United States

United States

A new found unity

A trans-Atlantic merger is taking place. A merger of ideas. The chosen policies for supporting wind energy are becoming the same in both Europe and the United States. First, the wind lobbies on each continent have come to the same conclusion on what seems to be the best policy for long term market security--a minimum proportion of wind power in the supply mix. Second, the US federal administration and the European Union's executive have just launched remarkably similar campaigns to ease wind into the power market proper. What remains to be seen is whether Europe or America will get there first.

An interesting and probably significant trans-Atlantic merger is taking place. A merger of ideas. Slowly but surely-and from very different roots-the chosen policies for supporting wind energy are becoming the same in both Europe and the United States. First, the wind lobbies on each continent have come to the same conclusion on what seems to be the best policy for long term market security. Second, the US federal administration and the European Union's executive have just launched remarkably similar government-backed campaigns to ease wind into the power market proper. The significance of the merger is twofold. The fact that both the American and the European wind associations, after great thought, are backing the same policy for a minimum proportion of wind power in the supply mix is a strong indication that in competitive electricity markets it is the best option. And the fact that widely differing governments have embarked on campaigns within weeks of one another strongly suggests that wind power has reached a stage of maturity well beyond the "promising but uncertain" mantra of earlier in the decade.

This coming together of ideas in wind politics is interesting because it emerges from entirely different market histories. In Europe, creaking and heavily controlled utility empires have ruled for decades, with the wind industry existing thanks to a plethora of subsidy programs. The notion of the entire European wind lobby throwing its weight behind American-style competitive market policies would have been almost unthinkable three years ago. Likewise, who would have believed that Bill Clinton would launch a program which in flavour, aims, beliefs and rhetoric is so similar to one announced in Europe not four weeks earlier? "Windpowering America" is calling for wind to make up 5% of the nation's electricity consumption by 2020, an aim which will take between 80,000 MW and 100,000 MW of installed capacity, depending on whose calculations you choose to believe. Europe's "Campaign for Take-Off" is calling for 10,000 MW of the EU's electricity to come from wind as part of its 12% target for renewables by 2010. The European Wind Energy Association argues that this should more rightly be 40,000 MW, and 100,000 MW by 2020. The ideology behind the goals is similar. Both governments are aiming for wind power development to be fully integrated into national-and local-economies.

Differences in language and semantics have obscured the fact that the American and European wind lobbies were pursuing the same path. A "Renewable Portfolio Standard" (RPS) does not sound much like a "wind power quota" or a "percentage obligation," but in essence they are the same. In Europe there is still much dissent about giving up what are perceived to be "safe" subsidised prices for "unsafe" market prices, even when the size of that market is guaranteed by regulation. But as the executive of Denmark's wind turbine owners association tells its members this month, the move is not from a "safe" to an "unsafe" market, but from a market controlled by political whim to one where political uncertainty is reduced and the beneficial effects of market forces come into play. In the long term a healthy commercial market is better for the economy-and thus its citizens-than any amount of command and control, and this rule applies just as well to wind economics as to any other kind.

The importance of a clear message

At last month's American wind conference, there was clear consternation about the damaging effects of the European division and whether it could be repeated in the US when states start adopting different support policies. Some advocated a free for all on the policy front, since nobody can definitively say which will work in the end. When it comes to regulatory details, this is sensible. Different regions have different traditions and need different rules. There are real and serious dangers, however, in pursuing a confusing plethora of market mechanisms at the overall policy making level. In Europe, where a political majority supports renewables, cries of dissent from the German wind lobby-in fear of losing its price subsidy system-derailed a framework law for a guaranteed market. In the United States, where the battle for a political majority is being fought against a truly mighty enemy-the oil and coal lobby-any such dissent could be fatal. Europe's directive for harmonised national laws is back on track. America might not be so lucky.

There are also plenty of positive reasons why a unified policy is a good idea. Project financing becomes cheaper if the same rules apply to the next project as well as to the first; a strong government lead on the wind front, such as a directive or national RPS, gives wind an official seal of approval, foiling the antics of anti-wind campaigners and making it less likely that an individual country or state will roll back its own legislation-thus a real volume business is started; and in the long term a competitive support system will bring down the price of wind power to the point where no more support is needed.

What remains to be seen is whether Europe or America will get there first. To judge by the far higher political profile given to the launch of Repowering America than to the Campaign for Take-Off, and the US wind industry's greater understanding of what needs to be done to make competitive markets work-as clearly revealed at last month's AWEA conference-the United States could be the winner yet. First, however, wind has to circumnavigate the fossil fuel lobby.

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