Last Wednesday was New York Wind Energy Day. Like other recent officially designated days (New York International Fringe Festival Day, Hispanic Television Summit Day), Wind Energy Day coincided with a big conference: the Wind Power Finance & Investment Workshop, hosted by the American Wind Energy Association.
On MTV's 44-foot billboard at 45th and Broadway in Times Square stood a video screen showing wind turbines and industry factoids ("Wind power jobs grew by 70 percent from 50,000 to 85,000 jobs in 2008"). Nearby, at 42nd Street and Seventh Avenue, 16 45-foot cylindrical wind turbines were spinning away, powering the 47-foot Ricoh billboard: the first wind-powered outdoor board in the world. (It apparently saves the Japanese photocopier company as much as $15,000 a month on electricity bills.) And on the afternoon that the Dow closed above 10,000 for the first time in a year, AWEA president Denise Bode and Broadwind Energy CEO J. Cameron Drecoll rang the NASDAQ closing bell. That benchmark put an exclamation point on a day full of good omens and ceremonial gestures, and set a bullish tone for wind energy in the American portfolio.
It's long been known that as much as 900,000 megawatts of bankable wind power blow over the U.S. Wind is woven into our culture, from the sweeping scythe that drove the Dakota settlers crazy to the howling winds of West Texas. Today, the U.S. boasts the world's largest and fastest-growing wind industry, with more than 25,000 megawatts of installed capacity. (More than 8,500 megawatts of nameplate-capacity wind power were installed last year, outpacing China's growth.)
And many wind advocates say that federal policy is now trying to develop the industry quickly, as the U.S. has extended the Production Tax Credit, put new loan guarantees in place, and, in late September, awarded $1 billion in stimulus money to the renewable-energy market, with the lion's share going to wind. Since July, the industry has completed about 1,600 megawatts of new wind energy projects and initiated more than 1,700 megawatts of construction, according to the AWEA's third-quarter report, released on Tuesday. More than 31,000 megawatts of wind power capacity are now operating in the U.S.
But even with a boom underway, some critics wonder how growth can be sustained. At the Wind Energy Finance Workshop, Tyler Tringas, a senior wind-energy analyst at New Energy Finance, offered me a few back-of-the-envelope indicators suggesting that the industry, under the current regime of state-level renewable portfolio standards, may have reached a growth plateau.
Renewable portfolio standards generally have spurred renewable-energy growth by requiring utilities to meet mandates, Tringas says: "a rough estimate of renewable generation that will be required by 2020 is about 100 gigawatts." The states will need to add 75 to 80 gigawatts before 2020 -- nearly 8 gigawatts a year for 11 years -- to meet those RPS goals, he says. "Last year, the U.S. installed 8.5 gigawatts of capacity," he says, "so we're already at the limit" of demand created by RPS incentive.
If the wind industry has reached its capacity to grow, what's next? The buzz at the conference was for long-term support of renewable energy, and the best way to do that, according to many in attendance, is with a national renewable electricity standard, or RES. A provision in the Waxman-Markey Energy and Climate bill would extend renewable portfolio requirements to states that don't have RES standards in place, mostly in the Midwest and Southeast. (No such provision exists in the Kerry-Boxer climate bill in the Senate.) The renewable-generation requirements under a national RES could be fulfilled by solar, wind, or biofuels, which would let states with poor wind resources fulfill the RES through other forms of renewable energy.
But utilities invested in coal-fired power plants, like Southern Co. (SO) and American Electric Power (AEP), vigorously oppose an RES provision. Other opponents include the American Coalition for Clean Coal Electricity; the National Association of Manufacturers, which has sponsored false findings on the Waxman-Markey climate bill; the American Petroleum Institute, headed by J. Larry Nichols, CEO of Devon Energy Corp. (DVN) and a global-warming denier; and the U.S. Chamber of Commerce, which Apple (AAPL) resigned this week over its opposition to climate legislation. Together, these groups spent $200 million in the first half of this year, according to The New York Times, to lobby against Congressional climate and energy bills. An oil-gas-utilities lobby helped defeat a provision similar to the current proposed RES -- requiring states to generate 15 percent of their electricity from renewable sources by 2020 -- which was dropped from the 2007 Energy and Security Act.
But an RES might have an easier time passing now. There's no longer a solid coalition of utilities opposing an RES, The New York Times reported Monday; some, like Exelon Corp. (EXC) and PG&E (PCG) are moving heavily into wind and solar, while others, like Southern Co., are fully committed to coal-fired electricity (and are embroiled in a schism with the natural gas lobby).
But even with such opposing factions, the large coal-fired companies still oppose wind and renewables. Denise Bode, CEO of AWEA, blames the utilities sector in thwarting Congress's latest attempt to pass an RES. "If you're going to make energy in the national interest, which it is, then electric utilities should be required to act in the public interest," Bode says. "They've been given a monopoly franchise in terms of territory and cost of service. In exchange for that monopoly, they must agree to operate in the public interest. And what the government has done historically is to determine what's in the public interest."
Bode says the AWEA seeks the same national commitment that other forms of energy have received since the 1920s, through tax policies offsetting the costs of drilling and geological and geophysical damage. In the 1950s, Bode says, Congress passed the Price-Anderson Act, providing all backup insurance to facilitate building nuclear facilities, and the coal industry has received depletion treatment in addition to regular tax treatment for the hundred years of its existence.
Conservative groups have railed against Waxman-Markey, claiming that its RES provision will raise electricity rates by 90 percent and even wreck the U.S. economy -- claims of economic disaster debunked by such opposition analysts as Joe Romm of Climate Progress.
A national RES, Bode says, would represent a long-term commitment to renewable energy. "You can't not do for renewables what you've done for every other energy source," she says. "To pass a weak climate and energy bill sends a negative signal. If that happens," according to Bode, "America will lose a footrace with the world in bringing manufacturing here. This is an issue that isn't just critically important today. It was critically important yesterday. We cannot wait for the future."
Mark Svenvold, author of Big Weather: Chasing Tornadoes in the Heart of America, teaches at Seton Hall University in South Orange, New Jersey.
Why the booming wind industry needs a renewable electricity standard