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The numbers are in and…it’s a bit of a mixed bag.  Nationally, we saw a 15% increase in capacity since the beginning of 2010.  That’s an increase of 5,115 megawatts and brings the country to 40,180 megawatts.  Unfortunately, that’s 50% less growth than we saw in 2009.

Minnesota, National Wind’s home state, added 22% capacity, beating the national mark.  The state added 400 megawatts in 2010.  The added capacity brings Minnesota to 2,200 megawatts of wind energy and bumps it to #5 in the nation for total capacity.

Internationally, the big news is that China has supplanted the U.S. as the world leader in wind energy.  China added 16,000 megawatts in 2010, more than three times that of the U.S., bringing its total to 41,800 megawatts.  These numbers reflect tremendous growth–China’s wind energy capacity increased by 62% last year.  The U.S. had led the world in most wind energy installed since 2008 when it overtook Germany for the top spot.

Elizabeth Salerno, AWEA Director of Industry Data & Analysis, argues that 2011 is likely to be a better year for U.S. wind than 2010. “Wind’s costs have dropped over the past two years, with power purchase agreements being signed in the range of 5 to 6 cents per kilowatt-hour recently,” Salerno said. “With uncertainty around natural gas and power prices as the economy recovers, wind’s long-term price stability is even more valued. We expect that utilities will move to lock in more wind contracts, given the cost-competitive nature of wind in today’s market.”  That, combined with the fact that we’ve entered the year with 5,600 megawatts already under construction, suggests a brighter outlook.

Wind energy still faces challenges, however.  Chief among these is the inconsistency of federal support.  The Production Tax Credit is set to expire in 2012.  The American Recovery and Reinvestment Act’s Treasury grant program, set to expire in 2010, received a last-minute extension through 2011.  We still lack a national renewable portfolio standard.  Congress continues to pass short-term measures and pass the football on the kind of long-term, consistent standards required to ensure clean energy will have a prominent place in our future.  The uncertainty caused by this inconsistent support hurts investment and slows growth.  The fact that China has overtaken us is evidence of this–they’ve shown leadership, so where’s ours?

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New wind manufacturing facilities: coming to a town near you

Even though the US has been the world leader in electricity-generating wind capacity for decades, many components of wind turbines—items such as generators, blades, and gear boxes—have historically been manufactured overseas. In fact, as recently as 2005, three quarters of manufacturing for the US wind industry was done on foreign soil. However, in recent years, explosive U.S. wind industry growth has amplified the demand for turbine imports, creating a supply shortage. As a result, a substantial increase in domestic wind manufacturing has occurred. According to the US Department of Energy, 68% of turbine parts are now made in the USA.

What has accounted for this change, besides growth in the industry? Many of the world’s largest wind manufacturing companies are recognizing the potential in the US market and opening new plants in the Midwest in order to be close to areas of high demand. According to the American Wind Energy Association’s (AWEA) 20% Wind by 2030 report card, 65 new facilities have opened in the past two years alone. These new plants are creating jobs and bringing new life to manufacturing towns hit hard by the 2008-09 recession. Also, our workforce is gaining greater know-how: over 100 colleges and universities have now developed course work geared toward teaching students how to build and install turbines.

Being able to produce turbine parts domestically is a huge boon for the U.S. wind industry. It lowers transportation costs, allows the industry to take advantage of  US workers’ long history of manufacturing expertise, and spurs investment in US wind companies. These benefits are the reason that passing a national Renewable Energy Standard (RES) is such a priority for our nations wind industry: an RES would create market certainty and thereby encourage manufacturers to keep building plants in the US. That’s why we’re rooting hard for Congress to pass an RES in fall 2010. Contact your Senator or Representative today!

The US Department of Energy’s recently published 2009 Wind Technologies Market Report shows a rising trend in domestically manufactured turbine equipment.  According to AWEA’s annual market report, the share of domestically manufactured turbine components grew from 20-25% in 2005 to around 50% in 2009.

