The rapid wind growth of 2008-09 is truly remarkable amidst the backdrop of a difficult recession. And it strengthens my argument that the EIA is underestimating wind power deployment over the next two decades. The report points to 300 GW of wind projects in the current pipeline. Some may not come to fruition. But if just half of them become reality by 2030, it will more than double the EIA’s forecast. And many new proposals will come about in the years ahead as our wind resource becomes better understood and wind turbine technology improves its efficiency and costs.

Wind power in the US will probably pass 1.5% of US electricity in 2009 and then 2% in 2010 as it marches toward our potential to at least equal Denmark’s 20%.

I’ll keep you updated as this clean energy market continues to develop!

Onwards in the Sustainable Energy Transition-

These numbers bode well for our ability to reduce emissions at an accelerating pace in the years ahead. As I posted a few weeks back, US carbon emissions fell substantially in 2008 to a level not seen since the 1990s. And preliminary estimates for January electricity consumption point to further progress as coal and natural gas use fell 3.2% and 9.9% from January 2008, respectively.

While lower-carbon natural gas took most of the substitution from coal in the period 1998-2008, growth in non-hydro renewable energy (mainly wind) played an important role as well. Just this past December, wind generation increased a whopping 67.2% compared to December 2007, and the annual share of electricity from renewables increased to 3.3% in 2008 (from 3% in 2007 and 2.9% in 2006). With electricity consumption projected to fall in 2009, the share of renewable energy will probably grow to 3.5%+ since their generation will grow (albeit slower than in 2008) while generation from coal and natural gas falls.

And in 2010+, wind and solar can grow on the scale to potentially supply most new electrical demand. By 2012+, renewable energy can meet incremental demand and also begin to take a bigger annual bite out of the US electricity pie. This should allow the coal share of electricity to continue to drop until carbon capture and storage (CCS) allows utilities to burn fossil fuels without destabilizing our climate further.

For those concerned about a loss of coal jobs, 2010 is not the abrupt end for coal. It is only another step in the transition to a cleaner energy future – a step that will provide jobs manufacturing, installing, and maintaining wind turbines and solar arrays that more than replace jobs in dirtier energy sources.

Bottom line: If we can lower coal’s share of US electricity under the climate-indifferent Bush & Co., we certainly can make great strides toward lower emissions with Obama & Co. holding the reins and a more mature renewable energy industry ready in the wings.

Onwards in the Sustainable Energy Transition-

The US overall solar market grew at a tepid 17% rate in 2008 with cumulative installations at 1.265 GW. Solar PV and water heating systems were installed at a record pace, but pool heating systems grew slower than in each year 2005-2007. No new concentrating solar power (CSP) plants were added to our national capacity (~420 MW), but over 6 GW are currently in the pipeline. Grid-tied PV and solar water heating capacity grew by 58% and 40%, respectively.

States in the Lead

California is again the PV market leader with more than half of the national capacity installed in 2008. California now has over 500 MW of PV capacity. New Jersey remained the #2 state market despite its small size. The rest of the top ten was made up of Colorado, Nevada, Hawaii, New York, Oregon, Arizona, Connecticut, and North Carolina – respectively. The US now has more than 1 GW of grid-tied solar PV.

Hawaii is the leader in solar water heating systems. The state now requires solar water heating in all new construction. Florida is the #2 state, followed by California, Colorado, Arizona, and Oregon. Total national installations currently total 485 MW, which remains far behind China.

Though unknown to many, solar pool heating remained the largest segment of the US solar energy market in 2008. It grew 762 MW or less than 10% due to the housing price bubble.

Total solar energy capacity finished 2008 at almost 9 GW compared to wind’s ~25 GW. So when some people say solar is miniscule, they are misleading. While solar growth will be slower in 2009, 2010 promises to be a big year that makes the solar industry comparable to its renewable cousin wind and other more conventional incremental energy options.

Here’s to US growth catching up with our friends in Germany and Spain within a couple years — putting our country back in a leadership position of the Sustainable Energy Transition!

Europe was by far the global leader for solar demand, making up more than 80% of the worldwide total. And the installation leader in 2008 was Spain at 2.46 GW, which overtook Germany with its 1.86 GW growth (though Germany remains the leader in total solar capacity at ~5.3 GW). The US growth was third, with .36 GW, followed by South Korea, Italy, and Japan (at .28, .24, and .23 GW installed, respectively).

Production

The fastest growth was in thin films, which grew 123% to .89 GW (or 15% of the PV market). The market share of PV producers from China and Taiwan grew from 35% in 2007 to 44% in 2008.

Polysilicon growth was at a blistering rate of 127% and has eased the tightness in the polysilicon market. Tightness in 2008 caused solar prices to rise by 3% in 2008. But polysilicon capacity, which is ~43% located in the US, is now sufficient for an ample amount of solar PV at ~8.3 GW. Excess polysilicon capacity is expected to continue to grow in 2009 and allow solar prices to fall 20+%.

Global revenue for the solar industry rose to ~$37 billion. Such a high revenue total makes the solar industry begin to rival the size of wind power. And the almost 2.5 GW of solar added in Spain makes 2008 solar competitive with record national markets for wind just a couple short years ago. The increased scale for solar makes the technology a contender to lower greenhouse gases significantly in the years ahead.

The year 2009 is shaping up to be very different from 2008. Solar growth will slow below 25% (potentially below 20%) and the resulting oversupply will send prices and revenues down sharply. For producers who are able to keep developing in the tough year ahead by lowering their costs, 2010 promises to be another record-shattering year when solar joins the big leagues as a major player in the energy market.

