As Wind Soars, Will U.S. Fall Behind?

At least the states have their act together, policymakers at WindPower 2010 say.

Dallas -- There are two worlds in wind, and you can see this bifurcation play out on the exhibit floor at WindPower 2010 in Dallas this week.

The first one is inhabited by Asian and European countries where leaders see a carbon-constrained future coming with increasing momentum as coal mines explode and offshore oil leaks ooze uncontrollably. Denmark, China, Japan, the U.K. and others have a strong presence.

The second world? The good ol' USA. The wind industry here has been growing strongly over the past several years. Nearly 10,000 megawatts of capacity was added in 2009. General Electric, despite a legal feud with Mitsubishi, remains one of the largest manufacturers in the space, and venture capitalists have begun to explore wind with new vigor. Nonetheless, uncertainty over national policies continues to create a veil of doubt.

Unlike many other nations, the U.S. does not have comprehensive carbon regulations or renewable energy standards. As AWEA CEO Denise Bode pointed out in the conference's opening session, polls show over 80% of U.S. voters favor such an RES and agree that Congress has not done enough.

Both a speech by Senator Byron Dorgan (D-North Dakota) and a panel that included Governor Ted Strickland (D-Ohio), Governor Chet Culver (D-Iowa), and Governor Bill Ritter (D-Colorado) highlighted more of wind's obstacles.

Congress has failed to provide clarity on whether it will extend the Treasury Grant program that got renewables through the recession in 2009. Without clarity about the energy and climate bill or the Treasury Grant program, the usefulness of the production tax credit (PTC) -- which will expire at the end of 2012 -- is in limbo with investors.

Meanwhile, federal lawmakers continue to hesitate about legislation to streamline the vital building of new transmission. New studies show that with adequate management, the U.S. grid could handle enough renewable energy to supply 30% of domestic energy needs. With such news, the nation ought to be scrambling to build new wires. But while the U.S. built 11,000 miles of natural gas lines, planning, pricing and siting complications limited new electricity transmission to 660 miles. Those complications could be eliminated by a pending bill putting the Federal Energy Regulatory Commission (FERC) in control of the process while leaving crucial decisions up to locals.

The one source of good news in the U.S. is the bold actions being taken by individual states. Many are adding, or increasing the stringency of, RES mandates. (Colorado just upped its mandate to 30% by 2020.) Some states are also tailoring legislation, building their workforces and improving their infrastructures as fast as they can, literally competing with one another to make their states more wind-friendly. Their reason is simple: wind brings economic growth, jobs and revenues.

In wind's other world, things are different because federal governments understand what the states understand. As Governor Ritter said, "One of the things we've learned from our friends in Europe is that they've got really good partners at the federal level."

The Chinese wind industry is growing faster than any other in the world. It moved into 2nd place in cumulative installed capacity in 2009, in part because of powerful support from its central government. Thomas Yao is the Director of the Public Affairs with Goldwind, one of China's two biggest integrated wind manufacturers and developers. He listed two crucial ways the Chinese government supports Goldwind's planned expansion.

"The Chinese government has a feed-in tariff," Yao pointed out. "The Chinese government classifies wind in four categories. And for each category, the feed-in tariff is fixed.... This is to make sure the industry is in healthy development."

As with the feed-in tariffs pioneered in Germany, China's tariff is a guaranteed, long-term, above-retail rate that assures wind project developers a good return on their investment. "It is a kind of subsidy or a kind of incentive to make sure that wind farm developers have the confidence and have their interests right."

China's feed-in tariff is a financial incentive, but there are other kinds of crucial support the Chinese government is providing, as well. "The Chinese government is also increasing their investment [in infrastructure], like grid development. Because if we have so many wind farms [but] the transmission lines cannot reach them, [then that] doesn't work."

Felix Losada, the Deputy Head of Corporate Communications with German wind giant Nordex, is one of those who chooses to believe growth lies ahead. He sees expansion coming in the second half of this year. Like most Germans, he is proud of the success of his country's feed-in tariff. "It has been in the past and it is still having an effect," he said.

"For the U.S., there are different solutions for each state, but we have the same [in Europe]," Losada went on, referring to different policies in different European countries. "It would be of course easier for everybody to make business if everything were the same way for the whole country. But I don't see that there is a hurdle or that there is something making it very difficult from state to state. We just see the situation and say, 'OK, it's just like it is at the moment.'"

Both Nordex and Goldwind are intent on cracking into the still-enormous U.S. market and, as foreigners, neither wanted to appear to insult America. But in the very way they referred proudly to their own countries' successful policies, they impugned the U.S. Congress's failure to support the industry.

The AWEA's Bode opened the conference with a look back to the first U.S. utility-scale, wind-energy-generated electricity. Despite Bode's eloquent account of the wind industry's recent impressive growth, the fact is that without a step-change in U.S. energy policy, the nation's now-world-leading wind industry will surely begin falling behind.

"We are standing at the edge of a cliff. We can fall or it's our time to fly," Bode told those in attendance. "The American wind energy industry is on the edge of explosive growth, leading our nation into a cleaner, more secure America. But we're lacking the long-term commitment needed to fulfill our promise. For us to take off, Congress must -- I repeat, MUST -- enact a national Renewable Electricity Standard and send a long-term signal to the industry, [which is] what it needs to grow and invest in a steady and sustained fashion. Congress, by not acting, is letting our lighthouse dim."