Wind Energy
we are still in the early stages of development of the wind energy sector, support in terms of public policy initiatives is vital.” “The Partnership for Progress is a good first step towards
ensuring that American workers are at the core of clean energy development in this country. Only when we are relying on US workers to manufacture the building blocks for renewable energy production can we put America firmly back on the road to prosperity,” US Senator Charles Schumer (D-NY) added.
Can the Markets Prevail? Some ‘Western’ analysts still believe a markets-oriented
approach works best and will ultimately prevail. They argue that subsidised inputs will result in a less efficient industry, more focused on volume than cost and quality – the best solutions coming from a competitive environment. The focus on adding new capacity has also run ahead of grid connections, meaning many Chinese turbines may never actually produce electricity.
... the prime motives for promoting clean
technology remain jobs, profits and energy security – not just climate change
Some in the ‘West’ believe the US still has an advantage in
innovation, with the owner of patents, not factories, likely to earn the biggest profits and win the technology race. In a Reuters poll earlier this year of 41 US venture capital
investors, more than three-quarters of respondents said the US would be the best market for cleantech over the next five years, and 88% believed America was the best place to base this business. China ranked second (with 16% of the total). In recession-battered Western nations, and in China, the
prime motives for promoting clean technology remain jobs, profits and energy security – not just climate change. That leaves no guarantee that there will be sufficient investment. If over the next 20 years the world is to boost renewable power,
build greener buildings and roll out more fuel-scrimping cars including hybrid and electric models, it must simply invest more. And whilst many forms of renewable power are expected to be more expensive than their fossil fuel counterparts for some time, how can the ‘free’ markets mobilize more green technology cash? The failure in Copenhagen has thrown the focus on national measures. And the Chinese are coming on strong. But there remain limited opportunities for investors. Oil
majors, for example, dwarf the asset values of green companies, and cleantech funds can’t ‘move the dial’ for the big funds whose participation is necessary to close the funding gap, according to Reuters.
worldPower 2010
Western nations could boost clean investor returns with a
tax on fossil fuels or guaranteed higher prices for renewable power generally. And aside from market levers, governments could adopt standards to make cleantech more attractive – for example requiring homes to install smart meter. “It’s worthwhile learning from the Chinese that these big
transformations do require some exercise of public power,” according to James Cameron, vice-chairman of green investors and advisers Climate Change Capital. It is easy to paint the clean energy trade between the US and
China in terms of winners and losers, “... but the relationship defies simplistic assumptions,” according to Michael Liebreich, of Bloomberg New Energy Finance. “For instance, while China has made significant in-roads into the US PV market, Chinese modules are often manufactured using machines designed by US firms. Similarly, US made wind turbines almost always contain parts sourced from China. The two nations may be in competition, but the big win for both of them would be to drive the cost of a clean power generation below the cost of fossil fuels.” Bloomberg NEF’s recent study Joined at the Hip: The US-China
clean energy relationship is intended to debunk the myths about US-China clean energy relationship.4
It emphasises that
end-product sales should not be the sole focus of any US-China clean energy comparison. Indeed, manufacturing capital equipment sales and installation are proving to be significant value creators for US companies. Moreover, protectionist measures could deny market opportunities and needlessly drive up the cost of clean generation in both countries. The prospects, expectations and nurturing of wind
generation remains a far more complex issue than just being couched in ‘global warming’ or ‘jobs at home’ terminology. Wind generation, with solar coming a close second, continues to provide an immediate option for curbing emission and diversifying generation sources, as well as spending stimulus money on domestic job creation. ■
Guy Isherwood is Editor of WorldPower and Commodities Now magazine.
www.commodities-now.com/worldpower
Footnotes: 1. Vital Signs, Worldwatch Institute ,April 2010. 2. US Wind Power Markets and Strategies: 2010-2025, IHS Emerging Energy Research, May 2010. 3. Great Expectations: US Wind Energy Development, Governors’ Wind Energy Coalition’s 2010 Wind Energy Recommendations is available at
www.GovernorsWindEnergyCoalition.org 4. Joined at the Hip: The US-China clean energy relationship, Bloomberg New Energy Finance, May 2010.
www.newenergyfinance.com
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