And for its accomplishments in 2008, the solar industry should gain some respect. Six GW is a significant amount of energy, a stepping stone to much larger impact for this low-carbon energy available practically everywhere with a vast potential to replace fossil fuels in the decades ahead.

Onwards in the Sustainable Energy Transition!

The US became the global wind leader at 25.2 GW with Germany moving to #2 at 23.9 GW. The North American and European markets were roughly equal in 2008 growth, with Asia following closely behind.

China Rising

China doubled its wind capacity again this year, adding a big 6.3 GW to hit 12.2 GW installed (4th globally after Spain). And China is poised to grow faster than any other country in 2009, potentially doubling again to ~24 GW. At such a quick rate, China will probably pass Spain and Germany by 2010 (and accomplish its 30 GW by 2020 national goal 10 years in advance). Whether China will pass the US in 2010-12 depends on US energy policy. If the US puts significant resources behind its stated goal to foster a green economic recovery, we may grow quickly enough to outpace China for many years.

With similar wind potential of ~1 TW each, it will be interesting to see how these currently coal-dependent top world energy consumers take advantage of this cost-competitive renewable power source. I’ll be covering the deployment race closely in the months to come…

But maintaining growth in 2009 will be a challenge. Financing of projects has frozen in the credit crisis and halted (for now) the plans of many solar developers such as SET’s business partner, Carolina Solar Energy. The Stimulus package that passed the House carried significant support for solar, but we will have to see if it makes it through the Senate this week before that support is guaranteed.

Solar panel prices for February should be reported within a few days, and I will give that update as soon as they emerge. Hopefully, the price of solar can fall enough to get close to grid parity once oil and natural gas prices return to economic growth levels beyond $70 per barrel and $7 per MMBtu by 2010.

Bottom line: California’s doubling of solar capacity in 2008 ensures that the US solar industry is quickly growing toward a significant scale of GWs rather than hundreds of MWs. With the right government policy, the US can surpass Japan and Germany as the leader in solar by 2012 just like we passed Germany in wind power in 2008. Without such growth, our domestic industry could fall behind these competitors and others.

The rest of the top ten are Oregon (7.2%), Colorado (6.9%), Texas (6.7%), Kansas (6.6%), and Montana (6.3%). Interestingly, California – which was long the aggregate wind leader until Texas overtook that position a few years back – is 15th in percentage terms at 3.1% (behind South Dakota (6%), Washington (5.2%), Oklahoma (4.1%) and West Virginia (3.4%)).

Half of our 50 states have less than .5% of electricity coming from wind power, pulling the national average down to ~1.9%. So we have to more than triple current capacity to compete percentage-wise with Spain, Germany, and Denmark, nations that get at least 6% of their electricity from wind turbines. If we are aggressive, this could be done by 2016, potentially the end of Obama’s second term.

Growth in 2009 is slated to be as little as 4.4 GW (17.5%) and concentrated in Texas and a handful of states such as New York, Indiana, Oregon, Illinois, and Kansas. Innovative incentives can help the wind industry buck the recession and credit crisis to foster more green jobs and more clean, low-cost electricity.

I’ll keep you updated as the year progresses, and we’ll see if we can get more states climbing toward the 20% mark achieved by North Dakota and Iowa.

The fourth quarter saw bigger capacity growth, at 4.1 GW, than any full year except 2007. And the US is now the biggest wind producing country in the world at ~25.2 GW – finally passing the much smaller nation of Germany.

Texas continues to be the wind power leader with over 7 GW. And Iowa had tremendous growth in wind capacity, putting it in front of California for second place among states with ~2.8 GW.

On the Jobs Front

While other industries were busy cutting more than 2 million jobs, wind was creating them. Dozens of new or expanded wind manufacturing and installation teams created over 30,000 jobs.

Unfortunately, the credit crisis is severely slowing wind growth in 2009. Federal legislation needs to support this bright spot in our economy as part of the path to economic recovery that can simultaneously lower greenhouse gas emissions.

Bottom line: Congratulations to the wind sector for another phenomenal year! Let’s help the industry continue to develop and grow as an engine for the US economy and for the health of our global environment.

I wrote last month on the potential production path if current declines continue at a mostly constant rate. This would lead to close to zero net exports by 2013. There of course is the possibility that decline rates accelerate, especially since oil’s price collapse and the credit crisis make enhanced oil recovery projects less profitable. But I now want to briefly go over the cases of the US, Indonesia, and the UK from data available in the BP Statistical Review of World Energy.

The US had peak oil production in 1970 at over 11 million barrels per day (Mbd), larger than Saudi Arabia’s output today. Ever since then, production has been in steady decline except for a few years of gains after prices skyrocketed in the 1970s and 1980s. Production is now ~40% below its peak of 39 years ago and is finally roughly stabilizing due to the high prices of the last few years.

Indonesian production peaked ~1991 at ~1.6 Mbd and has since fallen a similar ~40% before some stabilization at less than 1 Mbd. The UK peaked in 1999 at ~2.6 Mbd and has fallen ~45% before its slowly declining ouput ~1.6 Mbd.

If Mexico has a similar trajectory to these major producers, then production may begin to stabilize in the years ahead at ~2.3 Mbd (40% below the 2004 peak of 3.825 Mbd). This level of production would preserve some small exports beyond 2012 as long as Mexico accelerates its energy efficiency efforts.

I will monitor Mexico’s monthly production figures and report any major insight on future supply as the year progresses. Whatever the exact numbers turn out to be, efficiency will be a smart move for us as this top source of imports faces less and less oil as time goes by.

Details on the webinar are available at www.leonardo-energy.org/drupal/node/4030 If you have any questions about the event or other programming, please contact us. We look forward to this event, and hope it will be useful for energy professionals as well as folks just getting to know the energy and climate landscape.