We had a chance to ask Randall Swisher, Executive Director of the American Wind Energy Association some questions about what he is seeing in wind energy trends and his overall outlook.nbsp;nbsp;

Aspire: What surprised you about the renewable energy/clean tech markets in 2008? Were there any significant developments (political, technological, consumer-driven and/or industry-driven) that occurred which you werenrsquo;t anticipating?nbsp;nbsp;

Swisher: Wind has been growing at such an explosive pace these last several years that I donrsquo;t think 2008rsquo;s record numbers are a big surprise, but they are notable.nbsp; This year, we expect about 7,500 megawatts of new wind capacity to be built in the U.S. which will make 2008 another year of 45% growth for the wind industry.nbsp;As this growth has occurred, wersquo;ve seen an increasing need to expand the supply chain for wind, including domestic manufacturing capacity.nbsp;

This year, AWEA made a conscious effort to encourage new growth in this segment of the industry, with a special session at our WINDPOWER 2008 conference amp; exhibition and two sold-out supply chain workshops.nbsp; Itrsquo;s worth noting that WINDPOWER 2008 attracted 13,000 attendees and 776 exhibitors from all links in the supply chain.nbsp; With this level of interest in the industry, we expect that more and more companies here in the U.S. will be moving into the dynamic wind energy market.nbsp;

Aspire: Obamarsquo;s administration has set a target of 10% of electricity coming from renewable sources by 2012, and 25% by 2025. In 2007, renewable energyrsquo;s contribution to total electricity generation in the U.S. was about .962 billion kWh per day, or about 8.4% of the total, and the EIA projects that by 2009 it will contribute about 1.039 billion kWh per day, or about 9.1%. Excluding hydropower, renewable electricity in 2007 represents only about 3% of installed electricity capacity and 2.5% of generation in the U.S.Do you think the 10% target is realistic by 2012 given the current global financial crisis? And where do you see the biggest contribution to reaching this target in terms of renewable energy sources?nbsp;nbsp;

Swisher: A national renewable electricity standard is important for several reasons.nbsp; It signals a long-term, national commitment to clean energy and would streamline the uneven patchwork of RES policies that currently exists among the states, spreading the benefits of renewable energy to all parts of the country.nbsp;

AWEA supports a 25% by 2025 RES.nbsp; An aggressive near-term target ndash; like the 10% by 2012 in the Obama-Biden New Energy for America plan ndash; is feasible, and essential to ensuring the rapid deployment of renewables with the end goal in mind.nbsp;nbsp;

Aspire: Wind energy production and consumption from 2000 to 2007 grew by more than 450%. Through August this year, production and consumption are up more than 44% from the same period last year. What do you think will be the key challenges in 2009 for continued strong growth in the wind sector? And what factors do you anticipate will happen, and need to happen to drive growth?

Swisher: Wind is capable of providing at least 20% of our electricity supply by 2030 using existing technology.nbsp; The U.S. Department of Energy has analyzed the challenges and benefits of achieving the 20% wind vision in a report, 20% Wind Energy by 2030, which you can view at www.20percentwind.org.nbsp;nbsp;nbsp;

Achieving this vision will depend upon two primary things:nbsp;nbsp;nbsp;

1.nbsp;nbsp;nbsp;nbsp; stable, long-term federal policy, such as a national renewable electricity standard of 25% by 2025 and a long-term extension of the production tax credit; also, in the face of the current financial crisis, the effectiveness of the production tax credit will be preserved by making it available on a refundable basis; andnbsp;nbsp;

2.nbsp;nbsp;nbsp;nbsp; Federal policies that encourage investments in transmission infrastructure ndash; a Green Energy Superhighway that will connect our abundant remote renewable resources with our population centers.nbsp;AWEArsquo;s policy recommendations can be found at www.NewWindAgenda.org.nbsp;nbsp;nbsp;

Aspire: What is your outlook on transmission and storage issues for wind energy, and what recommendations would you make to companies developing them, and investors funding their development?nbsp;nbsp;

Swisher: Lack of adequate transmission infrastructure is one of the biggest obstacles to the long-term growth of wind power and other renewables in the U.S.nbsp; In essence, we simply donrsquo;t have enough transmission capacity to deliver low-cost power from windy rural areas into the cities where electricity is needed.nbsp; The wind industry supports federal policies that would bring about the construction of a high voltage, interstate transmission superhighway to deliver electricity over long distances, like the one envisioned in DOErsquo;s 20% Wind by 2030 report.nbsp; (The report refers to the conceptual design of a transmission plan put forward by American Electric Power Co., one of the nationrsquo;s largest utilities, http://www.aep.com/about/i765project/docs/WindTransmissionVisionWhitePaper.pdf)nbsp;nbsp;

Storage, on the other hand, is not essential to achieving the 20% wind vision. One of the misconceptions about wind is that it will not provide a significant amount of our nationrsquo;s electricity without storage technologies in place. DOErsquo;s 20% wind scenario makes it clear that wind can provide that level of electricity by 2030 without requiring additional storage.nbsp; As the penetration level for wind climbs to 20% and above, there will be the need for the electric industry to move towards more flexible sources of generation, such as hydro, natural gas or demand response.nbsp;

Storage can be valuable, but it will usually be more expensive than other sources of flexibility in the system.nbsp; It is also important to evaluate the value of storage or other forms of flexibility as they apply to the entire utility system and not simply as dedicated back-up for individual wind projects.nbsp;nbsp;

Aspire: The U.S. has been a world leader in terms of additions of wind capacity and cumulative capacity, but it lags several other countries as a percentage of electricity consumption. Why is this, and what factors need to happen to make the U.S. a world leader here as well?nbsp;nbsp;

