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A recent flow article Covid-19 and commodities revealed the extent of the impact a halt on production had on the WTI. At one point on 20 April, the May contract for the benchmark had started the day at US$17.85/bbl traded at –US$39.55/bbl, remaining in negative territory for around six hours before recovering to US$1.43 the next morning. Oil is traded on its future price and given that futures contracts were due to expire on 21 April, traders took steps to avoid having to take delivery of the oil and incur storage costs when storage capacity is running out fast.
While dark clouds continue to loom over Texas’s oil wells, fortunes look a lot better for its growing renewable energy industry, which has seen wind farms increase in number since the first farm was erected in Big Springs in 1999. With more than 40 farms1, Texas is the world’s fifth largest wind energy generator2 with the installed wind capacity exceeded only by that of the United States overall, China, Germany and India, the state is seen as a profit-driven leader of renewable energy commercialisation3.
Texas forms the majority of the 1800 megawatts of new wind power installed in the US in the first quarter of the year, with 540 megawatts of new projects installed, according to recently-released figures from the American Wind Energy Association (AWEA). The Association shows that the volume of projects under construction set a new record with 24,690 megawatts under construction across the country.
The Wind Powers America First Quarter Report 2020 further reveals that US project developers installed more than double the amount of wind capacity in the first three months of 2020 than over the same period in 2019. Eleven new wind projects totaling 1,821 megawatts became operational during the first quarter, enough to power 560,000 American homes and more than double the installations from the first quarter of last year Developers also started construction on 4124 MW of wind power, bringing total construction activity to 24,690 megawatts.
“America's largest source of renewable electricity is poised to build on its 50-state footprint of job creation and economic development, and to continue bringing reliable, clean, and affordable electricity to communities across the country," said Tom Kiernan, CEO of the AWEA. "While we continue working to mitigate the challenges of COVID-19, the wind industry is committed to investing in the US economy and keeping the lights on for millions of Americans."
In 2019, 7.3% of electricity generated in the US was from wind energy (see Figure 1), highlighting its potential to further penetrate a market that is still dominated by fossil fuels (nearly 63%) and nuclear energy (about 20%).
Figure 1: US utility-scale electricity generation by source, amount, and share of total in 2019
Source: US Energy Information Administration