The forces driving the development of new wind generation in the United States are reaching Category 4 hurricane strength. Although today wind accounts for just 1.5 percent of the nation's electricity, if current trends continue, we'll meet the DOE's articulated goal of 20 percent wind-powered generation well ahead of the 2030 target. But that's a big if. Unless there's a significant increase in manufacturing capacity, it's unlikely the spectacular growth in installed wind power of the past few years can continue at anywhere near its recent pace -- an unsustainable 45 percent in the United States this year alone, according to American Wind Energy Association statistics.

There are three hurdles that must be overcome if we are, in fact, to reach that 20 percent target over the next two decades: commodity prices, manufacturing capacity and competition from the rest of the world. Each of these is intimately entwined with the others. The steepest hurdle, however, is manufacturing capacity. The United States is now the world's single largest market for wind manufacturers, and 17 factories have either been announced or constructed in the United States over the past year and a half.

But will all of those plants actually be built? "The biggest single factor that's limited wind turbine manufacturing in the United States," according to Randall Swisher, executive director of the American Wind Energy Association, "is our lack of consistent stable policy."

The massive Economic Stabilization Act that Congress passed in October in response to the credit meltdown extended the production tax credit (PTC) for one year. While he hailed the extension as essential to the continued expansion of manufacturing capacity and new installations, Swisher insists much more work needs to be done, and he anticipates working with the new Congress and administration on "a serious long-term clean energy policy." The key is long-term.

For manufacturers, long-term assurances are essential. Siemens dedicated a new blade manufacturing facility in Iowa last year and announced that it would essentially double the size of that plant by the end of next year, but Mike Revak, a Siemens spokesperson, says that further expansion will be highly influenced by long-term national commitments. GE, the country's largest supplier of wind turbines, reports that its subcontractors are also increasing capacity. Blade manufacturer Molded Fiberglass Companies, for instance, opened a new facility with about 750 employees in South Dakota this year. But GE's Sean Fitzgerald, platform leader for the company's popular 1.5-megawatt turbine, notes that while GE wants to build its supplier base "our suppliers have to take a lot of risk if they feel the long-term policy is not stable. They certainly need an extension of the PTC, but they also need a long-term stable policy."

History validates the importance of stable government policy toward wind. Each time Congress failed to extend the PTC, which has happened three times since the original credit was incorporated into the 1992 energy act, installation of new units fell 70 to 90 percent the following year, effectively halting growth. Roby Roberts, senior vice president of Vestas Americas, the largest manufacturer of turbines worldwide and the second largest, after GE, in the United States, sees the failure of the United States to enunciate a clear long-term policy as the most significant hurdle in the way of realizing the potential of wind. "You need a long-term extension of the tax credits. You need a long-term big-picture build-out of the transmission system. You need a federal renewable energy status. And you need reasonable climate legislation, a clear price signal for the cost of carbon. Given those four essentials, the United States will have a very robust wind industry that could grow from 20,000 megawatts to 305,000 megawatts by 2020," says Roberts.

Vestas has increased or plans to increase its blade manufacturing capacity in this country with new facilities in Colorado that will supply about half of the blades they're going to use in North America over the next few years. They're also building facilities to produce towers, but a large percent of their components will have to come from overseas for the foreseeable future. That means the cost of wind power will be impacted by the rising cost of oil and the constraints on total shipping capacity worldwide.

The United States, of course, competes with the rest of the world, particularly Europe and Asia, for a finite number of turbine components. According to the Danish renewable energy consulting firm BTM Consult, there appears to be sufficient capacity to meet demand for blades for the next several years, although with just two suppliers in the world for blades for turbines larger than 3 megawatts, the outlook for larger turbines is less clear. And supplies of the large bearings all turbines require, especially for main shaft and pitch movement bearings, is much more limited. According to BTM, it's unlikely that shortage can be resolved near term, and they see this as one of the most severe constraints on the growth of the industry.

The shortage of bearings illustrates another issue confronting the industry: commodity constraints. There is a worldwide shortage of the high-quality alloys used for bearing rings that no increase in manufacturing capacity can solve. Similarly, constraints on basic commodities at the bottom of the manufacturing pyramid impact final products at the top. A lack of high-quality steel alloys, for instance, a key component of myriad manufactured products, affects forged material, which in turn affects bearings, gearboxes and so on.

In the end, whether we actually meet the stated 20 percent goal by 2030 depends on the political and social commitment we are willing to make. While the market today looks extremely promising, and while major manufacturers are taking steps to increase capacity in the United States, it will take more than promises to convince them to continue to focus on the U.S. market. It will take specific -- and expensive -- long-term commitments such as those already being made by governments in Asia and, especially, in Europe. In the meantime, competition for manufactured components and for the commodities that go into them will only continue to increase.

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