IN DEPTH: Steve Sawyer takes aim

Steve Sawyer reserves most of his ire for the US

Steve Sawyer reserves most of his ire for the US

Frustration is etched on Steve Sawyer’s face. The usually diplomatic Global Wind Energy Council (GWEC) boss is understandably angry — angry at Obama, angry at “the nut jobs” in Congress, angry at Oettinger, angry at Canada and angry at Australia.

He is exasperated because he knows what could be achieved, what should be being done.

Kind words, if you can call them that, are reserved only for parts of the world that have shown a real commitment towards wind energy and tackling climate change — Brazil, Mexico, South Africa, as well as Asia and the rest of Latin America and sub-Saharan Africa.

The bulk of his wrath is for the US. He believes that the country is largely responsible for a global slowdown in the wind industry, while simultaneously ambushing the chances of reaching a strong new climate deal.

“But in terms of the big numbers, the US market remains hostage to the nut jobs in Congress who bounce up and down and around,” he tells Recharge during an interview in Brussels. “If you look at it rationally, why would anyone invest in the US wind market? Of course we invest in it because it’s the biggest market in the world, but if you applied the same criteria as you do to other markets, you would run screaming from the room.”

But outside the US, things are far from gloomy. Sawyer still believes China will remain the main engine for global wind growth for many years ahead, with new markets emerging in the Philippines and Thailand.

While GWEC is still compiling its final 2013 data, they should show China and India are regaining momentum, particularly the Chinese offshore sector.

Overall, GWEC believes 2013 is likely to be remembered as another difficult year for the global wind industry, with annual market numbers down largely due to the precipitous drop in US development activity after its record installations in 2012.

Cumulative global wind installations passed 300GW last year, although the annual market numbers will be down because of the US. “In terms of the big numbers, the US wind market remains hostage to a frequently hostile Congress,” Sawyer says.

Yet he believes the US market will recover strongly in 2014 and 2015, and in general can look forward to a strong couple of years, with wind supplying increasingly cost-competitive power.

sawyer_panel.jpg“In 2014, there will be 6-7GW under development in the US [compared to less than 2GW in 2013]. I think the overall economics of wind are taking over as the main argument in its favour — even if we had to live without the production tax credit [PTC], the industry is now coming in with very competitive prices for any new projects in the US.”

With a number of tax incentives for renewables, including the PTC, set to expire at the end of 2013, several Democratic lawmakers in mid-December were urging Congress to pass an extension package.

“Nobody has any idea of what’s going to happen in the US after 2015,” says Sawyer.

The GWEC secretary-general claims coal is dying as an energy source in the US, not for environmental reasons, but purely due to its price. “For newbuilding in the US, both natural gas and wind are cheaper, while solar prices are also coming down pretty quickly.”

However, he believes the notion of long-term policy planning for anything that requires US congressional approval is unlikely to happen.

“Despite the fact you have tax breaks still in place for the oil industry, which date back to the 19th century and are buried deep in the tax code, it’s a brave congressman who would investigate these things and bring them to light.”

On the other hand, Sawyer expects many of the policy uncertainties in Europe to be resolved this year, and believes the continent can press home its technological advantages.

“Europe needs to develop as a technology centre — a forward-looking and forward-thinking place,” he says.

“It needs to be the technology and creative hub for a new 21st-century economy, despite the best efforts of energy commissioner Gunther Oettinger and others in the [European] Commission to destroy it.

“The best thing I can say about Oettinger is that his sell-by date is fast approaching. We in Europe are not going to lead the world in coal, nuclear or gas technology, but we have started to make it in renewables”.

Sawyer holds out big hopes for Japan, which he thinks will become an increasingly interesting market in the second half of the decade and beyond.

“In Japan, you have a three-year environmental impact assessment process that only applies to wind turbines. That’s why Japan’s installations were down last year, and will be down next year, and will not start to pick up until 2016.

“But the offshore wind projects are interesting and I hope groundbreaking, and you know the Japanese want to be at the vanguard, as evidenced by the formation of the joint venture between Japan’s Mitsubishi and Denmark’s Vestas”.

South Africa has emerged as a major new player in global renewables after a successful series of national tenders, with almost 4GW of wind and solar projects awarded in three bidding rounds since 2011.

“It’s still a bit fragile, but the latest Round 3 results were good. And the fact they might even add a few more projects is even better,” says Sawyer.

“Over the next decade, I think you are going to see South Africa’s renewables sector create an industry that is going to start spilling over into Ethiopia, Kenya and Tanzania.

“There are projects that we have been working on with the International Renewable Energy Agency to try to build awareness and political support for tying together the East Africa and Southern African power pools.

“It has political support, and there are now big interconnections between Ethiopia and Kenya, which is a good start. Ethiopia is a very poor country, but extremely rich in renewables resources — some of the best wind and solar in Africa, excellent geothermal and very good hydro.”

Sawyer, who visited Saudi Arabia at the end of last April, predicts that the country is going to build a lot of solar and wind in the next five to ten years.

“The Saudi thing is real. They have a fundamental demographic and economic problem, as their domestic economy already consumes 30% or more of their oil production and is rising.

“The European companies are already there, and the top wind and solar companies are already there. It is simply too big a market to ignore, particularly as they have a stated aim to reach 54GW by 2032”.

sawyer_tips.pngIn terms of South America, Sawyer believes most of the interest will centre on Brazil, followed by Uruguay, Chile and smaller developments in Peru and Ecuador.

“We had the first commercial wind farm in Venezuela last year,” he says. “I also know a lot of people are trying to figure out how to make wind power work in Colombia, which is not easy due to the difficult political situation.

“The other locus of developments in Latin America is Mexico. However, in percentage terms some of the most interesting developments are in countries such as Nicaragua, Costa Rica, Panama and Honduras.”

Sawyer despairs at the slow progress being made at international climate change talks.

“There is an unparalleled lack of global political leadership on this subject from anyone,” he says.

Despite President Barack Obama’s supportive stance on renewables, Sawyer accuses him of not caring about the climate. “He has made it clear that he is not going to put any significant part of his administration’s efforts into dealing with energy or climate issues.

“Obama can give a good speech, but the way his representatives then act at the global climate negotiations makes it very clear that he is ‘candy-coated Bush’ and nothing much else.

“These talks are struggling. I think they’ve already sold the 2°C global temperature rise down the river. They have wasted the last two years since the Durban meeting. So now they’ve got two more years before the meeting suppose to decide it all in Paris in 2015.

“There is no acknowledgment by the US of the reality of climate change that the rest of the world faces, and no political will in Congress to do anything about it.

“I think the IPCC’s [Intergovernmental Panel on Climate Change’s] recent alarming climate assessment report will make a difference in some countries, but unfortunately in others the messages are not seen as quite so urgent. So in [Prime Minister Stephen] Harper’s Canada, forget it, [Prime Minister Tony] Abbott’s Australia, forget it, [President Vladimir] Putin’s Russia, forget it, and in many others.

“We desperately need to be [optimistic] but I think we are like the frog in the pot that is warming up. What we now need is someone with a stick to poke the frog to get it to jump out of the pot — and I just wish I had that stick.”

He says it is hard to predict what will come of the Paris meeting, but that “some elements of the Kyoto Protocol could still be put together in a couple of evenings”.

The central question is whether enough political will still exists to overcome the US, Russia, Australia, Canada, and others. “Well, probably we do, but someone needs to stand up and start waving the climate flag pretty quickly — maybe a re-elected [Chancellor Angela] Merkel, France’s [President François] Hollande trying to save his presidency, or even Obama himself.”

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