Looking back, 2010 was a year of recovery. The industry installed 5GW, bringing total capacity to 40GW. That was the slowest pace of development in several years and is testament to the financial crisis and the uncertainty surrounding US federal energy policy.
"Last year the industry was still in a post-recession mode," says Matthew Kaplan, a senior wind analyst at IHS Emerging Energy Research (EER). "There's still a tremendous amount of uncertainty in the market." The 2008 credit crunch truly hit installations last year, he says, whereas in 2009 development was buoyed by the legacy of better days. However, the availability of project financing eased in 2010 compared with the year before.
Financing woes continue
However, market weakness meant US developers were still increasingly forced to get power-purchase agreements (PPAs) upfront to secure financing - and to use turbines with a history of reliability on US soil. But PPAs remained difficult to obtain, because of the competitive market, while selling wind on the spot electricity markets - where prices track that of natural gas - became tougher. The industry saw PPAs for wind being signed in the range of $0.05-$0.06/kWh towards the end of 2010.
Overall, demand for electricity was reduced due to the economic slowdown. Contributing to the gloom was the looming expiration of the Treasury grant programme - a payment in lieu of an investment tax credit. The grants - authorised by the $787 billion stimulus package of early 2009 - are cash payments equal to 30% of the installed project cost, a boon to recession-strapped companies without the tax exposure needed for the production tax credit.
The programme was eventually extended at the end of 2010, but the uncertainty over its future was especially painful for manufacturers. As Vic Abate, vice-president of GE's renewable energy business, says: "New business (for manufacturers) was still probably a third to a fifth of what it was before the financial crisis. We don't think the (grant) extension will be a growth driver, but it will help slow down the slowdown."
According to AWEA, in 2010 the Treasury grants may have increased wind project installations by as much as 50%, despite the post-recession climate. The leading developer in the US, Iberdrola Renewables, installed a record 1GW of capacity in 2010.
Also contributing to the sagging market was the lack of a long-term federal energy policy, such as a renewable energy standard (RES). Efforts to pass such a bill foundered, in part because it was bundled in senate bills with unpopular cap-and-trade proposals. The failure to pass a national RES came despite a Democratic president, and a Democratic-controlled Senate and House of Representatives.
A proposed clean energy standard, which would include low-carbon energies such as nuclear and clean coal, started to gain traction towards the year's end. That came after Republicans' great strides in the all-important November mid-term elections - when they took control of the House and increased their standing in the Senate - dimming hopes for near-term major changes in renewables policy.
Good news came from the Federal Energy Regulatory Commission, which made a move that could lead to a new era in easing the transmission log-jams thwarting so much development. In December, it approved a landmark proposal by grid operator Midwest Independent System Operator (Miso) on cost allocation. For so-called multi-value projects,the costs of transmission infrastructure would be shared across Miso's market. Yet, despite the sagging 2010 market, the vastness of the US still meant movement on major projects. In September, ground was broken at Terra-Gen Power's 1.55GW Alta Wind Energy Center in the Mojave desert, California. The first phase was completed in the fourth quarter. The 201.6MW Penescal II project, developed by Iberdrola Renewables, was completed in Texas.
Other major project completions included Xcel Energy's 201MW Nobles project in Minnesota, Iberdrola's 210MW Buffalo Ridge II in South Dakota and the 200.1MW Papalote Creek developed by E.on Climate and Renewables in Texas, a state where development continued to be constrained by lack of transmission. Another giant project to be commissioned was the 300MW Cayuga Ridge in Illinois, also by Iberdrola, - an example of the growing wind development of the Upper Midwest.
The government has also been prepared to help fund new projects. In Oregon, the federal energy ministry offered a guarantee on an 80% $1.3 billion loan to finance Caithness Energy's 845MW Shepherds Flat project. In May, Pattern Energy - owned by private equity firm Riverstone Holdings - secured $800 million for wind as part of its long-term aim to develop 4GW.
Chinese manufacturers have also started making moves towards the US market. In December, Goldwind announced it would acquire what will be the first major US project to use its turbines, the 106.5MW Shady Oaks project in Illinois.
