Windletter - Largest U.S. Wind Power Conference Reflects Burgeoning Industry

MAY 2005

Largest U.S. Wind Power Conference Reflects Burgeoning Industry

By Kathy Belyeu
AWEA Staff

he American Wind Energy Association (AWEA) hosted utility and business
leaders, national and state policymakers, and renewable energy advocates at its largest
WINDPOWER Conference and Exhibition ever, attracting more than 4,100 attendees to
the Colorado Convention Center in Denver, Colorado. Highlights included a discussion
of the future of the industry and what needs to be done to overcome challenges to continued
growth.

The exhibit hall featured impressive displays from more than 235 companies occupying over 46,000 square feet of exhibition space. New exhibitors at this year’s conference included Siemens, which purchased Bonus Wind Energy in late 2004; and Goldman Sachs, which purchased a controlling interest in Zilkha Renewable Energy earlier this year.

City and county, state, and federal elected officials stood together on the podium of the opening session to welcome the wind industry to Denver and to express enthusiasm for the benefits that wind power can bring to their state, including high technology job growth, economic development in farming areas, and cleaner electricity production. Denver city and county Mayor John Hickenlooper (D) welcomed the attendees by speaking about the renewable portfolio standard passed last year in the nation’s first state referendum on renewable energy. “It was the ultimate customer survey,” he said, “and your industry won!” Colorado Governor Bill Owens (R) held up for praise Xcel Energy’s popular green power program and the Colorado Green project, currently the
fifth largest wind power project in the country. Senator Ken Salazar (D) said that he believed 65 Senators would support a federal renewable portfolio standard of 10% by 2020 if it were part of the energy bill, which is being debated in the Senate. Salazar also said that he supported an extension of the wind energy production tax credit. U.S. Representative Mark Udall (D-Colo.) expressed thanks to the people of Colorado and to his colleague Lola Spradley (R), former Speaker of the Colorado House of Representatives, who helped bridge the partisan divide in support of the renewables referendum. Udall has sponsored legislation to extend the PTC for five years. He is also working to increase the amount of federal funding spent on wind research and development. In parting, Governor Owens left an honorary proclamation declaring May 15-21, 2005, “Colorado Wind Energy Week.”

Industry leaders were in accord that the intermittency of federal support for wind energy is hampering the growth of the industry, keeping wind power costs artificially high, and suppressing domestic job creation. The leaders who addressed the conference in the “Wind Industry Leaders’ Forum” were Terry Hudgens, president and CEO of PPM Energy; Tom Carbone, president of Vestas Americas; Andreas Nauen, president of the Siemens wind power division; Mark Little, vice president of power generation of GE Energy; and Mike O’Sullivan, senior vice president of development for FPL Energy. Even in the midst of what AWEA predicts will be the largest year ever
in terms of new wind power capacity installation, with up to 2,500 MW of new wind power expected to be installed, Hudgens said that the industry was only able to supply approximately one-third of market demand, because of bottlenecks in the industry that are a result of the two-year cycle of the wind energy production tax credit. They emphasized that the short-term nature of the PTC hurts the U.S. wind industry because it inhibits investors from making the long-term investments needed to build up a more developed supply chain in the U.S., which is crucial for lowering costs.
On the opening day of the WINDPOWER Conference, AWEA’s small wind turbine committee unveiled the results of its Small Wind Industry Market Study, which forecasts sales of nearly 13,000 small wind turbines in 2005 totaling nearly 14 MW of installed capacity across the country and $25 million in sales. Other findings from the market study are: the small wind turbine industry could reach sales of 75,000 turbines totaling 115 MW of installed capacity in the 2006-2010 timeframe; four U.S. firms supply at least one-third of the global market for small wind turbines; with the right government policies in place to grow the market, U.S. small wind capacity could increase from approximately 30 MW to 107 MW by 2010; and manufacturers are aiming to reduce hardware costs
20% to $1,700 per installed kW by 2010.

The utility executives speaking in Tuesday’s session, “Utility Leadership in Wind Energy,” represented different parts of the county and came from both public and investor-owned utilities, but they agreed that wind power is increasingly viewed as a mainstream power resource in areas of the country where the wind resource is strong. Presenters were Wayne Brunetti, chairman and CEO of Xcel Energy; Eric Markell, senior vice president of energy resources for Puget Sound Energy (PSE); Dean Crist, vice president of regulatory projects for MidAmerican Energy Co.; and Gary Thompson, director of the Nebraska Public Power District (NPPD). Xcel Energy currently purchases the second-largest amount of wind power in the nation – the output from 884 MW – second only to Southern California Edison (SCE), which purchases the electricity from 1,025 MW, according
to AWEA’s second annual wind power leaders rankings released on May 12. Brunetti said that Xcel was on track to surpass SCE by the end of 2006, when it will be purchasing the output from 1,400 MW of wind power in Colorado and Minnesota.

PSE is developing two wind power projects in Washington State, the 220-MW Wild Horse wind power project located in Kittitas County and the 150-MW Hopkins Ridge wind power project in Columbia County. The utility has set a goal of supplying at least 5% of its customers’ total electricity needs from renewable resources, such as wind power, by 2013. MidAmerican Energy will own 360 MW in wind power projects by the end of 2005. According to Crist, wind will grow from 2% to 8% from today to 2008 in terms of installed capacity, and will grow from 1% to 5% in terms of energy production in the same time frame. NPPD is developing a 60-MW wind power plant with its municipal utility partners near Ainsworth, Neb., that will be operational by the end of the year.

Thompson said one of the tools that really convinced senior management in the utility that wind power was the right investment for the future was its deliberative poll conducted in 2003, where NPPD gathered over 115 of its customers to conduct a day-long session about the state’s future energy options. According to Crist, 96% of customers said the utility should do a 200-MW wind power project and 94% of customers said the resource should be rate-based instead of offered as a green power subscription program to only those customers interested in purchasing it.

At the awards banquet Tuesday night, AWEA honored twenty-two individuals from across the nation for leadership in the development and promotion of the U.S. wind energy industry. Spradley and Udall shared the State Leadership Award, which was given for “tireless support of state renewable energy policies culminating in the passage of the precedent-setting Colorado RPS initiative.” U.S. Senator Charles Grassley (R-Iowa), U.S. Representative Bill Thomas (R-Calif.), and U.S. Representative Jim McCrery (R-La.) shared the Congressional Leadership Award for “longstanding leadership in support of wind energy and the wind energy Production Tax Credit.”

The full list of award recipients is at http://www.awea.org/news/Awardslist_WP2005.pdf .

Wind energy is a global industry, and the Denver WINDPOWER 2005 conference also marked the U.S. launch of the Global Wind Energy Council (GWEC). GWEC brings together the wind industry and its representative associations – such as AWEA, the European Wind Energy Association, and the Indian Wind Turbine Manufacturers Association – and global companies such as GE and Vestas to call for stronger national and international policies to support the expansion of wind energy. GWEC members operate in more than 50 countries and represent over 1,500 organizations involved in hardware manufacture, project development, power generation, finance and consultancy, as well as researchers and academics.

“Wind energy today is a global, multi-billion-dollar industry,” said AWEA Executive Director Randall Swisher. “The growth of this conference reflects the dynamic market for wind power. Our association believes that, with stable, supportive federal policy, wind energy could provide six percent of the nation’s electricity by 2020 – all from a clean, domestic, and inexhaustible source. Private and public utilities, global finance leaders, international power plant developers, and all facets of the energy industry now look to wind energy as part of their future planning and to more stable government support for this fast-growing sector.”

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