Wind industry essential to deliver the emissions cuts we need, say industry leaders

They addressed 100 heads of state and government on the need to embrace wind power for combating climate change in UN Leadership Forum on Climate Change.

“I am here to remind our leaders that wind energy can go a long way in achieving the emissions cuts we need, right now. No other power technology can make that claim,” said Steve Sawyer, Secretary General of the Global Wind Energy Council. “The power sector is the single biggest source of CO2 emissions, so global decision makers have a responsibility towards the environment and towards humanity to make profound changes to the way we produce electricity.”

The wind industry has demonstrated that with the right support, the technology can save 10 billion tons of CO2 by 2020, and thus play a key role in reducing carbon emissions. Wind energy can be deployed virtually anywhere around the world, and unlike other ‘pie in the sky’ options in the electricity sector, the technology is proven and can be used on a large scale in the timeframe that has been identified as crucial: now.

“While many developing countries, including Brazil, India, China, are driving the energy revolution, some rich countries are falling way behind. We are urging them to take the lead again by committing to meaningful targets in Copenhagen, and by boosting the use of renewable energy,” said Steve Sawyer.

The UN Leadership Forum was convened by UN Secretary General Ban Ki-Moon, with the aim to build positive political momentum towards the Climate Change Summit in December 2009 in Copenhagen.

The private sector has a strong interest in the outcome of the climate change negotiations and is increasingly calling for an effective global climate treaty. Leading infrastructure and energy generation companies such as Acciona and Siemens, which both have heavily invested in building up their wind energy business, were represented at the meeting, as was the CEO of Vestas, the world’s largest wind turbine manufacturer.

Wind energy must be key climate change solution

Climate change is now generally accepted to be the greatest environmental threat facing the world, and keeping our planet’s temperature at sustainable levels has become one of the major concerns of policy makers. The UN’s Intergovernmental Panel on Climate Change projects that average temperatures around the world will increase by up to 5.8°C over the coming century. This is predicted to result in a wide range of climate shifts, including melting ice caps, flooding of low-lying land, storms, droughts and violent changes in weather patterns.

One of the main messages from the Nobel Prize winning IPCC’s 4th Assessment Report released in 2007 was that in order to avoid the worst ravages of climate change, global greenhouse gas emissions must peak and begin to decline before 2020.

While the power sector is far from being the only culprit when it comes to climate change, it is the largest single source of emissions, accounting for about 40% of CO2 emissions, and about 25% of overall emissions. The options for making major emissions reductions in the power sector between now and 2020 are basically three: energy efficiency and conservation; fuel switching from coal to gas; and renewable energy, primarily wind power.

Wind power does not emit any climate change inducing carbon dioxide nor other air pollutants which are polluting the major cities of the world and costing billions in additional health costs and infrastructure damage. Within three to six months of operation, a wind turbine has offset all emissions caused by its construction, to run virtually carbon free for the remainder of its 20 year life. Further, in an increasingly carbon-constrained world, wind power is risk-free insurance against the long term downside of carbon intense investments.

Given the crucial timeframe up to 2020 during which global emission must start to decline, the speed of deployment of wind farms is of key importance in combating climate change. Building a conventional power plant can take 10 or 12 years or more, and until it is completed, no power is being generated. Wind power deployment is measured in months, and a half completed wind farm is just a smaller power plant, starting to generate power and income as soon as the first turbines are connected to the grid.

The global wind industry has set itself a target of saving 1.5 billion tons of CO2 per year by 2020, which would amount to a total of 10 billion tons saved in this period. See Global Wind 2008 Outlook for GWEC’s scenarios of wind energy development up to 2050.

While developments in 2008 show that the sector is well on track to meeting this target, a strong global signal from governments is needed to show that they are serious about moving away from fossil fuels and protecting the climate.

As positive outcome to the climate negotiations throughout this year, resulting in a new global agreement in Copenhagen in December, is of fundamental importance and will send the kind of signal that the industry, investors and the finance sector need for wind power to reach its full potential.

Wind energy makes sound economic sense

No fuel price risk

In contrast to the uncertainties surrounding supplies of conventional fuels, and volatile prices, wind energy is a massive indigenous power source which is permanently available in virtually every country in the world. Other than new gas, coal or even a nuclear power plants, the price for fuel over the total lifetime of a wind turbine is well known: it is zero. For conventional generation technologies, the volatility of fuel price developments are a significant risk factor, with oil prices recently fluctuating between 50 and 150 USD in the course of just one year.

Wind farm owners, however, know how much the electricity they generate is going to cost. No conventional technology (except hydro – the ‘established’ renewable power generating technology) can make that claim. This is of fundamental concern not only to individual utilities and power plant operators, but also to government planners seeking to mitigate their vulnerability to macroeconomic shocks associated with the vagaries of international commodity markets.

The cost of wind energy

In addition, at many sites, wind power is already competitive with new-built conventional technologies, and in some cases much cheaper. Although nothing can compete with existing, embedded conventional generation plant that has already been paid off (and was mostly constructed with significant state subsidies: governments still subsidize conventional technologies at the rate of about 250 billion USD/year), wind power is commercially attractive, especially when taking into account the price of carbon, which is a factor in a growing number of markets.

Investment and jobs

lready in 2008, over €36.5 billion were invested in wind energy worldwide, and the sector is now employing well over 400,000 ‘green collar’ workers. According to the GWEC scenario, the annual value of global investment in wind energy would reach €149.4 bn by 2020 and account for over 2.2 million jobs.

Although these figures may appear large, they should be seen in the context of the total level of investment in the global power industry. During the 1990s, for example, annual investment in the power sector was running at some €158-186 billion each year.

Especially at times of economic uncertainty and high unemployment rates, any technology which demands a substantial level of both skilled and unskilled labour is of considerable economic importance, and likely to feature strongly in any political decision-making over different energy options.

Regional economic development

Regional economic development is also a key factor in economic considerations surrounding wind energy. From Schleswig-Holstein in northern Germany, to Andalucía in Spain; from the US Pacific Northwest to west Texas to Pennsylvania; and from Xinjiang and Inner Mongolia in China to Tamil Nadu and Gujarat in India, the wind power industry is revitalising regional economies, providing quality jobs and expanding tax bases in rural regions struggling to keep their economies moving ahead in the face of the global flight to the cities.

No geo-political risk

There are no fuel costs, no geo-political risk and no supply dependence on imported fuels from politically unstable regions.

Every kilowatt/hour generated by wind power has the potential to displace fossil fuel imports, improving both security of supply and the national balance of payments, which is not only an issue for the United States which sends more than half a trillion dollars a year out of the country to pay its oil bill. This is an even larger issue for poor countries in Africa, Asia and South America whose economies have been devastated by recent oil price hikes.

Speed of deployment

Wind power also has the advantage that it can be deployed faster than other energy supply technologies. Building a conventional power plant can take 10 or 12 years or more, and it is not producing power until it is fully completed. Wind power deployment is measured in months, and a half completed wind farm is just a smaller power plant, starting to generate power and income as soon as the first turbine is connected to the grid.

Even large offshore wind farms, which require a greater level of infrastructure and grid network connection, can be installed from start to finish in less than two years, a crucial asset given the pressing threat of climate change.

Emissions

Wind energy emits neither climate change inducing carbon dioxide nor the other air pollutants, and as a result has none of the high external costs related with conventional energy sources. Within three to six months of operation, a wind turbine has offset all emissions caused by its construction, to run carbon free for the remainder of its 20 year life. In an increasingly carbon-constrained world, wind power is risk-free insurance against the long term downside of carbon intense investment.

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