Two monsters in USA and global wind that nobody has ever heard of are going to dominate the USA Wind movement. Iberdrola and EDP

across the U.S. by 2012.

Iberdrola and EDP: Deep Pockets
Unlike smaller rivals in the U.S., which are finding it hard to raise funds in tight credit markets, the Europeans are backed by well-capitalized parent companies, allowing them to expand just when others are cutting back. Analysts now expect Iberdrola and EDP to start snapping up some of the cash-strapped independent companies that account for roughly 40% of the U.S. wind-energy business.

“Under current market conditions, the big players such as Iberdrola Renovables and EDP Renovaveis will consolidate in the booming U.S. market,” says Eduard Sala, senior analyst at Emerging Energy Research (EER), a consultancy based in Barcelona and Cambridge, Mass. “Players without finance could be forced to sell, with the large, experienced companies filling the void.”

Consolidation of the U.S. wind industry is due partly to changing economics that have made the sector less attractive to some investors. Oil prices have more than halved since their record highs in July 2008, so projects in renewable sources have become relatively less cost-effective than when energy costs were peaking. A reduction of available credit, as well as rising charges for loans, also has squeezed developers looking for high rates of return from wind farms.

“Investors are facing hard times, because they either can’t find project financing or the economics just doesn’t add up on current energy prices,” says EER’s Sala.

Aggressive Expansion
That has left an opening for well-funded Iberdrola and EDP, which are looking beyond the short term to increase their wind-energy production more than 100% by 2012. For Iberdrola, that means spending $23.4 billion from 2008 to 2012 to increase capacity from 7,700 megawatts to 18,000 MW. Two-fifths of the investment is targeted at the U.S. EDP’s planned rate of expansion is even more aggressive: It wants to add 1,400 MW annually between 2008 and 2012, effectively tripling its existing 3,000 MW capacity to 10,000 MW over five years. Total capital expenditure is expected to top $12.5 billion, with two-thirds earmarked for U.S. facilities

China’s dramatic jump into wind power installations and manufacturing provides a glimmer of hope amidst what is otherwise a terribly polluted picture of unsustainable environmental devestation driven largely by coal-fired power generation. But just a glimmer.

Cambridge, MA-based consulting firm Emerging Energy Research affirmed the wind sector growth last week, issuing an analysis that puts China on track to hit 135,000-megawatt of wind capacity in 2020; EER expects China to lead the world in annual wind installations by 2011. EER’s 135-gigawatt prediction for 2020 marks a big jump up from the already optimistic prediction by Chinese Wind Energy Association secretary general Haiyan Qin that closed our May 2008 reporting on China’s wind sector – namely that his members would have no trouble doubling the official 30 GW national goal for 2020

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