Navigating the Winds of Change in the Energy Sector

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Researched by Industrial Info Resources (Sugar Land, Texas)--Constraints to the advancement of wind power generation in the U.S. are on the rise, causing power generators to rethink development plans. In a recent interview, Shane Mullins, VP Product Development for Industrial Info, responds to questions regarding the changing landscape of wind energy projects and expounds on the ups and downs of wind power development this year.

Click here to listen to the podcast on Windpower Engineering.

Industrial Info is currently tracking more than 107 gigawatts (GW) of wind energy projects in the U.S., accounting for about one-third of the capacity of active new-build power generation projects. Of this amount, 5.6 GW of wind power units are currently under construction in the U.S. With a large backlog of projects, the sector is reeling from a series of setbacks, including lack of funding, which has led to project cancellations, project deferrals or trimmed-down projects. Many projects are counting on Treasury Department cash grants, but with the lack of legislation, these grants could dry up. In some cases, equipment vendors themselves are funding projects.

On the plus side for the industry, the aftermarket business is expected to increase as a growing number of wind turbines fall out of warranty. Wind turbines typically have warranties that last two to seven years, depending on the make and model of the turbine.

"Approximately 8,000 megawatts of wind turbines are expected to fall out of warranty in the next three to four years," says Mullins. "This is providing an opportunity for contractors offering aftermarket services."

OEMs such as General Electric (NYSE:GE) and Vestas are focusing on manufacturing new turbines rather than maintenance. With more wind turbines out of warranty, a slew of third-party maintenance service companies are on the rise. These companies include: NAES Corporation (Issaquah, Washington), John Wood Group plc (LSE:WG) (Aberdeen, Scotland), enXco, a renewable energy developer that is part of French electricity firm EDF Energies Nouvelles S.A. (EPA:EEN) (Paris, France), and ATS Wind Energy Services (Saint Cloud, Minnesota).

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.