WIND POWER TO INCREASE DRAMATICALLY IN USA

For U.S. Wind Industry, 2009 Downturn to Give Way to 2010 Surge

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Beyond near-term market uncertainty created by the financial crisis, the longer-term prospects for the U.S. wind industry remain strong, according to a new study from Emerging Energy Research (EER), a Cambridge, MA-based advisory firm. While a rapidly growing U.S. wind market?expanding at an average annual growth rate of 40% since 2005?has slowed down to pre-2008 levels, the market is expected to bounceback as soon as 2010, according to EER.

In the near-term, EER forecasts that 2009 wind capacity additions may drop as low as 6.5GW, 24% below 2008’s record levels. But, with a return to liquidity in wind project debt and tax equity markets, EER anticipates a potential rebound of 9GW of wind capacity additions in 2010, and 11GW in 2011.

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According to findings from EER’s new U.S. wind market study, the following trends signal a positive outlook for U.S. wind markets:

U.S. wind gets short-term boost from new federal incentives: The Obama Administration’s economic stimulus package provides several new tax equity financing options for U.S. wind projects installed in 2009-2010. The provision of a 30% Investment Tax Credit (ITC) with Treasury grant optionsĀ could help to considerably drive near-term growth, according to EER.

State Renewable Portfolio Standards (RPS) drive US wind growth with building momentum toward a national RPS: Momentum behind the establishment of a national renewable portfolio standard is growing and would help to build demand for renewables as part of the country’s energy future, according to EER.

Transmission build out positions U.S. wind for long-term development: Build-out of major new inter-state transmission aiming to unlock high-wind resources in the U.S. Midwest and Southwest regions is of great importance in key US wind states such as Texas, California, the Dakotas and Wyoming.

Major investments in U.S. wind turbine manufacturing facilities remain on track: Confidence in the long term stability of U.S. policy support has led to dozens of announcements of new U.S. manufacturing facilities for wind turbines and their components.

U.S. regulated utilities extend commitment to wind power ownership: In regions of the U.S. where regulated utilities are allowed to build and own new generation assets – primarily the Midwest, Southwest and Pacific Northwest -utility rate-based wind ownership activity has continued to proliferate and diversify. In many of these regions, utilities are undertaking long-term plans to build, own and operate wind assets, often with project development partners.

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Under EER’s base-case forecast scenario, U.S. annual wind power growth will increase from 8.5GW in 2008, to nearly 15.5GW by 2020.

Sourced and published by Henry Sapiecha 23rd June 2009

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