Summary
Despite the onslaught of "The Great Recession" that started up in full in the last quarter of 2008 (bankruptcy of Lehman Brothers, General Motors, Chrysler, Merrill Lynch, etc) which became a world wide contagion, much of the renewable energy industry did OK for itself in 2009. In particular, the wind turbine industry truly became a world wide industry, with 3 major centers of growth - North America (US centered), Asia (China centered) and Europe (many major nations with steady growth). In addition, the offshore wind turbine industry began to "take off" in Europe in a significant manner; growth should be near 100% for several years for a variety of reasons. In addition, several other countries adopted a Feed-In Tariff, and a few more seem ready to take he plunge - especially the UK. Total world capacity was almost 158 GW at the end of 2009 with an average output of almost 45 GW. At this rate, by the end of 2015, world capacity will be near 450 GW (doubling every 3 years), with an electrical output equivalent to 150 x 1100 MW nuclear reactors.
The PV industry also sold a lot of product, though a market upset in Spain caused a significant variation in sales throughout the year. In the U.S., the ethanol industry performed steadily and profitably, after the wild ride of the 2007-2008 era. The bio diesel industry did not do well in the U.S. after the European Union slapped import duties on subsidized US product. Meanwhile, steady growth occurred in both biomass combustion (often wood to energy) and geothermal sectors. Finally, a corn cob to ammonia facility, and waste wood to ethanol (syn-fuels route) were close to completion by the end of 2009.
In NY state, 2009 was for the most part a dreadful year, renewable energy speaking. The weakness in the NYISO system, coupled with a collapse in electricity demand led to lower prices, which effectively shut down the wind turbine installation industry in the state. In addition, no significant NY wind turbine related manufacturing operations were started up. The only glimmers of progress was the takeover of the Fulton ethanol facility by Sunoco, followed by the successful operation by the end of the year, as well as the start-up of the Globe manufacturing silicon plant in Niagara Falls (98% Si). In early 2010, high purity Si will be in production, for which there should be a significant market in Ontario.
Discussion
Wind: Last year, new records for worldwide and US installation rates were set. New installations were 37.466 GW (about $60 billion was spent on this) versus only 26.3 GW installed in 2009. At this pace (22% CAGR for he last decade) the installation rate will be 113 GW/yr worldwide, and the installed capacity will be close to 475 GW by 2015. See
http://www.gwec.net for details
China doubled its production and installation (essentially no imported turbines are allowed entry into China any more, and only a small percentage of its turbines are made by non-Chinese firms, a direct result of deliberate government policy) from ~ 6 GW to 13 GW. Total installed capacity is now 25.8 GW. By next year, the installation rate should be near 25 GW, and more wind turbine capacity probably will exist in China than in any other country. Unfortunately, the installation of coal and gas fired power plants has also been kept up at a significant rate - so much so that China will now have to import successively larger amounts of coal. In effect, China has achieved "Peak Coal" within the country, due to the inefficient and dangerous coal mining system. Other significant coal uses are for steel, chemical as especially ammonia and major by-product urea. China is self-sufficient in wheat and rice only due to massive over nitrogen fertilization - also deliberate government policy. Also unfortunate is reports of the poor quality of the wind turbine units; production and installation of turbines (which requires labor and capital) seems to be more important than is the electricity that is supposed to be obtained from them. Maybe this is the down side of the meld between communism, capitalism, fascism, corporatism, corruption and the world's oldest bureaucracy - all of which make for the bizarre mix that is China in 2010.
In the U.S., 9.9 GW of turbines were installed - mostly in Texas - see the AWEA map at
http://www.awea.org/projects. The higher than expected installation rate was still not sufficient to fully utilize the large production capacity installed in the last 2 years - several facilities had to slow down, especially in the early part of 2009. The new stimulus measures pushed by the Obama administration (the use of the ITC and or equivalent 30% grant instead of tax credits versus the PTC) were an important factors in this recovery. The US now has over 35 GW installed, which should produce an average of nearly 12 GW on a continuous basis. Due to the "Great Recession" - George Bu$h 2's parting gift to America - electricity demand fell in 2009 versus 2008 by about 5% in the US. Much of the lower electricity usage (~ 25 GW) was the result of less coal and natural gas combustion to make electricity. Partly as a result of this, US CO2 pollution fell in 2009 versus 2008 by about 500 megatons (less electricity made, less gas burned in shuttered industrial facilities, less driving of cars and trucks).
In Canada, Ontario and Quebec were where most wind development occurred (950 MW). Thanks to the Green Energy Act in Ontario (a Feed-In Law), wind development is likely to significantly escalate (double each year for several years) in 2010. In addition, over $84 billion (21 GW) in proposed offshore wind farm applications (100 of them) for the Great Lakes were submitted to the Ontario government in less than 1 month. With this rate of wind turbine installation, the closure of those dreadful coal burning power plants like Nanticoke could start happening by 2011.
