By Barbara Kessler
Green Right Now
It’s clear that America wants wind power. At the WINDPOWER 2010 conference in Dallas this week, industry advocates, governors from three states, energy company executives and even a former president all said it: Bring it on.
Surveys show it too. A March poll commissioned by the American Wind Energy Association found that nearly 90 percent of Americans want the country to develop more wind energy — an approval rating politicians can only dream about.
State governments want wind. Those in the windy plains states, especially, and have shown it by enacting Renewable Portfolio Standards (RPS), which set goals or mandates for the state to derive a certain amount of its power from renewable energy. Iowa leads the nation in using the greatest percentage of wind, which accounts for 14 percent of its power. It achieved that by offering loans to wind developers and telling state utilities to buy 105 megawatts of electricity from renewable energy projects. (Farmers had a hand in it, we learned at the WINDPOWER Iowa display, because they were amenable to putting giant wind turbines on their plentiful land and growing corn around them — a harmonic vision that stands in stark contrast to what the oil spill has done to fisherman in the gulf.)
But it’s not just Iowa or Texas, the state with the most wind farms, that’s knee-deep, or sky-high in wind. By last count, 14 states were in what the AWEA calls the “Gigawatt Club” with more than 1,000 MegaWatts of installed wind capacity.
States outside the nation’s “wind belt” midsection also stand to benefit. Wisconsin and Pennsylvania have wind-related manufacturing facilities and want more. Coastal states like Maine and Delaware are seeking their own wind operations offshore. Even Ohio’s getting into the act, announcing this week that it will partner with GE to put wind turbines in Lake Erie.
Big companies, both U.S. and European, want to develop wind in the U.S. Witness the well-staffed glitzy booths by Siemens, General Electric, Suzlon, Vestas and Gamesa at the WINDPOWER conference; and more importantly their factories and offices on the ground in Colorado, Iowa, Oregon and Pennsylvania. Hundreds of smaller companies that supply everything from nacelle parts to safety harnesses for wind technicians are pushing ahead, building facilities near the big player’s hubs in Kansas, Missouri, Minnesota and West Texas.
The list goes on. Steelworkers see wind as a way to move into the future by crafting wind blades. Community colleges from Maine to Texas are ramping up programs to train young adults for good-paying, technically skilled wind jobs.
There’s little apparent downside to this industry that can provide local power and local jobs across the spectrum.
Consumers stand to win with wind, in spades, by accessing a low-carbon way power their house and their electric cars that won’t skyrocket in price when the base fuel runs out. In fact, considering that wind can reduce carbon pollution, just about everyone is a stakeholder. Compared with coal, it’s night and day – one spews toxic emissions, destroys mountains and buries wilderness in sludge; the other can claim a light footprint. Even the birds killed by wind turbines look like a more tolerable impact (and potentially solvable problem) next to BP’s still-unfolding graphic illustration of the unholy damage wrought by a fossil fuel oopsy.
Wind even trumps its clean energy competition. It’s more technically evolved than solar power, and doesn’t consume water like solar installations. (Though it’s an eminently compatible buddy for solar, being strong at night while solar pulls daytime duty.) Wind beats nuclear power in many minds because it simply doesn’t carry the risk of environmental catastrophe (You may have seen the Internet spoof about the Massive Air Spill, satirizing the BP situation.)
And yet, there are clouds on wind’s horizon.
In America, land of the bargain shopper and the short term gain, wind still costs more than coal power, even with some federal tax incentives in place.
The difference depends on many factors, not the least of which is how close a customer lives to the windiest parts of the country.
Wind is new and requires capital investment for turbines. Those turbines are costly to ship, especially when they mostly come from Europe. Wind also faces a host of issues related to getting it from Des Moines to Des Plaines, or Sweetwater to Clear Lake City.
Billions are needed to update the outdated national grid system – which is most often likened to a horse-and-buggy enterprise in a world of cars and freeways — so that wind can be effectively disseminated. (To read more about the “Smart Grid” see the DOE’s site.)
Many have said that the energy playing field needs to be leveled by a federal carbon tax or carbon fee, or a cap-and-trade plan, that would put a price on the pollution caused by coal, the nation’s leading source of power for buildings.
But Congress, it barely needs to be said, has failed to move this ball down that field. Climate bills become mired in endless debates about the methods – Carbon fee? Cap-and-trade? Tax shifting? – as well as the entrenched argument over whether climate change is exaggerated.
The latest Congressional offering, the Kerry-Lieberman American Power Act, doesn’t even include national targets for renewables, an omission that leaves wind industry leaders shaking their heads.
The view from above, and ahead
American wind hit its stride a couple years ago. States had incentives in place, climate change was a concern and some consumers were asking for green power. Installations grew throughout the economic crisis. The U.S. became the world’s leading producer of wind power, surpassing Germany, with current wind installations capable of producing 35,000 Megawatts.
