Efforts to develop a new and sustainable business model for the US wind-energy market have begun, with initial debate between a hundred of the country's sector leaders having taken place in late February at a forum in Arizona. Further talks are scheduled, with the ultimate goal the creation of a new wind-energy strategy ready to implement by the end of 2013, if not earlier.
The need for a more financially robust and stable business model for the US wind-energy sector has become pressing, as the sector's long-standing reliance on the federal government's soon-to-expire production tax credit (PTC) has thrown the industry, once again, into a state of crisis. Increasingly, US wind-energy leaders are expressing frustration with the volatility that results from dependence on the PTC and the need to develop more secure and long-term sources of financial backing.
"Backstopping the whole conversation is the fact that we have a real economic opportunity here," said Dan Adler, president of the California Clean Energy Fund. "We have to figure out how everybody in the game can make money out of it, understand the technical realities of it, and work together to integrate it into the stable energy framework."
Adler argues that hundreds of millions of dollars of dormant cash, in the form of retained earnings, are available from large private-sector companies. "New major sources of corporate capital are announcing their intent to invest," he said. "Whether or not they're doing deals yet is an open question. But corporate America is waking up to this opportunity."
Gathering the various communities that together make up the USA's wind-energy industry is unprecedented and overdue, according to Bryan Hannegan, vice-president of the Electric Power Research Institute (EPRI), which organised the forum in February, in conjunction with the American Council on Renewable Energy. "It's the first of a longer set of dialogues and reflects a growing maturity on the part of the renewable-energy industry".
Top of the agenda for US wind-industry leaders is a need for more stable markets - whether through continuation of the federal PTC or other mechanisms. "But a PTC without a market that wants wind power is not going to see much activity," warned Adler. With this in mind, one of the priorities of further discussions will be how to strengthen local demand for wind-generated electricity.
Development of new wind farms in the US is typically driven by renewable-energy portfolios (RPSs), which require energy utilities to acquire a given percentage of their electricity from clean sources. "Only in certain cases and only recently is wind competitive with natural gas. It's the purchase mandates in the form of RPSs that really motivate these markets."
Another issue - for energy utilities and wind developers alike - is to ensure that skilled workers are available in sufficient numbers, given a wider climate of early retirement and attrition. "There's a need for hiring a new generation with technical expertise at the utility level, along with re-skilling a lot of the dormant construction industry's workforce," said Adler.
February's forum was not intended to find quick consensus. Instead, it isolated the views of four constituencies through panel discussions. These groups were: the wind development community, investors, regulators, and energy utilities. This summer's follow-up event will bring the four constituencies together in a bid to find common ground and new solutions.