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US wind demand to exceed US$10bn in 2012

Demand for wind turbine systems and components is expected to increase 6.8% a year to US$10.1 billion in 2012, according to industry research firm Freedonia Group.

Advances will be driven by rising interest in developing domestic energy resources - particularly renewable resources, such as wind. Additionally, gains will be driven by the increasing implementation of renewable portfolio standards at the state levels, as well as continued political will to support incentives such as the federal production tax credits (PTC) that help make wind energy more cost competitive.

Still, this rate is a sharp deceleration from the extremely rapid pace of the period 2002-2007, during which demand increased nearly 16-fold. Following this explosive growth, some moderation is to be expected from the high base as the market begins to mature and problems such as inadequate electric grid capacity still need to be addressed. These and other trends are presented in the study Wind Turbine Systems, from the Freedonia Group.

In 2007, independent power producers accounted for the largest share of wind turbine system demand at the utility grade level with 83%. In many cases, these independent power producers have greater expertise in developing wind energy projects and efficiently operating wind farms, having achieved economies of scale.

However, through 2012 public utilities are expected to post the strongest growth, albeit from a small base. Often, these utilities are responding to regulatory and public pressure to increase their use of renewable resources.

Much of the US has strong wind energy potential. As of 2007, the West South Central sub region accounted for the largest share of sales with 33%, aided by the strong and well established markets in Texas and Oklahoma. Sales in this sub region benefit from the availability of large tracts of relatively inexpensive land where winds are strong and steady.

However, sub regions with less established wind energy markets - particularly New England and Middle Atlantic - are expected to post the strongest gains through 2012. Gains in these sub regions will be driven by newer and increasing government incentives in several states, as well as relatively high local energy prices and growing interest in developing wind farms both on- and offshore.

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