Japan, Germany Stake Claims in U.S. Renewable Energy Market

July 29, 2009

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Japanese and German companies – already well-entrenched in global solar and wind energy markets – are starting to stake claims in the emerging U.S. renewable energy market thanks to the Obama administration’s support for renewable energy initiatives and investments, but analysts say it’s too early to count out U.S.-based businesses.

One of the most recent Japan-based companies to enter the U.S. market is Sumitomo Corporation of America with the purchase of an interest in a 120-megawatt (MW) wind farm in Martin County, Texas, encouraged by government incentives for renewable energy investments, according to the company.

Sumitomo has purchased a 42.5 percent share in Stanton Wind Energy LLC from AIG Financial Products Corp., a part of American International Group, Inc. The Stanton wind project is managed and operated by Stanton Wind Holdings LLC, a subsidiary of Invenergy Wind North America LLC, one of the leading wind developers in the U.S. The remaining share will be held by GE Energy Financial Services and the Invenergy group.

The $240-million Stanton wind project uses 80 1.5-MW GE turbines and started commercial operations in February 2008. The 120-MW wind power facility, when compared to coal power plants, will reduce CO2 emissions approximately 800,000 tons annually and 20,000,000 tons over 25 years, according to Sumitomo.

Sumitomo already has two developed and operating wind farms in Japan, and one project under development in China.

More than 2,800 megawatts of wind energy was installed in the United States over the first quarter of 2009, with new projects in 15 states bringing the total wind power generating capacity to 28,206 MW, according to the American Wind Energy Association.

Other Japanese companies have been expanding into the U.S. wind power market including top Japanese wind power company Eurus Energy Holdings Corp., which is building a 63,000-kW site in the northern part of Oregon, reports Money.CNN.com (via Dow Jones Newswires). This facility is expected to be operational by the end of the year.

Eurus already has eight wind farms in the U.S. with this ninth facility raising its total power generation capacity in the U.S. by 12 percent to nearly 600,000 kW, according to Money.CNN.com.

As Sumitomo made its announcement, Mitsubishi Heavy Industries Ltd., Japan’s largest heavy-equipment maker, said it plans to build a wind-power generator assembly plant in the U.S. or Canada early next year, reports Bloomberg News.

Yoshiaki Tsukuda, a director overseeing Mitsubishi’s engine and turbine business, said in the article that the proposed plant may cost as much as 10 billion yen ($105 million) and produce equipment capable of generating 600 megawatts of electricity annually. He said possible locations for the plant include Texas and the Dakotas where wind farms are likely to be built.

Mitsubishi is competing with General Electric Co. to supply wind turbines and generators as the Obama administration supports legislation that will require utilities to generate as much as 15 percent of their power from renewable sources, reports Bloomberg.

Some German renewable energy companies are setting up shop in Arizona, which was the first state to enact a law requiring that 15 percent of its electricity comes from renewable sources by 2025, reports DE-World. These companies include a small German company Schletter that manufactures mounting systems for solar panels, and Solon, which manufacturers photovoltaic solar panels.

Arizona Corporation Commissioner Kris Mayes, who is responsible for regulating the state’s utility and energy policy, said in the article that price fluctuations in the oil and gas markets have pushed governments to look for more sustainable energy technologies.

Solon spokeswoman Katrin Evers said it’s riding a wave of positive public sentiment for renewable technologies in the United States, which she said is helping the company stay profitable despite the current global recession, reports DW-World.

Schletter CEO Martin Hausner told DW-World that he expects it will be at least three to five years before the U.S. renewable energy market comes into its own.

In the wind power market, DW-World reports that German company REPower, a global supplier of wind turbines, is building 75 two-megawatt turbines in California, after completing a project in the state of Washington.

REPower’s chief financial officer Pieter Wasmuth said in the article that he and other European companies were anticipating a huge boost in U.S. sales in the coming years, reports DW-World.

However, analysts say that U.S. companies most considered to give Europeans a run for their money include General Electric’s energy division and First Solar, an Arizona solar panel manufacturer that has made much of its money doing business in Germany, reports DW-World.

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mknightfarms@yahoo.com i need some advice. i want to start a farm that has a methane plant, wind power, solar power, raise feedstock and livestock and samll crops for other. the land i have in mind sits on top of a 10,000 year old aquifer that is pumped with an 18 inch pipe. please contact me with any ideas for funding.

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