WIND THIS YEAR

US Wind Growth Flat, Project Spillover Carries 2009
Matthew Kaplan, 23 October 2009 (Emerging Energy Research)

"…Confirmed project activity has revealed that US wind project developers do not expect a major drop in 2009 megawatts added, despite the economic crisis: 6.3 GW have already been added in 2009, while more than 2 GW are under construction and scheduled for activation by year’s end.

"In the first quarter of this year, most market participants expected a significant drop in 2009 activations to well less than 6 GW based on frozen financial markets. However, a combination of projects planned for 2008 spilling over into 2009 and construction activity by developers eager to qualify for American Recovery and Reinvestment Act 2009 (ARRA) provisions, points to US market growth of approximately 8 GW in 2009…"

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"…2009 will likely finish with the second-highest figure on record of megawatts activated annually in the US. This higher-than-expected build rate underscores 2008 as a frenetic year for wind additions, since as much as half of 2009 projects were initially planned for 2008. This implies that, under improved supply and financing conditions, the US may have yielded closer to 10 GW of installed wind in 2008.

"The 4 GW of projects moving from 2008 into 2009 reflects the impact of the financial crisis on project development timelines. Approximately 1.5 GW of wind turbines were delivered by original equipment manufacturers (OEMs) in 2008, but were not energized at project sites."

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"…[T]otal wind installations in 2009 will approach or even surpass 8 GW. The promise of backing from the ARRA—including the US Treasury grant and newly released Department of Energy loan guarantees— is driving project construction…[N]early US$1 billion of grant money has been awarded to wind projects, most of which began construction in 2008…Mixed signals point towards flat 2010. The real economy is now experiencing the impact of the financial crisis…Both offtaking utilities and wind power generators are reluctant to close deals with falling demand, unprofitable merchant wind prices, and declining fixed power purchase agreement prices. Although project financing is beginning to flow again, unattractive offtake options continue to vex wind developers.

"ARRA grants and longer-term policy drivers, including RPS incentives, help counter these short-term economic inhibitors. 5 GW of wind projects are currently under construction—many of which will be activated in 2010. While project construction is picking up to obtain grant funding, delays due to the financial crisis indicate 2010 wind activations are more likely to remain stagnant compared with 2009. However, because projects must begin 5% construction by year-end 2010 in order to qualify for the grant option, construction activity could surge."