New wind installations for 2010 came in at about one-half of the capacity added in the previous year. This surprised no one, as the industry struggled through an uncertain policy environment that temporarily settled too late for any immediate effect.
The U.S. wind industry built 5,115 megawatts of wind power last year, down from about 10,000 megawatts in 2009.
"Our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more," said Denise Bode, CEO of the American Wind Energy Association (AWEA).
AWEA wanted to look on the bright side. It said the industry entered 2011 with over 5,600 megawatts currently under construction - and with wind cost-competitive with natural gas for new electric generation, utilities are moving to lock in favorable rates.
"Now that we're competing with natural gas on cost, we need consistent federal policies to ensure we have a diverse portfolio of energy sources in this country, and don't become over-reliant on one source or another," Bode said.
AWEA said that 3,195 megawatts generating capacity came online in the fourth quarter of 2010, down from 4,113 megawatts installed in the same period in 2009.
A one-year extension of the so-called 1603 cash grant program passed Congress last month, which kept some momentum going into next year.
The industry is likely to finish 2011 ahead of 2010 numbers, according to Elizabeth Salerno, AWEA Director of Industry Data & Analysis.
"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."
Total U.S. wind capacity now stands at 40,180 megawatts, which fell behind China for the first time. China now has 41,800 megawatts, according to a Jan. 13 report from the Chinese Renewable Energy Industries Association.
With U.S. policy only guaranteed for the next year, expect that gap to widen considerably.
COMMENTARY: The fact is, Chinese greatly subsidizes its alternative energy industries and pegs the Yuan, to the U.S. dollar, making their goods cheaper to import into the U.S. and more expensive for U.S. producers to expert to China. So long as this trade imbalance continues, the U.S. will continue to fall behind in wind capacity vis-a-vis China.
For forty years, the federal government has failed to implement a strategy for cutting U.S. dependence on fossil fuels (i.e. national energy policy). And for over a decade, cap and trade has defined the federal policy vision of the U.S. clean energy and environmental community, only to collapse in summer 2010.
The U.S. is also divided politically between liberals who support a comprehensive U.S. energy policy that reduces our dependency on foreign oil, establishes well defined goals and objectives, and relies more on renewable energy sources like wind, solar, biofuels and advanced alternative energy technologies like fuel cells and hydrogen.
Conservatives on the right, believe that the U.S. should exploit every possible non-renewable energy alternative to importing foreign oil--expanding offshore drilling, shale oil, coal and nuclear. Conservatives are not very interested in renewable energy sources, driven by the belief that global warming does not exist.
Although many states have established their own initiatives to increase investment in renewable energy, the U.S. lacks a cohesive and focused national energy policy, and this is why investments in wind, solar, biofuels and advanced alternative energy technologies will remain in a state of uncertainty.
President Obama allocated $50 billion from his Stimulus Plan when he came into office, but most of those subsidies have been allocated or run out. In his State of the Union address in late January, President Obama made renewable energy a priority, stating, “clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.”
Conservatifes took control of the House of Representatives in November 2010, and so long as conservatives remain the majority party in the House, and controll the federal budget purse strings, investments in renewable energy will remain on the backburner and there will be no centrally-focused and cohesive U.S. energy policy to speak of.
The American Wind Energy Association (AWEA) is a great source of information about the U.S. wind energy industry. If you want to know more about the U.S. wind power industry, I recommend you read AWEA's many publications and fact sheets under the Learn About Windpower section.
Courtesy of an article dated January 25, 2011 appearing in RenewablesBiz
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