The Woes of Wind

A recent report by the American Wind Energy Association (AWEA) shows wind power's popularity has waned significantly since the spike in activity during 2009 when 10,010 MW in new capacity was added.

According to the AWEA,

The U.S. industry added just 395 megawatts (MW) of wind-powered electric generating capacity in the third quarter of 2010, making it the lowest quarter since 2007. Year-to-date installations stood at 1,634 MW, down 72 percent versus 2009, and the lowest level since 2006. In 2010, wind projects in the U.S. are being installed at half the rate as in Europe, and a third of the rate as in China.

The report says the government's failure to establish a coherent federal policy is responsible for much of the decline, pointing out that uncertainty created by the lack of a Renewable Electricity Standard makes utilities reluctant to continue building out proposed projects. "Such policies are already in place in China and Europe, resulting in more than $35 billion of expected investment in 2010 - nearly four times the investment the U.S. will see this year," according to the report.

In order for the wind energy industry to regain momentum, the AWEA believes government needs to continue to offer tax credits and legislate a benchmark of 15 percent renewables in the national electricity mix by 2020. Such legislation was proposed in the U.S. Senate last session by several senators including Byron Dorgan (D-ND).

There are other factors, however, that experts say are making it difficult for wind energy to expand. Among these are a lack of demand resulting from a drop in electricity consumption and falling natural gas prices resulting from a huge supply surplus. In addition, lack of transmission capacity means that energy producers in Plains states such as North Dakota cannot to get their wind powerto the eastern U.S. where their major markets are.

The government needs to establish the playing field, as the AWEA has proposed, but economic and technological issues also need to be resolved before wind energy again can prominently participate in the game.