Tempered optimism

A bird's-eye-view of wind energy in 1996 concludes that without governments counter balancing the combined weight of the nuclear, coal, gas and oil lobbies, which already tilt the electricity market firmly against renewable energy, all wind can do is cling to the opposite edge. The European Commission objection to premium rates paid by Germany for renewable energy, Latin America's wind potential versus economic and political uncertainty, and Quebec's announcement of a protected market for 250 MW of wind power are discussed.

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True to tradition, December provides the opportunity for this column to take a bird's-eye-view of the past wind energy year. By happy coincidence -- and certainly more by luck than design -- there are three stories in this issue which provide an excellent platform for conducting an annual overview. Together they sketch a neat outline of the state-of-the-art of the wind market anno 1996. Sadly, though, the sketch does not give grounds for the same level of optimism reflected here in December 1995. A year ago we were welcoming the warmer political climate for wind and the increased recognition of its benefits, especially for developing countries. In hindsight, the welcome was perhaps premature.

The first of the three stories reports that the European Commission (EC), in all its wisdom, is officially objecting to the premium rates of pay that Germany pays for renewable energy (page 20). Such rates, argues the EC, constitute unfair competition. How in all the world a few pfennigs paid in recognition of wind's environmental benefits can be construed as "unfair competition" when compared with the enormous subsidies paid to German coal defies all rational logic. The phenomenally rich German utilities should be ashamed of themselves for making such a claim to the EC. Equally concerning is the Competition Commissioner's apparent total ignorance of the details of the EC's own draft Directive on Europe's forthcoming Internal Energy Market. The Directive's Public Service Obligation specifically allows for subsidies to level the playing field for renewables. And as if that were not enough, it should be remembered, too, that along with security of supply, increasing the contribution from renewable energy is a mainstay of EC energy policy. Attacking the country which has done most to follow the EC's own policies appears nothing short of lunacy. For wind energy at the end of 1996, the moral of this sorry tale is not a happy one. Renewable energy policy, it seems, is still a political aside, useful for making grandiose promises to the public, but not worth making a stand for against the all-powerful electricity establishment.

The second story is a feature article which takes a long hard look at Latin America, a region which holds great potential for wind energy. The conclusion to be drawn from the feature, however, is that here is yet another market which largely remains inaccessible. A good wind resource and rising demand for electricity are no match for economic and political uncertainty when it comes to attracting investment for new energy technologies. What's more, the dash to deregulate is not being tempered with European and North American concerns for the environment. Argentina is shaping up to be a prime example of market liberalisation out of control, with fossil fuel electricity prices pushed through the floor as the desire for short term gain overrides a more fundamental sense of self preservation. For the foreseeable future it seems the wind industry's involvement in Latin America will be limited to pockets of demonstration projects. But if the World Bank's development programme had a word in the ear of the International Monetary Fund, these countries could be persuaded to change tack on their energy policies. Renewables will have to shout much louder to be heard, though.

The third story in our selected trio is a deal more uplifting. In Canada, Quebec has got its act together and announced a protected market for 250 MW of wind power (page 23). Granted, the plan is modest and makes many assumptions that might be hard to fulfil -- such as the expectation of thousands of new jobs -- but its announcement shows a political willingness to get wind turbines up and running. This is significant. From the beginning, political will has been the single most important factor for a thriving wind industry. All the major markets of today, Denmark, the Netherlands, India, Germany, and Britain, as well as the emerging markets of tomorrow, such as Spain and now Canada, rely heavily on governments that are willing to protect the long term interests of their citizens.

For this reason the European Commission's attack on Germany's premium rates is abominable. The time might well have come for the rates to be lowered in recognition of wind's increasing technical and market maturity, but for the EC to demand this on behalf of the oil and electricity establishments is a gross travesty of the democratic process. The combined weight of the nuclear, coal, gas and oil lobbies already tilts the electricity market firmly against renewable energy. Without governments in the counter balance, all wind can do is cling to the opposite edge. This is why Quebec's declaration of political will towards wind is significant. And this is why Latin America and other developing regions of the world must become aware of their responsibilities in energy politics. For there is no getting away from the ultimate truth: without far greater use of renewable energy, the world can no longer sustain our ever growing need for never ending electricity supplies.

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