Gabriel Alonso has more than a decade of experience in the wind energy industry. He is CEO of EDP Renewables North America, formerly known as Horizon Wind Energy. Before that, he was chief operating officer of the company. He is also chairman-elect of the American Wind Energy Association.
What moves did EDP Renewables make in North America in response to the regulatory uncertainty in the U.S.?
There are three factors that came together to create the downturn in the U.S.:
- The uncertainty created by the Congress’ inability to pass a long-term renewable-energy Production Tax Credit;
- The economic recession decreasing demand for energy; and
- The abundance of low-priced natural gas driving down energy prices.
When EDPR North America anticipated these factors we made a number of moves:
- We right-sized our organization by eliminating a number of construction and development positions, while all the while increasing our international and solar driven positions.
- We cut our non-discretionary spending to a bare minimum; and
- We focused our energies on maximizing our output from our existing operating assets.
Do you think that the wind-energy Production Tax Credit will be extended before the end of the year? How will this affect you?
I believe the Congress will enact a short term PTC in the lame-duck session. The wind industry has done a great job creating a non-partisan coalition supporting the PTC, and I am confident Congress understands how important wind is to the U.S. economy and the future energy mix.
What is the biggest challenge facing the wind energy industry?
The U.S. wind energy faces a number of challenges, including:
- The need to get a PTC extension and long-term clarity on federal policy support of wind energy. This policy work must include active participation in Congressional tax reform deliberations and examining new federal and state policy options that may decrease the reliance on the PTC;
- Obtaining long-term power purchase agreements by getting our customers to understand the value proposition of wind in regards to price stability, environmental benefits, resource diversity and energy independence;
- Market expansion by assuring state renewable portfolio standards are properly implemented and hopefully expanded;
- Working with our partners to address siting challenges; and
- Taking advantage of wind broad public support by creating new relationship with federal, state and local policy makers, regulators, environmental organizations and thought leaders.
What will 2013 look like?
2013 will probably not be as robust for the wind industry as 2012 due to the market factors and PTC uncertainty discussed above. However, I am confident the U.S. economy will recover and the industry will build on the successes we have created by expanding our manufacturing base, building more efficient and durable wind turbines, working with regulators and our customers to understand wind’s value proposition as a stable source of energy with no fuel risks; and creating a broader state and federal coalition supporting our industry.
This question-and-answer session was produced as part of SmartBrief’s 2012 Best Of reports, which capture the year’s most important stories in each industry. Sign up now for AWEA SmartBrief to get tomorrow’s report on the top must-read stories from the oil and natural gas industry.
Image courtesy of EDP Renewables.