by Mercedes Galíndez (University of Cambridge)
This blog is based on research funded by a bursary from the Economic History Society. More information here.
Seventeen years passed between Edison patenting his revolutionary incandescent light bulb in 1880, and Poul la Cour’s first test of a wind turbine for generating electricity. Yet it would be another hundred years before wind power would become an established industry in the 2000s. How can we explain the delay in harvesting the cheapest source of electricity generation?
In the early twentieth century wind power emerged to fill the gaps of nascent electricity grids. This technology was first adopted in rural areas. The incentive was purely economic: the need for decentralised access to electricity. In this early stage there were no concerns about the environmental implications of wind power.
The Jacobs Wind Electricity Company delivered 30,000 three-blade wind turbines in the US between 1927 and 1957. The basic mechanics of these units did not differ too much from their modern counterparts. Once the standard electrical grid reached rural areas, however, the business case for wind power weakened. Soon it became more economic to buy electricity from centralised utilities, which benefited from significant economics of scale.
It was not until the late 1970s that wind power became a potential substitute for electricity generated by fossil fuels or hydropower. Academic literature agrees on two main triggers for this change: the oil crises in the 1970s, and the politicisation of Climate Change. When the price of oil quadrupled in 1973, rising to nearly US $12 per barrel, industrialised countries’ dependency on foreign producers of oil was exposed. The reaction was to find new domestic sources of energy. Considerable effort was devoted to nuclear power, but technologies like wind power were also revived.
In the late 1980s Climate Change became more politicised, and interest in wind energy as a technology that could mitigate environmental damage, was renewed. California’s governor, Jerry Brown, was aligned with these ideals and in 1978, in a move ahead of its time, he provided extra tax incentives to renewable energy producers in his tate. This soon created a ‘California Wind Rush’ which saw both local and European turbine manufacturers burst onto the market, with $1 billion US dollars being invested in the region of Altamont Pass between 1981 and 1986.
The California Wind Rush ended suddenly when central government support was withdrawn. However, the European Union (EU) accepted the challenge to maintain the industry. In 2001, the EU introduced Directive 2001/77/EC for the promotion of renewable energy sources. This Directive required Member States to set renewable energy targets. Many directives followed which triggered renewable energy programmes throughout the EU. Following the first directive in 2001, the installed capacity of wind power in the EU increased thirteen-fold, from 13GW to 169GW in 2017.
Whilst there is no doubt that the EU regulatory framework played a key role in the development of wind power, other factors were also at play. Nicolas Rochon, a green investment manager, published a memoir in 2020 in which he argued that clean energy development was also enabled by a change in the investment community. As interest rates decreased during the first two decades of the twenty-first century, investment managers revised downwards their expectations on future returns – which fostered more attention to clean energy assets offering lower profitability. Growing competition in the sector reduced the price of electricity obtained from renewable energy. 
My research aims to understand the macroeconomic conditions that enabled wind power to develop to national scale. In particular, how wind power developers accessed capital, and how bankers and investors took a leap of faith to invest in the technology. My research will utilise oral history interviews with subjects like Nicolas Rochon, who made financial decisions on wind power projects.
To contact the author:
Mercedes Galíndez (firstname.lastname@example.org)
 Righter, Robert, Wind Energy in America: A History, Norman, University of Oklahoma Press, 1996, page 93
 Madrigal, Alexis. Powering the Dream: The History and Promise of Green Technology. Cambridge, MA: Da Capo Press, 2011, pages 239-239
 Jones, Geoffrey. Profits and Sustainability. A History of Green Entrepreneurship. Oxford: Oxford University Press, 2017, page 330
 EU Directive 2001/77/EC
 Rochon, Nicolas, Ma transition énergétique 2005 – 2020, Les Papiers Verts, Paris, 2020