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China Wind Farm

Photo by: Mike Locke

The United States wind industry gained a new competitor as China surpasses Germany last year to reach the world’s #2 spot for total installed capacity.  Currently, the US sits in a comfortable lead with 35,159 MW of total installed capacity;but with China’s exponential installation growth, our hold may not be very strong.  According to the Global Wind Energy Council (GWEC), in 2004, there were only 764 MW of wind capacity installed in China.  That number has been doubling almost every year, reaching 25,805 MW by the end of 2009.

Goals for wind turbine installations have been growing as well.  In 2007, China announced a national target of 5,000 MW installed by 2010.  Only a year later, that number increased to 10,000 MW.  After a whopping 13,785 MW growth in 2009, China set a new target of 35,000 MW installed by 2011, and 150,000 MW installed by 2020—a fivefold jump from the original 30,000 MW goal in 2007 and 50,000 MW more ambitious than the US goal of 100,000 MW installed by 2020.

The push behind China’s renewable energy boom lies in their National Renewable Energy Legislation.  First effective in 2006, the legislation states a national preference for the development and utilization of alternative energy resources.  This meant setting a national commitment of 15% renewable energy use by 2020 and providing increased government funding for green energy research and projects.  The legislation also requires power grid operators to purchase all energy generated from renewable sources, with a penalty for those who do not abide.

wind turbine production

Engineers work on a wind turbine part.

Despite our difference in governing styles, the United States could stand to learn a thing or two from China’s National REL—especially in the economic success it has created.  According to the Chinese Renewable Energy Industries Association (CREIA), renewable energy accounted for 1.12 million jobs in 2008 and is climbing by 100,000 each year.  The majority of these jobs come from manufacturing companies.  China is currently the leading producer of wind turbines and solar panels.  In the wind industry, that success was facilitated by the adoption of the “70% domestic” rule in 2004 which states that all turbines in Chinese wind farms must have at least 70% of its parts made in Chinese factories.  The impact was phenomenal.  The Chinese turbine production industry has grown from only six manufacturers in 2004 to nearly 90 at the end of 2009.  The government recently abolished this requirement to allow for more participation in the international market.  According to GWEC, only 17 Chinese-made wind turbines were exported in 2009.

The American market has the potential to grow at such an electrifying pace as well if we adopt a National RES.  The “Job Impacts of a National Renewable Energy Standard” study, conducted in 2009 and published by the RES Alliance for Jobs, found that a 25% by 2025 national standard would support an additional 274,000 jobs than an industry without a public policy.  The American Solar Energy Society’s (ASES) Green Jobs Report also forecasts more favorable outcomes for implementing an RES.  In the “business as usual” scenario, which means no changes in policy or major initiatives, the report only predicts a 130% increase in revenue and a 160% increase in jobs created in the next two decades.  The alternative scenario, which calls for a sustained public policy commitment, predicts a potential revenue growth of 1,200% and a 1,300% increase in jobs in the next two decades.  These are astounding differences for the adoption of one piece of legislation.

Figure 1

Change in Renewable Electricity Supported Jobs in 2025 With a 25% RES by 2025.

Every other summer, my parents and I take a trip back to China to visit our family.  I will never forget how my homeland greets me as I step onto its streets.  Outside, the sun burns earnestly on a cloudless horizon.  Its light is obscured by a permanent layer of smog, causing the sky to remain a dusty gray-blue hue and trapping in the oppressive heat.  Take a breath, and the summer’s fever invades the lungs, infecting the veins within milliseconds.  “Sauna days,” my uncle chuckles as he lifts my last suitcase into the car, “do you miss them?”

I don’t.  I really don’t.  Sauna days are the worst part of my Eastern adventures.  Hopefully, these muggy summers become more bearable with the help of a strong national commitment to greener energy, making my future vacations a lot more enjoyable.  As for the rest of the seasons I spend in the good old US of A, here’s hoping we are headed in the same direction.

According to the famous musical which bears the state’s name, Oklahoma is “where the wind comes sweeping down the plain”. With the passage of a new law in the Sooner State, it looks like the state’s energy providers will soon be making more use of it. The law, called the Oklahoma Energy Securities Act (OESA), sets a goal that by 2015, 15% of the state’s electricity should come from clean sources.

Wind projects under development in Oklahoma.

