As Michigan continues to consider whether to support offshore wind turbine development, the wind power industry nationwide is losing strength because of increased development costs and lowered natural gas prices.
The Dallas Morning News reports that according to the American Wind Energy Association only 539 new megawatts of wind power were added in the first quarter of 2010 — the lowest level of development since early 2007 — and wind industry leaders are hoping that a federal renewable electricity standard could reverse the current slowdown.
The cost to build a wind farm has roughly doubled in the past four years due to steep increases in steel and copper prices as well as currency fluctuations. A credit crunch has further hurt growth.
When natural gas sells for $4 per million British thermal units as it has for much of the year, wind power loses the big price advantage it had when natural gas traded near $10 in 2008.
While a slow economic recovery has helped push oil prices higher, natural gas seems more stubborn, in part because producers keep discovering huge fields of gas-laced shale deposits and drilling methods to tap the gas are improving, analysts say. Swelling reserves could keep prices in check for years.
Congress is currently considering legislation that would require that 20 percent of the nation’s electricity come from renewable sources by 2020.
Under Michigan’s 2008 renewable energy law utilities here must get 10 percent of their power from renewable sources by 2015. This is one of the lowest goals among the 28 states that have adopted such standards.
Crain’s Detroit Business reports that some believe that increasing the state’s renewable power standards would help the state attract wind turbine manufacturing.
“Michigan has just about everything going for a major wind OEM (original-equipment manufacturer) to build in Michigan, but what is holding them back is lack of sure demand,” said Frank Zaski, a member of the Midwest Governors Association Renewable Energy Advisory Group.
Zaski said Michigan must increase its RPS (renewable power standard) goal over the next several years or find itself at a regional disadvantage.