Renewable Energy and International Competition

Among the panoply of reasons why the United States must invest in and develop an alternative renewable energy industry is the oft-touted call for energy independence. As we all know, reliance on fossil fuel and oil is environmentally costly. But even for those remaining holdouts who insist that the causes of global climate change are not anthropogenic, there is no denying that the middle eastern oil states have more leverage and power over us than we are comfortable with as a result of our insatiable thirst for oil. In short, whether our reasons are environmental or political, we must find a way to end our foreign energy dependence.

A number of recent studies published by the National Renewable Energy Laboratory and the American Wind Energy Association demonstrate that the United States hosts a wide array of accessible renewable energy resources including solar, biomass, and on and offshore wind. One of the more obvious benefits of using these renewable resources is that the fuel sources are cost free. However, the turbines, photovoltaic films, and other renewable energy infrastructures are not free and the companies that make these things are still profit-seeking businesses who must seek out welcoming regulatory environments in which to develop and flourish.

Right now, we are at a crossroads. The United States can either decide that it wants to encourage a renewable energy industry or it can decide to dither around in the regulatory morass in which we have been stagnating for the last decade and more. But the longer we wait, the more likely it is that once we do decide to get in the game, the industry will have taken root elsewhere, and we will once again find ourselves dependent on foreign nations whose markets and political policies are not in tune with our own. One of the biggest threats to the United States renewable energy industry is China:

"China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world's largest maker of wind turbines, and is poised to expand even further this year."

"China has also leapfrogged the West in the last two years to emerge as the world's largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants."

"These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China."

See, http://blog.algore.com/2010/02/china_in_the_lead.html

The European Wind Energy Association 2009 annual report states:

• 199 offshore wind turbines were installed and grid connected totalling
577 MW during 2009, up 54% from the previous year-- a total of 828 offshore
turbines have now been installed (and interconnected) offshore in nine European
countries;
• Turnover in 2009 was approximately €1.5 billion, and is expected
to double in 2010 to
approximately €3 billion;
• 1,000 MW expected to be
installed during 2010, a 75% market growth compared to 2009;
• 17 offshore
wind farms under construction, totaling over 3,500 MW and a further 52 offshore
wind farms have been fully consented, totaling more than 16,000 MW;
• More
than 100 GW of offshore wind farms currently being planned by project
developers
and utilities.

According to Offshore Wind China (www.offshorewindchina.com/english/index.aspx), in addition to a 56% average growth rate per year over the last five years for the wind energy industry generally, China is also making concrete progress with offshore wind projects:

China is regarded as one of the richest countries in offshore wind resources,
whose mainland coastline is about 18,000 kilometers – the fourth longest
coastline in the world. At 10 meters’ height, the offshore wind resource is
estimated to be 750 million KW, among which 100 million KW is in the 10 meter
depth waters. With the nation’s 40％ population, the coastal area is the most
developed area in China and also the largest consuming market for
electricity. The first Chinese offshore wind farm in Shanghai went online
in 2009 as a demonstration project, followed by further ambitious plans to build
more offshore wind farms in the costal provinces of Jiangsu, Zhejian, Fujian,
Guangdong and Shandong. It is estimated that Jiangsu province will
establish the offshore wind farm with the total capacity of 7GW and Zhejiang
province of 2.7 GW by the year of 2020. The development of offshore wind power
has a huge potential in China.

As of this post, the United States has not fully permitted-- nevermind installed-- a single offshore wind turbine.

For the domestic Offshore Wind Industry, many are looking to Secretary Salazar's imminent decision on the future of the proposed Cape Wind project as a canary in the coalmine. DOI Secretary Salazar has indicated that he will issue a decision as to whether the Cape Wind project may be sited in Nantucket Sound by the first week of April. Although the project has proven that its benefits will significantly outweigh any environmental detriments (as demonstrated by the final Environmental Impact Statement issued in 2009), several Native American tribal groups, including the Wampanoag, have challenged the project and requested that the National Parks Service identify Nantucket Sound as a protected historic site. Nearly all offshore industrial interests have rejected the NPS's determination that Nantucket Sound is eligible for this status because it would likely impart a "chilling effect" on nearly all offshore development projects. This decision is the final federal regulatory hurdle that Cape Wind must overcome before the project is able to obtain a site lease.

Secretary Salazar has requested comments from the general public to inform his decision. Hopefully, Secretary Salazar will recognize that his decision and the impact that decision will have on the renewable energy industry in the United States generally will resonate far beyond the clean energy and climate change communities. This is a decision with enormous import for the United States position in world politics and in the international economy.