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US wind will see a surge in 2010

The US wind energy market could bounce back in 2010 after a slower 2009, predicts analyst Emerging Energy Research (EER).

EER says it believes 2009 wind energy capacity additions could drop to 6.5 GW in 2009 – down 24% from the record year 2008, but that 2010 could see a re-bound of 9 GW of new wind additions, and another 11 GW in 2011.

By 2020, the US could see wind power growth of 15.5 GW, EER predicts.

“The US wind industry may post its strongest year ever in 2010 when the incentive-laced economic stimulus begins to show returns and transmission build-out reaches market,” says EER Senior Analyst, Matthew Kaplan.

Federal incentives and RPS

The US economic stimulus package provides several new tax equity financing options for US wind projects to be installed in 2009 and 2010. The 30% Investment Tax Credit (ITC) combined with Treasury grant options could also contribute to near-term growth.

EER says a momentum is building for national renewable portfolio standards (RPS), which would spur wind growth even further.

“One RPS currently under consideration would require 20% of electricity from renewables by 2020,” says Kaplan. “With wind as the fastest growing renewable energy sources, this could have a huge impact.”

Transmission and manufacturing

Plans for transmission build-out in the US have a positive impact on long-term development plans for wind energy, EER believes. A major new interstate transmission system could help unlock wind resources in the US Midwest and Southwest and ensure steady market growth.

The US is also seeing major investments in wind turbine and turbine component manufacturing due to confidence in the long-term stability of US policy.

“While the economic downturn has delayed some of these projects, recent investment commitments nearing US$1 billion alone from leading European turbine OEMs Vestas, Siemens and Nordex provide a strong indicator of the US wind market’s long term prospects,” Kaplan notes.

There are also signs that in regions where regulated utilities are allowed to build and own new generation assets – primarily in the Midwest, Southwest and Pacific Northwest – utility rate-based wind ownership activity has continued to proliferate and diversify, EER says. In many of these places, utilities have long-term plans for building, owning and operating wind projects – often together with project development partners.

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