Wind Energy Planning

Obama’s policies to “roll back the specter of a warming planet” are beginning to shape the new US energy horizon, however whether they will result in a new green, low carbon country is up for debate.

The US House of Representatives sanctioned the ‘American Recovery and Reinvestment Tax Act” this week reinforcing the message that Obama is serious about renewable energy. The bill includes proposals for new grants which according to the American Wind Energy Associaiton “would make tax incentives for the renewable energy industry usable even in hard economic times” together with “provisions to promote transmission for renewable energy”.

Despite Obama’s green energy goals some investors remain sceptical about the ability of renewable energy to be a key contributor to electricity needs. This is the view of Marin Katusa Chief Strategist, Casey Research Energy Team who believes that Obama’s “over ambitious” renewable energy plans will backfire and as a result coal will see renewed public support when people realise they want to go back to the “tried and true”. The investors move on to forget about the cost of nuclear, pat themselves on the back for their uranium investments and steer away from wind and solar due to their high costs and unreliability.

The factors coming into play in Marin’s assessment are the costs of improved grid infrastructure and questions over whether government subsidy is sustainable. It is true – a characteristic of renewable energy projects and in particular wind energy is high capital cost. However if a government has the guts to stimulate the initial investment required, long term reduced costs will be enjoyed – without as much nuclear waste disposal to pay for – clearly far too long term for investors to worry about.

Obama is keen to demonstrate that he wants to give the right support to renewable energy. If you are prepared to take a medium term view, renewable energy has to be an intelligent investment.