The good news just came this morning: the US wind industry shattered all records in 2009 , coming within a whisper of installing 10 GW (10,000 MW) in the year, up 18% from what was already a record year. Total installed capacity went up from 25 GW from 35 GW, i.e. up 40% With similarly strong numbers expected out of China, and Europe's soon-to-be-announced but expected-to-be-decent numbers (with strong news on the offshore front ), this is really upbeat news - and it is relevant to Europe as a large chunk of turbine manufacturing globally is still done in Europe, and volatile US demand has made life difficult for turbine manufacturers in the past.
And this was really unexpected. Some of you might remember that I wrote a diary last year titled: "Wind power set to decline under Obama? " I was worried, like many others, that the industry would suffer massively from the financial crisis, dependent as it was on long term loans and tax equity structures provided by banks like Lehmann Brothers, and that new installations would collapse from the lack of funds.
Thankfully, I was wrong.
While the first half of the year was really tough, something made a difference: the stimulus plan, and specific support mechanisms focused on the wind industry. The collapse of the US investment banks had destroyed overnight one of the main sources of funding for the industry: tax investors, who were willing to pay upfront the PTC (production tax credits) allocated by the federal government for each kWh of wind energy produced over 10 years. With their huge losses, the previous players no longer had any way to claim tax credits… The government smartly offered an equivalent support tool in the shape of grants, for roughly the same amount as the PTCs represented (30% of project costs), but paid in full upon first production of electricity by the project.
These grants, along with other State-based mechanisms, have allowed the industry to not collapse, and indeed keep on growing. And, as the AWEA (the industry group in the US) notes, the local content of US wind projects has reached 50% last year, compared to 25% in 2004, which represents 85,000 jobs, the majority of which will not be offshore-able (operations and maintenance cannot, by definition, be done anywhere else; the manufacturing of many parts, in what is a heavy industry, is best done, for logistical reasons, near the sites of erection of the projects). Of course, the rest of the content largely comes from Europe, so the health of that market is a good thing for Europe's manufacturers and their employees...
So count me as surprised - but nevertheless really happy to have been proven wrong in this case.
On a political level, I guess one should note that the stimulus represents the largest ever boost for green energy in US public policy, despite being a very small part of the package. Just like cash-for clunkers and the bailout of the car manufacturers were a small part of TARP but one of the most effective tools to avoid a complete catastrophe during the collapse last year… Given the effectiveness of such measures (which come as close as one can get to "industrial policy" in the US, it is a pity that (i) it took economic collapse to implement them and (ii) that so little of the money spent went to such purposes. While I certainly wouldn't put the rest of the stimulus in the same wasteful category as the rest of the TARP and all the other support schemes for the financial world, one wonders what could have been done with a stimulus package focused on green energy and the associated building (or re-building) of infrastructure on a continent-wide scale.
But it's not too late to push for such a focused effort, and there are overwhelming arguments for it: jobs, obviously, but also national security (less need to import fuel to produce electricity) and even electricity prices: wind power actually brings them down . And of course, preparing the grid for future needs, such as the integration of large numbers of plug-in cars. And the same arguments naturally apply in Europe as well, especially given our even bigger dependence on imported fuels for power generation...
And, best of all, it would build on an obvious, unimpeachable success which can be fully claimed and owned by Obama administration.
From European Tribune .