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Quick Look: Renewable Energy Development in the U.S.

Developers, manufacturers, investors and other renewable energy industry stakeholders need to know where the next big market is going to be so that they can adjust their business decisions accordingly.

Since 2003, global consultancy Ernst & Young has released its Country Attractiveness Indices, which gives a numerical ranking to 30 global renewable energy markets by scoring renewable energy investment strategies and resource availability. The indices are updated on a quarterly basis and the most recent report can be found here.

Here is the firm’s assessment of the U.S.

Onshore wind

The wind sector in the US continues to be hard-hit by an unfavorable policy environment and adverse macroeconomic conditions. MAKE Consulting has lowered its forecast for wind turbine installations in the US by 23% between 2010 and 2015. It is estimated that poor market conditions have led to a 71% fall in the construction of US wind farms compared with the same period in 2009, with Bloomberg NEF predicting only 6GW of turbine installations this year compared with 9GW in 2009.

A particular issue has been the continual low natural gas prices, which are bringing down the cost of gas-fired electricity. This is making it increasingly hard for wind project developers to negotiate attractive power purchase agreements with US utilities.

In the second half of 2010, the Department of Energy (DOE) announced a conditional commitment to provide a partial loan guarantee to support the world’s largest wind farm to date, the 845MW Caithness Shepherds Flat project in Oregon. The US$1.3b (€933m) project will implement 338 General Electric 2.5MW turbines, and represents the largest project to date to receive a DOE loan guarantee offer under the support of the American Recovery and Reinvestment Act.

Offshore wind

While onshore wind has been suffering in recent months, offshore wind in the US is demonstrating strong growth potential, with 5GW of planned offshore wind projects in the pipeline.

A new 350-mile (563-km) Atlantic Wind Connection is being developed to connect 6GW of offshore wind turbines between Virginia to New Jersey. This backbone transmission project is being funded by Google and other investors at an estimated cost of US$5b (€3.6b).

New Jersey also recently signed a bill named New Offshore Wind Economic Development Act to develop a program of offshore renewable energy tax credits that supports 1.1GW of offshore wind installations. It is hoped that these credits will help developers secure project financing.

Solar

The US CSP market is expected to surge following approvals for a significant number of projects.

BrightSource Energy is planning to build a 392MW solar thermal plant in California based on Distributed Power Tower and heliostat mirror technology. The project should be operational in 2013 and is supported by US$1.4b (€1b) in DOE loan guarantees. Tessera Solar’s 664MW Calico solar plant was also recently approved. The US$1.75b (€1.25b) installation will utilize Stirling’s SunCatcher dish technology.

The Department of the Interior has approved the installation of the world’s largest solar energy project, the 1GW Blythe Solar Power Project, which will utilize parabolic trough collector technology and is due to come on line in 2013. Other projects include NextEra’s 250MW Beacon Solar Energy Project and the Genesis Solar Energy Project/Imperial Valley Solar Project, with a combined capacity of 959MW.

For more information on renewable energy development in the U.S., contact the report’s author Michael Bernier.

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