John Phipps: What Solar and Electric Can Learn From Recent Wind Energy Woes

Opponents of wind energy may be encouraged by the financial difficulties of that industry. For the first time in several years, wind generated electricity costs are rising after years of being driven lower by new technology and competition.

Wind giants like Vestas, GE, and Siemens are facing losses as they struggle with several simultaneous and familiar issues. Beginning in 2010 the build-out of wind farms looked to be on a solid track, and with the economics of wind turbines promising, many countries started lowering subsidies. At the same time, new research and much more operating data helped designers push turbine size, efficiency, and productivity to new levels. Thanks to much larger machines, wind turbines need not seek the highest wind speed areas, as newer turbines produce with less than 10 mph breezes.

These advances did not come cheaply, however, and manufacturers kept pushing the envelope to build ever larger machines. The breakdown of the supply chain devastated turbine production just as this push was starting.

At the same time, China’s new emphasis on infrastructure has leaders looking inward to supply the construction of new wind farms within China, decreasing their exports of crucial components. Meanwhile in the US and to a lesser extent elsewhere, the permitting process has made planning new capacity more expensive and time-consuming. This is another huge advantage for the Chinese where no local or regional permission or even opinions matter. Like their extensive high-speed rail system, engineers determine the best route, and that’s where it gets built.

A planned wind farm in my area was essentially scuttled by remarkably stringent siting regulations, for example. For fossil fuel fans and investors, especially coal, this may be good news, but the slowdown in renewable energy development suggests higher oil and coal prices.

Meanwhile, greenhouse gas emission goals get pushed farther into the future. This promises a financial collision with the enormous number of companies and governments that have loudly committed to zero emissions. But this is not just a two-player game.

The economics of solar, a massive rollout of electric vehicles, and differing outlooks for specific fuels like natural gas and oil promise investor headaches and forecaster frustrations.