Wind Industry Fears Mainstream Status

SOURCE: AWEA

The wind industry is an unqualified success adding 5,116 MW of capacity in 2010, a 15% increase in the US for a total installed US capacity of 40,181 MW and a whooping 38.3 GW worldwide—an amazing 24% increase. With Congressional action extending the Section 1603 treasury tax grants program at the end of 2010, wind is poised for a strong 2011 with more than 5,600 MW of new wind projects under construction in Q1:2011 as the year before.  Longer term, AWEA expects wind energy to provide about 20% of the total US electricity consumed by 2030. All of this is good news.

You’d think the industry would be cheering—but instead Denise Bode, CEO of American Wind Energy Association (AWEA) reverts to her usual form and whines in a recent AWEA press release:

“The American wind industry is delivering, despite competing with energy sectors that have permanent government subsidies in place.  Wind is consistently performing adding 35% of all new generating capacity since 2007 – that’s twice what coal and nuclear added combined.”

Maybe AWEA was bummed out by the US DOE announcement of a $2.1 billion conditional commitment loan guarantee for a two unit 484 MW concentrating solar thermal power plant at the Blythe Solar Power Project, the largest amount ever solar project loan guarantee to date for US DOE.

But balance that against General Electric’s (GE) acquisition of 90% of Converteam for US$3.2B significantly expanding GE’s core technology in converters and grid interconnect equipment for wind as well as other renewable technologies.  GE’s wind turbine business along with Converteam and other investments in permanent magnet generators and motors for wind turbines and propulsion systems and the potential for scaling the wind industry and improving its turbine efficiency went way up.

Not only is wind energy a mainstream resource as costs fall, but it has competitive advantages over solar energy because of its larger scalability and little or no water use.  Offshore wind is also a major growth opportunity in the US and Europe so wind’s potential looks good.

So why does Denise Bode whine so much?

  • Maybe the wind industry looks at the same graphics we all do and sees the huge installed base of coal and natural gas and worries that the failure of cap and trade legislation, failure to enact a national clean energy standard and the looming achievement of the 20% state renewable portfolio standard goals will slow wind energy’s growth.
  • Maybe AWEA still worries that the days of the Section 1603 treasury tax grants are numbered and is bummed that the government is unlikely given worries over the deficit to keep doling out money as wind is acknowledged as a successful mainstream resource.
  • Maybe wind worries that its environmental allies will abandon it to the death of a thousand NIMBY cuts and proposals for larger scale wind projects meet resistance like every other large scale project.

Wind Fears Competition

I think the answer to why AWEA whines is that it realizes that the success of wind energy in establishing credibility in the energy market, scaling its growth and cutting its costs to competitive market levels transforms wind—-and soon solar energy too—from upstarts to be protected, subsidized and preferred into fully mainstream resources that must now compete, innovate, drive down costs and drive up efficiency and be bankable in order to displace coal, nuclear and natural gas in the supply stack.

Competition terrifies the wind industry—and that fear is its biggest impediment to long term success.