Demand for U.S. wind energy is likely to be sluggish in the coming years as power prices are low and a federal renewable energy mandate is unlikely, Bank of America Merrill Lynch Global Research said on Tuesday.
Wind is increasingly less competitive as power prices have dropped to between $40 and $50 per megawatt-hour -- some $20 less than what wind energy has historically sold for in recent years through purchase power agreements, the analysts said.
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The U.S. wind industry has grown 39 percent on average each of the last five years, but even with steady growth, wind power generation accounts for just 1.8 percent of the country's total, according to a recent report by the American Wind Energy Association.
More than 10,000 MW of wind power capacity were installed in the United States in 2009, the AWEA said, brining total U.S. capacity to 35,000 MW. Analysts at Bank of America Merrill Lynch said they expected wind installations to fall to 7,000 MW this year and to recover more gradually than they previously forecast. They forecast 8,000 MW of new capacity in 2011 and 9,000 MW in 2012 -- both below the level hit last year.
http://www.reuters.com/article/idUSTRE63J5GY20100420While 20% growth year over year is impressive (for any industry) it is just another example that just because wind capacity doubled every 3 years in past doesn't mean it will keep doubling every three years in future.
This is one reason why nobody (at least nobody will influence and power to make it happen) is realistically considering 100% renewable energy in the next 20-30 years. The next two decades are critical for GHG mitigation.
To get 100% renewables would require a staggering amount of production. We live in a capitalistic society. If a wind company builds a new production facility and demand falls they take a loss. So production capacity will grow slowly to take up slack from proven capacity growth. Essentially production growth is a second derivative of current capacity. Companies are conservative, nobody every went bankrupt by expanding "too slow".
Law of large numbers is catch up with wind industry. Nothing grows exponentially forever. The only way we reduce GHG in a material way is "all of the above". In the real world (as opposed to cheerleader fantasy land) there are real limits of growth of wind power and wind growth accounts for 97% of all renewable energy growth. The capacity installs of all other forms of renewable energy are negligible. Sadly I think even CCS needs to be included in that "all of the above" (although coal is still dirty for non-carbon reasons). The numbers are just so big.
This is why any attempt to "kill nuclear" is simply incompatible with reducing GHG. If nuclear goes away then that creates a huge GHG hole over the next 2 decades. Even with Wind Lobby optimistic growth rate it would simply "fill the nuclear hole". All those thousands of MW of wind would simply replace nuclear energy. Low carbon replacing low carbon. Thirty years from now we would go from 20% nuclear and 2% wind to 2% nuclear and 20% wind.
Trading one low carbon source for another one does nothing to reduce net greenhouse gases.Obama understands this and that is why he is a reluctant (realistic) supporter for nuclear energy.