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Windmills: the green power giants are ready to go

American and European wastelands now have new quixotic giants: wind power is the renewable with the best growth potential.

Wind power isn’t a distant promise, but a renewable energy source showing solid growth, now and in the future.

Currently, only 1.5% of worldwide energy consumption is powered by wind, according to Businessweek (a little more than 1%, according to the World Wind Energy Assocation).

And, while the cost of electricity generation from wind have shrunk to as low as 4 or 5 cents per kilowatt hour, it is still a slightly higher price than electricity generated from coal or natural gas.

In a market without regulation nor incentives- and without penalties for CO2 emissions-, wind power wouldn’t be viable for private industry. Wind power has grown in Europe and the United States thanks to government support.

Worldwide, wind power capacity grew by a record 30% in 2007.

The equation: RE

Nevertheless, the improvement and price reduction of the technologies used to produce wind turbines have drastically improved the reliability of the wind farms, which are becoming increasingly more profitable.

If the current growth in improvements continues, wind power could soon solve the equation presented by Google.org, a self-sufficient subsidiary of its Internet business, whose support of the development of renewable technologies is summarized by the powerful RE

That is to say: to achieve that renewable energies (“RE”) are cheaper than coal (“C”). Once this formula can be achieved, a goal that Barack Obama shares (Eric Schmidt, president and CEO of Google, is one of his advisors as he prepares his presidency), incentives will no longer be necessary.

Wind power: increasingly more efficient and inexpensive

Wind power has evolved since the late seventies. Constant improvement of the mechanisms and technology used places large scale wind power close to accomplishing the Google equation: to achieve that the KW hours produced by wind are equal or cheaper than that produced by coal.

The first turbines were manufactured from components from the ship construction industry. Currently, the materials and designs are derived from the aerospace industry, which has permitted that wind turbines, increasingly more powerful, move with the help of increasingly longer and more geometrically sophisticated blades.

The designs are, also, more intelligent: when the wind blows too strong and could damage a wind turbine, the blades can bend their structure to repel part of the wind, or even to stop the structure, if is necessary.

Wind, more ecological than coal (and soon, cheaper)

Current turbines are more sophisticated, resistant and intelligent than their predecessors, thought up at the beginning of the 20th century from the designs of Albert Betz: according to Victor Abate, when GE entered the business of wind turbines, in 2002, the average turbine was out of service 15% of the time.

In 2008, this percentage has been reduced to 3%, which has reduced the price of energy generated to 4 to 8 cents per kilowatt hour (kWh).

The technological advances, the increase in regulations related to the fight against climate change and, above all, the dramatic price reduction for wind production are making it possible that wind energy could become cheaper than electricity produced from coal within the next few years. Producing energy from coal is still the cheapest (5 cents per kilowatt hour).

Nevertheless, according to a study by the the Massachusetts Institute of Technology, these 5 cents per kWh will rise to 8 cents if in the next few years a mandate is enforced to capture the CO2 generated to avoid the emission of greenhouse gasses.

Producing electricity with clean coal is, therefore, as expensive as wind power, which does not depend on fossil fuels nor generate emissions, or waste that must be processed.

By the end of 2007, the world capacity of wind generators was 94.1 gigawatts, according to the Global Counsel on Wind Power. Wind generates around 1% of the world’s electricity consumption, but represents about 19% of the electricity production in Denmark, 9% in Spain and Portugal, and 6% in Germany and Ireland (Data from 2007).

An abundant, though intermittent resource

Wind power is a clean, renewable, abundant resource that helps to reduce greenhouse gas emissions. Nevertheless, the main obstacle is its intermittence.

Electric companies have invested in technical improvements related to the materials and power of wind turbines. The main operators of this renewable source employ teams of meteorologists that study sophisticated models to determine where are the best locations for wind farms. It’s not sufficient to ascertain where the wind blows, but how strong it is and with what historic regularity.

A difference of a kilometer or two with regard to the best possible location has significant results on the energy generated.

Wind power: a serious thing

Wind power is not a future promise, but the most flourishing one of all the renewable energy generation technologies and with a history of success beginning in the 1970s, as the Danish technological answer to the oil crisis of 1973.

