CIG: BoA Merrill Lynch Global Research predicts sluggish demand for U.S. wind energy.

New research indicates that demand for U.S. wind energy will be sluggish as long as power prices remain low.
By: CIG LLC
 
April 21, 2010 - PRLog -- CIG has learned that a recent report by Bank of America Merrill Lynch Global Research has had some disappointing forecasts for the U.S. wind energy sector.

Increasingly wind energy is less competitive than conventionally generated power as the power prices have dropped to between $40 and $50 per MW/hour, around $20 less than what wind energy has historically been sold for through power purchase agreements according to analysts.

The report indicates that if the U.S. government were to set a renewable portfolio standard, requiring utilities to obtain a certain percentage of their power from renewable sources such as wind, solar or ocean power the demand may still increase, CIG believes.

Whilst many states such as California have set individual standards, the report shows that such a bill is unlikely to be forthcoming in the near future.

"It seems likely, therefore, that the U.S. wind market will be tough in 2010 and remain tough in 2011 before beginning to pick up in 2012," CIG understands the report as saying.

Figures available to CIG indicate that during 2009 over 10,000MW of wind power capacity was installed in the U.S., with 1 MW being sufficient to power around 800 homes.

The BoA Merrill Lynch analysts reported that they expect a drop in wind installations to 7,000 MW this year and 8,000 for 2011 and 9,000 the following year.

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CIG is an exclusive, members only, offshore, private equity, investment firm that provides consulting services to like minded members of the private equity and alternative investment community.
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