The Law of Wind

Two decades ago, the price of wind was more than $90 per MWh and the industry norm was a long-term (e.g., 20-year) fixed-price power purchase agreement with an investment-grade utility offtaker. Those days are gone. In recent years, prices have dipped below $20 per MWh in organized markets like ERCOT and SPP, and long-term utility contracts for busbar sales have largely been supplanted by “virtual” power purchase agreements with an array of corporate offtakers that are looking to wind, solar, and other renewable energy technologies to help fulfill their environmental social and governance (ESG) goals. The dramatic reduction in price over time is a clear sign of a mature industry. Developers got better at siting, building, and operating wind projects; equipment manufacturers dramatically increased the size and improved the productivity of their machines; competition increased; and costs went down. And the shift toward corporate offtakers is as much about companies addressing public concern over the contribution of fossil fuel generation to climate change as it is about state renewable portfolio standards being satisfied in the near term.

The wind industry has shown that it’s capable of continued improvement and growth in the face of shifting political winds. The integration of storage solutions, the impressive growth of offshore wind in the United States, the opportunities for repowering an existing fleet of turbines, and the continued buildout of the transmission system to bring new wind power from windy sites to load all present challenges for the industry to meet and the law to accommodate. Since the push for an omnibus reconciliation package in the form of Build Back Better has run into major headwinds in Washington, D.C., the industry is bracing for—and everyone is keeping their crystal balls handy to foresee—a change in the landscape for production tax credits and investment tax credits. On our current trajectory, the loss of the production tax credit will no doubt require some adjustment and re-posturing. But it feels like we’ve been here before and there is every reason to have confidence that the industry will meet this challenge as well.

As one of the first law firms to focus on wind energy, Stoel Rives is pleased to have worked with so many talented players over the years to help bring the industry to its current level of success. Our dedication to supporting the industry into the future is demonstrated by the significant time and effort we have devoted to preparing and keeping current materials like The Law of Wind and its companion publications in other areas of renewable energy. As attorneys, we take seriously our duty to help educate the industry and the public in general on the legal aspects of developing, constructing, financing, operating, and repowering wind energy resources.

We hope you find this guide useful. Please note that PDF versions of this document are available for download at no charge at all. Let us know how well it serves your needs—any suggestions or comments on how it could be improved are most welcomed. Also, you can follow our summaries of and comments on important developments in the industry through our Energy Law Alerts, and in our Renewable + Law Blog.