WIND POWER INDUSTRY
POISED FOR RECORD GROWTH
Written by: American City Business Journal
The energy industry has the wind in its sails. After a bleak year in 2004, the North American market is expected to see record growth in 2005. New wind power installations in 2004 stood at less than half of 2003 levels.
That's according to a study released by Emerging Energy Research, a Cambridge, Mass.-based independent research and advisory firm that asserts wind plants have become commercially viable sources of power for the U.S. and Canada.
In fact, EER expects annual wind power investments in 2005 to surpass the $2 billion mark in the U.S. for the first time.
"Wind plants are no longer the relics of environmental activism in the 1980s," says William Ambrose, president and founder of EER.
"Wind power has now become mainstream for U.S. and Canadian utilities."
According to the study, state and provincial renewable-portfolio mandates in the U.S. and Canada and the growing competitiveness of wind technology, particularly in light of rising natural gas prices, are prompting utilities to commit to long-term power purchasing agreements.
EER predicts that leaders in wind power in the U.S. and Canada, including Rosemead, Calif.-based Southern California Edison Co., Pacific Gas and Electric Co. in San Francisco, Dallas-based TXU Corp., and Montreal's Hydro-Quebec, will be joined in 2005 by a long list of utilities across the region, many of which will be securing large-scale wind power for the first time.
Austin-based Green Mountain Energy Co., one of the country's largest clean-energy providers, is making an effort to get more people thinking about wind-generated power.
The company recently announced a New Year's campaign titled Live Better Now, to encourage individuals to impact air cleanliness by signing up for cleaner energy.
Green Mountain, which has about 600,000 customers nationwide, offers electricity that's generated from sources such as wind, solar, water, geothermal, biomass and natural gas.
According to the EER study, North America will likely experience more than a three-fold increase in wind power capacity by 2010.
The research firm contends that new independent power producers are changing the nature of the electricity market, creating a more competitive environment.
But that could mean it may be more difficult for smaller independent wind producers and developers to compete.
"Many will become prime acquisition targets for the larger players looking in and consolidation will likely happen," says Godfrey Chua, research director of EER's global wind advisory services.
But the EER study shows that policies in the U.S. have not been supportive of a renewable energy initiative, which could lead to a market spike in 2005, and a crash in 2006.
"Unfortunately U.S. policies to date have discouraged local manufacturing," says Ambrose, adding that this has forced windfarm builders to consider expensive imports from Europe or Japan.
In May, the City of Austin announced it was looking for ways to entice companies that manufacture wind generation equipment.
Austin Energy, the city-owned utility, holds the key to attracting manufacturers, says Walt Hornaday, CEO of Austin-based Cielo Wind Power LLC. Cielo develops wind farms but doesn't manufacture the equipment.
Hornaday says a large long-term order for wind power from Austin Energy would be the best way to lure manufacturers here.
Austin Energy has one of the most aggressive clean energy plans in the country, promising to have 20 percent of its energy coming from wind, the sun and other natural sources by 2020. About 2 percent of Austin Energy's electricity currently is classified as renewable energy.
The key to bumping up business for wind turbine manufacturers lies in stabilizing the regulatory environment, Ambrose says.
If that happens, "the industry would scale dramatically, creating thousands of U.S. jobs in manufacturing, engineering and construction; reducing our dependency on foreign and polluting energy; and ultimately rendering wind power as a low-cost energy source."
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