(Image Credit: Teratornis)
The wind turbine industry has had its fair share of ups and downs in recent years, but 2011 was especially turbulent for the industry. Even with improvements in the technology, the industry’s growth seems to correlate directly with the economic and legislative environment. In spite of a tumultuous 2011, the wind turbine industry has a number of positive areas of growth.
Off-Shore Wind
A consistent concern for communities looking to embrace wind power is that the turbines themselves are an eye-sore. The higher the turbine, the more efficiently it functions due to the natural aerodynamic drag caused by the surface of the earth. Towering as high as 200 feet (70m), wind turbines can sometimes be seen from miles away. Add the cost of development and many communities are deciding to look elsewhere for long-term energy cost savings.
Enter the University of Maine who is advocating putting wind generation systems as many as 20 miles off-shore. At this distance the turbines will be completely out of site and can be optimized for harnessing the winds that move off the coast. The goal is to move away from oil and gas for heat and electricity production and push Maine residents to use electric heaters and electric vehicles. Estimates indicate that residents of the state spend around $10,000 per year on energy costs, which could be cut to a fraction of that amount with sustainable solutions like wind turbines. But at a cost of around $20 Billion, the University has some major hurdles to overcome.
Recent Commissions
A bright spot for wind turbines is a project commissioned by the Edison Mission Group. Capable of generating as much as 55 megawatts, the 23 turbines of the proposed wind farm could produce enough energy for 14,000 average homes. This wind farm will be near the Maryland and West Virginia borders on Green Mountain.
Warren Buffet has even thrown his capital into wind farming. Berkshire Hathaway owns MidAmerican Energy, which recently bought out Invenergy Wind’s 81 megawatt project. MidAmerican Energy currently owns more than 3.3 gigawatts of wind energy capacity and is the leader in the U.S. in wind energy production. Still, the 50 turbines needed for the Invenergy project will only help the wind turbine manufacturers who are desperately looking for buyers.
Tight Margins
Manufacturers cite tightening margins as a key concern as more competitiors enter the market. In the U.S., Congress did not renew a production tax credit for 2013, which will make costs of production in the States more difficult. This is especially true since countries like China are heavily subsidizing wind turbine manufacturing in an effort to reduce dependency on foreign oil and other energy products.
The result of no wind production tax credit is being said to likely cause a crash in the wind markets. Says Justin Wu of Bloomberg New Energy Finance, “The U.S. wind market will likely crash in 2013…Uncertainty over the Production Tax Credit extension this year means that little development activity will take place.” The 2.2 cents per kilowatt hour tax credit has been enough to spur growth, but without it U.S. manufacturers are concerned more production will have to be outsourced overseas.
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