Wind developers worried about future as they come off record year
By: MARK WILLIAMS
Associated Press
01/26/10 5:30 PM EST
COLUMBUS, OHIO — The U.S. wind industry had its best year yet in 2009, with enough new generating capacity installed to power the state of Washington, according to a report released Tuesday.
The nearly 10,000 megawatts of generating capacity added in 2009 expanded production of the nation's wind fleet by 39 percent, said the report from the American Wind Energy Association.
Wind now rivals natural gas as the leading source of new electric generation in the U.S. with the two combining to account for 80 percent of the new capacity added in the U.S. last year.
Wind generates about 2 percent of the country's electricity, and is being counted on to help move the country away from traditional sources of fuel that contribute to global warming.
"We shattered installation records and we actually created jobs in the development side but that hasn't translated through to the manufacturing side of the business yet," said Denise Bode, the trade group's CEO.
Tim Stephure of Emerging Energy Research said the year was especially impressive given that the record results came "in the midst of a huge recession and a lot of challenges for the industry."
Still, the report is misleading in that several projects that came online in 2009 were supposed to wrap up in 2008, but got held up in supply constraints, he said.
Government stimulus efforts were behind the big increase in generating capacity last year, the group said.
Those programs were able to sop up inventories of turbines that had been hard to sell after the recession crushed the ability to finance projects and investment in manufacturing dropped. The stimulus money generated enough new jobs in construction and operations to offset a loss of manufacturing jobs.
But there are problems on the horizon.
Stimulus money is running out and even though many states have adopted standards requiring certain amounts of electricity to come from renewable sources, Congress has yet to adopt a nationwide standard.
Wind backers say the lack of a such a standard is keeping wind from reaching its potential and providing stability for manufacturers to expand their U.S. operations.
"You can put tax credits in place on the manufacturing and on the development side but those don't drive demand," Bode said.
At the same time, electricity consumption has declined two straight years for the first time in 50 years. Prices of natural gas, used to generate more than a fifth of the nation's electricity, are about half of what they were in the summer of 2008.
These factors, coupled with still hard-to-get credit, are making it more difficult for developers to sell their projects or production at favorable prices, Stephure said.
Even without a renewable standard the amount of electricity from wind will continue to grow. Utilities regularly announce additions of wind generation as they build their portfolios of power from alternative sources.
The giant jump in new capacity has pushed the five-year average annual growth rate for new wind generation is 39 percent. Enough wind was added last year to power 2.4 million homes.
"We see these kind of booms and busts where we have dramatic activity and it demonstrates we're ready to move," Bode said. "It's just that we have to have a longer-term policy."
Texas leads the country in wind generation with about three times the production of the next highest state, Iowa. After Iowa are California, Washington and Minnesota.
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AP Energy Writer Sandy Shore contributed to this report from Denver.