Since then, in 1979, the Danish manufacturers Kuriant, Vestas, Nordtank and Bonus initiated the mass production of turbines for wind power and wind farms have multiplied their capacity for electricity generation. Likewise, the wind power market is the fastest growing of all renewable energies, according to a report by Research and Markets.

The generation capacity of wind farms has itself more than quadrupled between 2000 and 2006 (data from the World Wind Energy Association).

The phenomenon, though still a local one (81% of the installations are found in Europe and United States), is on the way to becoming worldwide: the five largest wind-producing countries have gone from 71% of the market in 2004 to 62% in 2006.

The World Wind Energy Association estimates that in 2010 there will be 160 gigawatts installed worldwide more than doubling from the 73.9 gigawatts existing in 2006, which assumes an annual growth of more than 21%.

Europe heads (for the time being) wind power installation

Europe heads the installation of wind farms, both those installed on land as at sea (“offshore” installations, like the one that extends, imposingly, in the north Sea, to the outskirts of Copenhagen).

According to Windtech International, Germany leads the world in number of wind farms and installed energy capacity (20,622 megawatts, by the end of 2006). In Europe, Spain follows (11,615 MW, or 9% of the total energy demand), Denmark (3,136 MW), Italy (2,123 MW), United Kingdom (1,693 MW), Portugal (1188 MW), France (918 MW) and Ireland (496 MW).

Despite the current world economic crisis and the fall in oil prices, which damage the forecasts of private investment in the sector, the market of emissions caps created by the European Union and policies of public subsidies in various countries has guaranteed that European companies consolidate their business in Europe and the rest of the world.

While Spain’s Iberdrola Renovables (the largest world consumer of wind power) and the Portuguese EDP Renovaveis are taking leading roles in the increasingly interesting American wind power market (as explains BusinessWeek), the European firms haven’t been asleep at home.

Germany is the country with more wind farms and with the largest wind turbine, built on the sea, while Scotland has the largest onshore wind farm in Western Europe, with 140 wind turbines of 2.3 megawatts each: total installed power is 322 megawatts.

United States: awaiting Barack Obama

If Barack Obama complies in the next few years with his objectives to reduce the energy dependence of his country, through the stimulation of renewable energy technology, the United States would be able to surpass Europe in world leadership of the wind power sector.

According to The Economist, wind power currently provides about 1% of U.S. energy, although in 2020 that figure could grow to about 15%, a colossal leap for the world’s main energy consumer.

The largest wind farms in the world are found in the United States. The largest one in terms of energy generation is the Stateline Wind Project, along the border between Oregon and Washington, with a maximum capacity of 300 MW.

The American market, traditionally less regulated than Europe’s, is seen as a great opportunity, for both energy users as for turbine-makers headquartered in Europe.

In words of Michael McNamara, specialist in clean technologies from the London firm Jefferies International, “The U.S. is the Saudi Arabia of wind. The American Midwest is windy, very flat, and with no natural beauty sites to speak of.” Large and simple truths that explain the interest of European firms from the sector (with Spain and Portugal at the head), with their experience as energy operators and manufacturers of the equipment (wind turbines, blades, towers, choice and study of locations, consultancy, etc).

Though the United States is surpassed by Germany in electricity capacity derived from solar installations, this type of installed power in the U.S. grew in March of 2008 by 18,302 megawatts, sufficient to supply 4.9 million homes.

The message expressed by Michael McNamara can seem even clumsy by its lack of concreteness. McNamara knows what he says, and his words carry weight after the unappealable electoral victory of Barack Obama: several studies, promoted even by the U.S. Department of Energy, conclude that the wind power that could be collected in the Great Plains (Texas, Kansas and North Dakota, mainly), would be able to generate sufficient energy to supply the entire country.

In the same way, “off-shore” installations (wind farms installed along the coast) would be able to supply the entire country, and calculations made on the establishment of parks in the Great Lakes show that these could generate 80% of the energy produced annually by Canada and United States.

