By RUSSELL GOLD
Wind-turbine makers say growth in their industry could dramatically slow unless the federal government requires more electricity come from renewable energy.
New federal stimulus grants helped restart a stalled wind-power industry, but Vic Abate, a General Electric Co. vice president in charge of its wind-turbine business, said orders for wind turbines to be built in 2012 and thereafter have been "extremely light."
He is worried that wind-power installation by 2012 could fall back to one-third of last year's construction levels without additional government support, taking the wind industry from "a boom to a bust cycle."
The biggest impact will be felt by the wind-turbine makers. Last year, GE made 43% of the turbines in the U.S. market. Competitors including Denmark's Vestas Wind Systems A/S, Germany's Siemens AG and India's Suzlon Energy Ltd. each held about 10% of the market, according to trade group American Wind Energy Association.
Vestas, the second-largest turbine manufacturer in the U.S., recently reported its order backlog in North and South America was down 66.6% from a year earlier. Michael Peck, head of institutional relations at the U.S. unit of Spanish turbine-maker Gamesa Corp., says passing a strong renewable-energy standard is needed to spur renewable-energy growth.
To head off a bust, the U.S. wind industry has made passage of a national renewable-electricity standard -- a requirement for electric power from sources such as wind, solar and geothermal -- a top priority.
Their pitch to lawmakers is jobs. A wind turbine "is a big piece of steel with rotating parts," said Andris Cukurs, chief executive of Suzlon's U.S. unit. "It is one of the few industries where you can absorb rust-belt workers." The industry's trade group said wind power added 35,000 jobs in the past year.
Numerous states already have passed renewable-electricity requirements, including California, where the governor last week signed an order requiring 33% of electricity come from renewable sources by 2020.
But the wind industry insists that a national policy is needed to spur utilities to sign long-term deals for renewable energy. Without these long-term deals, wind farms can't get financing. And without wind-farm development, the thousands of jobs manufacturing high-tech blades, towers and other turbine parts could be in jeopardy.
Critics aren't convinced. Dan Kish, senior vice president of the Institute for Energy Research, a free-market energy think tank, said the government shouldn't be promoting renewable energy through mandates. "It's frankly outrageous," he said.
But wind energy has been a success story for the U.S., which generates more electricity from wind than any other country. In 2008, about 8.5 gigawatts of wind power, capable of powering more than two million homes, were installed in the U.S.
The federal government has been responsive to the needs of the wind industry. Earlier this month, it began handing out cash grants to wind-farm developers to encourage development.
That is helping restart wind projects stalled by the financial crisis. But the industry is not seeing many new orders for wind farms to be built in 2012 and 2013. Typically, turbine orders are placed two to three years ahead of construction.
The climate bill passed by the House of Representatives in June -- and now under consideration in the Senate -- calls for 20% of electricity to come from renewable sources by 2020. Another bill, proposed by Sen. Jeff Bingaman (D, N.M.), requires a weaker standard: 15% of electricity from renewable sources by 2021. The wind-turbine industry said the lower standard would stall wind growth for five years.
Even that lower standard may be too high for some utilities. Dominion Resources Inc. Chairman Tom Farrell this summer said he thought hitting 15% in the southeast U.S. "would be a real stretch."
Write to Russell Gold at russell.gold@wsj.com
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