A new gust of wind projects across the US

Out in the dwindling oil fields around McCamey, Texas, where rattlesnakes outnumber people and black-gold gushers once blew their tops, a new energy geyser is blowing - wind power.

More than 860 wind turbines today pinwheel where oil derricks once bloomed, cranking out pollution-free megawatts for wind developers like FPL Energy, a Juno Beach, Fla., utility with the nation's largest wind-power portfolio. In turn, that energy is transmitted to cities like Austin.

"We call our town the wind energy capital of Texas," says Sherry Phillips, McCamey's wind-centric mayor.

With wind farms popping up from New York to Texas to California, wind power is riding high in the saddle again. Explosive growth of more than 40 percent this year - 3,400 megawatts of new generation is expected - could make the United States the world's largest wind-power market, a new report shows.

In the past, the wind industry has soared or swooped depending on whether Congress renewed the wind-energy production tax credit, as it did last fall. But amid the current boom, some say it won't be long until the industry is ready to stand on its own.

Rising natural-gas prices, new state mandates requiring clean energy, and utilities' concerns over global warming are key forces. Together, they leave the wind with enough momentum and critical mass to keep growing even if Congress does not renew the tax credits, some argue.

"The big story is that the North American wind-power market is reaching an entirely new level," says Godfrey Chua, research director at Emerging Energy Research, a research firm in Cambridge, Mass. "This year will see the beginning of the end of the boom-and-bust cycle that has plagued the US wind industry."

Among the biggest factors spurring growth are states taking the reins of leadership from the federal government on energy mandates. Eager to cut air pollution, global warming, and rising electric rates, at least 22 states have approved "renewable portfolio standards" - legislation requiring utilities to include renewable sources like wind, solar, hydro, and biomass in their energy mix.

At the rate wind power is being installed on the ridges and plains of North America - US and Canada - wind power will grow by 4,250 megawatts this year, compared with about 2,600 megawatts last year. If Congress renews the tax credit in 2007, the industry could be installing 6,000 megawatts a year by 2010, according to a new study by Mr. Chua.

Because wind provides power intermittently, there is a limit to how much of the energy mix it can provide. Still, some say 5 percent of total US generating capacity is a reasonable goal. In fact, the US wind building boom could soon bring cumulative wind power to more than 9,200 megawatts, serving the equivalent of 2.4 million households, according to the American Wind Energy Association. (Still, that's less than 1 percent of US power generation.)

Another key reason the wind industry is surging is due to "a whole new cast of players bringing much greater financial capital, corporate muscle, and political leverage," Chua says. Where "cowboy" developers abounded, Fortune 500 companies are jumping in. Goldman Sachs and global energy developer AES have plunged into wind-farm development. German giant Siemens has joined General Electric making wind turbines.

Horizon Wind Energy, a Houston-based developer owned by Goldman Sachs, is aggressively developing hundreds of megawatts of wind power across the country. One such endeavor is the Maple Ridge Wind Farm project about 75 miles northeast of Syracuse, N.Y. Set in maple-syrup country, the first turbines on the wind farm went online last month.

With three full years of growth behind it and stable growth ahead until at least 2007, when the tax credits expire again, wind developers and turbine manufacturers are "seeing a more stable environment and growing confidence," Chua says.

"There's not a utility company in the country that isn't thinking at least a little bit about wind energy and renewable power," says Michael Skelly, chief development officer of Horizon Wind Energy. A major factor, he says, is uncertainty over global warming.

"When you're an energy company deciding where to get your electricity, you're making decisions 20 years ahead," he says. "For most of these industry people, looking that far out, they see a carbon question mark."

Undergirding that shift is the fact that with natural-gas prices soaring, zero-fuel-cost wind looks cheap. Advances in wind-turbine technology cut the average cost of wind power to about 4 to 5 cents per kilowatt hour in 2004, from more than 80 cents per kilowatt hour in 1980. Add to that the tax credit, which chops the cost a further 1.9 cents per kilowatt hour, making it competitive with natural gas and even with coal.

"Word is getting around about wind," says Randall Swisher, executive director of the American Wind Energy Association in Washington. "Up and down the Great Plains are states like Oklahoma, Kansas, Nebraska, and the Dakotas, where there's no special incentives or mandates. But hundreds of megawatts of wind are being developed there because it pays."

That message is getting out. Whole Foods Market Inc., the grocery chain, this month announced it would buy wind power to supply all its energy needs. In Colorado, where typically a mere trickle of consumers sign up for wind power, the falling price of wind power saw Xcel Energy's Windsource program get nearly 3,000 applications in November - more than 15 times the usual volume of consumers. That created a waiting list of more than 1,100.

The gale of wind-power projects has produced a surge of orders for wind turbines that is currently the major constraint on industry development, analysts say. General Electric, the largest US producer of wind turbines with 60 percent of the market by some estimates, is producing all it can make and has an order backlog.

All that interest has new US wind- turbine companies like Gamesa, Suzion, and Clipper Wind Power coming on strong. Last year, Clipper's factory in Cedar Rapids, Iowa, produced just five turbines. This year, it plans to make 150.

"It's great to see the institutional interest among utilities and the finance community," says Jim Dehlsen, Clipper's chairman and CEO. "It's been a long time coming."

Back in Texas, King Mountain near McCamey was one of the biggest wind farms in the country with 215 turbines just completed in 2004, creating scores of new jobs and millions in tax revenue for the town. Now, hundreds of megawatts of new wind power are in development in other dry, wind-swept Texas vistas like Taylor County. A new offshore development near Galveston has also been approved.

This year, Texas could become the nation's leading wind-power state.

"We're about to pass California," says Jim Suydam, spokesman for the Texas General Land Office, which oversees state-owned lands. "We're having a little bit of a race."