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TAMING A SLIPPERY ANIMAL

A series of gloomy changes is apparently undermining the wind industry, but the market is certainly not heading for depression. Industry order books are full, with many companies expanding; new markets continue to open, with India doing a fair imitation of California during the tax credit boom years; wind is no longer in need of capital subsidies, as the just announced contracts in Ireland reveal; and the technology is still improving, with an array of big turbine prototypes being developed. As a thermometer for measuring wind energy's health, the fortunes of this magazine are no bad indication, either. The rate of new subscribers has never been more impressive -- and the amount of good news to cram into these pages has never been more overwhelming. Public willingness to invest in green power is strong, too, despite the activities of protest groups, with green financing schemes running in several countries.

The cyclical swings of the wind business continue to be alarmingly short and sharp. While economic cycles follow a five to seven year pattern of ups and downs, eight months is all it seems to take in wind energy. It was only last August that this column dreamily mused over the good times ahead: new energy strategies were being laid in the US, with the promise of dozens of wind contracts; Germany was putting up turbines faster than manufacturers could make them; Britain was keeping the industry on excited tenterhooks, pending the third round of Non Fossil Fuel Obligation (NFFO) contracts; and public protest, for once, had been silenced by a wave of public support, the ripples of which were reaching far and wide.

Eight months later those summer musings are looking decidedly silly. The US market seems to be plunging into the doldrums -- those promising strategies have either never appeared or been fiercely attacked, Iowa being this month's example (page 27), along with the demise of California's renewables' auction (page 46). In Germany, the utility establishment is busy undermining the Electricity Feed Law (page 30), the legislation which guarantees a market for wind power, threatening to destroy financial confidence in what has been the world's most active wind market -- more than one bank is reconsidering lending money to prospective developers. Meantime in Britain, the pre-Christmas joy brought about by news of nearly 500 MW of selected wind projects, has been dampened by concerns over the viability of the low contract prices (Windpower Monthly, February 1995).

So is the wind market heading for depression? Definitely not. While it is human nature to laugh one moment and cry the next, short term cycles are notorious for masking the underlying health of a market. To judge by its vital signs, wind energy has never been fitter. A series of upward curves dominate its medical report sheet: industry order books are full, with many companies expanding; new markets continue to open, with India's doing a fair imitation of California during the tax credit boom years; wind is no longer in need of capital subsidies, as the just announced contracts in Ireland reveal (page 20); and the technology is still improving, with an array of big turbine prototypes being developed (page 30). As a thermometer for measuring wind energy's health, the fortunes of this magazine are no bad indication, either. The rate of new subscribers has never been more impressive -- and the amount of good news to cram into these pages has never been more overwhelming. Public willingness to invest in green power is strong, too, with schemes running in several countries despite the activities of protest groups.

It would seem that last summer's musings were not so silly after all, though much of the current good health has been generated from an unexpected quarter. India -- pregnant with promise for so many years -- has exceeded all expectations. In no time at all, the 300 MW barrier has been cleared; 500 MW before the end of the year is well within the bounds of reality.

There are lessons to be learned from the current cyclical dip, though. If there is a thread running through the ups and downs of wind energy, then it is attached to that slippery animal, "political will." It is political will which has brought the Indian market to life -- India has a government determined to see renewables making up a good proportion of its new generating capacity. It is a political desire to follow India's lead which is making China consider a wind market framework (page 28). It is political will which created the protected, long term markets in the UK and Ireland. And it is political will which has made one German state insist on fair pay for renewables (page 24). On the other side of the coin, it is lack of political will which has caused the downward slide in the US. Utilities there feel there is no longer the political backing for clean power to take priority over production of cheap power. It could also be lack of political will which lets utilities in Germany get away with undermining the foundations of what has been the most successful programme in the world for stimulating a healthy wind market.

Wind energy's cyclical swings tend to be short and sharp because the market is still heavily influenced by political whim. The depressive effect of surprise injections of uncertainty does wind and its investors no good at all. If enough political will can be created to get long term market frameworks in place around the world -- unassailable by the vested interests of the power plant establishment -- then wind, too, might be able to go five or seven years between unnecessary dents in its otherwise healthy growth curve.

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