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WIND IN A GLOBAL PERSPECTIVE

The article is a survey of the development of wind energy from a tax shelter to a serious, world-wide industry of mass-produced, modular, and radically cleaner energy services. By the end of 1994, over 25,000 wind turbines were providing a peak generating capacity of roughly 3500 MW on a global basis. The increasing demand for energy supplies from developing countries will further a restructuring of the world's electric power industries within the foreseeable future.

The mid-nineties would seem to be a poor time to introduce a new energy technology. Oil prices are languishing at half the levels reached a decade earlier, and public concern about the environment has plummeted from its peak earlier this decade. Yet wind power installations in 1994 appear to have reached a record high -- well above the earlier peak reached in 1985 -- and the next few years show every sign of being even more bullish.

Unlike the wind industry of the eighties, which was almost entirely concentrated in California and Denmark, today's wind power boom is a truly global phenomenon, extending from the Great Plains of Minnesota to the grasslands of Argentina, and from the northern plains of Germany to the southern plains of India. By the end of 1994, over 25,000 wind turbines were in operation worldwide, providing a peak generating capacity of roughly 3500 megawatts. During the next few years, that capacity is likely to rise by as much as 20% annually.

During the 13 years that I have followed and written about the wind power industry, I have seen its annual electricity output grow by a factor of 200. In that time, it has gone from being a glitzy tax shelter in California for wealthy dentists and Hollywood moguls to a serious global industry, with 1994 revenues of more than $1 billion. Even more dramatic changes are ahead, however, for wind energy is starting to figure prominently in many national energy plans and could become a major source of income and employment in some countries.

As wind energy comes of age in the mid-nineties, it will enter a world energy economy that is being transformed more radically than at any time in the past century. In the coming decade the world will demand energy systems that are more efficient, and more economical than ever before, and the technologies are now available to meet those stringent needs. Wind power is well-positioned to contribute to this emerging energy system -- but only if wind energy technologies continue to improve and industry leaders are responsive to the demands of a rapidly changing world.

Back in the 1970s, computer pioneer Alan Kay said that "The best way to predict the future is to invent it." Although energy industries have defied that slogan for decades -- wasting millions of dollars on faulty forecasts while under-investing in innovation -- the pace of change is now clearly accelerating. A new generation of efficient, mass-produced, modular, decentralised energy technologies is now entering world markets -- and holding out the promise of an era of radically cleaner energy services. They are a stark contrast to the huge oil refineries and steam-cycle power plants that have dominated the energy economy in decades past.

Consumer driven

The coming energy revolution is likely to be driven by a combination of new consumer demands and growing environmental concerns, both of which will be increasingly dominated by developing countries. Energy use in poor nations is projected to double in the next 15 years, and with that growth comes a staggering burden of local and regional air pollution. In China, for example, lung disease has recently become the leading cause of death. In addition, the accumulating burden of carbon dioxide in the atmosphere is now threatening the stability of the world climate. To avoid the risk of potentially catastrophic climate shifts in the middle of the next century, the world will need to achieve a rate of carbon emissions per unit of gross national product that is roughly one tenth the current level. This essentially means an end to the fossil-fuel-based energy economy as we know it.

Although this goal is ambitious and has been described by the World Energy Council as virtually impossible, ongoing innovations could make it relatively easy and highly economical. In the years ahead, everything from roof top solar cells to basement mounted fuel cells and flywheels will become commonplace, linked together by a new generation of electronic controls that allow individuals to shop for electricity using their television remote controls. Equally radical, electric are hybrid-electric automobiles are also nearing the commercial marketplace. Made of composite materials and lacking normal piston engines, these new cars will be highly efficient and largely non-polluting.

Although many of these new energy technologies are currently far too expensive to find a large market, this could change in a hurry. The economies of mass manufacturing will quickly bring down the cost of the new technologies and ongoing innovations will be rapidly incorporated in new products in much the way that today's consumer electronics industry operates.

One of the biggest changes ahead is the restructuring of the world's electric power industries, many of which have grown bloated and monopolistic over the past few decades. These outdated structures are likely to be replaced by smaller, more nimble public and private concerns that specialise in electricity generation, transmission, or distribution, each of which is a separate business that deals with other companies via open, arms-length transactions.

Opportunity knocks

For the wind power industry, the rapidly changing face of the world's energy systems presents major hurdles but even larger opportunities. The low-cost and environmental cleanliness of some of the other new technologies present obvious challenges. A new gas-fired, combined-cycle power plant in the United States, for example, generates power for just $0.04 per kilowatt-hour, while emitting no sulphur dioxide and 60% less carbon dioxide than a coal-fired plant. In other words, in the decades ahead, it will not be sufficient for wind power to be competitive with today's coal plants. Wind turbines will have to become continually less expensive to keep up with the advancing competition -- and eventually will need to exist without subsidies.

Although these figures are daunting, as is the growing complexity of the utility industry, wind power will in many ways be favoured by the emergence of a more competitive, differentiated and environmentally-sensitive power market. As older coal and nuclear power plants are forced to compete, and the uneconomic ones written off and shut down, wind power will find its way onto the world's power grids. On the other hand, even more care will have to be taken to reduce the environmental effects of wind power and allow it to fit gracefully into rural landscapes and economies for it to thrive.

In many regions, strong winds are available in the right locations and at times of the year when it is most needed. In the future, that value will be rewarded with a higher electricity price. And in developing countries, where fossil fuels are often scarce and demand growth nearly unlimited, the opportunities will be particularly large. The recently burgeoning wind markets of India, China, and Mexico are indicative of the fact that developing countries are bound to dominate wind power markets in the next few decades.

Revolutions are by nature chaotic and unpredictable, and the coming energy revolution is no exception. It will offer opportunities for the wind business to grow and even prosper, but only if those who lead it are innovative, nimble, and responsive to the demands of the marketplace and the needs of ordinary citizens.

Christopher Flavin is Vice-President for Research at the Worldwatch Institute in Washington, DC. He is the co-author, with Nicholas Lenssen, of Power Surge: Guide to the Coming Energy Revolutions (W.W. Norton, 1994) He serves on the boards of the American Wind Energy Association and the Business Council for a Sustainable Energy Future.

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