Will the US obstruct the wind energy companies?

The Spanish operator of wind-power plants Iberdrola Renovables announced yesterday in its third quarter earnings report that it lowers its expectations to the American market. Going from expecting new installations of 1000 megawatt earlier this year the company now only expects to install between 600-700 megawatt in the US.

Now what does really mean? First of all it confirms the downturn in the American wind market that is not only bad news for the wind industry, but also for the environment. One of the major reasons for the wind power obstacles in the US is the extremely low gas prices that do not give the electricity companies any incentive to buy power from wind power plants. In that way it is difficult for the turbine manufacturers as GE Energy, Vestas and REpower to get involved in new projects and put up more capacity.

According to one of the largest Scandinavian banks, Nordea, the downgrading outlook from Iberdrola Renovables is bad news for the wind business and such lower expectations will eventually affect the large companies, i.e. the world largest wind turbine manufacturer Vestas. Nordea already lowered its recommendations on the Vestas stock to “hold” in May because of the discouraging outlook for the American market.

Furthermore, regulatory challenges destroy growth possibilities for the wind power companies, because there still is no national legislation on sustainable energy in the US.

At the same time China is on a wind high at the moment and the World Wind Energy Association just reported that China has already installed 7800 megawatt this year up until July leaving the US and India on a shared second place with 1200 megawatt installed each. If this trend continues China will probably outpace the US in most installed capacity in total by the end of this year.

Off course it is amazing that China is doing such a great job in installing wind power, but at the same time it is very depressing that the worlds most energy consuming country is not following the same path. I find it important that the big nations turn to sustainable energy and also encourage the green companies to keep innovating. And at the moment we need more of that from the US.