Green Labor Journal - Working for a Substainable Future

Denise Bode on Green Jobs in Wind Energy

An interview with the CEO, American Wind Energy Association, on 85,000 wind energy jobs today and DOE projections that wind can provide 20% U.S. electricity by 2030

 

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Editor’s note: On March 2, 2010, Denise Bode addressed the EnergyBiz Leadership Forum in Washington, D.C., on “U.S. Wind Industry: On the Move.”  After her presentation, GLJ interviewed Bode about manufacturing jobs in the wind industry and whether Congress and the federal government are responsive to the growth potential of wind energy.  Here are her responses.

20% Wind Energy by 2030

GLJ: A U.S. Department of Energy Study states “The U.S. possesses sufficient and affordable wind resources to obtain at least 20% of its electricity from wind by the year 2030.”  Is the wind industry on track to meet that projection?”

DB: Yes, we are on track, in fact we are ahead of the projections.  But, one of the critical things we face is not having enough of a domestic manufacturing base to support the growth of wind generation at this pace.

Let me explain. We are actually on track to do it faster – and this is great because every time you put wind on the grid, it avoids fuel costs and provides incentives to build manufacturing facilities here in the U.S.  And, it creates tens of thousands of new jobs.

However, unless we get long-term, federal policy support, instead of this on-again, off-again tax policy that we’ve had to live with for the last decade or so, we won’t have the manufacturing base grow as quickly as it could here in the U.S., and we won’t meet the necessary targets earlier.

Installed Wind Energy: 35,000 MW
GLJ: How fast did wind energy grow in 2009?

DB: We are now growing at 10,000 MW a year.  U.S. installed wind capacity increased from 25,000 MW in 2008 to 35,000 MW in 2009.  Industry growth was fairly flat for a number of years, until we started really gearing up in terms of state Renewable Electricity Standards (RES). 

This combination of a federal production tax credit (PTC) and state RES attracted enough manufacturing, so that you really started reducing the costs of building wind out ─ of parts and equipment, of turbines and towers.  As you add more manufacturing in the U.S., you continue to bring down those costs.  But, it is critically important to get the long-term policy in place, not just in 29 states with an RES, but as a federal policy, a federal RES, saying that renewables are in the public interest.

That would tell utilities that renewables, including wind, need to be part of their permanent portfolio.  They’ve got to have this assurance, the predictability of a national policy stating that it is in the public interest to make renewables a significant part of your power generation portfolio.  This kind of national policy would really drive the growth of manufacturing and green jobs in the power sector.

85,000 Wind Energy Jobs
GLJ:  When you talk about wind energy supporting 85,000 jobs today, aren’t you’re really talking about greening the Rust Belt?  Most of these wind power components come from steel, sheet metal, machine tooling, electrical equipment, etc.?

DB:  Yes, this is the exciting thing about the wind energy industry.  Wind energy growth is basically helping industries where people are out of work. This growth is happening just in the last four-five years, as the manufacturing sector followed the Renewable Electricity Standards at the state level.  
So, energy policy drives job growth in regions of the country that we need to diversify economically.

Regarding renewable energy job growth, the states have been the leaders here.  This is grassroots-up policy that really works.  And, the states are showing the way, particularly in renewables policy, because of the vision of state utility commissioners.  They are the ones who for years now have said for utilities, “in exchange for your monopoly franchise, state government has the ability to say what is in the public interest.”

And, the states have said, we think it is in the public interest to have renewable energy, not only because it makes us more secure nationally, but because this brings in jobs and manufacturing locally.  If we do it first, before the next state does, we’ll bring that manufacturing plant here. So, the expansion of wind energy is also an economic development policy ─ which, unfortunately, many people in Congress just don’t understand yet.

2010 Windpower Conference and Exhibition
It is not just us, the American Wind Energy Association (AWEA), saying this.  If you come to our 2010 Windpower Conference and Exhibition in Dallas on May 23-26 and see 50 states buying exhibition booths, then you would really get it.  That’s what’s driving this growth now and what drove it before.  

And, this is why it is so appropriate to have a federal energy policy, saying that it is in the national interest to have these renewable sources of energy in place. Because, not only do we want to generate less carbon and less pollution, and to use less water, but, by golly, we want America to lead in jobs, in these new kinds of green jobs.  And this sends a message to the rest of the world.  

U.S. manufactures 53% of Wind Power Components
GLJ:   You mentioned that 53% of the 8,000 components needed for a wind power installation are now “Made in the U.S.A.,” and that this is a significant increase over what it used to be.

