The spiraling costs of traditional fuels and energy sources such as natural gas and coal have generated tailwind for alternative energy sources. Utilities are increasingly taking to small and medium wind turbines to avoid heavy investments in coal plants, new gas generators, or thermal units. Once their ability to integrate distributed energy improves, there will be greater demand for small and medium wind turbines. Below 100 KW (small turbines) and 100 -1,000 KW (medium turbine). Most wind turbine manufacturers will feel optimistic about their market prospects since their low energy generation costs ($0.10 per kWh) could give them a competitive edge in the energy market.

Manufacturers will be hoping to keep the turbine price fixed in the face of rising production costs. This is because they are aware that investors could often be wary of the long wait for returns on investments. Sometimes, the cost benefits will be apparent only after ten years. Also, the costs of production could vary widely, since winds are sporadic and windy spots are often located far away from urban centers – the main end users of this power. However, manufacturers can control the costs to some extent by increasing the scale of production to generate economies of scale or by outsourcing the production of smaller components. Currently, the cost of turbines is balanced by the exponential demand from utilities; however, when there is a cost imbalance in future, the supply and demand equilibrium could be upset.

Active Government Support to Attract Greater Investments

The government could play a significant role in luring more numbers of investors to the wind energy market through subsidies. In fact, the market is highly dependent on these incentives for reducing the cost of the system and the pay back period. In the United States, production tax credit (PTC) continues to be an influential growth factor, as installations have been increasing and decreasing depending on PTC’s extension and termination. This wavering PTC policy has also dented the confidence of developers and industrial investors in production base. “However, state-based polices such as Renewable Portfolio Standards (RPS), Renewable Electricity Standards, and Renewable Energy Production Incentive (REPI) have moderately compensated for inconsistency in PTC implementation,” says the analyst of this research service. The U.S. companies can take heart from the issuance of renewable energy certificate (REC), which encourages domestic generation of renewable energy.

The government has also diversified its energy portfolio and shown preference for alternative energy sources such as wind power due to its need for energy security. “Moreover, with stringent pollution standards driving the cost of generation from coal sources, new avenues of investment in wind energy systems are opening up,” notes the analyst. “As most small and medium wind turbine manufacturers are from the United States, it is hoped that the budget for energy will be extended to include other investment areas such as infrastructure and expansion of renewable energy installations.”

Technologies

The following technologies are covered in this research:

– Energy and power supplies

– Transmission and distribution

– Power generation

– Renewable energy

– Oil and gas

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Segment:

– Below 100 KW (small turbines)

– 100 -1,000 KW (medium turbine)

By Geographic Region:

– The United States

– Canada

For more information visit researchandmarkets.com

SOURCE: Research and Markets Ltd.