Financially, the numbers show a decreased dependence in imported turbine equipment in 2009 than the previous two years.  Despite the industry’s largest installation growth in 2009, only $4.2 billion was spent on imported parts and goods, compared to $4.6 billion spent in 2007 and an industry peak of $5.4 billion spent in 2008.  When we look at it in terms of percentage, it’s even more promising.  Around 85% of total turbine cost was spent on imported parts in 2006, decreasing dramatically over the next four years to 39% in 2009.  These figures consider the fact that some parts may be purchased in the previous year and used in the following, and a four month lag was adjusted to compensate for this assumption, and the analysis is made from September of the previous year to August of the following.

Wind Power Equipment Imports as a Fraction of Total Turbine Cost

Wind Power Equipment Imports as a Fraction of Total Turbine Cost

The United States still leads the way in global importation of turbine equipment, representing approximately 34% of worldwide imports.  This seems like a rather significant percentage – especially since no other country reached 10% of global imports – but keep in mind, 2009 installations increased our annual capacity by almost 10,000 MW.  Plus, the United States contributed rather significantly to global installations, placing second after China (13,750 additional MW).  Spain trails in third with a significantly lower 2,331 additional MW installed.

Continuation of the domestic production trend could lead to future economic benefits.  Last year, 13 new facilities opened and 21 were announced.  Because of increased domestic production, a number of American manufacturers previously inactive in the wind energy sector were able to transition into the industry.  As a result of these developments, AWEA estimates that the wind energy sector employed around 85,000 full-time employees in 2009.  Although these figures were the same in 2008, the number of job-years was significantly higher for 2009 than for 2008.  This suggests that wind energy is providing stable jobs to our economy.

Based on the numerous sector projects announced in 2009, the US Department of Energy expects increased domestic production in the years ahead, but only if our wind power market remains stable.   Enforcing a national RPS could greatly facilitate the stability of the wind market.  Unfortunately, as we have mentioned in our previous blog post, a national RPS is no longer included in the energy bill.  We continue to encourage you to contact your Senators and urge for the inclusion of a renewable energy standard in future legislation.

Note: As of July 22, 2010, reports indicate that the energy bill no longer includes an RPS.  We encourage you to call your Senators and tell them to urge the inclusion of a renewable electricity standard in the bill. See the American Wind Energy Association’s website for information on who to call.

One of the most commonly tossed-around acronyms in the renewable energy industry is the RPS, which in this case doesn’t stand for “rock-paper-scissors”. Instead, as many readers may already know, it stands for “Renewable Portfolio Standard”. To those not familiar with the concept, a Renewable Portfolio Standard is a government mandate which requires a certain amount of a state or country’s energy to come from renewable sources.

A national RPS—one which applies to the whole United States— is prominent on our radar right now because it plays a large role in the proposed energy legislation making its way through the Senate. It’s one of several energy reform measures being considered, along with a cap-and-trade system for limiting carbon emissions and other pollution restrictions targeted at utilities. The problem is that with the curtain about to fall on the current legislative session, there’s a lot of uncertainty in the Senate about which path to take.The case for a national RPS has been made by several groups hoping to get a last-minute bill to the table. Senators Amy Klobuchar of Minnesota and Tim Johnson of South Dakota introduced a bill known as SAFEST (Securing America’s Future with Energy and Sustainable Technologies), which calls for a 25% RPS by 2025. Another effort was made by Senators Bryan Dorgan of North Dakota, Tom Udall of Colorado, and Mark Udall of New Mexico, who called for a suggested RPS of 15% proposed by the Energy and Natural Resources Committee last year to be strengthened and signed into law. However, with the time crunch, it is possible that a bill will not be ready to vote on before the August Recess.

If passed, a national RPS would provide the wind industry and country with many benefits. Let’s cross our fingers that the Senate will find a way to take action on this!

