United States

United States

Crystal ball gazing

As a member of the band of lawyers who have specialised in wind power development transactions in the United States, Ed Einowski, a partner with legal firm Stoel Rives since 1985, has gained a deep understanding of how the business functions. He believes a huge amount of money is sitting on the sidelines as investors take a wait and see attitude regarding the promise of new energy policies under the administration of Barack Obama. These could include a long term extension of the federal tax credit for wind investment, an alternative fiscal instrument, a national renewable energy mandate and a major overhaul of the nation's faltering transmission infrastructure.

"There'll be a certain amount of time where the market will be evaluating how it's all going to work," Einowski says. "But it could act as a very good stimulus to getting people rolling again on these financings and putting projects in service. We could see in the second and third quarter the activity picking up to very substantial levels again."

Much of the investment in American wind power in recent years has flowed from European utilities. "But even if the European capital dries up, it's not like all the money in the world has disappeared," says Einowski. Owners are just uncertain of where to invest it. Also bank credit will start to flow again, he believes. "The banks aren't really lending in any big way right now, but eventually they're going to have to get back to lending. That's how they make their money."

Looking ahead, the wind industry could see a fundamental change in how business is done, where capital comes from and how it will flow. Einowski believes that even if traditional players pull out of the market, major new players are likely to be attracted once the financial and political ramifications start to shake out.

"I wish I could pull out my crystal ball and tell you exactly what will transpire," Einowski says. "But it's difficult to see, given our needs in this country, that this industry is going to suffer a mortal blow and I do not believe that is going to be the case. Exactly how it's going to get through these current difficulties and what the timeframe will be -- that yet remains to be seen."

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