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What's Holding Up Wind Development?

What's Holding Up Wind Development?

It boils down to just three letters - PPA.

The mood at this American Wind Energy Association was far more positive than last year, says Cole Gustafson, NDSU biofuels economist.

"While the collapse of Wall Street lending and finance was the impediment to wind energy expansion last year, now it is just three letters – PPA," he says.

PPA is an industry acronym for power purchase agreement.

"Recently, several forces have combined to lower the value of a PPA," he says.

"First, prices of competing fuel sources, most importantly natural gas, have fallen considerably. This has forced a reduction in the value of wind energy. Second, the slow economy has lowered the demand for electricity in general. Third, the wind industry still faces great political and regulatory risk as climate legislation, passage of a national renewable energy standard and a continuation of favorable 2009 stimulus programs are uncertain. Finally, transmission constraints and curtailment still cast a shadow over long-term growth."

Source: NDSU Ag Communications

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