Change is blowing for wind power industry

‘Not your father's windmill’
Technology is also speeding the expansion of wind energy, which – after fire – is one of the oldest energy sources known to man. First introduced for irrigation and milling in Persia as early as the 7th century, windmills appeared in France and England in the 12th century and spread throughout Europe. But today’s windmills bear little resemblance to the quaint wooden structures that dot the landscape in picture postcards from Holland.

For starters, windmills have gotten a whole lot bigger. Using lighter, stronger materials, manufacturers are producing wind turbines that can carry blades some 34 meters long. The next generation is headed for 50 meters – making the total span about the length of a football field. Bigger blades mean more power per turbine, boosting output to something like 1.5 megawatts.

“This isn’t your father’s windmill,” said Rice. “The materials in the blades, the way the loads are handled, the gearing, the generators that exist now 60, 70 feet above the ground in the nacelle of the unit – it’s pretty sophisticated technology.”

Further efficiencies are coming from larger installations. Setting up 200 windmills at a time reduces the cost per unit from setting up just 5 units.

In the U.S., more than 90 percent of installed wind generation capacity is in just 12 states. But that concentration may be changing. Some 2,500 megawatts of new power is expected to be installed this year, expanding the total capacity by a third. The expansion is being helped in 18 states by what are called Renewable Portfolio Standards,  which require utilities to generate a minimum percentage of their power from non-polluting, renewable sources by a target date. A similar provision on the federal level, calling for 10 percent of power generated from renewable sources by 2020, was approved by the Senate but dropped in the final version of the recently enacted energy bill. (The White House also opposed the idea, saying it would raise consumer costs and was better left to the states.)

Wind power is turning out to be a popular way to satisfy those renewable fuel requirements because it is already cost-competitive in many regions. But there’s no question that government subsidies still give wind power a substantial boost. In the U.S., the wind power industry enjoys the tailwind of a special tax depreciation schedule for wind turbines, and a 1.8 cent per kilowatt production tax credit for equipment used to generate wind power.

In Germany, by far the biggest generator of wind power with about a third of the world’s total wind power capacity, the Renewable Energy Sources Act, passed in 2000, aims to increase the share of power covered by renewables to 12.5 percent by 2010, and to 20 percent by 2020.

Some believe government incentives are a mixed blessing. The latest production tax credit for wind power in the U.S., for example, expired in Dec. 2003 and wasn’t renewed until Sept. 2004. The result, said Rice was “a tremendous amount of dislocation in the supply chain because you go from feast to famine.”

“You had no action in the U.S. for 8 months,” he said. “What you had is suppliers -- the manufacturers plus our supply base -- building up all this inventory and not really sure when it was going to flow through. Then all of a sudden the floodgates open and for the next 15 months we’re working overtime.”

Congress renewed the tax credit through 2007 in the recent energy bill, helping to maintain the momentum behind the business. Some 90 companies in 25 states now make wind turbine compensation, according to the American Wind Energy Association.

And as manufacturers churn out more and more units, factories become more efficient and the cost of manufacturing falls further. As alternative energy equipment makers ramp up to produce those economies of scale, the industry has begun to consolidate around fewer, bigger players.

“The number of players who can afford to take these relatively big bets are becoming less and less,” said Steve Westwell, head of BP’s renewable energy business.

MORE FROM AFTER OIL

After Oil Section Front

EC eyes 20% renewables target for 2020 Firm aims to make 'biocrude' from algae Solar power shines bright in Silicon Valley From foe to fuel? Texas eyes mesquite Honda announces ethanol breakthrough Ethanol output could double by 2010 Calif. utility bullish on plug-in hybrids California gives big boost to solar power Brazil boosts ethanol output as prices soar Mountains of manure to become ethanol After Oil Section Front   Add After Oil headlines to your news reader: