|Boom-and-bust installations of US wind industry.|
The American Wind Energy Association (AWEA) has announced that with only 700 megawatts added in the second quarter of 2010, wind power installations to date this year have dropped by 57% and 71% from 2008 and 2009 levels, respectively. Manufacturing investment also continues to lag below 2008 and 2009 levels. AWEA and a broad coalition of renewable energy, labor, utility, and environmental organizations are calling on Congress with an urgent appeal to put in place a strong national renewable electricity standard (RES) to spur demand for renewable energy, attract manufacturing investment, and save and create jobs.
“Strong federal policy supporting the U.S. wind energy industry has never been more important,” said AWEA CEO Denise Bode. “We have an historic opportunity to build a major new manufacturing industry. Without strong, supportive policy like an RES to spur demand, investment, and jobs, manufacturing facilities will go idle and lay off workers if Congress doesn’t act now – before time runs out this session.”
Wind power’s boom-and-bust cycles, shown in the accompanying chart, not only cause layoffs but also discourage investment in new manufacturing facilities. In effect, the U.S. is losing the clean energy manufacturing race to Europe and China, which have firm, long-term renewable energy targets and policy commitments in place.
An RES is also politically popular: According to a national poll conducted by Public Opinion Strategies and Bennett, Petts & Normington, an RES is popular among American voters with strong support across party lines, with 65% of Republican voters, 69% of Independents, and 92% of Democrats favoring the legislation.
Second quarter highlights include:
* First half of year status: The 700 MW installed bring the first half of 2010 to 1,239 MW, 57% and 71% below 2008 and 2009 levels, respectively.
* 2010 projection: Even with over 5,500 MW under construction and a more active second half of year in store, AWEA projects that 2010 installations will likely be 25-45% below 2009 installations, depending on policy developments.
* Beyond 2010: There is a dramatic drop in the project development pipeline after the 5,500 MW under construction — that is, there is no demand beyond the present “coasting momentum.” Without stable policy, without demand and new power purchase agreements and without new turbine orders, the industry is sputtering out. However, passage of a strong national RES will boost demand and fire up the industry’s economic engines.
* Recovery Act Funding: American Recovery & Reinvestment Act funding is key to bringing projects that are already in the pipeline (i.e. “shovel ready”) to the finish line, and this happened in a spectacular way in 2009 with 10,000 MW of new wind power installed — generating as much electricity as three new nuclear power plants. However, today, power purchase agreements, the locomotive that drives the project pipeline, are difficult to obtain, given the drop in overall electricity demand, lower natural gas prices, and the absence of a clear national renewable energy policy. A RES would stimulate utilities to buy wind power and conclude power purchase agreements, get the demand locomotive going again, and work in tandem with Recovery Act funding to produce spectacular results as seen in 2009.
* While wind turbine orders saw a slight uptick in 2Q, mostly for 2010 delivery, the order level continues to be below what is needed to drive more manufacturing.
* New wind turbine manufacturing facility openings dropped from 2008 and 2009 levels, with only two new manufacturing facilities coming online in the first half of 2010, compared to seven in 2008 and five in 2009.
* To date in 2010, the U.S. has installed more coal and natural gas power plants than wind and other clean, renewable energy sources. By contrast, during the previous two years, wind roughly matched new natural gas, and together the two sources accounted for about 90% of all new annual generating capacity installed over the past 5 years.
* Texas is the state that installed the most new wind power in 2Q. However, near-term activity is now concentrated in the Midwest, Northwest, and Intermountain regions.
AWEA is the national trade association of America’s wind industry, with more than 2,400 member companies, including global leaders in wind power and energy development, wind turbine manufacturing, component and service suppliers, and the world’s largest wind power trade show. AWEA is the voice of wind energy in the U.S., promoting renewable energy to power a cleaner, stronger America.
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