Normally viewed as complementary, the natural gas and wind industries found themselves more at odds Monday as the American Wind Energy Association (AWEA) kicked off its annual meeting in Anaheim, CA. Windpower 2011 was less bullish than in recent years in announcing growth in megawatts and jobs.
Ignacio Galan, the CEO of one of the largest wind developers in the United States, Iberdrola Renewables, was quoted in the business press as saying shale gas production has “transformed” the U.S. energy landscape, driving down gas and electricity prices and making it tougher for new wind developments to pencil out. Skeptics point to the reduction of added wind megawatts last year compared to 2009 (10,000 MW in 2009 and 5,100 MW last year). Pessimists also reported that this year’s added wind development could drop to 3,000 MW, although others are predicting that the 5,000 MW/year level may stick around for the next few years.
But according to some of the speakers at the conference’s first full day, there are other political and economic issues that are impacting the wind industry, including the need for a splintered Congress to extend the production tax credit and other subsidies that are set to expire the end of next year.
Rep. Earl Blumenauer (D-OR) said he thinks that within the current Congress “there should be an opportunity to put together a broad coalition to pass” an energy bill that would address all of the credits and subsidies for energy sources.
“We’re facing a situation where all of these expiring tax provisions as coming up right at the end of this Congress,” Blumenauer said. “So there is going to be a flurry of activity before the next election. I think that gives us opportunities as part of a broader piece of legislation like we have done in the past, or something that is narrower and more focused for a majority to move forward. I think there is going to be a point where people actually want something done.”
Blumenauer thinks that a national renewable portfolio standard (RPS) has some broad, bipartisan support. “When you get outside the Beltway, it is not controversial,” he said. “I am cautiously optimistic we can do something despite the controversies that exist.”
On the skeptical side was Montana Gov. Brian Schweitzer, who said the federal government and Congress are “better at motion than action.” While support for renewable energy standards continues in the states, the state delegations in Congress will often turn a deaf ear on proposals for a national standard.
“They support RPS standards at home and then go to Washington, DC, and take a powder when it comes to extending the production tax credit,” Schweitzer said. “It is pretty clear that the hydrocarbon industry will do everything it can to step on alternative energy for the time being. Washington, DC, responds best to crisis.”
Ever the optimist, AWEA CEO Denise Bode said in the weeks since California formalized its RPS at 33% for 2020 “the floodgates have been opened” in terms of new offices and companies from the wind industry coming into the state. “I have companies from all across the country opening new offices, and we have a significant number of Asian company representatives that have come here for this conference,” Bode said.
Nevertheless, indicators from various consultants and researchers is for a slowdown in U.S. wind development compared to the go-go growth of just a few years ago.
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