But the downturn and “lack of long-term market signals” took a toll, according to the AWEA. Installations were down in the first quarter of 2010, compared to 1Q 2007.
“Utilities are not seeking long term contracts with wind power,” said Gabriel Alonso, CEO of Houston-based Horizon Wind Energy at a panel discussion of wind executives on Tuesday.
The high price of wind relative to dipping natural gas prices is one reason. Utilities want to make smart buys and must justify to state regulators that they’re looking out for the consumer, a dynamic that can skew choices in favor of established power sources like coal and natural gas.
To inject a longer viewpoint into this picture, wind industry leaders want a national Renewal Electricity Standard (RES), to help drive utilities and state regulators toward selecting green, renewable power. The power of wind, with its ability to cut carbon emissions, isn’t fully valued by a simple cost comparison, industry executives said in the panel discussion Tuesday.
“We should not run our long term policy based on short term realities,” Alonso said. “People are talking about (buying) coal, about cheap gas, but where’s this country heading 20 years from now?”
Even though Americans say they want wind power, their elected leaders haven’t been consistent in supporting the industry.
Companies building wind projects have benefited from federal Production Tax Credits (PTCs), which provide 2.1 cent per kilowatt hour (kWh) differential to wind producers. PTCs were a big driver in pushing wind capacity forward. But Congress has kept them on a tight leash. They’re up for renewal every couple of years, next in 2012. Each time PTCs come up for renewal, elected officials debate their merits and inject uncertainty into the wind market.
Wind executives say that volatility threatens not just wind jobs, but the nation’s competitiveness in wind.
If the future in the U.S. is murky, then companies will install wind turbines in say, Poland instead, where the business makes sense and the capital investment can be supported, Alonso said.
Finding the RES-ipe for success
If the U.S. had a strong RES, preferably one calling for 25 percent of its electricity to come from renewable energy by 2025, it could change the game. (The U.S. Department of Energy has suggested that a more modest RES of 20 percent renewables by 2030 is realistic.)
A strong RES would demonstrate to utilities and global suppliers that the U.S. will stand behind wind development and keep incentives in place, said Ned Hall, executive vice president of AES and president of AES wind generation, based in Arlington, Va.
AES Wind, which develops and operates power projects around the world, would like to do more business in the United States, but without better “clarity” about the future, 80 percent of its development effort is outside the U.S., Hall said.
Jens-Peter Saul, CEO and president of Siemens Wind Power, echoed those concerns. “The U.S. is our most important market. We’ve invested in faith.” Germany-based Siemens has built a factory in Iowa and is bringing another online in Colorado.
“But our supply chain is not following us,’’ Saul said. “America could be a much stronger nation with a RES.”
In the absence of a RES and stronger federal support, wind operations have been buoyed by the PTCs, state incentives and in some instances, federal TARP money. (Wind is “shovel ready” in many states.)
But without a plan from the federal government indicating that support will be sustaining, financing and justifying big capital investments becomes trickier.
Michael Sullivan, senior vice president of NextEra Energy Resources, which operates wind farms in Texas, said the industry needs to show it is striving to achieve all possible efficiencies to make renewables more competitive with traditional power sources.
He disagrees that a RES is necessary for a stable U.S. market. The industry should focus instead on making steady advances, striving to go from providing 2 to 3 percent of the nation’s power to the next rung of providing 4 percent of U.S. power.
“Focus on the singles and doubles and put the runs on the board,’’ he said. “If we put a product out there that the public wants to buy” the industry will grow to the appropriate size.
A RES is not realistic or viable in every state (translation: unwindy Southeastern states for instance) so the wind industry would be better served to spend its energy (no pun intended) on fixing the grid so it can carry wind power to urban centers effectively and accommodate wind’s variable output.
Just getting the grid up to speed is difficult enough, given the multiple stakeholders, which include hundreds of locally controlled utilities across many states, Sullivan said.
Wind developers do need the U.S. to subsidize and support grid improvements, the other panelists agreed. In addition to Alonso, Hall, Sullivan and Saul, the panel included Martha Wyrsche, president of Vestas Americas, the U.S. wing of the Danish wind giant.
Alonso noted that the past decade has brought 11,000 miles of new natural gas pipeline, but only 668 miles of new power transmission lines.
Why can such a major project be fast-tracked for gas, but not for wind? he asked.
While the RES could send all the right signals to investors, foreign companies and policymakers, a technologically improved Smart grid, that with interactivity and computerized communications, could truly catch the wind, moving it swiftly to urban centers from rural wind farms.
“We need transmission,” Alonso said. “Once we access the windiest areas of the country. We all win.”
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