Amid Economic Crisis, Wind Power Spins More Slowly

On Michigan's "thumb," a broad peninsula whose gusts make it one of the best places in the U.S. to site a wind farm, Noble Environmental Power has erected 30 huge wind turbines -- 16 more will finish the job.

In this file photo, a wind turbine is assembled at Energy Northwest's Nine Canyon Wind Project near Finley, Wash.

(Jackie Johnston/AP Photo)

But the project was hit by a financial gale last month when key underwriter Lehman Brothers went bankrupt. With Lehman out, Noble was forced to sell in a hurry. Three more Lehman-financed wind-power projects in New York are also in doubt, according to published reports.

America's credit crisis is shaking up not only smaller alternative energy sectors like solar and geothermal, but also the largest renewable electricity sector -- wind power.

As a result, wind generation may grow far more slowly in the United States next year, experts say. Financing for wind projects is likely to shift more to deep-pocketed utilities and other companies far from Wall Street -- including big foreign companies searching for a foothold in the United States.

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Until this fall, plowing billions into new wind farms from North Dakota to Texas to California had been the epitome of renewable-energy investing for hedge funds and big banks. But even though the U.S. may still be the "Saudi Arabia of wind power," tapping that resource will be far tougher.

"We all know that with the impact of the credit crisis on the economy, there's no way that this sector will not also be hurt," Randall Swisher, executive director of the American Wind Energy Association told reporters during a teleconference call last week. With the cost of capital rising and access to credit more difficult, "eventually that's going to have an impact on our members' ability to do business," he says.

Wind power used to have the breeze at its back. This year it is the second-fastest growing source of electricity generation after natural gas. It's also winding up a banner year of building about 7,500 megawatts of new generating capacity -- about 50 percent more than 2007. And wind energy seemed set to soar, buoyed by recent renewal of a vital production tax credit (PTC) from Congress.