Other overseas manufacturers continued to invest in 2010. Nordex opened a nacelle assembly plant in Arkansas, Siemens inaugurated a new nacelle plant in Kansas, and France's Alstom announced it would build an assembly plant in Texas. Mitsubishi's new facility in Arkansas, to assemble the company's 2.4 MW turbine, was also given the go-ahead, despite speculation over the Japanese company's epic clash with GE over intellectual property rights.
However, it is still a rollercoaster market. In February, Vestas announced 114 lay-offs in its US operation only to announce 100 new hirings at its Windsor, Colorado, blade plant eight months later. And towards the end of 2010, Suzlon axed 110 jobs at its blade making plant in Minnesota before announcing a new distribution centre in Illinois.
The US supply chain was in parts strengthened. But for towers, there was more capacity than demand, says EER's Kaplan. In contrast, for castings there remained room for investment.
As of the year end, the volume of projects under construction make 2011 look relatively promising. According to the analysts, more than 4GW was in progress in early 2011, the lion's share of which started in 2010. Many of these would have been in line to receive Treasury grant funding, as the programme - until it was extended - required ground to be broken by December 31.
AWEA puts the year-end total under construction at 5.6GW and predicts that the sector's 2011 performance will exceed last year because of the continued drop in costs, a recovering economy, and because of a rush to meet the possible expiration in December of the Treasury's renewables grant programme.
GE's Abate is more cautious. He does not expect completed installations in 2011 to exceed 2010 - he says the volume could even be slightly lower. But, on a more optimistic note, he believes 2012 will be "slightly better".
STATES IN THE US WITH OVER 1.8GW IN 2010
State/project Owner Supplier MW
Texas (10.1GW) Added 2010: 672.2
Loraine Third Planet GE 100.5
Penescal II Iberdrola Mitsubishi 201.6
DeWind* Little DeWind DeWind 10.0
*Little Pringle 2 DeWind DeWind 10.0
Cedro Hill Edison Mission Grp GE 150.0
Papalote Creek II E.On Climate & Ren. Siemens 200.1
Iowa (3.7GW) Added 2010: 3.0
Bulldog Bulldog LLC GE 1.5
Wolverine Wolverine LLC GE 1.5
California (3.3GW) Added 2010: 454.5
Pine Tree extension LADWP GE 15.0
Teichert Aggregates Foundation GE 1.5
Alta (Vestas) II Terra-Gen Vestas 150.0
Alta I Terra-Gen GE 150.0
Hatchet Ridge Wind Pattern Energy Siemens 101.2
Montezuma NextEra Energy Siemens 36.8
Oregon (2.3GW) Added 2010: 457.3
Portland General Portland General Vestas 174.8
Electric (PGE) Electric
Biglow Canyon III PGE Siemens 174.8
Star Point Iberdrola Suzlon 98.7
Patu Wind Farm Patu Wind Farm GE 9.0
Minnesota (2.2GW) Added 2010: 396.9
Grant County Juhl Wind Suzlon 21.0
Woodstock Xcel Energy EWT 0.8
Municipal Wind America
Elm Creek II Iberdrola Mitsubishi 148.8
Nobles Xcel Energy GE 201.0
Ridgewind Ridgewind Power Siemens 25.3
Washington (2.2GW) Added 2010: 196.0
Lindon Enxco Repower 50.0
Coastal Energy Coastal Energy GE 6.0
Big Horn 2 Iberdrola Gamesa 50.0
