The economy is starting to take a toll on the green energy sector. Florida Power and Light said Monday it is trimming its plans for new wind energy projects by 400MW in 2009 to a total of 1.1GW of new capacity, still a significant amount. The company indicated that it remains committed to renewables and wants to remain poised "should attractive market opportunities present themselves."
A short-term breather before a resumption in clean energy investment doesn't surprise Clean Edge principal Ron Pernick:
Companies are cutting investments across the board, so it's not just about
renewables. I think there's no doubt that there's significant uncertainty in the
marketplace, that credit is tight and that that's impacting the decision-making
processes of quite a number of organizations. Renewables don't exist in a vacuum
and aren't separated from the vagaries of the market.
The good news is that wind turbines are suddenly more available as backlogs shrink--for now.
Gamesa, the Spanish wind-turbine manufacturer, has "temporarily" ceased production, and is awaiting customers to confirm purchase plans. Suzlon, the fifth largest turbine manufacturer saw its stock price plunge and its customers back off after another widely-reported turbine failure.
If the reduction in demand is temporary, the reduction in supply can be temporary too. If, however, the economic climate for wind energy remains difficult due to tight credit, inconsistent and unpredictable energy policy, and recession-induced reduction in electricity demand, expect an industry shake-out, higher costs, and a more difficult time until steady winds return.