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United States

Best year ever in America -- Market heating up again

About 800 MW of new and repowered wind plant was installed in the United States in 1999, almost one-third of the nation's total wind capacity of 2490 MW at the end of the millennium. American wind amounts to about one-fifth of the world total.

For the last few years, the US proportion of global wind development had been shrinking because of the soft US market -- with cheap oil and few government incentives for investment or trading in renewable energy. The tide was turned by companies racing to beat the June 30 expiration date of wind's Production Tax Credit (PTC). Almost all of the 797.53 MW of new or repowered capacity was installed in the first half of last year in order to beat the deadline. Although the PTC was then extended to 2002, it was not signed into law until almost the end of the year. Development all but ground to a halt from July to December, even though the extension is retroactive, back to July 1.

The pace is once again expected to heat up, at least for the next several years, both because of the tax credit and because of state mandates, namely in Minnesota and in Texas, where the first properly detailed Renewables Portfolio Standard (RPS) was recently enacted. More RPS legislation could follow in other states.

In Minnesota, the final major phase of 450 MW of wind power required by state law will be as large as 150-160 MW. But America's hottest short term market will be Texas. Under the state's RPS, 2000 MW of renewables projects must be built by 2009. Of that, 400 MW is required by 2003; another 450 MW by 2005; 550 MW more by 2007, and a final 600 MW by 2009. The lion's share is expected to be wind. A "Renewable Credits Trading Program" will be launched on January 1, 2002, and will be in effect until 2019 as a mechanism for setting a price on the environmental value of renewables power, in addition to its electricity market price. Retailers with insufficient renewables credits will be penalised -- with a penalty of $50/MWh, or 200% of the average cost of credits traded during the year. The timing of the program suggests the market will start taking off soon -- probably this year.

Last year's wind installation in the US was only beaten by that of Germany. Of the almost 800 MW installed in America, about 600 MW was in the form of new wind farms, with the remainder made up repowering -- the replacement of old turbines with larger more efficient state-of-the-art machines, in California's San Gorgonio Pass and Tehachapi regions.

Wind development also continued to break out of California. Minnesota, Iowa and Texas saw the largest new installations: the 113 MW Storm Lake I of Zond turbines in Iowa; the 103 MW Northern States Power III -- also Zond turbines -- on Buffalo Ridge; and in McCamey, Texas, 75 MW of NEG Micon turbines were installed by FPL Energy and FORAS with power being sold to Central and South West Corp.

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