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Wind-energy companies losing to cheap natural gas, lack of subsidies

Wind farm developers, including FPL Group Inc.'s NextEra Energy, the largest U.S. wind-power producer, and AES Corp., based in Arlington, Va., have slowed investments in domestic wind energy. AES has directed most of its planned wind turbine installations overseas, said Ned Hall, president of the wind generation unit. "Eighty percent of our development budget is outside the U.S.," Hall said at the conference.

Vestas Wind Systems A/S, Siemens AG and Suzlon Energy Ltd. may end up with underused U.S. factories as cheap natural gas and a lack of federal support reduce wind turbine deliveries this year by as much as 50 percent.

Vestas, the world's largest maker of wind turbines, is spending $1 billion to expand annual production capacity in Colorado to 3,000 megawatts and hire 2,000 workers to sell and build turbines. Siemens plans to open a parts factory in Kansas this year, and already manufactures blades in Iowa.

They're betting that the U.S. will pass a law that requires utilities in every state to buy electricity from renewable resources.

State support helped new wind farms match natural-gas plant additions over the past two years even as gas prices sank 59 percent. Absent a federal mandate, wind turbine factories, touted as job creators by President Barack Obama, may sit idle.

"We see challenges ahead," Martha Wyrsch, president of Vestas Americas, said in Dallas last week at the annual conference sponsored by the American Wind Energy Association, a Washington-based lobbying group. "Installations are down for this year."

At stake are investments in factories that produce steel towers, fiberglass blades and... more [truncated due to possible copyright]  

Vestas Wind Systems A/S, Siemens AG and Suzlon Energy Ltd. may end up with underused U.S. factories as cheap natural gas and a lack of federal support reduce wind turbine deliveries this year by as much as 50 percent.

Vestas, the world's largest maker of wind turbines, is spending $1 billion to expand annual production capacity in Colorado to 3,000 megawatts and hire 2,000 workers to sell and build turbines. Siemens plans to open a parts factory in Kansas this year, and already manufactures blades in Iowa.

They're betting that the U.S. will pass a law that requires utilities in every state to buy electricity from renewable resources.

State support helped new wind farms match natural-gas plant additions over the past two years even as gas prices sank 59 percent. Absent a federal mandate, wind turbine factories, touted as job creators by President Barack Obama, may sit idle.

"We see challenges ahead," Martha Wyrsch, president of Vestas Americas, said in Dallas last week at the annual conference sponsored by the American Wind Energy Association, a Washington-based lobbying group. "Installations are down for this year."

At stake are investments in factories that produce steel towers, fiberglass blades and turbines spread throughout the U.S. and employing more than 85,000 workers in the world's largest market for wind energy.

Siemens, the third-biggest supplier to the U.S., said utilities won't sign long-term power purchase agreements, or PPAs, because of a decline in electricity demand and because natural-gas plants appear to be a cheaper means of generating power, based on current prices for the fuel.

"We've taken a leap of faith," Siemens Wind Power chief executive officer Jens-Peter Saul said at the conference. "There's a lack of PPA's available in this market."

U.S. developers installed wind turbines with a capacity of about 10,000 megawatts last year, bringing the total to 35,000 megawatts in operation, the largest concentration in the world, according to the American Wind Energy Association.

"New orders depend a lot on what goes on in Washington over the next 60 days," Steve Dayney, chief executive officer of Repower Systems AG's U.S. unit, said in an interview. Repower, which is 91 percent owned by India's Suzlon, manufactures most of its large components for the U.S. market domestically, he said.

"Right now, there's a lot of uncertainty in the U.S."

Wind farm developers, including FPL Group Inc.'s NextEra Energy, the largest U.S. wind-power producer, and AES Corp., based in Arlington, Va., have slowed investments in domestic wind energy.

AES has directed most of its planned wind turbine installations overseas, said Ned Hall, president of the wind generation unit.

"Eighty percent of our development budget is outside the U.S.," Hall said at the conference.

With the first annual decline in U.S. electricity demand in 50 years, and with natural-gas prices down 25 percent this year to about $4.20 per million British thermal units, utilities and state regulators are reluctant to spend more for wind power.


Source: http://www.denverpost.com/b...

JUN 1 2010
http://www.windaction.org/posts/26567-wind-energy-companies-losing-to-cheap-natural-gas-lack-of-subsidies
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