Ken Silverstein | Dec 02, 2010

The United States has a ton of wind potential and especially offshore. But its inability to develop a reliable energy policy is not just hurting the wind sector, it's also working to benefit the coal industry. That's the view from one manufacturer, which also says that the recession has taken its toll.

Tough times have dented economic production and thus affected energy consumption. But coal has proved itself to be among the most durable fuel. If wind is prioritized, the industry says that it could surpass the expectations. That would entail the new Congress extending the favorable tax breaks that are now given to developers as well as enacting a renewable portfolio standard that mandates more green energy.

"This year, coal is leading," says Randy Williams, chief financial officer for Chattanooga-based SIAG Aerisyn, which builds wind towers. "The install rate for wind this year is a disaster."

In a talk with reporters who visited Aerisyn's warehouse, he went to say that this country will lag behind other nations. That's because it has been unable to commit to a sustainable green energy policy that includes permanent tax breaks and standards that would require utilities hold certain portions of their generation mix in green fuels.

The U.S. wind industry added just 395 megawatts of wind-powered electric generating capacity in the third quarter of 2010, making it the lowest quarter since 2007, says the American Wind Energy Association. Year-to-date installations stood at 1,634 MW, down 72 percent versus 2009, and the lowest level since 2006. Altogether, about 36,700 MW of wind power currently exist in this country.

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. China and Europe, for example, each have something resembling renewable portfolio standards. That has subsequently resulted in more than $35 billion of expected investment in 2010 -- nearly four times the investment the U.S. will see this year, adds the wind association.

Interestingly, the U.S. Energy Information Administration is reporting that in 2010 coal accounted for 39 percent of all new installations while wind made up 14 percent. In 2009 that relationship was the inverse.

About 15 coal plants have recently been announced. Of those, 12 are progressing, says the National Energy Technology Lab. In 2009, 8 new ones powered up with most using of conventional technologies as opposed to those that are supercritical and those that substantially reduce emissions. That's because they are newer and more expensive, all in an uncertain regulatory climate as well tenuous economic times.

"We're increasing our dependence on fossil fuels, impacting our national security, instead of diversifying our portfolio to include more renewables," says Denise Bode, chief executive of the American Wind Energy Association.

Congressional Concerns

To be sure, those running power plant operations have voiced concern over the intermittency of wind power while applauding the reliability of coal generation. Critics will point out that fossil-fired fuels are used to keep the lights on when the wind stops blowing. Wind is therefore more costly than alternative sources, especially those placed offshore where underwater transmission is necessary. 

Expanding wind's sphere of influence would also mean growing the nation's transmission infrastructure. Wind, which is prevalent in rural areas, must be moved to urban regions where it is needed. Offshore transportation, meantime, is even trickier.

With that, the U.S. Department of Energy has set a goal of expanding wind's role from about 1 percent of electric generation today to 20 percent in a decade's time. Getting there will require lots of capital and an active federal role.

According to the U.S. Department of the Interior, harnessing the waters off the Atlantic coast could meet about 25 percent of the nation's electricity demand. The most accessible and economic areas, though, are those in the shallow end, which could still supply states along the East Coast with about 20 percent of their power. States along the Pacific Coast, furthermore, are rich with wind but facilities would have to be built in deep waters.

Altogether, the Interior Department says that offshore wind power could generate 1 million megawatts. While an impractical figure right now, that number would dwarf the amount of currently available coal-fired electricity.

Those in the wind business say that they can meet the challenges and that the wind turbines to enable such progress are constantly improving. "The technology evolves every day," says Andreas Stahr, sales director at SIAG Aerisyn. "The turbines can now catch the wind when it can be hardly felt. If policies in the U.S. are adjusted and renewable portfolio standards are enacted, you will see huge investments being made."

In the south, Duke Energy, Santee Cooper and Southern Co. are investigating offshore wind energy while the region's major schools have active programs. Georgia Tech, Clemson University and the University of North Carolina are partnering with not just the utilities there but also the existing manufacturers and engineering firms, says the Southern Alliance for Clean Energy.

As the recession lifts, wind energy will gather some steam. But the rate of acceleration will fall short of what the industry hopes. The new Congress is unlikely to be active in the sector and more apt to just preserve the current rules and regulations.

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