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United States

United States

THE OPPORTUNITIES ARE STILL THERE

Spearheaded by the demise of the Biennial Resource Plan Update in California and its contracts for several hundred megawatt of wind capacity, the US wind power market is wobbling uncertainly. Following the Republican take over in Congress, Texas and New York, the environmental wave on which wind was riding is rapidly subsiding. But the US wind industry must not turn its back on the home market and concentrate purely on selling its products overseas.Companies need a domestic market if US wind energy technology is to have credibility abroad. The lead taken by Westinghouse, ready to develop wind projects at home and worldwide, should help pull the US industry through.

With the recent shock ruling by the Federal Energy Regulatory Commission (FERC), throwing out contracts for over 1000 MW of wind in California, the United States is seeming an ever more tiresome place to do business. Many in the wind industry were already fed up with dragged-out government programmes that lead to demo projects that can't be reproduced and slow things down, projects that look too much like "loss leaders" (their purpose is to sell the next deal), Nimbys, and the power of the entrenched energy technologies.

Most US wind projects seem to be in the throes of a delay, a scale-back, litigation, or mired in an inability to plan long term. The list of new US development issued last month by the American Wind Energy Association looks impressive, but we know that too many of the most immediate projects are not quite unfolding as predicted. And now the entire Biennial Resource Plan Update in California is in jeopardy -- and the wind developers who had invested in the outcome could be hit hard. Some are saying the mood is as bad as five years ago, when the Reagan-Bush years bottomed out and there was only one US manufacturer and no tax credits. For a couple of years, it appeared far better -- we had environment friendly Clinton, Democrats on Capitol Hill, a tax credit of 1.5 cents a kilowatt hour until the end of 1999 and major plans in the Northwest, Minnesota, New England and Texas.

Then a sobering process occurred -- some delays took hold, technical problems became apparent at closely watched projects, Republicans swept the US Congress, Texas and New York, while energy dropped off the White House radar screen. Meantime wind power elsewhere was taking hold. India, Mexico and Chile just look increasingly good.

Utilities keen to diversify

But something has made European firms want to retain a foothold in America and home-grown companies stay in the domestic market. There are still opportunities -- possibly even a few thousand megawatts by the start of the next century. That's a great deal as the US, still by far the world's largest wind power producer, has only about 1700 MW installed, almost all in California.

Northern States Power is to issue a shortlist soon of chosen suppliers for its next 100 MW of wind on Buffalo Ridge, Minnesota. Bids will be awarded in April. By 2002, the state is to have 425 MW or even as much as 800 MW cumulative on line. And in Minnesota they make decisions and proceed, they don't dither like the Californians. In Iowa, developers are saying two or even three large projects should proceed, this year or next. New England will see a few megawatts and possibly a large project in Maine (page 30-31), although not everyone is pinning too much on anywhere east of the Mississippi because of likely political resistance and lower winds. But Wyoming, Texas, Colorado, the Pacific Northwest√Č if one American industry member is right, "It's a slam dunk."

Enough utilities nowadays do want to know, do want to plan and diversify, or have already been watching wind for some time now. Even with the BRPU set-back, which could be a national precedent, there seems to be a critical mass of utilities that will go it alone and buy wind power because it can be built quickly and fits their power needs. Old nuke and coal-fired plants will need to be re-powered as they end their useful life. As US gas reserves dwindle, Canada could jack up the price of natural gas, that imported resource that is almost as much of a drug as cheap oil. Who knows, maybe Clinton or someone equally environmentally-minded will be president in 1996 and maybe the US Congress will be thinking about energy, efficiency and renewables.

The FERC decision could be seen as a useful kick in the teeth for the wind industry. For one thing, nobody should be too surprised. California has always been known as a tough place to do business -- and when you anger the big boys, especially with funny deals, they are likely to come out fighting. The last time it became this ugly the wind industry regrouped. That is what will have to happen -- and this time big boys such as Westinghouse, now re-entering the business, are likely to be throwing their weight around on wind's behalf, too. US companies have to continue doing business in their home country. Without a home market there is no credibility for US technology, no understanding and backing from the public, little chance of financing, no stock market openings, and nothing for multilateral aid agencies like the World Bank to seize upon and spread further. This may be a difficult and challenging market, but you don't walk away from it.Ros Davidson, US Editor1995

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