Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
Suzlon: U.S. wind growth slowing in '09
NEW YORK |
NEW YORK (Reuters) - Sales of new U.S. wind power generation in 2009 will probably be half the record 2008 level as the financial crisis paralyzed cash flows to new wind farms, the head of wind turbine maker Suzlon Energy Ltd's U.S. operations said on Thursday.
That contraction will reduce revenues for Suzlon in the world's largest wind power market from the nearly $1 billion the company posted in 2008, Andris Cukurs, chief executive of the Suzlon U.S. operations, said in an interview.
Development of new wind farms has slowed sharply in recent months as banks suffering from the global credit crisis shut off the flow of money for new projects.
"There're a lot of (plans in the) pipeline that want to be converted into projects right now, but basically, until the money starts flowing again, they won't be, and that's the reason I think the market will be half what it was this last year," Cukurs said.
About 8,350 megawatt of new wind power generation came on line in the United States in 2008, the equivalent of about eight coal-fired power plants.
Those additions moved the United States past Germany as the world's leading wind power generator, although the 25,000 MW of wind power in the United States is only about 1 percent of the nation's total power supply.
Still, with states requiring that a greater share of their electricity comes from clean energy sources such as wind or solar, U.S. power producers are expected to continue to seek even more turbines in the coming years.
"I see 2009 as a year of where we need to get things sorted out in the United States, but on the other hand, 2010 and beyond, based on discussions we're having today with our clients, I think we're more or less back to normal," Cukurs said.
Suzlon, the fifth-largest turbine maker in the world and No. 3 in the U.S. market, plans to continue adding to the more than 800 people it currently employs in the United States at its Chicago headquarters and manufacturing plant in Pipestone, Minnesota.
"Even in a down year we're still adding 20 percent more workforce this year," said Cukurs, an 11-year veteran of the wind industry.
Rival turbine maker Vestas Wind Systems, the global market leader, is also planning to expand in the United States, but its chief executive, Ditlev Engel, warned that the company could lay off workers in the coming months if the market does not improve.
President Barack Obama has called for boosting renewable energy to 10 percent of U.S. supply by 2010 and to 25 percent by 2025. The stimulus plan he signed into law included new incentives, including a 3-year extension of the production tax credits for wind power.
That tax credit extension was "a very positive signal from the administration," Cukurs said. "It basically means, yes, all things begin equal, we should go ahead and invest in manufacturing."
Suzlon's stock crumbled by about 90 percent last year as Bombay markets fell sharply and the company suffered from reliability problems related to the blades on its 2.1 megawatt turbine.
Those problems, including cracking that caused one blade to break off a turbine in Illinois, contributed to a 40 percent drop in the share in one day in October.
Those problems have not been seen in a new generation of blades, and the company is retrofitting all suspect blades installed in the United States.
About 40 percent of the 1,200 blades have been retrofitted, Cukurs said, and the company has taken a charge of about $35 million for the program.
- Tweet this
- Share this
- Digg this