"New York has become a hot bed of activity," says Gray, noting that the Maple Ridge Wind Farm is larger than any project ever built in the eastern US. The project's 198 MW makes it bigger than many state totals for wind power, Gray says. Maple Ridge, formerly known as the Flat Rock Wind Power Project, is a joint venture between Zilkha Renewables and PPM Energy. Located about 75 miles northeast of Syracuse, the project, renamed to reflect the maple sugaring tradition of the region, is expected to be operational this year.
Other developers are expressing interest or in the process of developing in New York, Gray says, although how many projects will be completed by year's end is less clear. "I don't think it's a coincidence," Gray says. "The production tax credit comes in and it goes, but once a state has taken a policy position in favour of wind, you know it's a place to work on for the next time the PTC is available. I have to think that's a factor."
The surge of developer interest is repeated in Illinois and Iowa. "There's a major pair of projects in Iowa that add up to over 300 MW," says Gray. MidAmerican has announced interest in developing a 310 MW project in the state and Midwest Renewable is looking at developing a 110 MW project.
"In Illinois it's the same kind of process, although at an earlier stage," Gray says. State governor Rod R Blagojevich announced his interest in a renewable energy standard in January, and the process is underway to determine rules. "There is a project being planned there that would be the largest in the US," says Gray. Although it is not in the running this year, Zilkha's 400 MW proposal for the Arrowsmith Wind Power Project shows "companies are lining up sites," says Gray.
The Texas model
Experience in Texas, which in 1999 passed a Renewables Portfolio Standard (RPS), demonstrates the power of properly constructed legislation, says Gray. An RPS includes provision for retailers to meet a standard through trade of renewable energy credits. The Texas boom in wind power development in 2001, "really flowed directly out of the adoption of an RPS," says Gray. "Our interpretation of what happened is that once utilities realised they were going to have to put in some percentage of wind, they realised it's not as expensive as they thought, so they put projects in so quickly they quickly exceeded the goal."
Gray notes, however, that a renewable energy standard is not necessarily a guarantee. In states where standards are less binding, wind speed is not as favourable or other factors come into play, a renewable standard "has less of an impact."
Other changes within the industry for 2005 are the types of players interested in wind. Compared to 2003, the most recent boom year for US development which saw 1687 MW go up, 2005 seems to have more players from the financial community, Gray says. "What we're seeing behind the scenes is a steadily growing interest in the technology in the US on the part of the financial community and some major companies." That's been demonstrated as Goldman Sachs, AES Corp and Shell have all become serious players in the market.
Goldman Sachs, a US investment banker, recently announced it would buy Zilkha Renewables (Windpower Monthly, April 2005) and in the past six months, AES bought Seawest Wind Power, invested in US Wind Force, announced a joint venture to develop new wind projects in the US with EHN of Spain (a major European wind developer since bought by Spanish construction giant Acciona), and created an executive position to handle its wind business.
Things may be changing, but so far Gray says, the mix of large, medium and small project developers seems steady. "It looks to me we still have a wide range of companies pursuing projects," he said. "I feel like I'm continuing to see new entrants into the field. It's not a situation of being sewn up by a limited number of large companies." Gray notes, however, that recent consolidations indicate larger companies may start to dominate in the future. "But for now it's still pretty open."
Boom and bust life
He says the industry seems to be adjusting to the idea of the PTC expiring periodically. "Whoever is ready to go the next time is going to get projects done," says Gray. "So you try to get as much done as you can, so you're ready the next time it becomes available. That to me is the major difference."
Indeed, two of the biggest developers have announced they could develop as much as 1200 MW of projects between them this year. FPL Energy, by far the largest wind developer in the US, has stated the company will add up to 750 MW in 2005. FPL has 440 MW under construction or completed. "We have other projects in our pipeline that we hope to be able to complete by the end of the year," says the company's Steve Stengel. PPM Energy, the second largest wind developer, has 424 MW under construction with "more to come," according to spokesperson Jan Johnson.
AWEA bases its projection of up to 2500 MW of new wind to come online in 2005 primarily on the numbers of turbines that manufacturers are indicating they will deliver during the year. Gray says that so far production seems to be evenly spread among the major suppliers. If all projects are completed, 2005 will be the biggest year so far for the US wind industry. "In 2003, it surprised us a little bit that it wasn't quite as large as 2001, but this year looks like it's going to be bigger than either of those," he says.
Long term, 2005 may be recognised as the year the wind industry reached a turning point in widespread acceptability. Gray says AWEA has seen a steady increase of interest and many more companies contacting the organisation for information. "We're seeing a number of different indicators that more and more people are saying this isn't going away and this may be a large and growing business that we should be a part of."