The largest wind farm in the world is found in the county of Taylor, in Texas: the Horse Hollow center has 421 windmills that generate 735 megawatts.

Construction of parks with a similar capacity is being planned. If doubts of this exist, Victor Abate, vice president of renewables for General Electric, explained in June of 2008 to The Economist that he is so convinced that in 2012 half of the new energy generated on American soil will be from wind that he is basing the business plans of this industrial giant on this risky assumption.

For the time being, the Texan businessman T. Boone Pickens has announced the construction in this state of the world’s largest windfarm, capable of generating 1 gigawatt of electricity (similar to the capacity of natural gas or coal plants), with a pricetag of two billion dollars.

General Electric, that expects to sell 6 billion euros worth of turbines in just 2008, will provide the wind turbines for the future plants.

Waking up the rest of the world

Besides Western Europe and North America, wind power is being developed quickly in other parts of the world.

The main emerging markets, above all the BRIC countries (Brazil, Russia, India and Chinese), have already made big investments in wind power, especially in the case of India and China.

India ranks fourth worldwide, regarding installed wind power, behind only Germany, the United States and Spain. In 2007, the world’s second most populated country produced 8,000 megawatts, 3% of the country’s energy consumption.

The Indian State of Tamil Nadu houses several wind farms, instigated by the local companies Suzlon and Micon, as well as by the Danish Vestas. Besides Tamil Nadu, there are also wind power installations in Maharashtra, Karnataka and Gujarat, while new projects are being planned in at least 4 other Indian States.

Moving from a mediocre eighth position in 2006 (with only 2,300 MW installed), China- in 2007- became the world’s fifth largest producer of wind power (with more than 6,000 MW), just behind the other great Asian power, thanks to much more rapid growth than that of any another large economy.

In principle, the Chinese government had established as an objective to produce 5 GW of wind power in 2010; upon accomplishing this in 2007, they doubled the objective, to 10 GW in 2010. To continue with the growth shown up until 2008, Chinese should be able to arrive at 2010 with around 20 GW of wind power installed, which endangers the world leadership of Germany and the United States. The latest predictions argue that China could be the main world producer of wind power by as early as 2009.

China has again modified their objective for installed wind power for 2020, from the initial 20 GW to a minimum of 30 GW.

Brazil also shows colossal potential for wind power, although for the time being they are not as aggressive as India and China.

Listing of the 20 largest wind power producers, in megawatts -MW- installed (years 2005 / 2006 / 2007):

  1. Germany (18.415 / 20.622 / 22.247)
  2. United States (9.149 / 11.603 / 16.818)
  3. Spain (10.028 / 11.615 / 15.145)
  4. India (4.430 / 6.270 / 8.000)
  5. China (1.260 / 2.604 / 6.050)
  6. Denmark (including the Faroe Islands) (3.136 / 3.140 / 3.129)
  7. Italy (1.718 / 2.123 / 2.726)
  8. France (757 / 1.567 / 2.454)
  9. United Kingdom (1.332 / 1.963 / 2.389)
  10. Portugal (1.022 / 1.716 / 2.150)
  11. Canada (683 / 1.459 / 1.856)
  12. Holland (1.219 / 1,560 / 1.747)
  13. Japan (1.061 / 1.394 / 1.538)
  14. Austria (819 / 965 / 982)
  15. Greece (573 / 746 / 871)
  16. Australia (708 / 817 / 824)
  17. Ireland (496 / 745 / 805)
  18. Sweden (510 / 572 / 788)
  19. Norway (267 / 314 / 333)
  20. New Zealand (169 / 171 / 322)

What happens if oil prices drop

Oil prices have fallen, what should cause a slowdown in the expansion of renewables. Cheaper petroleum means less pressure to change toward a system of different energy production.


