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Wind Power Sinks Back to 2007 Levels in 2Q

07/28/2010
SustainableBusiness.com News

The American Wind Energy Association (AWEA) today announced that with only 700 megawatts (MW) added in 2Q10, wind power installations to date this year have dropped by 57% and 71% from 2008 and 2009 levels, respectively.

Manufacturing investment also continues to lag below 2008 and 2009 levels. AWEA and a broad coalition of renewable energy, labor, utility, and environmental organizations are calling on Congress with an urgent appeal to put in place a strong national renewable electricity standard (RES) to spur demand for renewable energy, attract manufacturing investment, and save and create jobs.

"Strong federal policy supporting the U.S. wind energy industry has never been more important,” said AWEA CEO Denise Bode. “We have an historic opportunity to build a major new manufacturing industry. Without strong, supportive policy like an RES to spur demand, investment, and jobs, manufacturing facilities will go idle and lay off workers if Congress doesn’t act now--before time runs out this session."

Wind power’s boom-and-bust cycles not only cause layoffs but also discourage investment in new manufacturing facilities. In effect, the U.S. is losing the clean energy manufacturing race to Europe and China, which have firm, long-term renewable enegy targets and policy commitments in place.

According to a national poll conducted by Public Opinion Strategies and Bennett, Petts & Normington, an RES is popular among American voters with strong support across party lines, with 65% of Republican voters, 69% of Independents and 92% of Democrats favoring the legislation.

Second quarter highlights include:

2010 projection: Even with over 5,500 MW under construction and a more active second half of year in store, AWEA projects that 2010 installations will likely be 25-45% below 2009 installations, depending on policy developments.
Beyond 2010: There is a dramatic drop in the project development pipeline after the 5,500 MW under construction—that is, there is no demand beyond the present “coasting momentum.” Without stable policy, without demand and new power purchase agreements and without new turbine orders, the industry is sputtering out.
Recovery Act Funding: American Recovery & Reinvestment Act funding is key to bringing projects that are already in the pipeline (i.e. “shovel ready”) to the finish line, and this happened in a spectacular way in 2009 with 10,000 MW of new wind power installed. However, today, power purchase agreements, the locomotive that drives the project pipeline, are difficult to obtain, given the drop in overall electricity demand, lower natural gas prices, and the absence of a clear national renewable energy policy.
While wind turbine orders saw a slight uptick in 2Q, mostly for 2010 delivery, the order level continues to be below what is needed to drive more manufacturing.
New wind turbine manufacturing facility openings dropped from 2008 and 2009 levels, with only two new manufacturing facilities coming online in the first half of 2010, compared to seven in 2008 and five in 2009.
To date in 2010, the U.S. has installed more coal and natural gas power plants than wind and other clean, renewable energy sources. By contrast, during the previous two years, wind roughly matched new natural gas, and together the two sources accounted for about 90% of all new annual generating capacity installed over the past 5 years.
Texas is the state that installed the most new wind power in 2Q. However, near-term activity is now concentrated in the Midwest, Northwest, and Intermountain regions.

Yesterday Senate Democrats introduced an energy bill that did not include an RES. However, AWEA and other organizations are making last minute pleas to have and RES included.

Bode released the following statement after Republican Senator Sam Brownback (R-Kan.) came out in favor of a renewable energy standard on Monday:

“Senator Brownback’s press release is further demonstration of the bipartisan support that exists for the national Renewable Electricity Standard (RES). Senator Brownback has experience in Kansas with the economic development benefits of renewable energy and has promoted renewable energy policy in the Senate, providing a key vote in the Senate Energy and Natural Resources Committee for the energy bill last year. We believe an RES not only has support for passage, but will strengthen the energy bill’s chances as well.”

The AWEA 2Q report is available at the link below.

Website: www.awea.org/publications/reports/2Q10.pdf