, according to AWEA, began tapping wind resources last year for the first time. Those were Delaware and Maryland.

According to AWEA there are now 38 states that have utility-scale wind projects, with 14 of those now having installed more than 1,000 MW of wind power.

--Jeffrey Ryser, jeffrey_ryser@platts.com

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