  1. Job creation.  We like to think about wind energy as a harmonious pairing of environmental sense and economic sense, and a study released by the Pew Charitable Trusts last year backs that up. According to the study, over the 10-year period from 1998-2007 the number of jobs in renewable energy increased 9.1%, compared to 3.7% for the economy as a whole. In the wind industry, the job increase over that same span was 23.5%. Also, according to the Union of Concerned Scientists (UCS), a 25% by 2025 RPS would create 297,000 jobs over the next 15 years.
  2. Economic Development. According to the AWEA’s briefing on National Renewable Energy Portfolio Standards, each wind turbine installed generates $1.5 million in economic activity. In addition, the UCS predicts that enacting an RPS would produce more than three times as many jobs as continuing on our current, more fossil-fueled approach.
  3. Consumer Savings . The UCS’s Clean Power, Green Jobs report found that a national RPS would reduce electricity prices up to 7.6%.
  4. Global warming prevention. Climate change continues to receive lots of attention in the media, and we probably don’t have to tell you about the effectiveness of renewable sources in cutting emissions. However, it’s interesting to note that 2010 has featured the warmest January-June period on record. And that wasn’t all from the New York Times’ “Green” blog; here’s an instance of two pictures speaking a thousand words.  
  5. Energy independence.  Passing a national RPS has the nifty side-effect of reducing our dependence on foreign oil. In addition, it should promote economic security by helping keep clean energy jobs in the US, instead of ceding the upper hand to countries such as China (read all about China in our blog below).  According to Senator Klobuchar, “The strength of our nation is tied to the strength of our energy economy. Not only are we still dependent on foreign oil, but other countries are making great strides in developing clean energy technologies.”

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.

Yesterday, Colorado governor Bill Ritter signed legislation increasing his state’s renewable portfolio standard from 20% to 30%. The law will require large utilities to generate 30% of their electricity from renewable sources by the year 2020.

Colorado’s 30% standard is one of the most aggressive in the country. About half of the states currently have some form of renewable energy standard in place; California’s standard—33% by 2020—is the country’s strictest.

A spokesperson for Xcel Energy, the state’s leading electric utility, has announced the company’s support of the law.

National Wind is currently developing one project in Colorado, NECO Wind, a 650 megawatt project in Logan, Sedgwick and Phillips Counties. NECO has signed 92,000 acres, and planning for the project’s first phase, 30 MW located in Phillips County, is well underway.

Lake Country Wind Energy announced today that it has selected REPower’s MM92 turbine for its first 40 megawatt phase. The 40 megawatt phase will consist of 20 MM92 turbines each rated at 2.05 megawatts with a 100 meter hub height.

"REpower Turbine"

This is REPower's MM92, 2.05 megawatt wind turbine

This will be REPower’s first wind turbine order for Minnesota and it helps advance the construction of the 40 megawatt phase to late 2010.

This will be the start of the largest community-owned wind farm in central Minnesota (Meeker and Kandiyohi Counties). Lake Country Wind Energy along with managing partner, National Wind, plans to develop additional wind projects up to 340 megawatts over the next several years.

View the press release here.

In an article in the November issue of Scientific American, Stanford professor Mark Jacobson (who we’ve written about before on the blog) released a plan where 100% of the world’s energy consumption comes from renewable sources by the year 2030. This is obviously an ambitious plan, but Jacobson (and his coauthor, Mark Delucchi), say it is achievable with worldwide governmental support.

In the plan, 51% of energy generation across the globe would come from wind energy. That amount of generation would require building 3.8 million 5 MW wind turbines. While that seems like an outrageous number, Jacobson mentions that 73 million cars and light trucks are manufactured every year. The remaining 49% of generation would come from solar and hydro .

In Jacobson’s vision, renewable sources will provide electric power for heating and transportation. While this will require large changes in infrastructure–and the mass adoption of electric vehicles–it will actually save on energy use over time, as electric power runs more efficiently than traditional fossil fuels. (For example, in a vehicle with an internal combustion engine, 80% of the energy in gasoline is wasted as heat. In an electric vehicle, only about 20% of energy is wasted.)

A major limiting factor in the plan is cost–the paper estimates that the massive undertaking could cost $100 trillion. Aside from cost, shortages of necessary materials and lack of political will are seen as the primary stumbling blocks.

The writers acknowledge at the end of the paper that their vision is something of a pipe dream–more of a concept of what is possible than what is feasible.

