Wind energy industry looks to Copenhagen for a mandate
In an interview, Denise Bode, CEO of the American Wind Energy Association, says the industry needs a renewable energy mandate from the climate conference in Copenhagen and from Congress.
American wind power is blowing strong despite hard economic times. That’s the message from Denise Bode, chief executive officer of the American Wind Energy Association and she’s sticking to it – despite the dicey economy.
“Last year during an almost depression we added 55 new manufacturing facilities and 35,000 new jobs in the US, which I think makes it one of the bright spots in the economy,” she said in an interview last week with the Monitor.
Right now the industry employs more than 85,000 people with many new wind-power factories having taken over previously empty appliance, auto, and steel plants, she says.
Last year the US took over first place globally in terms of the amount of installed wind power, she notes.
No one disputes that 2008 turned out well indeed for US wind power. The economic hammer really didn’t hit the wind industry until the fall – about a year ago. Wind power had its financing yanked out from under it just as the rest of the economy did.
Even so, many projects that already had their funding soldiered ahead, and by year’s end, a record 8,500 megawatts worth of turbines had been installed.
A large number of projects from the heady go-go days when a flush Wall Street was financing wind farms with abandon were still in the pipeline in 2009 – up through the first half of this year, Ms. Bode acknowledges.
Now, however, the picture is less clear even though there are bright spots.
Growth was strong through the end of the third quarter of 2009 with 5,800 megawatts of capacity built – more than the 5,000 last year.
Still, today there is just 5,000 megawatts of wind power in the near-term development pipeline compared with 8,000 megawatts last year. That slowing is hurting US wind manufacturing plants in places like Iowa, where turbine and blade manufacturing facilities have laid off workers and are sitting on a lot of inventory, analysts say.
The wind power industry got a pick-me-up this summer when stimulus funding began to hit. A measure that allowed an alternate means of financing kicked in – enabling wind-power developers to turn investment tax credits into dollars by getting direct refunds from the federal government.
So far at least $1 billion in such financing has supported the industry this year, Bode says.
“Until the end of 2008, [wind power manufacturers] were making machinery as fast as they could,” she says. “Now we’re still seeing significant problems in this manufacturing sector. The recovery package threw us a lifeline, but they’re still hurting.”
But as important is the stimulus aid was, what happens next in Copenhagen and in Congress – and how soon – is critical, she says.
On her wish list this Christmas is a strong statement or agreement coming out of both the climate summit and Capitol Hill committing the US and the rest of the world to shift away from fossil fuels and put in place clear requirements – a mandate – to build renewable energy.
What happens in global climate and global energy politics matters very much, she says. “It makes a huge difference if the world as a community decides to recognize these [carbon emissions] costs … and say we’re going to do something about it collectively – and move to cleaner sources of generation.”
“Tax credits will trickle down as a lifeline to keep manufacturers alive,” she continues. “But what we really need is a strong national commitment from Congress – a hard target” that sets a percentage requirement for how much renewable energy utilities must use.
To do that, climate-energy legislation that provides mandates to build renewable energy generation is needed – not just caps on carbon emissions, she says.
A Renewable Electricity Standard (RES) is featured in both the House version of climate energy legislation passed this spring and the currently stalled Senate version. But neither is as strong as Bode would like.
The House bill’s RES starts in 2011 requiring just 4 percent renewable energy rising to 20 percent by 2020. Much of that, however, can met by energy efficiency improvement and “clean coal,” she says with barely disguised disdain.
At this point, the Senate bill’s standard is even weaker – starting in 2010 at 3 percent and rising to 15 percent with various opt out provisions for governors, she says.
Offshore wind development is a big focus right now for the industry, said Bode, particularly in the New England area. The controversial Cape Wind project appears to be moving ahead as the development group announced this month that National Grid would buy “most likely all of the power,” a Cape Wind spokesman told ClimateWire.
But for offshore wind power development to surge, more comprehensive siting studies and policy development is needed at the federal level between the Federal Energy Regulatory Commission, Department of Energy and Department of Interior.
“New England has to be able to plan for offshore wind power,” Bode says.
Transmission lines are another huge potential roadblock. Without new lines to bring in renewable wind power from distant Plains states, wind generation will be stymied, she says.
New technologies like superconducting cable that could be buried underground out of site, might lessen the local “not-in-my-backyard” type resistance toward lines bring wind power from the Dakotas to major US cities, some industry experts say.
Mortality of wind power to birds and bats remains a question mark and is being studied actively by the industry and independent researchers.
Even so, right now some 300,000 megawatts of wind projects are in the queue, at various stages, Bode says. Many of those aren’t “real” projects yet, she admits.
But it shows that the industry is poised to get to 20 percent of the nation’s energy generation – if the Federal Energy Regulatory Commission (FERC and other siting authorities can get transmission issues worked out.
“We’re shovel ready, ready to rock and roll, and we can get to 20 percent [of US energy generation] easy, clearly by 2030,” she says. “But transmission is going to be an increasing problem over the next five years.”
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