Wind power faces multiple hurdles

During his brief tenure as governor of New York, David Paterson decided to put numbers to his commitment to alternative energy. By 2015, he pledged, 45 percent of the state's electricity would come from renewable resources and improved efficiency. Wind power was a big part of the plan.

Paterson's deadline is only four years away. Chances of making 45 percent are flickering like a spent light bulb.

With respect to wind, the reasons for the sputtering cross both public- and private-sector lines, experts say.

The fledgling wind industry nationally and in upstate New York is being tested by weak public policy, heavy competition from China and the emergence in the Northeast of hydraulic fracturing to release huge stores of underground natural gas, one of wind's chief competitors as a power source.

Still, the value of being in the Rochester region - where wind power, especially offshore wind, is a significant resource - brought several local companies to Henrietta last week to a conference on the wind energy supply chain. The session was sponsored by Greater Rochester Enterprise and Phillips Lytle LLP, an upstate law firm with a focus on renewable energy.
The conferees were there in part because, though wind power is still small, there is opportunity afoot.

For instance, in the Southern Tier town of Howard, Steuben County, a 25-turbine wind farm is being built. And Genesee Community College is adding a wind turbine, though its role will be largely educational.

Things are happening. But the question for local businesses, and for American business in general, is whether they can make money at this. As long as the wind blows in that direction, they're interested.

Last week's presentations didn't dispel doubts.

"What I hear today is that this is a very competitive business," said David Schupp of Power Drives Inc., a Buffalo firm with a Rochester office. Power Drives makes machine parts such as hoses, fittings and valves. "For us, the margins might be too small to get involved in the supply chain. A lot of these things are made in China and overseas. A made-in-America policy would help."

There is legislation in Congress on the jobs issue. The bill would provide grants to turbine manufacturers and suppliers if they create jobs in the U.S., said Edward Weston, director of the Great Lakes Wind Network. The network's objective is to strengthen the supply chain, which he said is now a "mishmash."

Without congressional action, Weston said, China could increase its advantage over the U.S. in wind power usage and manufacturing. According to the Global Wind Energy Council, the development of wind energy in China is unparalleled in the world. America is building its wind industry, but at a much slower pace.

"What was troubling was that the (economic) stimulus bill provided grants to U.S. companies that used wind but allowed them to buy parts overseas, including from China," Weston said. "The companies would get their grants and turn around and use the stimulus money to pay their Chinese suppliers."

Other than directing grants and tax credits to support U.S. firms, President Barack Obama and Congress lack a consistent, cohesive, strong policy that ensures more use of renewable resources, conferees heard.

"California is doing it," Weston said. "There's teeth in their law. Without that, utilities and others will base their decisions on financials."

Weston isn't a pessimist on U.S. wind power. He said progress on increasing its share of the power grid is about on schedule. Last year, wind accounted for 5.1 gigawatts, enough to power 1.3 million homes. And the equipment is holding up.

"Fourteen thousand turbines went out of warranty last year," he said.

But 2010 was a down year, partly due to the recession but also to the promise, decried by many, of hydrofracking to tap natural gas. The more the price of natural gas drops, the more wind is deflated by comparison.

"Growth in this industry depends on a long-term national strategy on renewables," Weston said.