Wind power suppliers and consumers span a broad range. Currently, wind power serves primarily large-scale utility markets, and smaller scale community-based projects are playing an increasing role in some regions. In addition, the eastern and Gulf Coast states are considering offshore proposals. If 20% wind energy by 2030 were to be reached, supply and demand markets would need to expand to deliver wind energy to end-use customers throughout the United States. This chapter presents a brief overview of U.S. electricity markets, major wind power supply chain segments, market drivers, and their potential impacts on U.S. wind power expansion. 6.1 U.S. MARKET EVOLUTION BACKGROUND 6 6 6 The U.S. Department of Energy (DOE) projects U.S. electricity demand to increase by 39% from 2005 to 2030 (EIA 2007). Taking into account projected plant retirements and the implementation of energy efficiency and demand reduction programs, meeting this increased demand could require new electricity generation to increase by more than 50% over that period. Wind power is a viable option for meeting a substantial portion of this growing demand for electricity. During the past seven years, the total number of wind installations worldwide has grown at an average annual rate of 27%. Recent growth of the wind power market in the United States has been driven by a dramatic reduction in the cost of wind energy, public interest in renewable energy, state renewable energy standards, federal production tax credits (PTCs), and volatile natural gas prices. Historically, however, periodic expiration and subsequent extensions of federal PTCs have resulted in intervals of no growth followed by explosive growth, as shown in Figure 6-1. The U.S. wind power industry has experienced two major transformations in its history. In 1940, more than 100,000 wind turbines—many of them Jacobs Windmasters—were in operation across the Midwest, producing electricity for isolated farms and ranches. Their use declined, however, as electrification connected rural U.S. regions to electricity grids in the 1940s and 1950s…

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