Ecocentric

Can Green Energy Scale? Wind Power Is Getting There

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Christopher Furlong / Getty

It’s a question we ask all the time: when will green energy scale up? After all, renewable power won’t really make a difference until it can provide a bulk of the country’s energy supply. That hasn’t happened yet—while technically renewable sources provide around 20% of U.S. power, nearly all of that is biomass or hydro. Wind and solar provide less than 4% of U.S. energy—statistically, that’s barely a bump.

 

But as Scott Jacobs, a great McKinsey clean energy analyst, pointed out to me at the Fortune Brainstorm Green conference this week, in one sense green energy is already achieving scale—in new power generation. Solar, as I noted in an earlier post today, is growing faster than any other form of energy, and new statistics from the American Wind Energy Association (AWEA) showed that wind added 5,116 MW of new capacity last year. That’s 26% of all new energy generation added in the U.S. in 2010, second only to natural gas, which supplied 40% of new power. (Shale gas—it is for real.) Since 2007 wind has added an average of 35% of all new capacity—twice the amount of new coal and nuclear combined. “There’s no silver bullet to the energy problem, but we’re part of the silver buckshot,” says Denise Bode, the CEO of AWEA.

Despite that, 2010 wasn’t the best year for the wind industry. Thanks in part to regulatory uncertainty last year and the post-recession collapse of the tax equity market that helps fund many renewable energy projects, just half as much wind was installed in 2010 as in 2009. And the U.S. has fallen behind China as the world’s wind leader—China now has some 45,000 MW of wind installed, compared to 40,000 MW in the U.S. China added 18,900 MW of wind in 2010, nearly four times more than the U.S.

But that’s not necessarily a bad thing. With an economy growing at nearly a double-digits, China needs to add an astounding amount of electricity capacity each year. The U.S., though, doesn’t—a mature economy, there’s no need for America to add massive amounts of new energy generation annually. (In fact, with proper energy efficiency measures, the U.S. might be able to reduce the need for new power even more.) That’s one reason why you may see solar grow and wind add more than a quarter of new generation, while renewables as a whole still remain a tiny portion of the overall energy mix. It could be that we’re just impatient.

Of course, if we wait around for the slow and steady replacement of coal plants with renewables at the current rate, it will take decades before our energy mix really turns greens—decades we may not have. And unsteady policy means that the future is still cloudy for renewables—especially if budget cuts outright eliminate clean energy subsidies, as the budget put forward by Republican Paul Ryan would. Wind, like other forms of clean energy, can’t be subsidized forever, because the faster it grows, the more expensive those aids will be, so technological innovation is key. Still, AWEA said that 5,600 MW of wind capacity was already under construction at the start of 2011, with the potential for far more. “You have to have more than a year to year policy,” says Bode. “We are part of the solution.” And they’re scaling up faster than you might think.

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