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| Fig. 1: An offshore wind turbine. (Source: Wikimedia Commons) |
There are many forms of alternative energy, each bringing the promise of clean, renewable energy. Wind energy is a popular alternate energy source that offers relatively large amounts of energy at more reasonable costs compared to other alternatives like solar, geothermal, and bio-fuels. However, the progression of this industry is a politically charged topic. From international trade to environmental policies, decisions of the United States government shape the landscape of how this alternate energy sector will progress. Opinions for and against government subsidies and protection for this industry are very strong, but both have valid points. This paper will cover a few recent issues the government is facing.
There are regions in the United States where a great deal of energy can be captured from the wind. One such place is Hawaii. Officials there plan to meet 70% of energy needs with wind by 2030. [1] Such a solution offers the promise of importing less fossil fuels that come at a higher price than the continental US. One problem Hawaii is facing in implementing this solution is the inconsistency with which the wind blows. A typical scenario, the wind is strong during times of low power usage and weak when electricity is in high demand. One possible solution Hawaiian officials are looking into are batteries, but the costs for both wind turbines and batteries are considerable.
Another challenge with Texas, currently the state with the most wind power, is the location of the wind turbines. The wind blows in west Texas but is needed most in cities like Dallas and Houston. This problem requires expensive networks of power lines to connect production with consumption.
A promising solution to the previous challenges is to build large wind turbines a few miles off shore. The rational is the distribution distance is much shorter and the wind is more consistent over the ocean. Countries like Denmark and Britain have such wind farms in operation which produce enough electricity for hundreds of thousands of homes. [2] China's first offshore wind farm also went online this month. For the United States however, offshore wind turbines have been in the planning and approval stage for years. Many local residents are against having these farms close to their homes and the cost of building offshore is roughly twice as much as on land. [2]
An important point to consider is how reliable energy sources are after a natural disaster. One of the most recent natural disasters that effected multiple major metropolitan areas was hurricane Sandy. After hurricane Sandy hit the east coast, fossil fuels were the only power source in operation. [3] All generators and water pumps used ran off gasoline or diesel. In fact, one of the first commodities requested by New Jersey Gov. Chris Christie from the federal government after the storm was quick delivery of motor-fuel supplies. This incident is an important reminder that whatever green energy solution is implemented, essential emergency infrastructure needs to be in place.
In response to the steady increase in demand for wind turbine farms, China has responded with an even faster manufacturing capacity. This has caused an international price war where many Chinese based companies are delivering towers below the cost of manufacturing. This practice is called dumping and several suites have been filed to increase tariffs on towers coming from China. [4] Without these tariffs, United States companies could not compete and would go out of business. If Chinese companies obtained a monopoly on the international market, tower prices would potentially increase substantially from the lack of competitors.
Wind turbine technology offers a substantial option for clean energy, however, many obstacles remain for the industry to exist without direct government aid. From an economics perspective, how long will the government need to protect local companies with tax incentives and international tariffs? The practical challenges of location and reliability must be addressed for a long-term solution. It is apparent wind technology will continue to grow, but the rate will largely rely on the government's decisions.
© Paul Theodosis. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] L. Petersen, "Hawaii Doubles Down on 'Big Wind,' Seeking Long-Term Energy Solution," New York Times, 15 Apr 11.
[2] T. Zeller Jr., "Cape Cod Project Is Crucial Step for U.S. Wind Industry," New York Times, 26 Apr 10.
[3] R. Bryce, "After Sandy, No One Lined Up for Wind Turbines," Wall Street Journal, 7 Nov 12.
[4] D. Cardwell, "U.S. Raises Tariffs on Chinese Wind-Turbine Makers," New York Times, 27 Jul 12.
