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The report also laid out a 10-point plan for promoting the industry's growth in the region, including putting a price on carbon, increasing renewable portfolio standards for Washington utilities and adopting aggressive green building codes. Both Oregon and Washington are members of the Western Climate Initiative, which is moving toward a regional carbon trading system.

In a Clean Edge report on the release of the study, co-author Ron Pernick, a co-founder of Clean Edge,  said:

"Clean energy is increasingly identified as the sector with the largest growth potential in the U.S. economy, and offers the best promise of meeting the twin challenges of economic and environmental decline. This report is a case study for how the Pacific Northwest region can seize a leadership role in the clean-tech economy." 
 

The report noted that the Northwest has already gotten a head start in some areas, including the fact that Oregon is the site of one of the largest planned wind farms in the world. The 300-plus turbines at Shepherd's Flat, would supply electricity to Southern California Edison. It's one of a number of projects centered in Oregon that would serve California utility customers, as Climate Law Update has noted. Even more recently, Northern California's Pacific Gas & Electric Company announced its own deal for wind energy from the Klondike wind turbine farm in Oregon (pictured).

Coincidentally, a California-based company has signed an agreement to build a floating offshore wind farm in deep waters off the Oregon coast, with the power likely destined for the regional grid, according to Fortune's environmental blog, Green Wombat. And the new report comes against further evidence that wind power is booming in the United States, including an electric power assessment released just Monday from the federal government's Energy Information Administration showing wind generation was up nearly 48 percent this year compared to 2007.

Despite the generally upbeat tone of the Clean Edge document, it noted some potential obstacles to the Northwest renewable energy industry, including the region's limited venture capital activity, the lack of a "21st century" transmission grid and no coordinated regional strategy.

--Dennis Pfaff of Thelen LLP

Photo: Turbines at the Klondike wind farm, Oregon; Courtesy of U.S. Department of Energy-National Renewable Energy Laboratory; Credit: Paul Woodin  

It showed not only how far the nation had come, but also the distance yet to be traveled to reach the 20 percent objective. For instance, the document reports that the United States has had the fastest-growing wind market worldwide and that it has led the world in new wind capacity for three years running.

In all, the country had nearly 17,000 megawatts of wind capacity at the end of 2007, up more than 5,300 megawatts. On the other hand, even with that growth -- a 46 percent jump in a single year -- it still represented just 1.2 percent of the country's electricity supply.

For individual states, the percentages were higher, however. Under a formula used by the report, nine states had enough wind capacity to account for more than 3 percent of their in-state generation. Topping the list were Minnesota and Iowa, where wind power accounted for 7.5 percent of each state's generation. Texas, the nation's top wind power state in terms of its total capacity, accounted for 3 percent while California, number two in the nation, came in at 2.8 percent. 

Overall, Texas easily dominated the other states in terms of new wind projects, installing more than 1,700 megawatts of turbines in 2007. Other states installing more than 400 megawatts each included Colorado, Illinois, Oregon and Minnesota. California, by contrast, had a relatively puny 63 megawatts installed. But that might change in the future as the result of new contracts such as one Climate Law Update recently highlighted.   

The report also documented economic ripple effects from the boom in wind energy development. It found that new turbine and component manufacturing facilities that were opened last year could account for as many as 4,700 new jobs. On the other hand, the report documented some quality control problems that surfaced as certain companies rapidly scaled up their operations.

GE remained the dominant manufacturer of turbines in the United States market, followed by Vestas, Siemens, Gamesa, Mitsubishi and Suzlon.

Turbine prices themselves have also increased dramatically -- by about 85 percent since 2002 -- according to the report. It attributed the spike to several factors, including the declining value of the dollar, increases in costs of materials such as steel and oil, shortages in some components, and moves by manufacturers to increase their profitability. Nevertheless, the report said that "wind power prices have been competitive with wholesale power market prices over the past few years."

One familiar cloud remained on the horizon, the future of tax incentives for renewable energy, including wind. Less than two weeks ago, House lawmakers made another attempt to get something going on the subject of tax credits for wind and other alternative energy sources, but its future remains uncertain. The importance of the tax incentives, the report said, was shown by the fact that there were "pronounced lulls" in adding new capacity during years when the "production tax credit," equal to about 2-cents per kilowatt hour, lapsed. Without an "imminent extension," the document said, the industry "may experience another quiet year" in 2009.

Another perennial obstacle to renewables, transmission capacity, showed some sign of easing with new expenditures on the rise. However, the report noted that "lack of transmission availability remains a primary barrier to wind development."

The report also found that state policies were important. For instance, it noted that 55 percent of the wind power capacity built between 1999 and 2007 was in states that had renewables portfolio standards requiring their utilities to purchase a certain percentage of power from renewable sources. In 2007, the proportion of new wind capacity going into states with such requirements was more than 75 percent, the report said.

(Photo of Texas wind farm, Department of Energy National Renewable Energy Laboratory; Credit: Todd Spink)