  • The end of cheap petroleum closer to reality that the relatively discounted oil prices from the end of 2008.
  • Nicholas Stern (author of the Stern Report), Thomas L. Friedman (author of Hot, Flat, and Crowded), Al Gore and advisors close to Barack Obama (Eric Schmidt among them) argue exactly the opposite: it is now, in full crisis, when renewable energies can play a fundamental role. It would be a matter of a “Green New Deal”, a possibility that we have already discussed in the report From crisis to Green New Deal?. The Economist, in a recent article, is opposed to the Green New Deal. Their motives, however, don’t seem as solid and well argued as the norm from this publication: though they are in favor of Obama creating an emissions commerce system, they don’t believe that they should grant subsidies to producers of renewable energies. The German government, for example, has a different opinion than The Economist.
  • Obama won the elections with a program that promises 5 million jobs in the sustainable technologies the sector, promoted as “green collar jobs” (visit Rise of the green collar worker (I)).

Eric Schmidt, who personally supported Obama in the last round of the campaign, is now a part of the transition team that will help the president-elect prepare for his arrival to the White House in January of 2009.

Schmidt will have a crucial role on the team. The investigations carried out by Google.org, the self-sufficient subsidiary of Google and one of the main investors in “cleantech” in the U.S. (the second largest investor in clean technologies in the third quarter of 2008), corroborate that is possible to drastically diminish the energy dependence of US with a clear bet on renewable energies.

What Schmidt says, and to which Obama should listen attentively (access to the proposal Clean Energy 2030, from Google):

  • The experience of Google.org, its investments in clean technologies and its predictions allow the firm to assure that the United States would be able to eliminate by 2030 electricity generation from coal, gas and petroleum, as well as to reduce petroleum use in transportation by 40%.
  • The price of the energy plan is estimated at 4.4 trillion dollars, although the savings obtained with the plan (5.4 trillion dollars) would be about 100 trillion during the 22 years of the life of the plan.
  • It would improve the energy efficiency in industry and homes, until reducing demand by 33%.
  • Electric generation plants using coal and petroleum would be replaced with renewable energy plants.
  • A fleet of electric and hybrid cars that can be recharged at home and with an extensive network, that would make up about 90% of total vehicle sales in 2030. Increase in the efficiency of current vehicles, improving their range.

Closer to the smart electric grid dreamed of by Al Gore (and Vinod Khosla)

The ideas of Eric Schmidt do not differ much from the explanation of America’s energy future given by Al Gore at the Web 2.0 conference, interviewed by the organizer of the event Tim O’ Reilly along with journalist John Battelle.

Gore supports a detailed, and even more ambitious, plan for the development of renewables and the elimination of dependence on fossil fuels.

The former vice president (see a piece of the interview where he speaks about the energy plan that, according to him, the United States needs), talks about a smart grid that would be fed from two colossal infrastructures of renewable generation in the country:

  • Wind farms that take advantage of the winds of the great plains of the Middle West.
  • Solar parks that would be installed in the sunny desert plains in the southwest of the country.
  • A new high voltage network that could conserve and transport all the electric power generated in remote places to the large cities.

Gore also details his plan in an op-ed piece for The New York Times in which he presses the country, and Obama, on the need to act now.

Creating colossal wind power installations that are capable of transporting energy across the continent is one of the challenges of the smart grid envisioned not only by Eric Schmidt and Al Gore, but also by private investors like Vinod Khosla, founder of Khosla Ventures.

For Khosla, it is necessary to substitute the inefficient and obsolete systems of alternating current (AC) installed in the United States and Europe at the end of World War II with a new interconnected network that uses direct current (DC).

Direct current is better prepared that AC to transport energy long distances. Likewise, the cables with this type of current can be laid on the marine floor without losing energy, somewhat impossible with the current systems of alternating current, as explains The Economist.

Eric Schmidt, Al Gore and Vinod Khosla are working vigorously to diminish U.S. emissions, simultaneously creating opportunities and employment for thousands of people (millions, in the longterm) and reducing their country’s energy dependence, reducing in-transit frictions with unfriendly oil countries.

Despite the world economic crisis, the electoral victory of Barack Obama makes the predictions for renewable energies in general, and wind power particularly, more encouraging, even though oil is now near 50 dollars per barrel, less than half that of a few months ago.

The growth potential of the wind power has never been greater. It’s a new era of opportunity, if Big Energy and Big Oil let the new industry take off.