The UTCLE sponsored Wind, Solar and Storage Institute is currently taking place in Austin, Texas. The Institute began on February 14 and runs through February 16. The first day of the Institute had a number of interesting presentations. A common theme seemed to be that the wind industry is in a difficult situation because of the unknown future of the Production Tax Credit (PTC) coupled with the low price of natural gas.
Presenters provided statistics indicating that about 6,300 megawatts (MWs) of wind generation capacity were installed in the United States during 2011. The current development projection for the United States in 2012 is over 8,000 MWs of wind generation capacity. Other statistics showed that the price of wind turbine generators (WTGs) more than doubled from 2001 to 2009. However, with a number of manufacturers entering the WTG market since that time, the price of WTGs has now fallen.
One of the several panels that presented information on the first day addressed the trends in leases and the impact those trends have on negotiations between landowners and developers. Many of these trends result from the challenges developers faced (and continue to face) after the economic turmoil of 2008-09. Three notable trends that the panel identified were (i) longer development terms in leases; (ii) economic terms closer to those typically found in 2004; and (iii) less competition.
This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.