The romantic vision of weaning the Midwest, and ideally the U.S., off the fossil fuel-powered electricity grid is appealing to many. Yet, perhaps equally as many believe it to be an elusive or perhaps unobtainable goal. I am not one of those skeptics - I am a believer.
A radically reduced carbon-dependent, cleaner energy vision becomes better understood, particularly as it pertains to the potential contribution from wind power, when one strips the situation down to the most crude, fundamental, yet most powerful drivers for large scale action - supply and demand.
On the demand side of the wind power market, the rest of the country needs to catch up to where the Midwest is in encouraging both utility scale wind and small community wind. At a minimum, states need Renewables Portfolio Standards (RPS) in place from their state governments to create the aggregate consumer market "demand" for clean energy. RPS is a regulation that generally places an obligation on electricity supply companies to purchase or generate a specified percentage of electricity from "renewable" sources such as wind, solar, biomass, geothermal, hydroelectric, etc. Only 27 states have such standards; however, all but Indiana in the classically defined "Midwest states" have some form of RPS in place. There are other important drivers in building demand (renewable technologies getting down the cost curve and competing with coal on cost is foremost), but RPS seems to have had the most direct impact thus far.
On the supply side, we obviously need more turbines, solar panels and clean energy developments in place. There are many drivers to boost supply, but wind energy is rather responsive to innovative tax credits and incentive programs for investors, developers and financial institutions. "The Minnesota Flip" is an example of a policy that has realized success in boosting wind energy supply, as demonstrated by Minnesota's national leadership position in community wind megawatt capacity. However, government-driven regulatory policy alone is not a sustainable clean energy panacea...
For the clean energy industry, in particular the wind industry, to really take off in the Midwest, it will require a regional wind supply chain ecosystem to both continually improve wind energy generation, through local companies driving technological innovation, and to develop local operational expertise that can bring down operational and especially maintenance costs of wind energy. Most wind turbines are physically enormous, expensive to purchase and very costly to install and maintain - just imagine the expense of getting a massive crane to a remote area to replace a broken turbine blade, coupled with the expense of moving around large replacement parts.
I am pleased to report that the development of this Midwest regional ecosystem is under way and is picking up steam. Yes, the Midwest will continue to pick up its share of contract manufacturing opportunities for major wind turbine OEMs, but the stories I find most encouraging and critical to accelerate and sustain the Midwest region's leadership in wind energy are those coming from the regionally-based wind-related technology innovators.
I'm not just blowing wind up your backside. Within the past month there have been announcements from Michigan-based wind sector technology companies from diverse sub-sectors of the wind power supply chain. (Disclosure: my venture capital firm neither invested in nor is actively considering an investment in any of the following three companies):
We are witnesses to this industry evolving right here in our Midwest backyard. It won't take place overnight, but innovative companies like Danotek, Astraeus and Accio, and many others are moving us closer to realizing the broader vision of substantially-reduced fossil fuel dependence, giving me reason to stand up to clean energy skeptics and confidently state, "I believe..."
In about five years electric and hybrid cars will demonstrate a dramatic revolution.
See the article The Love Affair with Autos Allows a Seductive Alternative - on the website: http://www.aesopinstitute.org
It provides an outline of how future cars might pay for themselves, by employing remarkable new technology that can turn them into power plants when parked.
Visualize electric cars that will need no recharge and hybrid automobiles that will use ordinary water as fuel: One gallon may prove sufficient for 1,000 miles of driving.
Of course, these statements are almost impossible to believe.
Yet, as the article indicates, this new science has begun to be validated by independent laboratory experiments.
And soon, I predict, more will be.
Until then, nobody is expected to accept these incredible breakthroughs as real.
Imagine the implications! The public will line up to buy such cars and trucks. The auto industry will come back to life.
This will change the conventional wisdom about energy. It opens a path to far more rapidly reduce the need for fossil fuels.
The real challenge is to accelerate development.
Instead of five years, it could take less.
With an all out effort, perhaps much less!
Wind energy / hydro-electric storage (dams) are not a viable alternative to fossil fuel ( natural gas).
The demand for the US energy is in a word "..profound..".
No known alternative can reproduce the magnitude of required energy with the same level of dependable quality.
Bio-fuel CAN work if the US collapsed the entire oil industry. I'm talking near extinction. Job loss and world power would diminish like a tsunami wave thats 100 thousand feet high. Now lets all live in the realm of reality here for a second.
What country would willingly collapse an entire industry for cleaner air and less national security ?
Answer world wide = none.
Oil drives war. War prevents invasion. If you can find an alternative to oil that maintains a choke hold on competing nations war machine THEN you have an answer.
It's convenient to be green. But would you put yourself in the shoes of an Iranian justice cleric ? How about trusting China with your security ? Japan ? Maybe North Korea ? How about Indonesia ? Canada perhaps ? Oh I know, Brittain ? No no how about Germany ? You get the point here ?
Oil is like granddads shotgun in the cellar. You dont wanna use it but you aint gonna throw it out.
It seems to me that the Great Lakes area is ideally located to be Americas "new" manufacturing power center. That is if the people with money will quit playing financial fantasy games and invest in real manufacturing in America.
The thing is manufacturing requires real intelligence whereas fantasy finance only requires tunnel vision, lack of morals and a bunch of geeks in the basement working on new ways to cheat.
Also, just because we have not yet invested into certain sub-sectors, doesnt' mean that we have not researched or met with some of the companies that are operating at the bleeding edge of the industry that give us some qualified insights. Do I consider myself and authority on wind power? Hell, no. Do I have an informed opinion on the matter via my work and the companies or investors I meet? Yes -- and that is what I am sharing in this post -- you can take it or leave it.
Lastly, in future posts I will be covering a variety of sectors, not just clean energy -- topics on deck are: LED lighting, electronic medical records and venture capital investment vehicles for the masses. We are a generalist fund and cover a variety of sectors, with a Midwest angle -- this is the perspective I was asked, and am pleased and honored, to share with those who are curious.
Thanks for reading...
In the absence of better efficiencies (Midwest utility-scale wind farms run at about 30% installed capacity if they are fantastic) or reliable grid storage that can flatline the supply, the only wind that has any effect is that coming out the mouths of the legislators and economic developers propping up these projects and companies for investors/developers and forcing utilities to buy the juice even though they will likely have to back up 70-100% with more fossil fuel power plants in order to reliably sell it.
If you want to fossilize fossil fuels, find something that can provide high efficiency baseline power or be forced to only use your air conditioner when you already have a nice breeze outside...
On your other arguments:
Price: Wind is subsidized because it is the most costly form of generation currently, ask any utility or developer.
Abundance: Not sure what this even means.
Location: Ask the people on Michigan's west coast how easy it is to get a permit.
No fuel required: Everything that is manufactured, shipped, maintained, etc has energy component cost in it.
No pollution: Wind energy can change climates downwind.
No water required: True!
Low maintenance: Utility scale wind turbines are very costly to maintain and have very high failure rates.
Easily maintainable: Same thing I guess?
Low impact on surrounding environment: Ask a bird.