General Electric Co., the biggest U.S. supplier of wind turbines, expects domestic installations to double next year after the renewal of a tax credit boosts demand.
Wind-farm developers including NextEra Energy Inc. and Invenergy LLC may install 3,000 megawatts to 4,000 megawatts of turbines in the U.S. this year and as much as 7,000 megawatts next year, Anne McEntee, GE’s vice president of renewable energy, said today in an interview.
The U.S. added a record 13,124 megawatts of turbines last year, outpacing natural gas installations for the first time, as wind developers raced to complete projects ahead of the Dec. 31 expiration of the production tax credit. Denmark’s Vestas Wind Systems A/S and Spain’s Gamesa Corp Tecnologica SA also expect new orders to pick up by the third quarter.
“The U.S. market is beginning to turn around,” McEntee said at the Wind Power 2013 conference in Chicago. “Utilities see wind energy as a hedge against rising fuel costs.”
The production tax credit for energy generated by renewable sources expired at the end of 2012 and was renewed for a year on Jan. 1.
GE has received orders this year for more than 1,000 megawatts of wind turbines, including one from NextEra for 100.3 megawatts announced today for a Michigan wind farm and Invenergy’s 215-megawatt deal announced last week for a project in Texas.
Germany’s Nordex SE, which hasn’t announced any sales in the U.S. this year, said the last-minute nature of the tax-credit extension stymied developers that might have placed orders by now.
“Utilities have acted slower than I predicted,” Ralph Sigrist, chief executive officer of Nordex USA, said today on a panel at the conference. “They’re taking their time.”
Developers have more flexibility this year because they only need to begin construction by Dec. 31 to be eligible for the tax credits, said Borja Negro, chief executive officer of Gamesa’s U.S. unit. The previous version of the credit applied to projects that went into service before the deadline. It pays owners 2.3 cents per kilowatt-hour.
“With the start-construction language we could see a U.S. market of up to eight gigawatts” of sales contracts signed this year, Negro said. “It could be more but unfortunately we’re facing a lot of ups and downs.”