Vantage Point Invenergy GE 90.0
Illinois (1.9GW) Added 2010: 315.1
Cayuga Ridge Iberdrola Gamesa 300.0
MUTI MUTI Northern 0.1
Top Crop II Horizon-EDPR GE 15.0
ON THE UP
STATES IN THE US WITH 1.2GW-1.5GW IN 2010
State/project Owner (developer) Supplier MW
Oklahoma (1.5GW) Added 2010: 351.9
Elk City II (1.5) NextEra Energy GE 72.0
Elk City II (1.6) NextEra Energy GE 28.8
Keenan II CPV Renewable Siemens 151.8
Minco Wind NextEra Energy GE 99.2
High Plains High Plains Northern 0.1
Tech Center Tech Center Power
North Dakota (1.4GW) Added 2010: 221.1
Cedar Hills Montana-Dakota GE 19.5
Ashtabula III NextEra Energy GE 62.4
Baldwin NextEra Energy GE 102.4
Bison Wind 1A Minnesota Power Siemens 36.8
Wyoming (1.4GW) Added 2010: 311.3
Dunlap Pacificorp GE 111.0
BLM-JCI BLM-JCI Nor. Pwr 0.1
Top of the World
(GE) Duke Energy GE 99.0
Top of the World Duke Energy Siemens 101.2
Colorado (1.3GW) Added 2010: 52.8
Pueblo Towers Vestas Vestas 1.8
Kit Carson Duke Energy GE 51.0
New York (1.3GW) Added 2010: 0.1
Town of Richland Sustainable Energy Northern 0.1
Indiana (1.2GW) Added 2010: 210.8
Meadow Lake II Horizon Wind Energy Acciona 91.5
Meadow Lake III Horizon Wind Energy GE 103.5
Meadow Lake II Q3 Horizon Wind Energy Acciona 7.5
Meadow Lake IV Horizon-EDPR Suzlon 6.3
Randolph Eastern Performance Nordic 1.0
School Corporation Services
The City of Performance Nordic 1.0
Union City Services
IN THE RUNNING
ACTIVE STATES WITH UP TO 1.1GW IN 2010
State/project Owner (developer) Supplier MW
Kansas (1.1GW) Added 2010: 60.6
Greensburg (John Deere Wind) Suzlon 12.5
Kansas State Kansas State Northern 0.1
University University Power
Spearville II KCP&L GE Energy 48.0
South Dakota (0.7GW) Added 2010: 396.0
Day County NextEra Energy GE Energy 99.0
Buffalo Ridge II Iberdrola Gamesa 210.0
Crow Lake Basin Electric GE Energy 87.0
New Mexico (0.7GW) Added 2010: 102.4
Red Mesa NextEra Energy GE Energy 102.4
Wisconsin (0.5GW) Added 2010: 20.0
Shirley Emerging Energies Nordex 20.0
Missouri (0.5GW) Added 2010: 148.5
Lost Creek Ridge (Wind Capital Group) GE Energy 148.5
(0.4GW) Added 2010: 84.0
Beech Ridge Q2 Invenergy GE Energy 84.0
Montana (0.4GW) Added 2010: 10.5
Diamond Willow Montana-Dakota GE Energy 10.5
Idaho (0.4GW) Added 2010: 205.8
Tuana Springs John Deere Wind Suzlon 16.8
Goshen North BP Wind Energy GE Energy 124.5
(11 wind farms) Reunion Power/
Group GE Energy 64.5
Maine (0.3GW) Added 2010: 91.5
Stetson Wind First Wind GE Energy 25.5
Nebraska (0.2GW) Added 2010: 60.1
Pine Ridge Job Corp Pine Ridge Job Corp North. Pwr 0.1
Flat Water Gestamp Wind GE Energy 60.0
Michigan (0.2GW) Added 2010: 20.7
Stoney Corners II Heritage North Pwr 2.2
Stoney Corners II Heritage SE Repower 18.5
Arizona (0.1GW) Added 2010: 65.1
Dry Lake II Iberdrola Suzlon 65.1
Maryland (0.07GW) Added 2010: 70.3
Criterion Constellation Clipper 70.0
Talbot County DPW Talbot County DPW North Pwr 0.3
(0.02GW) Added 2010: 3.0
Notus Falmouth (Notus Clean Vestas 1.7
Berkshire East Sustainable PowerWind 0.9
Ski Area Energy Development
Cape Cod Regional Sustainable North. Pwr 0.1
Town of Barnstable Town of Barnstable North. Pwr 0.2
CCRTA CCRTA North. Pwr 0.1