Wind Market Update Susan Williams Sloan American Wind Energy Association Wind Energy Symposium Texas A&M University European Union Center of Excellence

Who is AWEA ? ●American Wind Energy Association ●National trade association for the wind energy industry Legislative / Lobbying Education & Outreach Member Services ●Currently >2,500 business, utility, academic, and non-profit members

U.S. Wind Project Growth U.S. Wind Project Installations

New U.S. Electricity Generation 42% of all new generating facilities added in 2008 were wind power plants. Wind was second only to natural gas for the fourth year in a row. AWEA Annual Wind Industry Report

As of end of Sept 2009, 31,109 MW of wind installed in 36 states > 1 GW 100 MW - 1 GW < 100 MW Installed Wind Capacity through end 3Q09

Turbine Manufacturer Locations Nordic (announced) Fuhrlander (announced) Suzlon Acciona, Clipper, Siemens Gamesa GE Energy Vestas DeWind Nordex LM Glasfiber Mitsubishi ( announced) Global Wind Systems (announced)

20% Wind Energy by 2030 The U.S. possesses sufficient and affordable wind resources to obtain at least 20% of its electricity from wind by the year U.S. Department of Energy, May 2008 Full report at

Wind Additions, 20% v. Actual Capacity Additions in 20% Scenario Actual Installations

Wind Projects Waiting in Queues Close to 300,000 MW of proposed wind projects are in interconnection queues. AWEA Annual Wind Industry Report

Then, Financial Crisis Hit...  Use of the production tax credit (PTC) requires tax liability, and most wind development companies do not have an internal U.S. tax appetite large enough to use the PTC.  Wind industry historically partnered with institutions that accessed or had tax appetites sufficient to monetize the PTC through the tax equity market. (JP Morgan, GE Capital, etc)  During the financial crisis, profits declined reducing tax appetite and the size of the tax equity market. Most investing entities left the wind market altogether while some entities went bankrupt (Lehman Brothers, AIG etc).

On the Supply Chain Side ●Turbine orders delayed, which caused ripple slow-downs throughout the supply chain –Lead-time on orders reduced –Existence of “Gray market” rumored –Production of 12 GW for ’08 dropped to 4 GW in ‘09 ●Composites supplier reported huge reduction in order for 2009 ●Many existing supply chain companies stopped hiring or announced layoffs ●Over 55 announcements of new facilities in 2008 slowed to just over 20 so far this year.

Response to the Financial Crisis An alternative to the PTC that did not rely on the tax equity market was necessary to continue to monetize the value of the PTC and drive the wind industry forward.

American Reinvestment and Recovery Act Wind Industry Benefits PTC extension through 2012 Temporary ability to claim 30% ITC, and receive Treasury grant in its place Small wind turbines now eligible for full 30% ITC New 30% manufacturing tax credit New loan guarantee program R&D funding Transmission funding

Treasury Grant Program Treasury Department began accepting applications on July 31, 2009 Grants will be paid within 60 days of online application submission 6-page application and guidance available: Two tranches of grant money have been released on September 1, 2009 and September 22, 2009 equaling over $1 billion.

Grant Program Showing Initial Signs of Success  15 wind projects successfully applied and received grant money  3Q 2009 numbers are stronger than expected: 1,649 MW were installed in 3Q 2009, which exceeds 2Q 2009, as well as 3Q Total 2009 installations were 5,800+ MW through the third quarter, more than initial estimates for  Clear sign of new activity with over 1,700 MW of new construction starts since mid-year  Over the past 6 months (2Q and 3Q 2009) the new investment in renewable energy was over $4.5 billion, which is almost twice as much as new investment the during prior 6 months (4Q 2008 and 1Q 2009).* *Source: New Energy Finance

Wind Additions, 20% v. Actual Capacity Additions in 20% Scenario Actual Installations projected

Annual Installed Capacity Under 20% Scenario Small Wind US Market Grew 78% in Fold Growth Projected Within 5 Years (US) Congress Passes 30% Tax Credit 2008 US Sales 17.3 MW 78% growth over ,500 units $77 million in sales 2008 Global Sales 33.6 MW 63% growth over ,900 units $144 million in sales Full report available at

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