Wind and technology, two key ingredients for a cleaner energy future

In 2016 nearly 15% of the total U.S. generation mix was renewable energy1 and it continues to grow. In 2018 alone this shift in trend showed that 60% of new installed generation capacity, or new builds, were renewable energy focused (solar, wind and hydro) and 19% of the existing installed generation capacity.2

Wind energy is one segment of that market which is helping to accelerate the transition to a low-carbon future and economy. This abundant natural resource has spurred an innovative industry that includes jobs in manufacturing, project development, operations, technology and maintenance.

Over the last four years, the wind energy sector has grown an average of 10% annually, creating jobs at a rate 21% times faster than that of the rest of the U.S. economy.3 This is evident in research by the Bureau of Labor Statistics which states that wind turbine service technicians is one of the fastest growing jobs in America now through 2026. Also, the American Wind Energy Association (AWEA) has reported that over the last decade this industry has invested an average of $14 billion annually in new wind projects4, which is helping to meet present and future energy needs, while balancing critical climate related issues.

Wind - Harnessing a powerful energy source

While the use of wind as a source of energy is not a new concept and has been used for centuries, it has moved past the standard wind mill to state of the art wind turbines and innovative technology.

Each year in early August the wind industry celebrates American Wind Week, an event led by the American Wind Energy Association (AWEA) to raise awareness and showcase the accomplishments and growth of the wind industry as well as the progress being made in the renewable energy sector.

“This American Wind Week, we salute the more than 105,000 U.S. workers who make it possible to transform the power of wind into affordable electricity that our families and businesses rely on,” said Tom Kiernan, CEO of the American Wind Energy Association. “We’re building more U.S. wind power today than ever before. This is what leadership looks like – growing economic opportunity, homegrown energy, and cleaner air from sea to shining sea."

Financing Wind – Tax Equity an area of opportunity

The bank, with its $125 billion environmental business commitment, is deploying both financial and intellectual capital, to develop solutions to climate change and other environmental challenges. This is the bank’s second environmental business commitment as it met its first goal, established in 2007 at $20 billion four years ahead of schedule. Since that time (2007) the bank has deployed nearly $12 billion to wind energy projects and deployed a total of $90 billion to low-carbon, sustainable business activities.

One area where the bank is leading is in tax equity investments. For the past three years Bloomberg New Energy Finance (league tables) rank Bank of America Merrill Lynch (BofAML) Renewable Energy Finance group as number one for total tax equity dollars invested in this area.5 Since 2007, this business unit has been responsible for approximately $6 billion of renewable energy tax equity financing with 82 wind farms totaling 12 gigawatts of capacity in 20 states.

"Driving growth in the renewable energy market by making significant tax equity investments in support of wind energy is critical to diversifying our generation mix and transitioning to a sustainable low-carbon economy,” said Todd Karas, Managing Director, Renewable Energy Finance at Bank of America Merrill Lynch.

How does it work?
Tax equity is a common component of efficiently financed U.S. renewable energy facilities. A renewable energy developer (sponsor) often cannot efficiently utilize U.S. tax attributes (tax credits/depreciation) due to limited U.S. taxable income. Therefore, a typical capital structure for U.S. renewables energy projects may include tax equity capital alongside sponsor equity investment.

Partnering for a more sustainable energy future

Bank of America’s commitment to the wind energy industry has come to life through notable projects and partnerships across the country. Working with clients like EDF Renewables North America is helping to ensure the proliferation of wind power – one of the most valuable natural energy resources – which continues to be a leading energy source and driver of a more sustainable economy and energy platform.

“EDF Renewables is dedicated in its efforts to lead the transition to a sustainable energy future. Bank of America has been a strong partner to support this mission.”  Jim Peters, vice president of Project Finance at EDF Renewables North America.

A recent example is BofAML’s Renewable Energy Finance team having partnered with EDF Renewables North America on several projects across the U.S. In Oklahoma at its Rock Falls facility the bank provided a $83.1 million tax equity investment in a wind power partnership that finances a 154.6-megawatt clean power generation facility composed of 60 wind turbines. At its Red Pine facility, we partnered on a $108.6 million tax equity investment, which finances a 200-megawatt clean power generation facility composed of 100 wind turbines located in Minnesota. Learn more about EDF Renewables on its website.

To read about other wind energy partnerships financed by Bank of America Merrill Lynch visit our Environment site.

For more details on American Wind Week, please visit http://www.americanwindweek.org/ or the American Wind Energy Association website.

1 U.S. Energy Information Administration renewable energy data

2 Federal Energy Regulatory Commission’s Energy Infrastructure Update

3 American Wind Energy Association (AWEA)

4 American Wind Energy Association (AWEA) Wind 101

5 2015, 2016, 2017 Bloomberg

8/9/2018


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