Total U.S. wind installed reached 40,180 megawatts by year-end 2010 with installation of 5,115 MW of new wind energy last year. This was down by half from the 10,000 MW installed in 2009. Meanwhile, China installed 16,000 mw of new wind in 2010 bring its total installed capacity to 41,800 MW passing the US for total wind capacity.
Instead of celebrating new high points for the wind industry worldwide, the American Wind Energy Association whined—as it always does—that Congress was not doing enough to grow the wind industry faster.
“Our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more.” —, of AWEA.
I doubt seriously that Denise Bode would want to change places with the coal industry living under the constant threat of regulatory assault by a hostile. Nor would AWEA want to be in the position of natural gas where low gas prices are forcing producers to cut back on production and shift locations. Nor would AWEA like the fate of the nuclear power industry where every day is like waiting for root canal surgery as the best market opportunity in generations slips away by the lack of Federal policy support and public ambivalence. Or then there is solar, where domestic manufacturers in the US and EU are routinely being thrashed by falling prices from China PV exports.
America’s Energy Industrial Policy isn’t working because we are trying to pick winners and inflict pain on chosen losers instead of creating a level playing field that allows the market to work as markets do. We know that competition works—we’ve tried it before. But it does not give politicians and those who bend their ear and give them money the “right answers” so hey jury-rig the rules to achieve the desired effect. Markets hate being toyed with and punish market manipulators whether Government or speculators with uncertainty, volatility and public outcry.
What is wrong with the wind industry?
- The biggest problem it faces is that the wind blows where the wires are not yet built so transmission access to markets is the key impediment to faster growth. Even in China, the Chinese Renewable Energy Industries Association (CREIA) and Greenpeace while trumpeting the 2010 success installing 16 GW of new wind capacity felt compelled to confess in their press statement that before this new capacity can be utilized serious grid access deficiencies must be solved. In other words, China’s industrial policy masters wanted bragging rights to the world title and steady output through their wind turbine export production facilities so they made up for the US shortfall by domestic installations even if they sit idle for lack of grid access.
- Wind suffers from a lack of self confidence. Instead of celebrating that it has achieved the goal of becoming a mainstream energy resource now cost competitive with natural gas—just where it said it wanted to be—it now fears cost competition and wants further protections from it. Congress did grant a one-year extension of the 1603 Treasury cash grant program, and AWEA does have a point about the up and down fickleness of these short-term extensions when a better policy would be to set the policy applicable until the policy goal is reached. But let’s face it, few other industries get checks from the Government for 30% of their project costs so it’s tough to get sympathy. And given the US deficit those checks are going to be harder to write in the future so now is the time for wind to wean itself and compete on cost like every other resource in the mix.
The Best Opportunities for Wind Energy are Ahead
What is needed now in the wind industry is bigger strategic thinking to position it to scale in collaboration with other parts of the energy supply chain trading victimization (we would have grown more if the Government would only give us more handouts) for strategies that partner with natural gas interests, transmission interests and customer aggregation/constant energy management interests in the emerging clean energy value chain.
What do I mean?
I mean quit whining and join forces with others who share wind energy’s strategic interest in expanding backbone transmission through national interest electric transmission corridors (NIETC) to straddle the grid boundaries, energy hubs like Tres Amigas and exporters like Nebraska Public Power District capable of assisting wind players develop the wind potential in strategic resource areas and move it to markets in the southeast, export it from West Texas, and use it in combination with natural gas fired generation from unconventional gas sources to create clean energy bundles which along with constant energy management services like demand response, energy efficiency and net metering position wind to the scalable renewable energy resource of choice for utilities and large C&I portfolios.
Scalable wind energy in partnership with other mainstream energy resources can be a game changer in many markets where a rising tide of clean energy aspirations raises all boats with wind in their sales. OK–bad puns but you get the point. When wind recognizes and accepts its mainstream responsibility to lead in the development of integrated clean energy solutions it will regain its “mojo” and define its future.
AWEA expects 2011 to be better than 2010 but not as good as the boom years. And that is true for the rest of us too no matter what industry we’re in, but wind can change its future best by not living in its past, breaking its co-dependency on the federal ‘dole’ and competing from its position of strength as America’s most scalable renewable energy resource.