Given that Oklahoma is located right in the middle of Tornado Alley, you’d expect the law to have especially strong effects on the state’s wind industry. And sure enough, Oklahoma is one of the most wind-abundant states in the country. The National Renewable Energy Laboratory (NREL) classifies the vast majority of the state as a Class 3 or Class 4 Wind Power Density area, which is a medium rating. However, most of the places that have high (class 5-7) ratings are difficult-to-access locations such as the crest of the Rocky Mountains. When you look at wind power potential and feasibility together, Oklahoma is about as promising a place for wind development as you can find.

As with all energy legislation, there was considerable debate over the exact terms of the law. The 15% clean energy level was set as a goal rather than a mandate, so companies are encouraged to comply, but not required. However, the law clears the way for Oklahoma to possibly match the “20% renewable energy by 2020” standard of neighbors Missouri and New Mexico. (For a complete look at various states’ renewable energy goals and mandates, click here). It also passed with overwhelming bipartisan support (91-2 in the House) in a state with a senator famous for declaring “global warming is a hoax”.

It is particularly encouraging that the OESA was passed with input and support from Oklahoma’s leading utility companies. One of the companies, Oklahoma Gas and Electric Co., plans to have its energy from wind production jump from 270MW to 750MW by 2012. That’s basically a tripling of wind capacity in just two years.  Hopefully, developments like this point toward a future where popular support for Oklahoma’s wind industry hits a critical mass.

The expected changes accompanying the passage of the OESA also show that wind energy offers environmental and economic benefits at the same time, as the law is expected to create jobs by encouraging wind and other alternative energy companies to locate in Oklahoma. It should also increase the profits of Oklahoma’s already multi-billion dollar wind industry, according to the Tulsa World newspaper.

Last Friday, the U.S. House of Representatives passed the American Clean Energy and Security Act by a vote of 219-212. Among other provisions, the bill contains a renewable energy standard (RES) that calls for 20% of the national electricity to come from renewable sources by 2030, although up to 8% of the standard may be made through energy efficiency improvements.

As we wrote about previously, a national RES that significantly invests in the future of green energy faces many hurdles. Much of the wind industry argues that the RES in its current state will do little to increase renewable energy any more than mandated by current state law, thereby failing to stimulate clean energy development and limiting green job growth.

The Senate Energy and Natural Resources Committee Recently passed their own energy bill that includes a 15% RES by 2021. There is hope the RES portion of the legislation will be strengthened during debate on the Senate floor. If the bill is passed, it will be reconciled with the House legislation in a conference committee.

Despite President Obama’s call for a national Renewable Electricity Standard (RES) that would require utilities nationwide to produce 25% of their electricity through renewable means by 2025, members of the Senate Energy and Natural Resources Committee are having difficulty developing legislation that will reach this goal. After spending the past two months debating the RES as part of a comprehensive energy bill, the committee has gutted the legislation and reduced the RES to 15% by 2021. Furthermore, up to 25% of the renewable energy requirement may be substituted for efficiency improvements (such as weatherization efforts) and many public utilities may be exempt all together. The House Energy and Commerce Committee produced legislation that is not much better, passing a renewable energy standard of 20% by 2020 where up to 40% of the requirement may be covered by efficiency measures.

While reducing energy use through efficiency measures is obviously beneficial, it shouldn’t come at the expense of renewable energy production. Neither the Senate nor the House proposals strive to reach the 20% Wind Solution by 2030 proposed by the Department of Energy.

Overall, these proposals do little to help create a robust, nation-wide standard for renewable energy. Marchant Wentworth of the Union of Concerned Scientists told the Associated Press that, after the exemptions and provisions in the proposals are taken into account, renewable requirements may be as low as eight or nine percent. Mark Sinclair of the Clean Energy States Alliance agrees, telling the AP that the proposed federal RES would mandate less renewable energy production by 2030 than would otherwise already occur under current RES laws in 29 states and the District of Columbia.

This blog recently examined the many benefits wrought by a strong national renewable electricity standard, such as the generation of “297,000 new domestic jobs, lower electricity and natural gas bills for consumers by $64.3 billion, and [the production of] $13.5 billion in new income for landowners leasing their land for renewable energy development.” The American Wind Energy Association (AWEA), along with other environmental groups, is continuing to lobby for the tougher standards.

Senator Robert Menendez from New Jersey warned that unless the RES is strengthened, the bill may lose Democratic support in the Senate. Menendez plans to amend the bill to include the 25% standard sought by the President once it reaches the Senate floor for debate. However, he is unsure whether the tougher standard would still garner enough Republican support to be passed.

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