Temperature trends, Climategate, Copenhagen, IPCC falsification, and now the Massachusetts Revolution–cap-and-trade is dead, the political pundits say. So much for the  inevitability argument that I heard from my colleagues during the Enron years (“come on Rob, get out in front of it and shape it!”), as well as the science-is-settled that had been the Word.

But what about a scaled back energy/climate bill with the key provision of a federal renewables mandate? Has the ‘Massachusetts Revolution’ killed that too?

We will soon find out. But one thing can be certain: Americans from coast-to-coast and border-to-border are going to look more closely at wind power, and I do not believe they are going to like what they see. (Enron, anyone?) Witness the growing complaints from the grass roots–including in-the-trenches real environmentalists–that industrial wind is intrusive, costly, and unreliable.…

January 7, 1997, some 13 years ago, was one of the worst days in my 16-year career at Enron. Enron had already entered into the solar business (1994) in partnership with Amoco (Solarex), and the U.S. wind industry was on its back. Zond Corporation was struggling, and rival Kenetech had recently suspended its dividend and was on the way to  bankruptcy. Enron bought Zond on this day and renamed it Enron Wind Company.

Enron Wind would never turn a profit, and it would be sold in May 2002 by the bankrupt parent to GE. (GE and Enron would have other ominous parallels.)

Enron came in at just the right time for a troubled, undeserving industry by

1. Putting a big-name corporation in the U.S. wind industry for the first time;
2. Issuing countless press releases on ‘wonderful’ green wind for the next several years; and
3. Successfully lobbying Texas politicians to enact the most strict renewable mandate in the country in 1999.

In Part I of this two-part post, we presented our observations of a power generation industry that will likely become more dependent on natural gas as a source of fuel for new power plants constructed in the coming years. Other fuel-based technologies (principally nuclear and coal) don’t seem to have the wherewithal to grab a larger piece of what should be a growing demand for electricity in the U.S. Both will be lucky to maintain their market share in the future. Renewables, with high levels of production tax credits, coupled with legislative mandates, will continue to grow in installed capacity but will contribute little to peak demand reduction. And should politically correct renewables (not hydropower) lose part or all of its government support, say as part of a deficit reduction program, then market share will actually be lost.…

“It’s déjà vu all over again,” said Yogi Berra. The baseball Hall of Famer could easily have been predicting the coming resurgence of new natural gas–fired power plants. A couple of nuclear plants may actually break ground, but don’t hold your breath. Many more wind turbines will dot the landscape as renewable portfolio standards dictate resource planning, but their peak generation contribution will continue be small (and disappointing).

The most interesting story for 2010 is that the dash for gas in the U.S. has begun–again. In Part II or this two-part report, we will explore the challenges facing nuclear, coal, and renewable energy electricity sources in 2010 and beyond.

Business Climate–Energy Demand

As we enter the second decade of the 21st century and a second year of avoiding an economic collapse, the U.S.…