As oil prices continue to rise and voter and government support for clean energy development increases, 2008 could be a year of record growth for U.S. wind developers. Yet with the Northwest’s increasing electricity demands creating constraints to the region’s transmission grid, the race to tap into the Northwest’s best wind sites is getting tighter—and some developers are feeling the squeeze.

Investment in the U.S. renewable energy market is expected to reach an all-time high of $25 billion in 2007, following a strong 2006 when investments in the sector tripled, according to a recent report from research firm Packaged Facts. The report, “Renewable Energy Investment in the U.S.,” projects the rapidly emerging renewable energy investment market could reach nearly $50 billion by 2011. Despite the industry’s rapid growth, wind developers in the West are being forced to work harder than ever to secure the region’s best sites.

“The competition for sites is as fierce as any time since I have been in the business,” says Chris Taylor, director of project development for the Portland office of Horizon Wind Energy, a subsidiary of Energias de Portugal.

Passed with strong support from rural landowners anxious to host wind turbines, new state renewable energy standards in Oregon, Washington and other states have lured an increasing number of wind energy companies to Portland in recent years (See “Current Power Broker: Darin Huseby,” nwcurrent, November 2007). 

Taylor, who has worked to develop strong relationships with Northwest landowners since Horizon landed in Portland in 2001, says the companies that established themselves early on are the ones best positioned in the current market.

Horizon, which was acquired by Goldman Sachs in 2005, was sold in April to Energias de Portugal for $2.2 billion. Acquiring Horizon Wind Energy's 560 gross megawatts (MW) of wind power generation provides EDP an entry into the rapidly growing U.S. renewable energy market.

Yet even if the federal government passed a national RPS, further boosting wind energy project development, transmission troubles in many parts of the country could raise the stakes even higher among developers.

Taylor notes that while the “low-hanging fruit”—sites with an excellent wind resource on large tracts of land with a single landowner, located close to transmission and with easy access to permits—are getting tougher to find, without transmission upgrades, many potentially viable projects might never get built.  

“We’ve only skimmed the very cream of the crop so far in the United States as far as wind sites,” Taylor says. “We generate less than 1 percent of our energy from wind in this country and we have far better resources than Europe. There’s plenty more to be done.”

In the year ahead, transmission troubles won’t likely stall any projects currently in the pipeline, but if the issue isn’t addressed soon, the wind industry could take a serious blow. After all, constructing additional transmission can take years—and time is of the essence for most investors of capital-intensive projects such as wind farms.     

In the West, the challenge is not so much lack of new transmission as constraints on the existing transmission system, adds Anita Marks, corporate spokesperson for Portland-based PPM Energy. “The West has been growing so much in recent years,” Marks says. “The utility infrastructure has to be built up to keep up with growing demand. Transmission constraints make it harder to move power from the generation areas to the locations where people need the electricity.”

Darin Huseby, who heads wind developer enXco’s Portland business development office, agrees. He says the Northwest, compared to other parts of the country, has a very complex and constrained transmission system. “There are pathways where it’s virtually impossible to get any more megawatts through the line,” Huseby says.

While current efforts, led by Portland-based Bonneville Power Administration, are underway to tackle the West’s transmission issues, some in the industry say federal legislation mandating a federal renewable energy standard could help create new transmission. 

“The latest polls I have seen show that more than 80 percent of the U.S. population is pro-renewables as a means for doing something about global warming,” says Jens Søby, President Vestas Americas, a subsidiary of Denmark-based Vestas Wind Systems (See “Current Power Broker: Jens Søby," nwcurrent, December 2007). “We see that on Capitol Hill. There is a growing understanding that the United States needs to take a leadership role in accelerating what we need to do to fight global warming.”  

A recent Zogby International poll of potential 2008 voters found that most Americans agreed the federal government should require at least some of their electricity come from renewable sources such as wind and solar. The poll, commissioned by the American Wind Energy Association, showed 77 percent of Republicans and 92 percent of Democrats supported a federal such legislation.