Renewable Electricity Standard Needed to Promote Wind Energy Manufacturing

AWEA calls for policy action, warns of manufacturing slowdown

While the U.S. wind energy industry installed 1,210 megawatts (MW) of new power generating capacity in the second quarter, American Wind Energy Association (AWEA) warned of signs of a manufacturing slowdown and called on Congress to pass legislation for a renewable electricity standard and improvements in the transmission system.

Through the first half of 2009, AWEA, the trade association representing 2,500 companies in the wind industry, reported that just over 4,000 MW of generating capacity had been added, more than the 2,900 MW added in the first six months of 2008. AWEA said another 5,500 MW was under construction, though not all was expected to be completed this year. Officials said most of the projects had been started last year and their financing secured before the market collapse last fall. They said the federal stimulus legislation was starting to have an effect on new projects being approved and funded.

While the number of completed wind farm installations was solid, AWEA said, it is seeing a reduced number of orders and lower level of activity in the manufacturing of wind turbines and their components. Officials said the industry had capacity for much larger production and growth, and noted that the global wind power industry is expanding aggressively.

"The numbers are in, and while they show the industry has been swimming upstream, adding some 4,000 MW over the past six months, the fact is that we could be delivering so much more," said AWEA CEO Denise Bode. "Our challenge now is to seize the historic opportunity before us to unleash this entrepreneurial force and build up an entire new industry here in the U.S. that will create jobs, avoid carbon, and strengthen our energy security. To achieve that, Congress and the Administration must pass a national Renewable Electricity Standard (RES) with strong early targets."

On July 16, GE Vice Chair and Energy Infrastructure President and CEO John Krenicki said RES bills passed by the House and the Senate Energy and Natural Resources Committee were too weak to drive growth in the industry. "The current RES proposals for 2012 -- anywhere from 3% to 6% of total U.S. electricity generation -- are essentially equal to or below the status quo." Krenicki said it would take "a 12% renewable electricity standard by 2012, with reasonable percentages to be satisfied by energy efficiency measures, to enable U.S. wind deployments to continue on the current growth trajectory."

"Manufacturing investment is the canary in the mine, and shows that the future of wind power in this country is very bright but still far from certain," said AWEA CEO Denise Bode in releasing the association's second quarter report. "The reality is that if the nation doesn't have a firm, long-term renewable energy policy in place, large global companies and small businesses alike will hold back on their manufacturing investment decisions or invest overseas, in countries like China that are soaring ahead. The instances where manufacturing investment is moving forward in the U.S. are in states like Kansas that have demonstrated a commitment to renewable energy and passed a renewable electricity standard. This type of commitment now needs to be made at the national level."

Total U.S. wind power generating capacity is 29,440 MW, according to AWEA. The U.S. wind power generating fleet now offsets an average of 54 million tons of carbon annually, reducing carbon emissions from the electricity sector by 2% or the equivalent of taking 9 million cars off the road.

Texas leads the nation in wind power generating capacity with 8,361 MW, and added the most capacity of any state in the second quarter with 454 MW. The state posting the fastest growth in the 2nd quarter was Missouri, where wind power installations expanded by 90%.

Three wind turbine and turbine component manufacturing facilities were opened, four facilities were expanding, and eight facilities were announced during the past quarter. This brings the total of opened, expanding and announced facilities up to 20 since the beginning of the year. However, many existing supply chain companies have stopped hiring or have furloughed employees due to the slowdown in contracts for wind turbines, AWEA reported, and the industry is showing a net loss of jobs for the first half of 2009.

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