Page 42 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Energy

much on innovation as financing. Utilities want
renewables to deliver more dependable flows to Nord Stream 2
transmission grids. To achieve that, the industry
is turning increasingly to data analysis to better
exploit changing weather patterns and integrate
technology. It’s also counting on exponential ▷The $11 billion natural gas pipeline could start
improvements in batteries to help store energy pumping late next year
for windless periods.
Wind has flourished, even as the industry grap-
pled with fickle congressional backing, supporters
say. In 2013, for instance, the tax incentives were
eliminated altogether, devastating turbine instal-
lations, which plummeted 92 percent from a
record 14.1GW in 2012. They returned in 2014, and
development began anew. While no one expects
that kind of whiplash, turbine makers and devel-
opers are preparing for a new reality as the tax
credits roll to an end.
Stopping the credits wasn’t an easy decision,
says Rob Gramlich, former senior vice president
for government and public affairs at the American
Wind Energy Association. The talks leading up
to the decision ran the gamut from the shifting
politics of energy subsidies in Congress to wind’s
lower costs. “The industry was divided,” Gramlich
says. “And Congress was deeply divided along In the shadows of a long-silent East German ▲ Construction of the 49
party lines.” nuclear reactor on the edge of the Baltic Sea, pipeline in August in
the Baltic Sea off the
The end result was a decision that threw engineers are drilling, dredging, and digging in a German coast
each side a bone: The tax credits would end, forest clearing. As one set of workers shifts con-
but only after a four-year phaseout, the longest taminated concrete and other radioactive materi-
uninterrupted stretch for them ever. “Most of als from the Soviet-designed Greifswald plant, half
our members were pleased for the certainty,” a kilometer away contractors for Gazprom PJSC
Gramlich says. are building the latest monument to Europe’s
Turbine installations are expected to rise to growing dependence on Russia for energy:
11,448MW in 2020, when the phaseout finally the controversial Nord Stream 2 gas pipeline.
ends, according to an analysis by Bloomberg Germany could receive more gas pumped directly
NEF. Then they could fall to around 6,071MW the from Siberian fields as soon as late next year.
next year. Meanwhile, the credits have helped The $11 billion pipeline is one of three giant
pay for roads, concrete pads, power lines, and projects helping the world’s biggest gas pro-
other infrastructure that will allow the industry ducer strengthen its grip on Europe and Asia.
WIND: SEAN D. ELLIOT/THE DAY/ AP IMAGES. NORD STREAM 2: SEAN GALLUP/GETTY IMAGES
to replace and repair turbines at a lower cost. Thousands of miles to the east, the Power of
Growing fears about climate change are mak- Siberia pipeline will connect with China, and a
ing wind power a must-explore renewable, both project under the Black Sea will deliver fuel to
for utilities under pressure to lighten the carbon Turkey and southeast Europe.
load and corporate do-gooders such as Apple Inc. Russia has sold gas to Europe since World
and Amazon.com Inc., which are among the top War II, meeting more than a third of the
corporate buyers of renewable energy. Credits or Continent’s demand last year. That share could
no credits, that augurs a strong future for wind, rise to 40 percent by 2025 if increased demand
particularly as improvements in storage batter- from China and its Asian neighbors, and higher
ies add reliability to their output. “The baton has prices, continue to tempt liquefied natural gas
been passed from the tax credits to other forms tankers eastward, says Jonathan Stern, a distin-
of financing,” says Tyson Slocum, energy program guished research fellow at the Oxford Institute for
director at environment group Public Citizen. Energy Studies. “Expensive energy is back, mainly
“This is the growth area for the renewables indus- driven by China,” says Fatih Birol, executive direc-
try.” <BW> �Christopher Martin and Jim Efstathiou Jr. tor of the International Energy Agency. “We’re