Our Take from WindPower: 2010 Will be Tough for Wind

Wind is one of the most mature – if not the most mature – renewable energy sectors. But it was clear this week that the industry is still experiencing growing pains.

After two and a half days and 15 interviews with industry leaders at the WindPower 2010 conference in Dallas, I’ve come away with a growing sense that 2010 is going to be a really difficult year for wind in the U.S.

Clearly, a lot of people have been saying this for some time as market conditions have shifted to make it more difficult to develop projects. Natural gas and oil prices have dropped, stimulus funds haven’t been deployed as much as expected and we have no national target for renewables.

Add in the threat of a double-dip recession, rapidly-worsening transmission constraints and the pressure on turbine suppliers from emerging Asian companies, and you have all the ingredients for a challenging year in the U.S. wind market. ::continue::

Most industry players expect a 40-50% drop in installations this year, putting us at around 5 GW of installed capacity. According to IHS Emerging Energy Research, this will the first time since 2004 that wind installations have dropped from the previous year’s levels.

Last quarter the industry put just over 500 MW online in the U.S., which is 2,300 MW less than the first quarter of 2009. This is a sign that the market has been severely weakened. Although developers installed 10 GW of wind capacity last year, many of those projects were spill-overs from 2008. Now the signs of those weaknesses in the market are finally showing in the numbers.

“It’s not easy out there – a lot of developers are pulling back on projects,” said Matt Kaplan, a senior analyst with IHS Emerging Energy Research. “The industry is going through some pain.”

With that said, everyone I spoke with (including Kaplan) was very bullish on the long-term prospects for wind. In its latest wind market report released at the show, IHS predicts that the industry will install around 165 GW by 2025.

The macro-drivers are so imbedded in the rhetoric around renewables – job growth, national security, climate change, international competition – they are creating a friendly tug-of-war among states eager to attract wind development activity. When the economy turns back around and demand for electricity increases, the demand for wind will again increase, says Kaplan.

I spoke with executives at a number of companies, including Siemens, Vestas, Bonfigioli and Statoil. All of them said the same thing: Companies along the supply chain will be feeling the squeeze until the economic landscape improves. But they will continue to invest in new technologies and projects in order to be well-positioned when the market inevitably picks back up.

One last sign that the industry has a lot to be positive about: The WindPower conference officially became the biggest power show in North America, with 20,000 attendees and 1,400 exhibitors. That makes it larger than any of the traditional power conferences – proof that the wind industry is making incredible progress, despite the current downturn.

Stay tuned to our podcast, Inside Renewable Energy, for interviews with industry leaders on market trends and new technologies.

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I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in touch through twitter! My profile name is: Stphn_Lacey

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