AWEA unveils a new strategy for growth beyond 2020, as some
fear the effects of Trump’s “fossil fuel fetish.”
Wind works. That's the overarching message -- and the
Twitter hashtag -- at the American Wind Energy Association's annual Windpower
conference and exhibition this past week in Anaheim, California.
The industry has followed through on its promises, said AWEA
CEO Tom Kiernan in his opening remarks on Tuesday. Wind companies said they
could reliably add more wind to the grid, and now five U.S. states are getting more
than 20 percent of their electricity from wind energy year-round. At times last
year, ERCOT and the Southwest Power Pool delivered more than 50 percent of
their electricity from wind.
With a stable tax policy, the industry boosted employment
from 88,000 jobs at the start of 2016, to 100,000 jobs at the end of the year
-- growing nine times faster than the overall economy. Within that period, the
number of manufacturing jobs grew from 21,000 to 25,000 at 500 factories and
assembly plants around the country. And the industry could add another 8,000
manufacturing jobs during President Trump's term.
Wind generating capacity surpassed
hydropower capacity for the first time at the end of 2016. At the same
time, the industry launched a promising new offshore
wind business in the U.S.
This growth has put global wind turbine sales on par with
the annual revenue of the NFL, and the wind industry's success is benefiting
underserved communities across the U.S., said Kiernan. Wind companies have
invested $14 billion in America each year for the past two years -- with most
of that in economically challenged rural areas. Over the next four years, AWEA
expects the industry to catalyze another $85 billion in economic activity.
"We are big. We are reliable. We are delivering on our
promises," said Kiernan. "And we're not just here to stay, we are
here to grow, and grow, and grow."
But that growth is not guaranteed. While there's plenty to
celebrate, the U.S. wind industry faces a host challenges -- including an
unpredictable president and a looming market downturn.
"We're not planning to ask for an extension"
The federal Production Tax
Credit (PTC) has played an instrumental role in growing the U.S. wind
sector. But the industry has accepted that it’s time for the policy to phase
out.
Tristan Grimbert, president and CEO of EDF Renewable Energy
and AWEA board chairman, said the industry will not ask Congress for another
extension of the PTC beyond the current sunset date in 2020.
"No, we're not planning to ask for an extension,” he
said. “The bigger issue for me is having fair market rules.” The plan is to
“protect legacy investments and plan for the future -- for the grid that we
want to have, which will be much more agile, much more decarbonized, much more
digital, and much more distributed.”
There was an acknowledgement at the conference this week
that the U.S. wind industry could be in trouble if it isn’t proactive. Research
firm Global Data projects the global wind turbine market will grow
steadily over the next few years, reaching $81.14 billion in 2019, before
contracting to $71.21 billion at the end of the decade when the PTC expires.
MAKE Consulting (now
a Wood Mackenzie business), projects the U.S. wind market will see tremendous
growth in new capacity additions in the near term, but that growth starts to
taper off after the 2020 mark. MAKE estimates 73 percent of the U.S. wind
industry’s 10-year growth will be concentrated into the next five years.
The firm noted that inaction to fill policy voids dampens
the outlook and adds pressure on the industry to accelerate reductions in the
levelized cost of energy of wind power.
In the spirit of taking action, AWEA's slogan for the 2017
Windpower conference is "a brand-new attitude." The brand-new
attitude is "one of confidence," said Kiernan. "Our brand-new
attitude is also one of knowing that wind power of today is not like wind power
of 20 years ago, or even 10 years ago."
"The future of the grid is about competitive,
affordable, flexible, clean power -- and that plays to our strengths," he
said. "These and other facts justify the belief we are number one, and we
are adding to the economic and national security strengths of America."
Kiernan acknowledged predictions of a market downturn in the
2020 time frame, and laid out a multi-step plan to “prove our critics wrong.”
The plan includes leveraging big data to boost
productivity, cut costs and reduce downtime. It includes protecting the PTC in
the near term and advocating for strong state-level policies. It includes
building new transmission projects and working with the Department of Interior
on regulatory reform in order to speed up the wind permitting process -- an
issue that plagued the industry during President Obama’s term.
So far, though, navigating the new Trump administration
hasn’t exactly been a breeze.
“Trump’s fossil fuel fetish”
Asked for one word to describe their views on the Trump
administration, a panel of wind industry leaders offered up the terms
"open," "interesting" and "hopeful." But there
was also a sense of doubt and uncertainty at the conference that revealed
itself more during coffee breaks and happy hours.
California State Senate President pro Tempore Kevin de
León didn't hesitate to express his views, however. He said outright that clean
energy is facing a "hostile" Congress and administration, and that
California is doing everything it can to fight back.
"Trump's fossil fuel fetish is not just environmentally
out of touch -- economically, it doesn't make any sense," said de León.
AWEA and other pro-renewable energy groups are taking more
of a “wait and see” approach. However, these groups have
expressed concern that the Department of Energy's 60-day grid
reliability study will be biased against renewables, and have sought ways to
weigh in on the research.
"I agree with the question that Secretary Perry has
asked," said Gregory Wolf, CEO of Leeward Renewable Energy. "But I
would argue that he's sort of framed it maybe a little bit one-sided, and so I
think that's a fair criticism as we see it play out."
Xcel Energy CEO Ben Fowke underscored his utility's
commitment to investing in wind power on Wednesday. He added: "We have
successfully integrated wind energy onto our system over the years without
sacrificing reliability, and we're making history in the process.”
Wind actually needs an energy system study
For Grimbert, it makes sense for the DOE to review how
energy markets operate. The wind industry actually needs a review of the energy
system if it’s going to be successful in the years ahead.
“The agility of the grid of the future is a tremendous
opportunity for wind,” Grimbert said. “The grid can manage wind; there is no
question about that anymore. The real challenge for our industry is actually to
adapt to a new power condition.”
That means competing with low natural-gas prices, the risk
of curtailment and negative pricing. It means using artificial intelligence to
improve project output. It means coupling wind with other technologies, like
solar, energy storage and fast-ramping natural gas. It’s also essential to
building new transmission lines in order for wind to provide reliable power in
a low-energy-price environment. And new market structures are equally as
important.
“We need a more sophisticated and fair market rule for the
ISO to be able to better control and manage the new generation assets, while
still preserving the legacy investments,” Grimbert said. Markets also need to
financially recognize the ancillary services wind can offer, as well as the
capacity and low-carbon energy wind provides.
“These value streams need to be recognized and compensated
for,” he said. “I know it sounds like a long-range vision of what the market
structure needs to be, but this is my vision…of what I want AWEA to pave the
road for.”
This is the strategy underpinning the “wind works” theme
being touted at this week’s conference.
While companies are busy bidding on,
building and financing projects before the PTC window closes, the industry also
needs to find ways to capitalize on all of the benefits wind provides going
forward.
“Now is the time to embrace and channel all forms of support
that can help us forge the policies and regulation that are needed for new
revenue streams to continue to help wind to thrive,” Grimbert said.
“A
brand-new attitude is that wind works for America, for all Americans."
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