With former president George W. Bush giving the keynote address at WindPower 2010, the curious co-dependence and competition between the wind energy industry and oil & gas has never been more obvious.
Today's wind industry faces many challenges, but none is more threatening than the historic low natural gas price and the new shale gas discoveries that suggest gas will continue to beat wind, its only real rival, in winning the limited financing available for new generation. Megawatt for megawatt, new natural gas plants are cheaper to build than wind projects. They can become more expensive because of the cost of fuel, which wind projects do not incur. But not when the cost of natural gas is below $6-to-$7 per MMBTU -- and right now it is hovering around $4 per MMBTU.
Nonetheless, wind is the biggest direct competitor with natural gas to capture the bulk of what money is now being spent to build new electricity generation. Nobody is investing in new coal, other renewables are more costly, and something the former president calls "nuculur" takes years to build. What's more, capital costs for turbines and other equipment are coming down. Offshore and onshore developers are also being helped by technology and execs from oil and natural gas, who built similar large-scale plants for fossil facilities in the 70s.
So when does crossover occur? President Bush, whose governorship of Texas oversaw the policy advances that grew the Texas wind industry into the nation's foremost, has been thinking about questions like that. He didn't give an answer, but he's thinking about it.
"This will come as quite a shock to some of our citizens," he joked about his latest task -- writing his memoirs -- with the wind industry audience. "who didn't think I could read a book, much less write one."
Ever the history buff, he is modeling his work on the memoirs of Ulysses S. Grant, widely recognized as the best of those written by former presidents. Like Grant's, President Bush's memoir will be anecdotal and designed to reveal opinions in the way he tells the story rather than in overtly stated judgments.
One of the anecdotes he will tell, he suggested, is how he saw the opportunity in wind energy in the 1990s and gathered a group of "young, spirited, environmentally conscious people" like Pat Wood, who he later appointed to chair the Federal Energy Regulatory Commission.
"We like wind," he said he told Wood. "Go get smart on it." Bush and Wood got smart enough to introduce to Texas a 10-year target of 2,000 megawatts of installed wind capacity that would turn into 9,000 megawatts of installed capacity in 11 years. As Mr. Bush proudly noted, Texas is first in the U.S. in cumulative wind capacity and, if it were a separate nation, would rank sixth in the world.
So what will grow wind for the nation? Mr. Bush did not endorse the Renewable Electricity Standard (RES) for which all previous WindPower speakers and the entire wind industry continue to push. Instead, the former President said, it is necessary first to accept that, as he declared when president, "we are addicted to oil."
It is necessary to break that addiction, he said, for three reasons: (1) It leads to economic instability, (2) it is harmful to the environment, and (3) it is a threat to national security. New technology, Mr. Bush said, is the way to break the addiction.
Risking being "a blowhard at a wind convention," the former President listed six things he learned as Texas governor that will grow wind:
(1) Good sound law;
(2) Allowing entrepreneurs to get a "reasonable return" for investment risks;
(3) "If you're interested in promoting industry, keep your taxes low;"
(4) Reasonable permitting;
(5) Access to transmission: "The bottlenecks to getting wind to the marketplace are transmission lines," he said. "There's a big difference between the talkers and the doers, and here in the state of Texas, we are doers."
(6) Giving consumers the option to choose wind energy, because "oftentimes they will."
We are in a transitional period, Mr. Bush said. A comprehensive energy policy is necessary. But his grandchildren, he envisioned, "will be driving electric cars powered primarily by renewable sources of energy, be it natural gas, whether it be nuclear power or whether it be solar and wind energy."
So there in Mr. Bush's inimitable words lies the answer: When natural gas becomes a renewable energy, it will certainly eliminate wind from the marketplace but, until that happens, count on wind to sooner or later regain its footing.
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Photo by Randy Eli Grothe