Advanced technology, skilled developers, built-out infrastructure, and the effectiveness of federal policy have brought the U.S. wind industry back to world leadership.

China’s installed wind capacity passed that of the U.S. in late 2010 and is now 50% bigger. But a Chinese wind turbine on the barren, wind-savaged plains of Inner Mongolia without grid connection asks the same question as a tree falling unheard in a forest: What does it produce? The smaller fleet of U.S. turbines are producing over 20% more electricity than China's.

“In the U.S., every step in development is driven by one thing: long term electricity production delivered to the customer,” explained EDF Renewable Energy Board Vice-Chair Dr. James Walker, author of a new statistical profile of world wind.

No production, no payment

Walker pointed to two “no production, no payment” key drivers:

• Long term power purchase agreements (PPAs) with utilities and, increasingly, with private companies like Google, Microsoft, and Yahoo, that pay only for kilowatt-hours delivered.
• The performance-based federal production tax credit (PTC) that pays project owners $0.023 per kilowatt-hour for the first 10 years of their installations’ output.

“What gets rewarded gets done,” Walker said. “China’s incentives reward construction and installation, not production.” In the U.S., he said, “competition improves the breed. Over 30 companies have an investment of between $900 million and $1 billion." Because of the structure of production-based utility-originated PPAs and the politically embattled PTC, he emphasized, "they are highly motivated to make their assets productive, day in and day out.”

Transmission and technology

Both China and the U.S. have rich wind resources remote from population centers.

China’s developers initially went to its remote regions to build. Some parts of Inner Mongolia, Hebei, and Gansu provinces have so much wind the Chinese call them “wind camps.” But a lack of transmission to energy-hungry cities like Beijing and Shanghai has led to 20% curtailment rates, making the projects financial losers.

When developers moved to provinces with lower wind speeds where transmission is available, they needed newer turbine technologies not yet perfected by Chinese manufacturers at scale.

Meanwhile, all across the Midwestern plains from Texas to the Dakotas, U.S. and Western European companies like GE and Siemens are building taller turbines with longer blades and smarter, more efficient electronics. The new technology can turn winds previously considered too weak to generate useful amounts of power into economic harvests.

U.S. wind delivers

The U.S. wind industry delivered nearly 168 billion kilowatt-hours of electricity in 2013. China delivered 136 billion kilowatt-hours and third-place Germany delivered 53 billion kilowatt-hours, reported American Wind Energy Association (AWEA) Data and Analysis Manager Emily Williams, citing Walker’s data taken from publicly available International Energy Agency, Global Wind Energy Council, DOE Energy Information Agency and AWEA reports.

Another 13,600 megawatts of new U.S. capacity are under construction and expected to go online by the end of 2015, Williams added. “Those under-construction turbines have really high potential capacity factors, from the high 40% range to above 50%.”

“The Chinese will say frankly they have the quantity right but still need to get the quality right,” Walker said. With an overall average capacity factor of more than 30%, compared to Chinese and German average capacity factors of 15% to 16%, the U.S. wind fleet essentially gets twice the mileage of its closest competitors, Walker said.

Both China and the U.S. are in the process of building new high capacity transmission dedicated to renewables. Because of the fewer regulatory impediments, China's new transmission will likely be in service sooner. In addition, higher-efficiency turbines using U.S. and European technology innovations will inevitably be coming out of Chinese factories at scale. These things could shift the numbers balance in the foreseeable future.

“The U.S. wind industry’s strength,” Walker said, is that “at every step of the way, from resource assessments and turbine manufacturing to the financing, building, and interconnecting of projects, performance-based contracts and incentives are winning the race to the top.”