The North American wind industry has seen an upward trend of foreign wind farm developers, owners and operators entering the market. Wind energy production has increased dramatically over the years in the U.S., attracting attention from nondomestic developers. And Canada's recent jump in wind energy capacity not only created a record-breaking 2006 – more than tripling its goal – but also has foreign developers turning their heads.
According to the American Wind Energy Association (AWEA), a total of 6,725 MW of wind energy was available in the U.S. in 2004. In 2005, that number jumped to 9,149 MW. As of Sept. 30, 2006, there was a total of 10,492 MW of installed capacity in the U.S., AWEA says. The Department of Energy adds that wind energy is the second largest new source of power generation in the U.S., after natural gas.
Now is a good time to join the U.S. market, says Mac Moore, Conergy AG's regional head in North America. He notes that the U.S. is the largest energy market in the world and has long-term prospects. Americans' attitudes have shifted toward consuming renewable energy instead of carbon dioxide-producing energy particularly because electricity and gas prices have risen and the government has promoted ‘reducing its dependence on foreign sources’ through tax incentives.
Germany-headquartered Conergy saw the U.S. as a viable market and recently expanded two of its subsidiaries – voltwerk and Suntechnics – into the eastern U.S. The new office, which will most likely be stationed in Pennsylvania, will finance and develop solar, wind and biomass projects along the East Coast.
Suntechnics concentrates solely on solar systems for residential and commercial buildings, and voltwerk has developed both solar and wind projects in Germany. Moore says because of the shortage of wind turbines, the Pennsylvania headquarters will develop solar photovoltaic (PV) projects initially and then use voltwerk's expertise to develop wind farms in the future.
The goal of the company is to obtain 50% of its revenue outside of solar PV and generate 50% of its revenue from international sales by 2008. However, whether wind, solar or biomass projects will be developed depends on which market and region will create the most earnings for the company.
‘We are looking at Canada and all countries around the world where there's a reasonably attractive market for renewables,’ Moore comments.
Canada has become an attractive market because of its recent growth, particularly in 2006. According to Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), Canada developed close to 800 MW of installed wind energy capacity during 2006 – far surpassing its goal of 240 MW for the year.
‘There's no doubt that there's growing interest from outside Canada in the Canadian wind market,’ Hornung says, noting that provincial commitments and targets suggest that about 10,000 MW of wind energy will be online in Canada by 2015.
‘This provides an indication that the growth that's occurred this year is not one-off, but is just the start of a period of steady growth going forward,’ he adds.
Illustrating the attention that an expanding Canadian wind industry is receiving from developers outside the nation, Dublin, Ireland-headquartered Airtricity Inc. recently entered into the market. Airtricity, which already has wind farm projects in the works in Texas and New York, acquired Gale Force Energy, a Toronto-based wind farm developer, in October to pursue Canadian wind. Gale Force Energy is currently in development stages for more than 30 wind projects throughout Canada.
Back in the U.S., mergers and acquisitions activity affecting the U.S. wind sector took shape in the form of Spain-headquartered Iberdrola acquiring 100% of MREC Partners and Midwest Renewable Energy Projects, both headquartered in Joice, Iowa, to further expand into the U.S. Prior to this acquisition, Iberdrola signed its first power purchase agreement with Allentown, Pa.-based PPL EnergyPlus, which made Iberdrola owner of the energy, capacity and renewable attributes from the Locust Ridge Wind Farm in Mahanoy City, Pa., for 20 years after the project's completion.
Iberdrola has reached a merger agreement to take over ScottishPower, an international energy company made up of four businesses, including PPM Energy. In October, PPM Energy implemented a plan to expand its wind activities into Canada through its Canadian affiliate, PPM Energy Canada Ltd., a gas storage operation in Alberta. If ScottishPower's board approves the merger early this year, the company will be expanding into the Canadian market through PPM Energy.