Posted by Keith Johnson
Well, that was quick. BP says it will ditch renewable-enegy investment in Europe and spend its clean-energy cash in the U.S., where the political pastures just got greener. From The Guardian:
BP has dropped all plans to build wind farms and other renewable schemes in Britain and is instead concentrating the bulk of its $8bn (£5bn) renewables spending programme on the US, where government incentives for clean energy projects can provide a convenient tax shelter for oil and gas revenues.
BP isn’t alone. Ditlev Engel, the chief executive of Vestas, the big turbine maker, is also rubbing his hands at the prospect of long-term support for renewable energy in the U.S.
All else being equal, the U.S. is a much more attractive place than Europe for renewable energy, especially wind power. Simply put, it’s windier. As Mr. Engel told Dow Jones Newswires, “People tend to forget that the U.S. has some of the best wind resources in the world and the technology is already there - it would be relatively straightforward to get a much higher percentage than the 1% that’s being generated now.”
But all else isn’t equal. Europe compensated for its poorer wind and solar resources with generous, long-term subsidies for years. That explains why Germany—which has neither lots of sun nor lots of wind—is a global leader in both.
To a certain extent, the siren call of endless prairie winds helped offset concern about U.S. government support for clean energy. Earlier this year, even with the future of wind-power subsidies up in the air, European firms started piling into the U.S.
But with the election of Barack Obama, and the likely creation of a green voting bloc in the Senate, the U.S. is suddenly even more attractive. Mr. Obama has pledged both more money for renewable energy and longer-term support; one of the big problems in the past was the government’s on-again, off-again subsidy policy. Oil companies like BP—as well as U.S. majors—could be well-positioned to take advantage of the subsidies, which take the form of tax breaks on U.S. income.
Now, all wind power needs to do is weather the credit crunch.