Offshore (and land-based) wind energy needs stable policy

William Pentland of the Pace Energy and Climate Center has an article at, remarking on press accounts that General Electric, the largest U.S. manufacturer of wind turbines, is rethinking its strategy on offshore wind power due to current lack of demand for its offshore wind turbines product offering. The news, Mr. Pentland says, may augur no or slow growth in the offshore wind market.

Time will tell whether this is so. With roughly 3,000 megawatts of wind farm generating capacity already in European offshore waters, and thousands more on the way, it’s clear that there is currently momentum in the wind power market.

As a former colleague used to say, I’ve seen this movie before–it happened in the 1980s with land-based wind. The U.S. enacted a tax incentive for wind, but included a sunset date just seven years after enactment, hardly time enough to develop a major new manufacturing industry. The incentive expired, a global oil glut knocked the props out from under energy prices, and the U.S. wind industry, at the time a world leader, disappeared. Major American companies with wind turbine development programs, including Boeing, United Technologies, Alcoa, Bendix, Grumman, and yes, GE–closed down those programs.

It wasn’t until a new supportive tax policy was enacted and then–more importantly–extended for more than a year or two in advance that the U.S. began to build a new wind turbine supply chain and manufacturing base. By that time, it was playing catch-up, with several major European turbine manufacturers providing stiff competition in the global market.

Today, tax policy uncertainty still threatens U.S. wind developers and manufacturers of both land-based and offshore wind turbines, and Mr. Pentland’s article exemplifies the effect of that uncertainty. Stable tax policy is what fostered the development of the supply chain for onshore wind and it is what is needed for the development of the supply chain for offshore wind (as well as continued growth for land-based). Otherwise, we will find ourselves a decade from now, wondering why the still-growing global market for offshore wind (and perhaps land-based too!) is dominated by foreign turbine and component manufacturers.

Tom Gray,