The report doesn’t mention that this would require adopting policies the Bush administration opposes. But that’s what elections are for.
Wind power is coming of age. In 2007, some 20,000 megawatts of wind were installed globally, enough to power 6 million homes. Sadly, most wind power manufacturers are no longer American, thanks to decades of funding cuts by conservatives. Still, new wind is poised to be a bigger contributor to U.S. (and global) electricity generation than new nuclear power in the coming decades. As I have written earlier, concentrated solar power could be an even bigger power source, and it can even share power lines with wind.
That means we can realistically envision an electric grid built around renewables: electricity with no greenhouse gas emissions, no fuel cost (and no future price volatility) and no radioactive waste. But while it is poised to happen, and other governments are working hard to claim market share, America will need a bold president to ensure leadership in these major job-creating industries of the 21st century.
Like solar thermal, wind energy has a long history. More than 2,000 years ago, simple windmills were used in China to pump water and in Persia and the Middle East to grind grain. Merchants and returning veterans of the Crusades introduced windmills to Europe in the 11th century, where first the Dutch and then the English improved the design. By the 18th century, more than 10,000 windmills operated in the Netherlands, where they were used to grind grain, pump water and saw wood. Ultimately the mills were replaced by steam engines because they could not compete with the low cost, convenience and reliability of fossil fuels. In America, windmills were widely used in the West by the end of the 1800s, providing water for irrigation and electricity for isolated farmers.
While wind has not been able to compete with large central-station electric power plants for most of this century, it began to see a resurgence in the 1970s because of the energy crises and government support. Those wind turbines, however, were crude derivatives from airplane propellers and were noisy and inefficient. Over the past quarter-century, significant aerodynamic improvements in blade design have largely solved both problems and brought down the cost of electricity from wind power by 10 percent a year (until recently). Wind energy can now be captured efficiently over a broad range of wind speeds and direction. Turbines, now placed where the wind is constant, have been scaled up from 35 kilowatt models of the early 1980s to 2 megawatts (2,000 kilowatts). Better weather forecasting and computer modeling allow much more confident predictions of wind availability 24 hours ahead of time.
With major government investments in wind in the 1970s, the U.S. was poised to be a dominant player in what was clearly going to be one of the biggest job-creating industries of the next 100 years. As late as the mid 1980s, we had over 85 percent of the world’s global installed capacity, and U.S. companies possessed the most critical knowledge about how to develop wind farms cost-effectively.
President Reagan cut the renewable energy budget more than 80 percent after he took office, and eliminated the wind investment tax credit in 1986. His administration saw wind power, clean energy and energy conservation as “Jimmy Carter” strategies, and, like most conservatives, Reagan opposed government-led programs to promote alternative energy. This was pretty much the death of most of the U.S. wind industry.
While President Clinton began increasing funding for wind, the Gingrich Congress blocked that effort beginning in 1995. President Bush and John McCain are two more conservatives who make positive statements about wind power while failing to support the policies that will help achieve this technology’s potential. That includes failing to provide consistent support of the tax credit, which allows wind to compete with better-subsidized power sources like nuclear, and to partly offset the much bigger subsidies other countries have for renewables.
Both Bush and McCain have also consistently opposed a renewable electricity standard that would have set a minimum requirement for utilities to generate part of their power from sources like wind. Most European countries have such standards and Denmark, Germany and Spain have had stable, aggressive policies for years, a key reason their countries have become turbine manufacturing leaders.
While wind power has expanded steadily around the world, it has grown in fits and starts here, with U.S. capacity additions repeatedly plummeting whenever the production tax credit was not extended by Congress and the president. Half the states have renewable electricity standards requirements, which, together with the credit, is the key reason that wind generation has continued to expand and that the domestic industry has not died out entirely in this country.
Since the turn of this century, wind has been growing explosively. From 2000 to 2007, the industry increased fivefold in size. Last year, $36 billion in wind investments were made around the world, with $9 billion invested in U.S.-based projects. In 10 years, it is expected to nearly quadruple in size.
Yes, I know, most of the media attention goes to a few high-visibility debates about putting wind in places like the waters off Cape Cod. But most installations are a welcome source of revenue to farmers and landowners. In fact, because the new wind turbines are tall, and don’t interfere significantly with grazing or farming, they have become popular in the central U.S., where the wind resource is best in the country. Some ranchers make half a million dollars a year by leasing only a fraction of their land for turbines.
Surprisingly, the top state for wind farms is not California, but, as of 2006, Texas. By the end of 2007, it had installed 4.4 GW compared to California’s 2.4 GW. By the end of March, Texas had 5.3 GW. Again, this has been driven by the wind tax credit and a strong state mandate. A year ago, the Texas Public Utility Commission approved transmission lines that could deliver up to 25 GW of wind by 2012.
