Sandy Shore AP – Prices for wind turbines have fallen 18 per cent globally since the renewable energy industry slumped with the recession, a consulting firm reported Monday.
The prices were affected by diminishing demand for the giant machines, a decline in the cost of raw materials such as steel and because components have been more accessible since late 2008, said Ethan Zindler, head of North American research at New Energy Finance.
“The logjam has clearly broken,” he said. “Steel prices have definitely come down as well, and those two things have contributed to lower turbine prices.”
Renewable energy provides a small fraction of electricity used today but the wind and solar sectors are among the fastest growing in the United States. In 2008, the U.S. became the world’s leading provider of wind power.
Like most industries around the world, the recession has hurt wind turbine manufacturers and wind farm developers. Companies have shelved development plans and laid off workers.
New Energy Finance said prices fell 18 per cent on contracts signed worldwide in late 2008 and 2009 for turbine deliveries in the first half of 2010.
The findings were based on interviews with 12 companies worldwide that bought wind turbines representing nearly 3 gigawatts of wind-generated electricity. The contracts occurred in 22 markets and covered 11 manufacturers.
“Worldwide, we’ve hit definitely hit a situation where there’s been a slowdown in demand and that is definitely resulting in prices coming down,” Zindler said. “There is a belief that demand will pick back up and that that will result in prices going back up.”
Duke Energy Corp., a Charlotte, N.C.-based power generator that operates some wind farms, has seen a slight softening in the market and price drop for turbines, spokesman Greg Efthimiou said.
He said he could not be more specific on how much prices have fallen because each contract is negotiated separately.
Roby Roberts, a U.S.-based senior vice president for Vestas Wind Systems, the world’s largest wind turbine manufacturer, declined comment on prices.
He said the Denmark-based company’s manufacturing operations in Colorado remain on track.
Roberts and others in the industry say a key to its recovery is government stimulus money that will be dispersed to renewable energy projects like wind farms where the bulk of the expense is incurred upfront.
The Treasury Department is drafting rules on how to apply for the money and how it will be allocated, which the industry and banks are awaiting. Zindler said he expects them to be released next month.
“Our view is when those rules are out, demand is going to pick up rather quickly,” he said.
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