USA - Wind energy costs boosted by turbine shortage

A prolonged shortage of wind turbines is pushing up prices for wind energy projects and forcing developers to scramble for deals long before construction begins. U.S. demand, tapped out manufacturing capacity and higher materials costs have kept markets tight and costs rising. The supply squeeze is more than three years old and only now is showing some signs of easing, wind developers and consultants say. The shortage is affecting developers nationwide, but the pinch is acute in windy Western states such as California, Washington and Oregon, which have ambitious plans to up wind-power production.

This year alone, Oregon developers are on track to more than double the wind power generated by wind farms in the Columbia River Gorge. Boom-time construction is expected to continue through 2008 — longer if, as expected, Congress extends a federal tax credit set to expire at the end of that year. If developers haven't secured their turbines — each costing about $2 million — they face at least a two-year wait, energy consultants and power planners say. So far, large developers haven't had to delay projects in the Northwest, according to Renewable Northwest Project, an industry trade group. Instead, they've pulled out the checkbook and locked up large numbers of turbines in anticipation of a sustained construction boom.

Some small developers have put projects on hold, finding turbine makers either sold out or uninterested in filling relatively paltry orders. The biggest effect shows up in the price. Developers and utilities won't disclose how much they're paying for turbines. But a study by the U.S. Department of Energy found that average turbine costs in the country, measured per megawatt, rose 17 percent in 2006. The study projects prices to rise an additional 14 percent this year.

That means a 1.5-megawatt turbine — a popular size — cost a developer $2.5 million this year compared with the average cost of $2.2 million last year. The price includes turbine components and installation. The higher costs are still working their way through to consumers.