Policy, not cash, main block to
wind power growth
Dec 15, 2000 - Matthew Jones - Planel Ark
LONDON - The average high street bank manager may
look askance at being asked to finance a wind farm,
but it tends to be government policy which holds
back growth more than lack of finance.
"On the whole
I don't get many people complaining about having
trouble getting funding for their projects," said
Vicky Pollard, chief executive of the European Wind
Energy Association (EWEA).
Pollard said it was government
policy that created, or failed to create, the right
conditions to attract investment.
Wind power comes
in various guises throughout the world, ranging
from vast wind farms spread across hundreds of acres
with turbines up to 100 metres high, to small community
windmills that may provide power to only a couple
The modern wind era got into gear after
the OPEC shock waves of 1973 buffeted western economies.
Wind is the fastest growing energy technology in
the world with total capacity of about 13,500 megawatts
from under 2,000 megawatts 10 years ago.
said investment was easy to attract in leading wind
countries like Germany, Spain and Denmark because
legislation favours the industry.
A report by the
American Wind Energy Association agrees; "The fuel
for European growth continues to be policy incentives
that have facilitated the birth and development
of the wind energy industry," it said.
a country with one of the strongest growth rates
in wind energy, active political support from national
and regional governments has propelled capacity
to over 1,700 megawatts from only 72 megawatts in
Some slowdown is expected because the regional
governments of Castilla and Leon have developed
additional requirements regarding siting of wind
Germany, the world's leading wind power
country with over 4,000 megawatts installed capacity,
has a guaranteed renewable energy tariff that pays
high prices for green electricity.
"In Germany there
is state encouragement to develop wind. The price
wind farms receive is relatively high, making projects
attractive to investors," said Ian Taylor, a renewable
energy analyst at environmental group Greenpeace.
Boasting over 1,700 megawatts, Denmark is a wind
tour de force. The country generates over 10 percent
of its electricity from green resources and targets
a 50 percent rate by 2030. Experts attribute the
growth to both public and political enthusiasm for
the green power source.
Other countries enviously
look at the Danish experience, which has produced
the leading wind turbine manufacturers and where
the industry exports over 75 percent of production.
Wind turbine firms Vestas and NEG Micon are big
players on the Danish bourse, at times driving the
In the US the wind industry is set to expand
from a current 2,500 megawatts of capacity, primarily
due to a federal tax incentive which encourages
the construction of wind farms. When the production
tax credit runs out on December 31, 2001 there are
fears growth will be slowed.
INDUSTRY STRUGGLES IN WIND-RICH UK In contrast,
Britain, Europe's windiest nation with enough offshore
wind alone to supply three times current electricity
demand, lags behind with a little over 500 megawatts
ministers say the right things, but there are consultation
after consultation and renewables have become tangled
up in the liberalisation of the electricity markets,"
The EWEA's Pollard said difficulties
in getting planning permission have hindered growth
"The project lead-in times are too long.
The main barrier is not investment concerns but
the planning process," she said.
Dale Vince, the
managing director of UK-based Next Generation, one
of Europe's leading green electricity providers,
said more support is needed.
"We need to level the
playing field and give renewables a chance, but
NETA (the government's reform of the wholesale electricity
market) is going the opposite way," he said.
the developing world, there are other problems.
"In Africa, the low price consumers pay for electricity
is an issue for all power projects," said Pollard.
India was one of the fastest growing wind markets
in the 1990s, but the extensive use of investment
credits led to unsustainable revenue losses and
the government modified the credits, a move which