Europeans look to U.S. for wind-power growth

The U.S. has led the world in installing new wind turbines for the past two years, but it still ranks behind Germany and slightly below Spain in wind power production, according to the Global Wind Energy Council. Now, America's renewed embrace of policies to encourage energy alternatives has led companies with years of experience in Denmark, Germany and Spain to invest on U.S. shores, challenging both the U.S. market leaders and any environmental opposition to building giant turbines.

"We're like the Saudi Arabia of wind, and we just haven't had the big exploration boom yet," said Michael Peck, a spokesman for Gamesa Corporacion Tecnologica SA, a Spanish company that makes wind turbines in Pennsylvania and develops wind farms around the country.

Two deals announced recently reflect the competition. Portuguese utility EDP Energias de Portugal SA agreed to pay $2.15 billion to buy Houston-based Horizon Wind Energy LLC, from investment bank Goldman Sachs, giving the company its first toehold in the U.S. And Denmark's Vestas Wind Systems, the world's largest wind-turbine maker, announced plans to build a $60 million wind-turbine blade factory in Colorado, its first U.S. manufacturing plant.

"The U.S. is a bigger area that (European companies) can look to for growth," said Thomas Emmons, senior vice president for structured finance at HSH Nordbank AG in New York.

On-again, off-again tax credits have hampered growth here compared with a more stable climate for incentives in Europe. European companies are encouraged that a federal wind-power tax credit has been extended through 2008, and 21 states and Washington, D.C. are requiring utilities to get electricity from renewable sources.

The U.S. gets less than 1 percent of its electricity from wind-powered generators compared with 20 percent in Denmark and 9 percent in Spain. Technology advances could push U.S. wind-power use to 5 percent by 2010, the Electric Power Research Institute says. If the federal wind tax credit is maintained, annual installations of wind projects in the U.S. will more than double by 2011, predicts market research firm BTM Consult.

"We could have had our own homegrown wind-power companies competing for these new wind-farm developments and manufacturing had we had the right policies in place," said Ron Pernick, a principal with research firm Clean Edge Inc.

Worldwide sales of wind turbines are projected to rise to $49.4 billion by 2011 from $25.1 billion this year, with the U.S. and Canada comprising about 23 percent of worldwide growth in wind power generation, BTM Consult estimates.

Wind-powered electricity remains more expensive than using coal or natural gas, but cheaper than nuclear power and far cheaper than solar, the U.S. Energy Information Administration says.