HANOVER, Germany, May 6 (UPI) -- The wind energy industry is beginning to repower existing turbines for greater efficiency and expanding to offshore locations in Europe, and despite unstable incentives for wind power in the United States, strong growth potential and the weak dollar are buoying interest in the U.S. market.
For most firms, the biggest barrier to the U.S. market is the lack of stable incentives.
The Production Tax Credit, which was due to expire at the end of 2007, was renewed in 2006 for one year until the end of 2008. It provides a 2 cent per kilowatt-hour credit to project developers for the first 10 years of operation but has expired three times since it was first created in 1992.
"If it is allowed to expire, the industry and investors worry that growth will fall off -- although 25 states and the District of Columbia have their own renewable electricity standards and that could provide somewhat of a cushion," Aaron Severn, legislative representative for the American Wind Energy Association, told United Press International at the Hanover Innovation Fair from April 21-25.
"That's an experiment we don't want to undertake. Very dramatic decreases in the amount of installed wind energy occurred in the past when the PTC expired. Our member companies say that projects would be put on hold and investment would flow into more stable markets if the PTC is not extended immediately," he said.
"Developers want long-term market stability," he added, emphasizing the importance of long-term, robust incentives.
The AWEA aims to have 20 percent of the nation's electricity supplied from wind by 2030. Statements by President Bush and Secretary of Energy Samuel Bodman in the past two years have echoed this goal, Stephen Miner, AWEA's director of conference and education, told UPI.
But infrastructure, including new technicians, is needed to support the industry's growth. Miner said that upgrading the country's aging electricity grid could be linked with the need to connect wind energy to high load centers.
The 2020 goal for wind, which currently provides 1 percent of U.S. electricity, would be achieved by implementing appropriate policies, such as a federal renewable electricity standard, and overcoming technical barriers by improving infrastructure and investing in R&D for taller towers and better blades to capture more of the wind, Severn explained.
A feasibility study conducted in 2002 by the Department of Energy's Energy Information Administration concluded that 20 percent of U.S. electricity could come from all non-hydro renewables by 2020 -- currently contributing 3 percent of U.S. electricity.
Richard Stuebi, a consultant who founded NextWaveEnergy, told UPI in an e-mail message that the goal for all non-hydro renewables is "technically doable, but in practice very much a stretch." He said a national renewable electricity standard for 20 percent would be needed, and something that aggressive isn't likely. Carbon legislation could obviate the need for a national renewable electricity standard, rather allowing market forces to drive them in -- along with other clean energies and more efficiency. These would offset mainly coal, which accounts for 49 percent of the U.S. electricity mix.
Stuebi also noted that if there were compliance for all state renewable mandates, it would lead to something like 10-15 percent renewables by 2020. He agrees that consistent incentives are vital for long-term, large-scale investments.
"In the absence of any carbon legislation, and in the face of enduring embedded subsidies to mature fossil and nuclear energy, a long-term extension of the PTC only seems reasonable."
Annual wind energy growth in the United States topped previous records at about 45 percent in 2007 bringing total installed wind capacity to 16,818 megawatts. The U.S. regions with the biggest wind potential as measured by annual energy output are the Midwest and West -- with North Dakota and Texas on top. Texas had the largest growth in 2007 and now leads in installed wind power capacity at 4,356 megawatts.
Worldwide, wind power grew at a record level in 2007 -- adding 20,000 megawatts of wind capacity and bringing global installed wind capacity to 94,000 megawatts.
Michael Weidemann, Canada sales manager for Enercon, one of the world's leading wind turbine manufacturers, said his company can't afford to invest -- either in production facilities in the United States or sales -- given the instability of the PTC.
"We're a private company and we need a pipeline that's secure for projects. We establish 12-year partnerships with customers. I believe our competitors have lost lots of money," he told UPI at the trade show.
He said Canada's incentives aren't that much better than those in the United States. Only Ontario has incentives comparable to those in Germany, but Enercon has sales in Nova Scotia and Alberta as well.
Vestas, a Danish company and another leading wind turbine manufacturer, has in-house manufacturing of the main wind turbine components in the United States, but added its first manufacturing facility, a blade factory in Windsor, Colo., in March 2008 and announced plans to build a tower factory, but Vestas Americas is primarily sourced by Vestas' manufacturing facilities in Europe and Asia.
Vestas, active in the United States since 1981, has been attracted by U.S. wind resources and tremendous wind energy growth of the last three years. Jens Soby, president of Vestas Americas, believes this potential and the desire among the American public for clean energy and energy independence as well as to combat climate change "will lead to a long-term policy and the necessary regulatory framework supporting a robust clean energy market."
Christine Woerlen, head of renewable energies for the German Energy Agency, or DENA, told UPI at the trade show that German firms are looking to internationalize and are looking to the U.S. market since it's one of the fastest growing alongside Spain and China. The German Parliament requested that DENA begin an initiative in 2002 to strengthen the export activities of the German renewables industry.
Many, including Woerlen, have also noted that the weak dollar is a strong incentive to establish production facilities in the United States for worldwide export.
Miner also pointed to interest in the fast-growing U.S. market from Spanish wind turbine manufacturers, who are actively looking for new markets.
A non-carbon-emitting energy source, wind uses no water in contrast to nuclear and coal power and has little impact on habitat, according to the AWEA. It is also a source of economic revitalization in areas of industrial decline and in rural communities and provides a stable source of revenue to farmers who lease land to host wind turbines.