With sensible policies, nations could set a goal of generating 25 percent of their new energy supply with WWS [wind, water, solar] sources in 10 to 15 years and almost 100 percent of new supply in 20 to 30 years. With extremely aggressive policies, all existing fossil-fuel capacity could theoretically be retired and replaced in the same period, but with more modest and likely policies full replacement may take 40 to 50 years. Either way, clear leadership is needed, or else nations will keep trying technologies promoted by industries rather than vetted by scientists.

Let’s hope legislators the world over are listening.

The economy is still in rough shape and today’s action on Wall Street will certainly attest to that sentiment. Yet despite the tough times, wind energy continues to develop, cutting down our carbon footprint and our reliance on dirtier methods of generation.

Despite the current economic struggles, the world’s biggest wind farm was recently announced in Roscoe, Texas. At 781.5 megawatts – enough to power more than 230,000 homes – it edged out the neighboring 735 MW Horse Hollow wind farm to snag the blue ribbon title. With projects of that magnitude, it’s no wonder that Texas is the state leader in installed net capacity (8,361 megawatts and counting). Iowa, California, and Minnesota, are the respective runners-up to the Lone Star State.

The wind farm itself is largely the result of one man’s initial vision. The idea of a large-scale wind farm in the area was brought to the attention of developers by Cliff Etheredge, a one-armed, 65 year-old farmer in the area. The power of one is demonstrated again.

Cliff Etheredge

Cliff Etheredge, the man behind the Roscoe Wind Farm, stands in front of several turbines.

Moreover, public policies continue to make financing options available to financiers of wind projects. The stimulus bill has already affected a dramatic impact on wind’s fortunes in the form of U.S. Treasury cash grants. These grants, which became available in the summer of this year, have picked up the slack of the sagging production tax credit (PTC) providing wind and other renewable energy projects with 30% of their production costs. Since their introduction, approximately $950 million has been fueled into projects that are under or nearing construction. Most of this money has gone to wind energy projects. A separate provision of the stimulus bill extended the availability of PTC’s by five years. Pending a continuing economic recovery, this is an important provision as the PTC’s are more effective than the cash grants in freer lending markets.

Other government initiatives continue to back wind. $2.2 billion Clean Renewable Energy Bonds (CREB’s) have also gone to government agencies, public power providers, and cooperative electric companies involved in clean renewable energy development and production. The midwestern entities that applied for the bonds largely did so with wind power projects in mind. And the energy bill circulating through the Senate calls for a national renewable energy standard that will cement dedication to wind and other renewables in federal legislation.

Despite a recession that refuses to end, wind power has remained an important asset to America’s energy plans. The future looks promising. Some economists are already forecasting 2010 as the strongest year for wind, ever.

We’ve previously written about the smart grid investments promised by President Obama’s stimulus bill, but yesterday the President announced for the first time what form that stimulus will actually take.

Obama announced the distribution of $3.4 billion worth of stimulus grants from a solar energy farm in Florida. Part of his rational for funding the upgrade to the country’s aging electrical grid sounded surprisingly familiar:

To offer one analogy, just imagine what transportation was like in this country back in the 1920s and 1930s before the Interstate Highway System was built. It was a tangled maze of poorly maintained back roads that were rarely the fastest or the most efficient way to get from point A to point B. Fortunately, President Eisenhower made an investment that revolutionized the way we travel — an investment that made our lives easier and our economy grow.

Now, it’s time to make the same kind of investment in the way our energy travels — to build a clean energy superhighway that can take the renewable power generated in places like DeSoto and deliver it directly to the American people in the most affordable and efficient way possible.

Constructing the smart grid is critically important for relaying renewable energy from parts of the country where it is generated (say a wind farm in rural North Dakota) to areas where it’s most needed (urban areas across the nation). The smart grid will also help to improve system-wide efficiency, cutting down on wasted electricity.

GOOD featured a map of where the stimulus money is going:

GOOD map

Minnesota did well, with funds for upgrading the transmission system and for placing real time ‘smart meters’ into homes and businesses.

Yesterday marked the single biggest announcement of stimulus fund allocation to date. Grants will be delivered to the winning companies and cities by the end of the year.

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