It’s August 2. The United States has averted default on its sovereign debt, but at what cost? Having watched with the rest of the world the unedifying spectacle of our not so courageous political leadership negotiate with the hostage-taking ideologues of the Tea Party, I find myself relying on the perfection of an early August day in Vermont to avoid falling into a slough of despond. I fear I am losing confidence in Winston Churchill’s dictum that “one can always count on the Americans to do the right thing…after they have tried everything else.” It seems we tried everything else, and in this case settled on the wrong thing. This turn in our politics bodes ill for the wind industry, indeed the entire renewable energy industry.
The renewable energy industry requires three conditions in the US to grow to its full promise for the future:
- Demand for electricity
- Competitively priced fossil fuels
- Policy support to level the playing field
And these are in order of importance.
For the next 18 months it is almost certain that the budget deal and its aftermath will slow down the already slow recovery — if it does not push the economy back into recession. This will further depress the current weak demand for electricity. Weak demand will mean lower natural gas pricing, already softened by excess supply, and there is no way this congress will tolerate regulation of hydraulic fracturing that would increase cost and prop up natural gas prices. Finally, it seems improbable that the congress will extend existing policy support. In consequence, only the very best projects of the most far thinking companies with control over their pricing will go forward until the shape of the next congress emerges in November 2012. This will make for a much smaller pie.
What To Do
So what is a solar/wind geek to do? Scour the world for those far-sighted companies with great projects. Innovate like mad and bring our technology, expertise and know how to those parts of the world where the structural elements of the market require the development of renewable solutions.
China is still growing rapidly, is ravenous for energy, is choked with pollution and is desperately seeking technology. India is also growing rapidly and seeking energy solutions. South Africa and Brazil are emerging as continental economic powers with growing economies and abundant resources. Of course it is harder to develop markets, customers and partners there than in Iowa or Texas or California, but not by much anymore.
The US is a competitive, and in some cases a low-cost producer, and our technological resources are prodigious. Renewable energy is a global industry. It requires global vision and global reach. Come on America — restore our confidence.
- What's wrong with the debt ceiling deal (money.cnn.com)
- Obama: Debt Ceiling Deal Done, Now Is Time To Focus On Jobs (huffingtonpost.com)
- Infographic: How China's Clean Tech Industry Crushes The U.S. (fastcompany.com)
- The scream ! by Nayer | Politics Cartoon | TOONPOOL