Why Oil Spill Hurts Progress of Wind Power

The BP oil disaster off the coast of Louisiana is affecting the progress of wind power as an energy alternative at the world's biggest energy conference in Dallas.

Photo: LMT

Ironically, the fate of wind has quite a bit to do with the fate of petroleum.

That’s why the estimated 20,000 visitors among the 1,400 exhibitors here have one eye on all the innovation in wind power, and the other on what is happening both in the Gulf of Mexico, where the oil spill is spreading, and in Washington, D.C.

"The oil disaster highlights the difficulty of relying on fossil fuels as a society," said Ray Wood, managing director for power and renewables at Credit Suisse . "So, if anything, it will raise the public consciousness about what is our addiction to oil, what is our addiction to fossil fuel.

"It should raise public awareness for renewable energy. It should help the federal government to support legislation to allow a phasing in of renewables in a more aggressive timeline."

It turns out, that might be the most idealistic angle among the thousands attending the conference. Yes, a huge oil spill makes wind power seem cleaner and safer, but to be truly viable, wind power needs what is called a renewable energy standard—a federal mandate to reach a certain amount of renewable energy production by a particular date.

That mandate would ensure wind energy's presence as a core part of the nation's alternative energy plans.

The possibility of that happening in the United States is closely tied to a broader energy bill that is now in Congressional limbo because offshore drilling was one of its key components.

Now, because of the BP spill, offshore drilling is a political albatross, hence a breakthrough in wind power is being impeded by the Gulf's oil disaster.

And the timing is problematic for the wind industry. After showing impressive growth in 2009—breaking records for installing nearly 10,000 megawatts of generating capacity—the first quarter of 2010 has shown the slowest growth rate in three years.

"Wind in the U.S. has been going gangbusters for the past five years," said Ned Hall, president of AES's wind generation division.

"Unfortunately, with what's going on in the economy and the lack of a national renewable energy standard, things are slowing down."

That doesn't mean Windpower 2010 has lost its collective sense of business optimism. The sheer scope of the conference is enough to prove that fact. And the industry is moving forward as if the legislative help will come, even though it likely won’t be this year.

"The legislation will be helpful for long-term growth, but I think right now, there's enough momentum at the state level and enough momentum at the financing markets to keep wind going," added Credit Suisse's Wood.

At Windpower 2010, energy giants like General Electric and Siemens are on hand, along with hundreds of developers from places as far away as Perth, Australia, and as near as right as Dallas.

These participants are making deals and showing the next phases of technology. And it truly is a global story, especially since more than 35 countries have the renewable energy mandates that each exhibitor wants to see in the United States.