Unlike people on a certain Eastern cape, Texans even find aesthetic value in wind turbines. “Texas has been looking at oil and gas rigs for 100 years, and frankly, wind turbines look a little nicer,” Texas land commissioner Jerry Patterson told the New York Times in February. “We’re No. 1 in wind in the United States, and that will never change.” Oilman Boone Pickens is planning “the biggest wind farm in the world,” a $10 billion investment. “I like wind because it’s renewable and it’s clean and you know you are not going to be dealing with a production decline curve,” Pickens told the Times. “Decline curves finally wore me out in the oil business.”
Why the explosive growth? The short answer is price. New wind farms are currently offering power at 4 to 8 cents a kilowatt hour, including the federal wind tax credit. Even without the credit, and with the recent price rise that most power sources have seen, wind power is delivering power at 7 to 10 cents/kWh. The price of new wind farms has risen 30 percent to 40 percent in the last few years for two reasons. First, commodity prices have soared. Second, most wind turbine manufacturing is in Europe, and the dollar has plummeted compared to the euro. As of 2007, America had about 18 percent of total global installed capacity and about the same fraction of the wind manufacturing business.
Ironically, the plunging dollar has done for the domestic industry what conservatives refused to do — make this country the place to build new wind manufacturing capacity. In the last few years, the percentage of U.S. wind equipment installed here but manufactured abroad has dropped from 70 percent to 50 percent, and that drop is projected to continue, which should help stabilize wind costs.
The one remaining big U.S. manufacturer of wind turbines was bought by General Electric in 2003 from the now-defunct Enron, a highly profitable move that preserved America’s role in large wind turbines. From 2004 to 2007, the company’s wind turbine production has grown 500 percent, and the division brought GE revenues exceeding $4 billion in 2007.
While the multi-decade drop in wind prices has stalled temporarily, prices for the competition have gone up the smokestack. New nuclear plants, for instance, have tripled in price. Analysis for the California Public Utility Commission puts the cost of power from new nuclear plants at 15 cents per kWh. It also puts the cost of coal (without carbon capture and storage) at more than 10 cents/kWh. That’s a major reason why, since 2000, Europe has added 47 GW of new wind energy, but only 9.6 GW of coal and a mere 1.2 GW of nuclear.
Yes, wind power is a variable resource, but this country has a great deal of power that runs around the clock, and many sources of flexible generation that can complement wind’s variability such as hydro power, natural gas, demand response and, soon, concentrated solar thermal power. Many regions in Europe integrate well beyond 20 percent wind power successfully. Iowa, Minnesota, Colorado and Oregon already get 5 to 8 percent of their power from wind. Moreover, as we electrify transportation over the next two decades with plug-in hybrids, the grid will be able to make use of far larger amounts of variable, largely nighttime zero-carbon electricity from wind. So post 2030, wind power should be able to grow even further.
The wind-driven future within our grasp can be found in the recent Department of Energy report, called “20% Wind Energy by 2030.” With improved efficiency and a decrease in capital cost, the report found that wind power should cost 6 to 8.5 cents/kWh, unsubsidized, even including the cost of transmission to access existing power lines. And the cost of integrating the power into the U.S. grid would be under 0.5 cents per kWh. This effort would only add about 50 cents per month per household, or under 2 cents a day.
For that small amount of money, the country would get the remarkable benefits listed at the beginning. The carbon dioxide savings alone would come to 7.6 billion metric tons cumulatively by 2030, at which point wind would be cutting annual emissions 825 million metric tons a year. That is the equivalent in emissions reduction of taking two-thirds of all U.S. passenger vehicles off the road.
The study notes that “few realize that electricity generation accounts for nearly half of all water withdrawals in the nation.” By 2030, wind would be cutting water consumption by 450 billion gallons a year, of which 150 billion gallons a year would be saved in the arid Western states, where water is relatively scarce — and poised to get even scarcer thanks to climate change. And on top of that, we get half a million jobs, of which nearly a third are high-wage workers directly employed in the industry.
How do we get there? The report does not discuss the necessary policies, but the answer is obvious. We mostly need a cap and trade system that results in a significant price for carbon. While waiting, we should extend the production tax credit for at least five years (until it is permanently sunsetted) to give the industry some consistency. At that point, a 20 percent (or higher) national renewable electricity standard for utilities would become the key policy support, at least until carbon was significantly more than, say, $50 a ton.
The Bush administration’s views of such policies range from lack of interest to outright opposition. So this report does highlight the disconnect between the amazing, but achievable clean energy future and the simple and relatively inexpensive government policies the administration just can’t stomach.
Fortunately, the next election will allow us to replace Bush with someone who supports all of those policies. Hint: It’s not the senator from Arizona.