With the benefit of hindsight, our warning back in April 2007, in this magazine's Windicator commentary, that what goes up in an economic cycle will eventually come down again was a little early, but prescient nonetheless. Making further predictions, given the current economic climate, is bordering on the foolhardy, but we stand by our belief that at a time when investment opportunities are scarce, wind is a sector that ticks the right boxes. Wind manufacturer expansion plans continue, as does research and development spending. Finance deals are getting done, also in the US. The sector is showing healthy signs of being one of the engines of global economic recovery, provided confidence in the market is maintained.
Politicians seem to have got that message on both sides of the Atlantic Ocean and in Asia. China's economic stimulus package immediately boosted wind sector confidence by freeing up cash flows for project financing and pledging money to a huge transmission network expansion (Windpower Monthly, December 2008). In Europe, the passing of a truly historic piece of renewables legislation last month -- on time and with its 20% by 2020 target intact -- is a feat many would not have believed possible a year ago. The share of renewables in the electricity sector has to more than double from the current 16% for the target to be met, with wind power contributing by far the lion's share of the new generation needed.
Europe's 20% green energy law has set the bar for Barack Obama. His selection of an energy team steeped in environmental awareness suggest he intends to make good on his promise to realign American policy for a renewables future. Time will tell if the team has the necessary understanding of energy market structures and power system issues not to be thrown off course by scare stories of economic disaster that will emanate from big oil and its brethren. Obama and his team must also avoid being hijacked by the nuclear lobby. Nuclear's irresponsible claims about its economics continue apace while it subtly sows seeds of doubt about renewables, wind in particular. Not believing anything the nuclear lobby says without full investigation first could usefully become Obama's rule number one in dealing with that industry.
Rule number two is to understand that anything nuclear can do for a modern power system wind can do too, only better and cheaper. A power system with high penetrations of wind power greatly reduces use of fossil fuels; it provides secure supplies of electricity, cuts costs for the consumer long term and creates thousands of new jobs. In Europe, wind has already proved it can do all this, provided that power systems are re-modelled to be flexible and transmissions wires are in place to take electricity from windy areas to centres of population. That is where future investment is needed.
Beware the myths
What Obama must not be sidetracked by is wild talk of the need for "storage" of electricity before wind power can come into its own, such as investment in turning electric vehicles into vast battery banks (page 65). At this stage, all that does is increase electricity consumption, giving the established energy sector breathing space to carry on business as usual. Instead, the priority must be efficient, not inefficient, use of wind power. That requires investment in flexible balancing of supply and demand and in strong networks that distribute wind power from the periphery. The aim is for every kilowatt hour of wind generation to actually displace fossil fuel, thereby bringing significant near-term reductions in C02 emissions.
Wind can do all that without inflicting economic pain. Despite falling oil prices and rising wind plant costs, wind power remains economic, as our annual analysis of generation costs reveals (page 51). Lower interest rates are part of the reason, along with better recognition of wind's intrinsic value as an energy source with fixed costs. That is good news for Obama's team. If it can get the message across that green energy is not synonymous with expensive energy -- and that the existing power system provides more than enough back-up for wind at affordable cost -- clearing the way for building-out America's transmission network for wind as well as other generation should not be impossible.
Gone are the days when wind power belonged to a pool of "promising" renewable energy technologies struggling to become affordable. As world wind capacity moves towards 120 GW, it is already producing more than enough electricity to meet the needs of the equivalent of the whole of Australia. Proof enough, surely, that wind is the future.