MARSEILLE (Reuters) – The economic downturn is delaying wind power projects in the European Union but the negative impact will not last because of strong sector fundamentals, a European wind power lobby said on Monday.
"There is a slowdown in the sector, we are seeing some signs, but much less than in other sectors," Arthouros Zervos, president of the European Wind Energy Association (EWEA), told Reuters on the sidelines of a wind conference.
"The impact will be short term because the fundamentals are still there for wind development," he said.
There was some difficulty in financing projects, which meant some were delayed but there had been no canceled projects so far, Zervos added.
Michael Liebreich, analyst with consultancy firm New Energy Finance, said he believed between 10 and 15 percent of all new projects in Europe in 2009 would be delayed or canceled.
The wind energy sector was attracting new sources of capital that compensated for banks' reluctance to provide debt finance for projects, the EWEA said.
"A growing number of power companies with strong balance sheets are investing in wind energy and there is increasing interest from institutional investors," it added.
While it expected the sector to be among the first to emerge from the economic turmoil, it urged governments and the European Investment Bank to establish loan guarantees to ease the banking liquidity squeeze.
LONGER TERM
In the longer term, Zervos was optimistic because of the European Union's decision last year to source a fifth of its energy by 2020 from renewable sources like the sun and wind, to cut greenhouse gas emissions and reduce dependence on unreliable imports of oil and gas.
The EU's plan had gained urgency after a gas dispute between Russia and Ukraine earlier this year, which forced hundreds of European businesses to shut down and left thousands of homes without heating, the EU's energy commissioner Andris Piebalgs told conference delegates.
"We now estimate installed capacity in the European Union to reach 230,000 megawatts (MW), up from a 2003 forecast of 180,000 MW," Zervos said, adding this included 40,000 MW in offshore capacity.
Wind power was expected to generate 600 terawatt hours per year by 2020 and make up between 16 and 18 percent of the EU's electricity demand.
The Global Wind Energy Council (GWEC) said last week the economic downturn would dent wind power growth in the United States in 2009, as firms scrambled to finance their projects.
It expected wind power growth to be stable in Europe and continue to increase sharply in China.
GWEC was more optimistic than some analysts, forecasting added installed power would grow in 2009 compared with 2008, contrasting with an HSBC report which last week forecast new additions would drop by a fifth.
The council said a $787 billion U.S. stimulus package would however help revive the sector when it kicked in, through tax breaks, financial incentives, loan guarantees and grants.
The council said it expected global wind power capacity to nearly triple in the next five years, although the year-on-year growth would slow down to an average of 22 percent, down from 28 percent in the last 10 years.
(Editing by Sue Thomas)
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