Windpower Intelligence data shows that in 2011, the US announced around 7GW of new projects with sites agreed, and Canada 759MW. There was also a significant increase in power purchase agreements (PPAs) in the US as utilities rushed to lock in bargain-priced wind even if there was no pressing need for the power. "Utilities are signing these PPAs with the recognition that the cost of wind is really, really low and it's not clear that it will remain that way," says Amy Grace, North American wind analyst with Bloomberg New Energy Finance.
Projects that began build by 2011 were eligible for a grant, and those that missed can receive a production tax credit (PTC), but that expires at the end of 2012 with renewal uncertain. The result is more than 10GW due online in the US in 2012. "We're seeing development activity taking off in a lot of different regions," says Matt Kaplan, senior analyst at IHS Emerging Energy Research. And the build plans, he says, are not just from perennial market leaders like Nextera Energy and Iberdrola, but also players like Duke Energy, BP, Enel and Invenergy. "We are seeing several developers build much more annual capacity than what they have in previous years."
It is clear that some regions are more attractive than others. California, with an aggressive renewables target of 33% by 2020, is a key area of focus, says Kaplan, with activity in neighbouring states geared toward California too. The demand has kept PPA prices in the state relatively high, increasing developer attention.
Moving inland from the coasts, however, many of the US market's early renewables targets have been met, so the demand is not quite as intense, says Kaplan. This is being reflected in PPA prices, which have dropped to as little as half of what California utilities are paying. It is also reflected in the precipitous drop in US wind-energy projects due to start in 2013. How quickly those numbers pick up depends on the timing of a tax-credit extension. Without that, Kaplan expects a low level of build for two or three years before renewables targets ramp up again.
Some US developers are looking north into Canada, where large government-mandated power purchases have created a huge backlog of contracted projects to be built out between now and 2016.
"There has been for the last year and there will continue to be growing interest in Canadian projects from large US developers," says Bloomberg's Grace. Florida-based Nextera announced that it has no plans for new US projects in 2013 and 2014, but will focus on its 593MW Ontario projects with feed-in tariff contracts.
California-based Pattern Energy and Chicago's Invenergy are prominent players in Canada, and Grace expects to see others. "A lot of the developers who have won PPAs in Canada are smaller developers," she says. "They will be ripe for acquisition by these US companies, who need to increase generation for their investors."
Major Canadian energy players like Calgary-based pipeline giant Enbridge are also in the hunt. By and large investor interest is focused on two key markets - Ontario, with a good feed-in tariff for onshore wind and long-term plan to grow wind on its system to about 7GW by 2018 - and Quebec, which plans to build more than 2.5GW over the next four years and buy another 1GW.
Grace also puts Alberta, with Canada's only competitive power market, among the country's leading jurisdictions for wind. Without access to the kind of long-term PPAs found in other provinces, developers have struggled with low spot-market prices. But some projects, notably Greengate Power Corporation's Blackspring Ridge 1 and Capital Power's Halkirk 1, are selling renewable-energy credits to Californian utilities. Carbon offsets are also being sold to the province's large emitters that must meet mandatory emissions targets.
When it comes to turbine supply, says Kaplan, GE, Vestas and Siemens continue to dominate. Although there have been Asian manufacturers looking to gain a foothold, including Goldwind's purchase of the 106.5MW Shady Oaks project in Illinois to showcase its technology, it has been a challenge. "It is really easy to finance a project with GE turbines, and much more difficult if you are looking at a new technology," explains Grace.
Innovation is helping to fend off competition, concurs Kaplan, with dominant players investing in R&D and pushing the performance curve.