01 June 2010

Is now the time to turn to renewable energy?

The disastrous Gulf of Mexico oil spill crisis, which threatens to become an unparalleled environmental disaster, highlights the need for the world to turn to the cleantech sector. As engineers battle to plug an out-of-control BP oil well, president Barack Obama called for an overhaul of the US energy policy, aiming to move the country away from a dependence on fossil fuels towards investing in domestic renewable energy and fighting climate change.

News of Obama’s wish to seek out alternative fuel sources follows an approval by his administration in April for what would be the first US offshore wind farm. Should all go according to plan, the Cape Wind project would comprise of 130 turbines and would be located off the coast of Massachusetts, in Nantucket Sound. However, the future of the controversial development could remain on uncertain ground as it faces strong opposition from two Native American tribes and some environmentalists and residents.

While the US had more installed wind capacity (10,010 MW) in 2009 than ever before, according to a report by the American Wind Energy Association, it was still behind Europe and China, which had capacity of 10,500 MW and 13,800 MW, respectively. The reason? The country does not have binding long-term commitments to install renewable energy, unlike the European Union and the People’s Republic.

According to the Global Wind Energy Council (GWEC), wind energy is a major player in the world’s energy sector, with the global wind market for turbine installations worth USD 63,000 million in 2009. China was the leading player in the market in 2009, with its wind generation capacity doubling for the fifth year running from 12 GW in 2008 to 25 GW at the end of 2009. It could reach its unofficial target of 150 GW by 2020 ahead of schedule, the GWEC’s report said.

The country accounted for 72 per cent of the USD 4,700 million raised though initial public offerings in the sector and seems to have had a strong start to 2010. In May China’s largest wind turbine blade manufacturer ZhongHang Huiteng Windpower Equipment told Reuters it would launch a domestic listing in a bid to raise its profile as it targets overseas growth, mainly in the US.

However, a planned listing is not necessarily a completed listing and global economic uncertainty, especially fears surrounding the euro zone debt crisis, has rocked the initial public offering boat; Xinjiang Goldwind Science & Technology, China’s second largest wind turbine manufacturer, is the latest company to pull its market debut dream – scrapping its expected USD 1,000 million Hong Kong-listing.

© Zephyr