Avista Corp., a utility based in Spokane, Wash., has become the latest in a series of U.S. companies to pull back on its wind power project plans.
The company has delayed plans to build a 50-megawatt wind farm in the state for at least two years, The Spokesman-Review reported today, the same day as Avista announced it had lined up $200 million in credit. Avista, which cited the high cost of wind turbines over other forms of renewable energy – such as an upgrade of an existing dam — now hopes to build the farm at the end of 2013, according to the newspaper.
“This stuff is really expensive,” Hugh Imhof, a spokesman for Avista, told the newspaper. “Why build a $125 million wind farm if we don’t need it for another two years?”
The news comes a month after T. Boone Pickens, the oilman turned wind power and natural gas advocate who chairs BP Capital Management, said he was considering paring down plans for a 4-gigawatt wind farm — which would have been the world’s largest — after some investors asked to pull out of his fund.
Last month, FPL Group also announced it was cutting back plans for more wind projects next year and Gamesa, a Spanish wind manufacturer, said it would temporarily shutter some of its factories amid concerns about customers’ commitments.
Some companies have been waiting to see how their sales will be affected by the economy before making buying commitments. Michael Butler, CEO of Seattle-based investment bank Cascadia Capital, told Earth2Tech that many companies are putting off major investment decisions until the new year. “Many people are just saying ‘Let’s shut down until the end of the year,’” he said.
But Butler maintains that long-term prospects for wind and other renewables still look good. After all, some large long-term wind plans are still getting funding. Spanish wind company Union Fenosa said Monday it would spend more than $1.9 billion to develop wind farms in Australia. That’s after Matthew Simmon’s Ocean Energy Institute last week proposed building a 5-gigawatt offshore wind farm, a project that could cost as much as $25 billion.
EnXco Inc., a subsidiary of EDF Energies Nouvelles Co. in France, announced Friday it had closed funding for a 150-megawatt wind project in California, slated to produce electricity for the PG&E.
“There’s clearly been a slowdown,” Butler said. “But I think, especially at the start of next year, money for good projects will be available.” Wind power manufacturers and project developers surely hope he’s right.