Uncertainty in the air


June 4, 2012

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The circus is on the move. This week Atlanta plays host, as the American Wind Energy Association (AWEA) rolls into town.

However, as the organisers open the doors to its annual conference, there’s an undercurrent of uncertainty in the air. And it refuses to clear.

So, twelve months on from Anaheim, has the North American wind market done what was required and engaged with the wider international energy market? Particularly as it moves ever closer to the very real potential of a world without a production tax credit (PTC), come 1st January 2013?

Honest answer?

Perhaps the reality is something few dare speak.

After all, the thought of operating without what has amounted to a relatively lucrative tax break since President George Bush signed it into law back in 2005 is a tough pill to swallow.

This, combined with the now successful campaign to slap a 25% tariff on imported Chinese turbine towers, together with the increasing threat of domestic shale gas, has amounted to what for many has been a tough year.

A period that has involved fighting multiple battles on multiple fronts and by proxy, has left little time for those working within sector to look up, stop and think.

Only that’s not all.

Add to this a dangerous perception that ‘busyness breeds business’ and it’s led many to think that a re-doubling of efforts is all that is required to kick start the order books and repeat the 6,816MW added to the grid in 2011.

However, to focus on growth (more growth and protectionism), is to miss the point.

More tellingly perhaps, is the often-overlooked fact that five separate US states now supply more than 10% of their power through wind energy (with South Dakota topping the bill at 22.3%).

That’s a compelling statistic. And one that suggests that while the ability to protect existing market share is important, a focus on future long-term viability and market independence is far more valid.

Lobbying for a(nother) tax break extension and engaging with the Fed to fight the Chinese is hard work, offering short-term gains but precious little long-term reward.

As the US wind industry starts filling hotel rooms and setting up shop for another conference and another year, perhaps it’s time to move the debate on?

Yes, there’s a short term factory closure crisis and yes, many will speculate about the impact on US maufacturing and jobs. Others will argue that a tax break is a tax break – not a subsidy – and that therefore there’s no government saving to be made from scrapping it at all. However, politics is at play and the simple reality is that it can’t be second guessed.

Naturally, the industry needs to sit up and take note and naturally the decisions made over the course of the next few months will have a profound impact on future innovation and investment. However, despite this, the industry simply can’t afford to remain at the whim of Washington. It won’t do anyone any good.

The US wind industry is big enough and bold enough to stand on its own two feet, it just needs the confidence to try.

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