by Todd Woody
Photo: NREL/Iberdrola RenewablesAs Paul Krugman’s New
York Times Magazine cover story on environmental economics, “Building the
Green Economy,” was ricocheting around the
enviro blogosphere last week, the American Wind Energy Association released
its
annual report [PDF] on the state of the wind industry.
It was an interesting juxtaposition—Krugman’s deep dive
into the macroeconomics of an aggressive cap-and-trade or carbon-tax policy to
limit greenhouse-gas emissions alongside a report from the frontlines where the
green economy is actually under construction.
What’s striking is that the wind farm–building boom
continued through the depths of the Great Recession in 2009, with a record
10,010 megawatts of new capacity added last year in the United States.
In fact, wind energy accounted for 39 percent all new electricity generation
that came online in 2009.
Sure, the renewable energy tax incentives in the Obama
stimulus package and various state renewable-energy requirements certainly
helped prime the pump. But even absent a national cap on greenhouse-gas
emissions, the strength of the wind industry indicates the decarbonization of
the economy is already underway, if haltingly.
According to AWEA, 90 percent of new power generation
built over the past five years has come from renewables and natural gas. In
other words, you are not likely to see many, if any, new coal-fired power
plants built in the coming years. California
regulators have prohibited big investor-owned utilities from signing long-term
contracts for electricity generated by coal plants in places like Utah and Arizona, while
the Golden State’s biggest coal-consuming utility,
the Los Angeles Department of Water and Power, has pledged to wean itself from
that particular fossil fuel.
And if carbon caps don’t do in other coal-fired power plant
projects, their voracious appetite for water may well halt expansion in the
desert Southwest. The U.S. Department of Energy estimates that a coal-fired
power plant equipped with carbon
capture and storage could consume twice as much water as a conventional
power plant.
Kristin Mayes, chair of the Arizona Corporation Commission,
the state’s utility regulator, told me last year that all power-plant projects
are being closely scrutinized for their water use. “If one of our utilities wanted to build a new coal plant, we would be
talking very much about water issues as well as cap-and-trade,” she said.
Wind-turbine farms,
of course, use no water in electricity production. AWEA estimates that by
displacing fossil-fuel power, wind farms saved 15 billion gallons of water in
2009.
Where the wind do blow
The knock against
wind is that despite the huge increases in capacity that have made the U.S. the
world’s biggest wind power—with more than 35,000 megawatts installed—all
those turbines still satisfy less than 2 percent of the nation’s demand for
electricity.
True enough, but the
picture changes if you take a state-by-state look. Iowa, for instance, relies on wind farms to
generate 14.2 percent of its electricity, according to the wind industry
report. Wind power supplies 9.4 percent
of Minnesota’s electricity, 8.1 percent of North Dakota’s, and 6.4 percent of Oregon’s.
In the report,
there’s a series of color-coded maps of wind-farm installations in the United States
between 2000 and 2009. Those states with significant numbers of turbines are
colored in shades of blue, those with few or none are white. At the beginning
of the decade, broad swaths of the country were blank slates, with California the only dark
blue state along with a handful of light blue states.
Maps: AWEA
By decade’s end,
most of the West and wind-swept Great Plains
states as well as parts of the Northeast were a sea of blue of varying hues.
Only the wind-poor Southeast and a handful of other states remained as white spots
on the map.
So, is the wind boom
only benefiting the blue states?
Not at all. Turn to
a map of wind-related manufacturing and the red states are a pincushion of red
dots from Arkansas to Georgia to Virginia, each dot indicating a factory.
Map: AWEA“Currently, over 200
facilities across the U.S.
supply to the wind industry, and this figure does not capture the many
additional facilities at the sub-supplier level,” the report states. “Wind manufacturing
facilities can be found in every region of the United States, and include major
new wind-dedicated facilities and established businesses that have diversified into
the wind-energy industry.”
Since 2005, the
number of turbine makers doing business in the U.S. has tripled from five to 15.
The wind industry currently employs 85,000 people, according to the report, a
figure that remained flat in 2009 after growing rapidly in previous years. Texas
remains the place to get a wind job, with more than 10,000 people employed in
the industry.
A cap-and-trade
market would certainly boost the fortunes of the wind industry, but emissions
trading probably can’t solve one of the biggest obstacles to further expansion—the lack of transmission to connect far-flung wind farms to population centers.
“The inadequacy of
the nation’s electric grid is a major impediment to the continued growth of the
wind industry,” the report noted. “Many wind projects that have connected to
the grid are forced to curtail a significant amount of their output or are
facing low or even negative electric prices because there is inadequate
transmission to carry their full output.”
There’s an
astounding 300,000 megawatts worth of planned projects seeking connection to
the grid, only a fraction of which is likely to get built due to transmission
constraints, according to the report.
Constructing that
transmission will be akin to building the interstate highway system of the past
century, and will involve juggling a slew of competing local, state, and federal
interests—a task the market alone is unlikely to facilitate and finance.
“These are daunting tasks,” the report concluded. “But the
progress made in 2009 suggests an industry that is at the cusp of new growth,
and new opportunity.”
Related Links:
The problem with a green economy: economics hates the environment
Krugman says what political media won’t: economists agree climate action is necessary, affordable
Paul Krugman on ‘Building a Green Economy’