Swisher: The main obstacle to large scale wind power development up to now has been the lack of stable, long-term, national commitment to clean energy.nbsp; At the same time, wind power has achieved a number of key milestones that make it an attractive option for generating electricity on a large scale. nbsp;nbsp;Here are a few of the key factors that have moved wind into the mainstream market:nbsp;nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Fossil fuels are finite and increasingly expensive.nbsp; Costs for wind technology have come down at a time when costs for all new generation are rising.nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Demand for wind ndash; and other renewables ndash; is on the rise, due in large part to concerns about climate change.nbsp; Consumers want clean, reliable and affordable electricity and utilities are working to diversify their resource portfolios to help stabilize prices when fossil fuel costs are increasingly volatile and in anticipation of carbon regulation costs.nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The domestic supply chain is expanding, with the industry opening, expanding or announcing at least 50 new manufacturing facilities since January 2007.nbsp; In 2005, the average wind turbine installed in the U.S. utilized less than 30% U.S.-made components.nbsp; Turbines installed in 2008 use nearly 50% domestic components.nbsp;nbsp;nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The federal production tax credit (PTC) has been stable for several years in a row, enabling the wind industry to lay the groundwork for significant expansion in the coming years.nbsp;nbsp;nbsp;

The long-term policies that the President-elect has indicated he intends to put in place ndash; a federal RPS, a long-term extension of the production tax credit, and building a Green Power Transmission Superhighway – will be key to dramatically increasing the share of electricity that the country generates from wind.nbsp;nbsp;nbsp;

Aspire: How do you see the current economic crisis impacting goals for wind energy growth?nbsp;nbsp;

Swisher: The current credit crunch is impacting the wind industry, as it is affecting every industry.nbsp; nbsp;However, the wind industry continues to be well-positioned strategically, especially in relation to competing fuels and technologies.nbsp; Wind power remains among the most attractive energy investment options right now, because of its risk reduction qualities.nbsp;

Wind is:nbsp;nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; a fuel-free resource, helping utilities hedge againstnbsp; the risk of fuel price volatility,nbsp;nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; an environmentally sound resource, helping national efforts to reduce emissions that contribute to global warming, reducing water use, and reducing pollution; andnbsp;nbsp;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; an exceptionally short construction cycle compared to technologies such as coal and nuclear that can tie up huge amounts of capital for five to ten years or more of construction.nbsp; nbsp;A number of challenges remain, however, and can be addressed by changes in federal policy.nbsp; For example, the federal production tax credit (PTC) needs to be adjusted (repaired) to make it effective in the current financial situation.nbsp; (See www.NewWindAgenda.org)nbsp;nbsp;

Aspire: What policy do you expect from the Obama administration and the next Congress in 2009 for the wind industry in the U.S.?nbsp;nbsp;

Swisher: See New Wind Agenda and Obama-Biden New Energy for America plan.nbsp;

Aspire: Proponents of geothermal energy argue that it is favorable to wind energy for utilities because it is base load energy. What is your response to that point of view, and how do you see this issue playing out over the longer term?nbsp;nbsp;

Swisher: Each technology has its own set of characteristics, its own strengths and limitations, and that is why a mix is usually the best option.nbsp; Wind has a set of characteristics that make it attractive in a utility portfolio, including cost-effectiveness, its emissions-free nature, and its widespread availability. Utilities can typically add wind power to their portfolios without major adjustments in the planning, operations, or reliability of their systems, according to studies looking at experience or modeling wind integration scenarios, as well as experience in Europe where wind energy development is much more widespread.nbsp;nbsp;

Integration adjustments are lowest when new wind power is being integrated into a broad region with a diverse mix of power sources, such as natural gas and hydropower.nbsp; Improved use of forecasting, and large balancing areas also make the integration of wind power more cost-effective. nbsp;Many utilities have large amounts of wind power on their systems, including Xcel Energy, the utility with the greatest amount of wind.nbsp; Herersquo;s a quote from Dick Kelly, chairman, president and CEO of Xcel:nbsp;nbsp;nbsp;

ldquo;Wind power is an integral part of our generating portfolio, and it has become a significant part of our nation’s response to environmental challenges like climate change,” said Kelly. “With the right public policy, it will be a growing and affordable part of our long-term plans.”nbsp;nbsp;

Aspire: What are you seeing in terms of the pace and availability of project financing for wind energy in the current economic environment, and how significantly is the AWEA reining in its projections for wind energy growth in the next few years as a consequence of the still eroding U.S. economy?nbsp;nbsp;

Swisher: It is too early for AWEA to estimate what the impact of the current economic environment might be on projections for 2009 and beyond.nbsp; The fundamentals of the technology are strong, and the countervailing factor will be the speed at which new policies are put in place by the new Administration.nbsp;nbsp; As Ted Strickland, the Governor of Ohio, recently said in answer to a similar question about the impact of the economy on wind power:nbsp; ldquo;This is one industry that has a bright future and it is full steam ahead.rdquo;nbsp;nbsp;nbsp;

Aspire: Can you elaborate further as to how optimistic you are that the incoming administration and Congress will respond positively to the renewable industryrsquo;s set of recommended priorities outlined by the AWEA, GEA, SEIA and Hydropower Association in November?nbsp;nbsp;nbsp;nbsp;

Swisher: We are enthusiastically looking forward to the opportunity to work with the new administration and new Congress.nbsp; Their agenda appears to be quite consistent with the agenda of the wind industry.nbsp; See the positions of the Obama-Biden New Energy For America plan, quoted in the Wind Energy for A New Era document at www.newwindagenda.org.
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