NEW YORK, Jan 9 (Reuters) - Power generated by wind, the largest source of U.S. clean electricity, likely fell in 2023 for the first time in over two decades, the U.S. Energy Information Administration (EIA) said on Tuesday, as difficult conditions and rising costs curbed capacity growth.

Total wind generation is expected to have fallen about 1% in 2023 to 430.24 billion kilowatt hours, the EIA said in its Short Term Energy Outlook (STEO) report. Total wind capacity reached an estimated 149.4 gigawatts in 2023, up 6% from 2022, the slowest capacity addition in a decade, it added.

"It's certainly been a down year for wind project development in the U.S.," said Aaron Barr, global head of onshore wind energy research at Wood Mackenzie. Last year, project developers faced a surge in financing costs with high interest rates, inflation and supply chain challenges.

In April, wind generation

briefly surpassed

total coal-fired power output, but slumped thereafter due to unusually weak wind speeds caused by El Niño.

El Niño is expected to continue through the Northern Hemisphere winter through at least April 2024.

Still, wind energy is expected to recover slightly this year as more developers tap into U.S. President Joe Biden's Inflation Reduction Act, said Wood Mackenzie's Barr. The act offers incentives to accelerate the transition to clean energy.

"In 2024 we expect the tide to start turning as the industry gets more steel in the water and adapts to the new seascape," said Marlene Motyka, U.S. renewables energy leader at Deloitte. Following Treasury guidance, more developers may seek to improve project economics by siting onshore grid connections along the coasts and qualify for tax incentives, he noted.

Electricity generated by renewables is expected to have grown less than 1% in 2023, the EIA said.

Power from natural gas, the largest source of U.S. electricity generation, reached an estimated 1,684.1 kWh in 2023, up 6% from a year ago, the data shows. (Reporting by Nicole Jao; Editing by Richard Chang)