The US industry of renewable energy has experienced tremendous growth within the last decade. Today renewable energy account for 35 percent of all new energy capacity, compared to only two percent in 2002. It is in particular the wind industry which has experienced growth. The wind industry has on average grown 32 percent annually for the past five years. The US is thereby leading the way for newly installed wind capacity. This growth has led to a large number of foreign manufacturers of wind turbines starting production in the US.
Vestas’ establishment in the US
One of the foreign manufacturers that has set up manufacturing facilities in the US within the past couple of years is Vestas. The company has exported wind turbines to the US since the early 1980’s and today they hold a market share of 18 percent.
However it is not until now that company really invests in a consolidation on the US market. Vestas opened its first factory in the US in 2008 and one month ago the first sod was cut for two additional manufacturing facilities in Colorado. Vestas has invested 300 million dollars in the two new factories and the outcome will be the production of 2000 wings and 1400 nacelles annually. Vestas furthermore plans to open a R&D Center in Boston in the foreseeable future.
17 billion dollars were invested in the US wind industry in 2008, which corresponds to a wind capacity of 8346 MW. However looking back it becomes evident how the level of investment in the wind industry has been very fluctuating from year to year. From 2002 to 2005 the amount of wind energy installed was 410 MW, 1687 MW, 389 MW and 2431 MW respectively. This instability is a direct result of the fact that the federal support for the industry has been very fluctuating.
Producers of renewable energy are highly dependent on the Production Tax Credit (PTC), a tax credit determined by the amount of renewable energy produced. The PTC has been in force on and off over the years and in respectively 2002 and 2004 the PTC was not enacted, which explains why there was such a drastic decrease in the level of investment in the wind industry these two years. Investing in the wind industry therefore previously involved risks and uncertainty.
However now that “The American Recovery and Reinvestment Act” has passed it is likely that the federal support for the industry will be much more constant. An example of this is the prolongation of the PTC until the end of 2012. On top of that a number of incentives, supporting the renewable energy industry, have been introduced with the intention of making the US less dependent on imported fossil fuels. It is therefore anticipated that the future growth of the US wind industry will be more constant than previously seen.
Potential for Danish export
The combination of an increasing demand for wind turbines and the prospect of a more stable support for renewable energy from the government create a market with great potential for Danish companies. This potential is furthermore substantiated by the demand for components for wind turbines that has arisen along with the tremendous growth of wind energy. A number of incentives have been introduced to create awareness about this potential, one of which was the trip of Crown Prince Frederik and Crown Princess Mary to the US in March.
30 March 2009