A Favourable Wind Blows

A Favourable Wind Blows

Governments have come to realise that wind energy, unlike other green energy contenders, is a mature technology

(Published in the Financial Times on October 27, 2005. Read the original here. )

Small is beautiful was once the slogan of the alternative energy movement. But when it comes to wind power, bigger is definitely better. Not only are wind turbines a lot bigger than they were a decade ago, but so too are the deployments.

Some critics argue that this large-scale development of wind energy carries too high a price – literally, in terms of subsidies or because of the environmental impact – but in a world worried about fossil fuel prices and global warming, wind energy seems a difficult option to resist.

In 2004, almost 8,000 megawatts (MW) of new capacity was installed worldwide, an increase of 20 per cent on 2003. On a good day, wind power contributes 20 per cent or more of electricity generated in leading wind power countries such as Denmark or Spain.

“Wind power has hit the big time,” says Corin Millais, chief executive of the European Wind Energy Association, which estimates the global wind market could reach $150bn by 2012.

The industry’s strong growth, initially limited to a handful of countries, looks set to extend globally as more countries wake up to the attractions of wind power in mitigating carbon dioxide emissions and reducing dependence on fossil fuels.

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Governments around the world have come to realise that wind energy, unlike other green energy contenders, is a mature technology whose commercial development and economic payback are well understood. Even the US has finally got the message – by the end of 2005, 2,000MW will be installed in the country. The next decade will likely see a broadening of the wind energy industry to cover new emerging markets in Europe, South America, north Africa and Asia.

Prospects in China look particularly bright. “China has a vast wind resource and an increasing need for electricity,” says Robert Gleitz, general manager of GE Energy’s wind business. The company recently supplied 23 turbines for a large-scale wind farm in China’s Hebei province. Other wind energy companies are also hungrily eyeing the Chinese market. This year, for example, Spain’s Gamesa has signed contracts to supply China with 255MW of wind power. By 2020, China wants to produce 20 gigawatts of installed wind power capacity. A new renewable energy law, based on the European model, comes into effect in January and sets favourable tariffs for green energy sources.

Much of the change in attitude is being driven by improvements to technology. As a result, the small-scale pilot projects of a decade ago have given way to big commercial wind farms in which dozens or even hundreds of giant turbines dot the horizon.

To satisfy the demand for bigger wind farms, GE Energy recently launched a new generation of 2.5MW and 3MW turbines which can be up to 120 metres high with rotor diameters of up to 94 metres. For offshore locations, it offers a new 3.6MW version with 104-metre diameter rotor blades.

However, not everyone welcomes the sight of these monster machines. For four years, a group of inhabitants of Cape Cod, Massachusetts has been fighting the construction of the first offshore wind park in the US.

Developers want to build Cape Wind five miles off the coast. The park will consist of 130 GE-supplied wind turbines with a maximum output of 420MW, and the project would produce enough electricity to power three-quarters of the surrounding area with renewable energy and could replace up to 113m gallons of oil a year.

However, such arguments hold little sway with opponents, who include prominent environmental campaigner Robert F Kennedy Jr, a marina owner and other well-heeled locals. They say the project will interfere with fishing, pose a hazard to navigation and disrupt tourism.

Last month, they took their protests to the seas and heckled a Greenpeace research boat that was giving supporters of wind energy a tour of the proposed site. The environmental activist group has come out strongly in favour of wind power through its Windforce 12 campaign, which wants to see 12 per cent of the world’s electricity generated by wind, saving 11bn tonnes of carbon dioxide by 2020. That Greenpeace should be cast as the villain in an environmental battle shows just how divisive and controversial the debate about wind power has become.

There are valid concerns about the environmental impact of large-scale wind farms, not least the noise produced by the turbines. “Wind farms do make a lot of noise in the form of a constant hum which means you would not want to live near one,” says Stephen Taylor, a consultant with Ilex, a UK-based energy consultancy.

Other common concerns include safety, electromagnetic interference, bird deaths and shadow flicker (the effect when rotating blades come between the sun and the viewer). The industry, however, says these issues can all be addressed by adequate design,
and most complaints boil down to nimbyism – not in my back yard. “People are generally in favour of wind power until you try to build in a specific location,” says Mr Millais.

Nevertheless, one of the biggest worries is that if one wind project is allowed, it will open the floodgates to more schemes that blot the landscape of a whole region. In the case of Cape Wind, for example, one of the promoters has identified a further 21 potential offshore sites on the north-eastern seaboard of the US.

As well as the knee-jerk reactions of local communities, wind energy also has to contend with some “deep green” environmentalists who have begun to challenge the industry’s seemingly impeccable green credentials. They argue that there are more efficient methods of offsetting carbon dioxide emissions of fossil fuels than using wind, such as improving the insulation of houses. They also argue that, because of the variability of wind, electricity grids cannot rely on wind power and have to maintain back- up capacity from conventional sources. Thus, the net result in terms of potential savings on fossil fuel or emissions reduction is minimal.

Ironically, one of the most convincing arguments against the extensive use of wind power comes from Denmark, which has one of the highest concentrations of wind turbines in the world. The installation of large numbers of wind turbines has led to problems balancing the Danish power grid. On windy days, more electricity is produced than can be used locally and the excess has to be sold on the open market, usually for much less than the subsidised price paid to create it. Conversely, on becalmed days, the country has to import electricity from neighbouring countries.

Mr Millais says the variability issue is not a barrier by itself to further penetration of wind energy. “Wind is variable but so is the entire electricity system, and it is a mistake to think that variability is inherently a problem,” he says. The solutions, he argues, include better grid integration, better market rules and improved weather forecasting techniques.

Another criticism often levelled at wind energy is that it is heavily subsidised. Supporters of wind energy counter that all energy sources receive subsidies in many forms and that, in the case of fossil fuels, their “real” cost would be higher if consumers had to pay for the full environmental impact of those sources.

Some type of price subsidy or tax break has been adopted in most countries to encourage investment in the wind sector. But over the longer term, the industry insists that the only way to tackle the age-old problem of making wind power economically viable is to build higher-capacity wind farms and in greater numbers. Only then can the industry achieve the economies of scale that will bring down costs and encourage investment of newer, more efficient technologies.

The International Energy Agency estimates that some 40 per cent of wind energy technology cost reductions can be attributed to research and development. However, further cost reductions of 30 to 50 per cent are necessary if the industry is to meet its long-term goal of supplying 12 per cent of the world’s electricity by 2020.

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