With New York recently introducing an Offshore Wind Blueprint and the recent completion of the United States' first offshore wind farm at Block Island, R.I., what is the future of offshore wind in the U.S., and how will policy affect the momentum this industry is seeing? During today's OnPoint, Tom Kiernan, CEO of the American Wind Energy Association, discusses the growth of onshore and offshore wind and the impact the current political climate could have on the industry's future.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Tom Kiernan, CEO of the American Wind Energy Association. Tom, it's nice to see you again.
Tom Kiernan: Great to be in, Monica, thank you.
Monica Trauzzi: So, Tom, AWEA is participating in the Conservative Clean Energy Summit this week here in Washington. How does the clean agenda play with conservatives, and what is AWEA's strategy in order to sort of influence the conservative dialogue on clean energy?
Tom Kiernan: Well, it's exciting. First of all, that wind energy is supported on both sides of the aisle, so we do have strong bipartisan support. On the conservative side, I think there are a couple of different reasons. One, obviously wind energy, more wind energy, helps with energy independence in this country, and they're very supportive of that, obviously. There is also lower-cost electricity. Conservatives and liberals, everybody enjoys low-cost electricity, and wind energy in many parts of the country is the cheapest source of electricity, so conservatives support that. There's also a connection with family values that wind energy is about "Made in America," it's here, it's homegrown. Obviously there's a lot of wind energy in rural America. So we're excited to be a part of this effort with the Young Conservatives for Energy Reform. Obviously we're also seeing a lot of support on the Democratic side for wind energy. So across the board wind energy has got a lot of momentum.
Monica Trauzzi: Are there specific concerns or questions that you hear from conservatives as you speak around the country?
Tom Kiernan: In the past we've had discussions on both sides of the aisle about the production tax credit, and we're very pleased last Congress, we had support from both sides of the aisle to extend the PTC for a five-year extension, albeit a phase-down, but that gives us policy support. So I think on the conservative side with that kind of question behind us, I think a lot of Republicans, Democrats are coming together.
I'll also say there was a recent poll that came out showing that 81 percent of self-identified conservatives were saying they want more wind energy. So we're seeing Americans looking for more wind energy — and often it's in places where we have more wind energy on the ground. In those regions of the country our support from Americans is even stronger. So as we're getting more wind out there, more of those people want more wind.
Monica Trauzzi: A little more broadly on politics — when you consider the current political landscape, both the presidential election and also the divisiveness we see in Congress, do you have concerns that your industry's growth could slow as a result of the current political dynamic?
Tom Kiernan: No, I don't. I do see significant development in the wind industry right now. We've got about 18,000 megawatts under construction or near construction, which is an awful lot for the industry. We're currently at 5 percent of electric generation in the United States as wind energy, and that should be doubled to 10 percent by 2020. So we've got a lot in the pipeline, a lot of momentum for the industry, and again, it's good for consumers, because we're the cheapest source of electricity in many parts of the country.
Monica Trauzzi: Does Clean Power Plan uncertainty have any impact on your growth projections?
Tom Kiernan: The uncertainty for the Clean Power Plan is a concern. We do very much feel at the end of the day the Supreme Court or the appeals court will move forward with the Clean Power Plan. Legally we think it's very strong and it also makes a lot of economic sense for state by states to move forward. Consumers are calling for clean energy, are calling for diverse sources of energy, and wind's right there. So the uncertainty is a bit of a problem but we think it's going to be resolved, and what will end up happening is what DOE analyzed, and that is that wind energy is the biggest, fastest and cheapest source of compliance strategies for the Clean Power Plan. So I think at the end of the day the Clean Power Plan will be beneficial to our industry and to consumers.
Monica Trauzzi: Considering the market dynamics, though, we see the utility industry, we see many states already moving forward on the path that the Clean Power Plan would take. So is the plan really needed then if the market is going in that direction anyway?
Tom Kiernan: I think it is needed, because it helps encourage some states that are a little bit slower and that aren't moving forward. So I think it will keep everybody moving forward. I would also just add on the momentum point, when you look at corporate purchasers. And it's not just the Facebooks and the Googles that are great, but a Wal-Mart, Procter & Gamble are buying a lot of wind energy. In 2015 just over half of the megawatts that were contracted through PPAs were corporate purchasers. So companies are realizing it just makes good business sense for them to be buying wind energy, because we have stable, long-term prices, and it's clean energy.
Monica Trauzzi: New York recently announced an offshore wind blueprint. How is Deepwater Wind providing an example for nearby states on how to move forward with offshore?
Tom Kiernan: We're really excited. Deepwater Wind is about to commission the first offshore wind project in the United States. It is the dawn of a new era for this country, a new source of energy very close to load. So we've got a lot of wind potential off the East Coast, obviously a lot of citizens, a lot of demand for electricity. So we see the offshore wind industry poised for a lot of growth. It does need to keep driving down costs, and we think with Deepwater Wind kind of pioneering the way, it will begin the process of building a supply chain in the United States for offshore wind, developing some of the ports. There are thousands of jobs that are just waiting to be developed with offshore wind. So it's a great start what Deepwater has begun.
Monica Trauzzi: And we see momentum both on the East and West coasts right now. Do you have specific numbers in terms of projections for growth for offshore?
Tom Kiernan: We don't have a good sense right now, though I can say there are 13 different leases throughout the country that have been let offshore, so a lot of companies are lining up to develop it here in the United States. There was also just last week an RFP off Denmark for offshore wind that was dramatically reduced in price. So the costs are coming down very quickly over in Europe, and frankly we expect the same cost reductions here in the United States in the coming years. So I think offshore, as with onshore wind, has a very bright future.
Monica Trauzzi: All right, very dynamic time for your industry. Thanks for coming on the show.
Tom Kiernan: Exciting. Thank you very much, Monica.
Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.
[End of Audio]