January 17, 2012 | Energy Policy, Leadership
We enter 2012 in a flood of uncertainty:
- What will happen in the U.S. whilst we figure out who will be running for president?
- Will the Europeans avoid the slide into their next great recession, and how will it affect their trading partners?
- Can China and India keep up their remarkable growth? And if they cannot what does the West do to compensate for that loss of steady business?
- Will Meryl Streep win another Oscar, 30 years after her last, for portraying Margaret Thatcher, arguably the only true western leader of change?
These are things that we will soon discover, but over which we, individually and as an industry, have little control. Same goes for natural gas prices. Due to the rapid increase in supply and unusually warm winter, storage facilities are filling up and the price has dropped below $3 per 1,000 cubic feet.
So what can we control?
We can reduce our costs, increase efficiencies, and leverage our strengths.
The “fuel” for wind power is free and abundant, and has the lowest environmental footprint of any other energy source. For the health of our planet, we must boost output and lower our costs. The trick is to do it before customer demand turns away from wind. An example is the US motor industry. By waiting too long to address customer demand for more efficient vehicles, some models and brands have disappeared completely. (You can only get your father’s Oldsmobile.) Now look at the choice of fuel efficient cars being offered.
Manufacturers of wind turbines are being proactive. The prices have dropped significantly in the last three years as supply has grown and efficiencies have been realized. The challenge for these manufacturers now is to remain competitive as demand drops. Vestas is a case in point.
While we can try to influence federal policy, we can never control it. That’s why we must vigorously pursue a program of continuous improvement. Although the Japanese have received credit for this approach through the “Toyota Way,” one of the strengths of America is its people, our creativity, and our willingness to change.
Our goals should be clear: generate cheap and clean power by using a free resource , increase production efficiencies, reduce installation costs, plan and build a smart transmission grid, and operate the entire system efficiently. Let’s stop fiddling with policy and get to work.
Not a bad new year’s resolution.