The U.S. wind energy market could see robust growth by the end of the year. It is expected that 8 GW of wind will be installed this year, which includes new projects and project spillover from 2008, according to a brief released by Emerging Energy Research (EER).
So far this year, 6.3 GW of wind have been added, and more than 2 GW are under construction and scheduled for activation by year's end.
‘At face value, it appears that the U.S. market could witness its second-best growth year to date; however, if you remove spillover build originally meant for completion in 2008, 2009 market activations will probably be closer to half of 2008 levels,’ according to Senior Wind Analyst Matthew Kaplan.
In the first quarter of this year, most market participants expected a significant drop in 2009 activations to well less than 6 GW, based on frozen financial markets. However, a combination of projects planned for 2008 spilling over into this year and construction activity by developers eager to qualify for American Recovery and Reinvestment Act 2009 (ARRA) provisions, points to U.S. market growth nearing approximately 8 GW this year, according to EER.
Despite this strong signal of growth, challenges for the U.S. wind market remain. Falling electricity demand, unprofitable merchant wind prices and declining fixed power purchase agreement prices have vexed project developers looking for electricity off-take, the brief says. However, ARRA provisions and longer-term policy drivers, including renewable portfolio standard incentives, may help counter these short-term economic inhibitors, according to EER.
Wind projects totaling 5 GW are currently under construction, many of which will be activated in 2010. While project construction is picking up to obtain grant funding, delays due to the financial crisis indicate 2010 wind activations are more likely to remain stagnant compared with this year.
SOURCE: Emerging Energy Research