HOUSTON, May 3, 2016 /PRNewswire/ -- Despite the Supreme Court's decision to stay the federal government's Clean Power Plan, which injected much uncertainty in the renewables industry, the decreasing costs and increasing efficiencies of wind energy still make it an attractive energy source for investment, BBVA Compass economists say in their new report.
Estimates on the cost of wind energy have been trending downward and make wind energy competitive with conventional energy sources, the economists say. Even after taking into account both the historically low prices of natural gas and the government incentives, they say onshore wind energy can be competitive with other conventional sources.
"No matter how you look at it, U.S. wind farms are becoming more cost efficient," said BBVA Compass Economist Marcial Nava, who authored the report with BBVA Compass Economist Amanda Augustine.
A large share of the drop in generation costs reflects less expensive turbines, which are the most important component of a wind-energy system, the economists say. Prices of turbines have gone down 30 percent since their peak in 2008-2009. "The turbines are getting bigger, better and cheaper," Nava said. "That portends well for the viability of wind energy."
The technological advances and fiscal incentives helped lead to a big uptick in wind-generation capacity.
"Wind energy added more electric generation capacity from 2014 to 2015 than any other source, followed by natural gas and solar photovoltaics," Augustine said.
From a global perspective, however, the U.S. is still lagging behind countries like Denmark, Spain, Germany and China, which the economists say have a better mix of manufacturing, regulations and adoption rates.
"A wind project's success is dependent on just the right mix of ingredients," Nava said. "In the U.S., success isn't guaranteed. But we're saying that even outside of the goals set forth in the Clean Power Plan, wind energy prospects are positive just based on the economics alone."
Nava and Augustine stressed that "in the short run, storage capacity is the most important technological challenge. In the long-run, wind and other renewables will succeed as changes in consumer preferences show that younger Americans are pushing the transformation toward a greener planet."
The full report, "Sure as the wind blows: the potential of wind energy in the U.S.," can be found at bbva.info/wind.
Led by Karp, the bank's research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates. Any statement or opinion of a BBVA Compass economist is that economist's own statement or opinion and does not represent a statement or prediction by BBVA Compass, its parent companies or management.
About BBVA Group
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at bbva.com.
About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 674 branches, including 345 in Texas, 89 in Alabama, 75 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (4th). BBVA Compass recently earned top nods for best mobile app and best regional bank in the South & West in Money magazine's annual list of the Best Banks in America. Additional information about BBVA Compass can be found at bbvacompass.com, by following @BBVACompassNews on Twitter or visiting newsroom.bbvacompass.com.
BBVA Compass is a trade name of Compass Bank.
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SOURCE BBVA Compass