In Mexico, developments across huge wind canyon/plateau in Oaxaca started - this will result in several GW of very fast wind speed turbines being installed - winds average 9 m/s in many locations in this state. See
http://www.bergey.com/Maps/Mexico.Wind.htm and especially
http://www.nrel.gov/wind/international_wind_resources.html#mexico. Oaxaca is in extreme southern Mexico; its wind resource is estimated to be near 44 GW delivered; this is really windy area, caused by the air pressure difference between the Gulf of Mexico and the Pacific Ocean
In Europe, about 10.5 GW of new turbines were installed - including over 500 GW of offshore installations. There is now over 76 GW of wind capacity in place - Spain and Germany have almost 60% of this capacity, but development is occurring at an increasing pace in several countries - notably the UK, France, Italy, Sweden, Portugal, Greece, Ireland, Poland and Turkey. The offshore development in the North Sea is about to achieve significant growth, as much of the infrastructure for this to occur is now in place. The manufacture and installation of 5+ MW units is now occurring in commercial mode. There are 4 makers of 5 MW or more sized units - REPower, Areva/Multibrid, Bard and Enercon; Enercon's is now rated at 7.5 MW, and they are targeting land based units using concrete towers and 62 meter long blades that are shipped in two parts.
As expected, installed costs stayed fairly constant; the price pressure cased by rising steel, copper and oil (epoxy resin is about 75 wt% of most blades, and that's mostly oil derived) eased somewhat. Several companies introduced moderate wind speed turbines (longer blades and possibly taller towers for a given generator size) in the US - notably GE, Vestas, Siemens, Nordex, Fuhrlaender and REPower. GE even introduced a replacement to it's huge moneymaker (1.5 MW) models - a 2.5 MW unit. There is a $1 billion project in Oregon where ~ 250 of these will be installed in 2010-2011. Most wind turbine companies managed to weather the financial storm of 2009 through being careful not to overextend themselves. If the world economy recovers a bit in 2010, they should be in for a good financial year. Many large manufacturing facilities were built in the U.S. in 2009 (notably Vestas, Nordex, Siemens) and Canada (REPower, Enercon), which should be producing products in 2010. All that is needed is customers....
As for NY State, the AWEA site lists several projects as coming on line in 2009, but they were all constructed in 2008 and one in 2007. None were started in 2009. This is mostly due to the collapse in electricity prices throughout the state that resulted when demand dropped by about 5%. Since electricity is a very inelastic commodity, a slight change in demand usually results in a large change in price. And due to the NYISO system, when demand drops slightly, prices collapse even faster due to the Merit Order Effect (the pricier electricity is removed, and prices can drop by 75% for a small drop in demand). Despite the presence of the RPS incentive in NYS (1.5 c/kw-hr for the 2009 projects, ~ 2 c/kw-hr for two proposed 2010 projects), less than 50% of the meager renewable energy targets established by the RPS program are likely to be met - a result of tying wind derived electricity prices to fossil fuel/depreciated/subsidized nuke derived electricity. Perhaps a different plan will be forthcoming which overcomes the unforeseen dis-econommies of NY's electricity market for renewable energy.
Solar - Worldwide PV capacity installed was about 8 GW in 2009 - worth about $50 billion and about 1 GW in terms of delivered electricity, making PV about 10 times more expensive than wind. No significant breakthroughs were introduced, though the superiority of the Feed-In Law system as a way to promote job creation/PV installations was quite apparent. MAny new manufacturing facilities were opened in 2008-2009 - especially in Germany and China (which is attempting to be the dominant world PV manufacturer, and the same goes for wind).
Biofuels - In the U.S., the ethanol industry continued its steady process, after the wild roller coaster of 2008. In that years, oil, corn, steel, fertilizer and natural gas prices all peaked, as did availability of credit; these collapsed by the end of 2008. Verasun, a major EtOH player, went bankrupt due to corn futures gambling (they got spanked bad); it was evidently bought out/plants were sold to Valero, a major petroleum refiner. During 2009, corn prices remained steady despite record yields (162.5 bushels/acre) and a huge crop, while natural gas and ammonia prices remained collapsed and while petroleum prices rebounded from $35/bbl to near $75/bbl. As a result, a record production of EtOH was achieved without the industry going bankrupt. By the end of 2009, production was averaging 765, 000 bbls/day. A 10% increase in capacity is anticipated for 2010.
The Future: For 2010, the worldwide and also regional economies are expected to recover, somewhat. China is expected to double its output, and it will become the country with the largest installed capacity and fastest installation rate of wind turbines in the 2010-2011 time period. At some point, it will also begin to flood the world with Chinese made wind turbines (all based on European technology), using Chinese financing (some of that Walmart money, put to a use).
In the U.S., the wind turbine marke will limpa along, still hampered by the bizarre financing schemes needed to install wind farms using tax credit/tax deduction based financing. Since electric monopolies are one of the few industries that have a reasonably assured profitability, they may well become dominant financiers and project owners in the industry. Continued major foreign ownership of wind farms and financing of wind farms is also quite likely (mostly European based, like Iberdola, EDP (Horizon), EDF, RES, etc.
A wild card in these efforts will be the demand for oil and also the price of oil (now extremely closely intertwined). World oil production has evidently reached an upper limit, mostly based on the ability to BUY the oil (Peak Credit). If worldwide economic activity picks up, oil prices might rise to the point where another recession is induced by late 2010 or early 2011. This would put the ability to finance wind farm developments in some doubt - especially in the U.S.
In Ontario, the "gold rush" for renewables will most likely continue, a direct result of their Green Energy Act. The contrast with NY State (and Ohio and Michigan) will become very stark, but the ability to get a Feed-In Law for any of these state is still questionable. The only difference between north coast and the south coast of the Great lakes will be in financing of projects. The stable prices made possible by the Green Energy Act will allow large scale developments (of varying sizes), while the unpredictable electricity pricing in the U.S. will effectively severely limit any new wind turbine installations (and render any PV installations moot, or else extremely subsidized by taxpayers).
Oh well, these are interesting times.....
DB
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