DB: Yes, with the industry basically doubling and tripling capacity over the past five years, what’s followed is growth in nearly every kind of manufacturing job, mainly in the old Rust Belt, and also throughout the wind-rich central plains states down into eastern Texas. And, since the source of wind energy is infinite, these are long-term, sustainable jobs.

Unlike other sectors of the energy economy, which may be depleting or may be on and off, or may be volatile, the one thing about the wind industry is that it is based on long-term contracts.  So, wind is different from natural gas, where the electric industry will negotiate only a one-year contract for natural gas – primarily because the fuel is so volatile.  Then the utilities go out and build these power plants.

With wind what they do ─ and these are mainly private sector companies that are coming in and building the wind farms, 85-90% are private sector ─ is go to capital markets to raise the money to build a wind farm. Then, the developers either build for a utility, or they build the wind farm themselves and sell power to a utility. In order to make this work, they sign 20-year contracts, Purchase Power Agreements, with the utilities.  As a result, consumers know what the cost of wind energy is going to be for 20 years out, and this certainty provides a strong, predictable basis for the economic growth, because energy costs are fixed.

As many of the panelists said today, certainty is everything for business.  Wind provides reliability, predictability and certainty. Wind may be variable, but that variability is predictable, because we can forecast increasingly accurately when the wind is going to go up or go down, so it is easily integrated into grid operations.

500,000 Renewable Energy Jobs by 2030
GLJ: What kind of job growth do you see coming in the renewable energy sector over time?  Do you have good numbers on this?

DB: Absolutely, if we get a national energy policy in place, according to a 2010 Navigant Consulting study on “Jobs Impact of a National Renewable Electricity Standard,” we are talking about generating 500,000 new, green jobs in the renewable sector by the 2025-2030 time period.

And, the lion’s share of these jobs are in the wind industry.  During the early years, I think we will be closer to 200,000 new jobs just for wind power alone, and that’s over and above where we are now.  

GLJ:  Do you see any real bottlenecks, such as transmission lines, or are these really all soluble, for wind to reach 20% of U.S. electricity by 2030?

DB:  No.  In fact the 20% DOE report contemplates there would be new transmission needed, but, not such an extraordinary amount that we could not do it within the next 20 years.  Right now, the projects are there; we are ready to go.  

We have a vision of a large network, a high-voltage super-highway, that’s the vision.  But, I think realistically you are going to see the transmission built.  It is already being planned on a regional basis, by the Southwest Power Pool and MISO (Midwest Independent Transmission System Operator) in the middle of the country. But, the Eastern Interconnection Study, I think, will help show the vision of how they can plan to do it, the same thing that we started doing in Texas and in the western states, in terms of sharing the costs of building out the transmission.  I really am optimistic that these transmission problems can be solved.

A National Renewable Energy Policy
GLJ:  What is your ideal national renewable energy policy for wind? If they gave you everything you wanted at the federal level, what would that look like?

DB:  I think it would be the policy professed by President Obama when he ran for office ─ 25% U.S. renewable energy by the year 2025.  We believe we can meet that, and that we are on track to meet that, but the key factor is having a strong national renewable electric standard in place in the early years.  

Both the House and Senate bills start in 2011 and 2012, and their target goals for bringing on renewables are much too low. They don’t sufficiently drive the new electricity development or the new manufacturing that needs come on line in order to really reduce costs.  We would like those early years be in the neighborhood of what would generate 10,000 MW of new installed wind growth annually, which would be more in the neighborhood of a 12-13% national RES. So, having a strong target in the early years is even more important that in the later years.  

Regarding the Production Tax Credits and Investment Tax Credits, what we’ve focused on is making sure that there’s not another drop off.  What happens when the tax credits expire is that you have people acting mainly in response to that, especially when there is no other policy in place.  So, what is critically important is having a long-term national policy with fixed start years, legislating that it takes effect in 2011 or 2012, while keeping current tax policy in place until that policy kicks in.

I don’t think anyone in our industry has said, you know, we need to have all of these things. But, when you look at 80 years of tax incentives for natural gas, plus all the exemptions for oil, and subsidies for nuclear power, I think we’re just asking for a level playing field for wind until we can get our feet underneath us.   I don’t think that’s an unfair request for an infinite source of energy that provides no pollution, uses no water, and costs virtually nothing in terms of fuel. In every study analyzed by DOE, wind saves consumers money.

For additional information, see American Wind Energy Association.