Fiscal crisis hasn't hurt most NNY wind farm development

Most local wind development companies said they're sheltered from the credit market turmoil that is rocking alternative energy development.

The industry is facing investment problems and falling oil and natural gas prices, the New York Times reported Oct. 21. And the Malone Telegram has reported Noble Environmental Power suspended construction of a 14-turbine wind farm in Bellmont until July or August.

But local developers say their projects are safe from the national economic problems.

James H. Madden, project manager for BP Alternative Energy's Cape Vincent Wind Farm, said, "We're still proceeding as planned."

He said smaller developers tend to rely more on debt financing completely for their projects, which leaves them exposed to more turmoil.

"We're in a good position because we don't rely on debt financing," Mr. Madden said. "We've got a solid balance sheet. We invest in our own projects."

Debt finance is one way of raising capital through selling bonds, bills or notes to investors. Another common practice in alternative energy development is using equity partners — investors who want tax credits, such as the federal Production Tax Credit, available for wind and other alternative energies. If a firm isn't making money, it doesn't need a tax credit.

"We haven't altered our development plans at all," said Matthew C. Dallas, Babcock & Brown Ltd. spokesman. Babcock & Brown is backing the proposed Galloo Island Wind Farm.

He said the company has five farms under construction, 20 operating and more planned throughout the country.

"We have a lot of strong relationships in the industry. We're doing well and growing," he said.

Peter E. Zedick, project manager for Acciona's St. Lawrence Wind Farm, said his company's projects are also secure.

"The St. Lawrence Wind Farm is continuing to move forward," he said in an e-mail.

Iberdrola, the developer of Maple Ridge and Horse Creek wind farms, did not return multiple phone calls and an e-mail between Monday and Wednesday.

Carol E. Murphy, executive director of Alliance for Clean Energy New York, said, "Like many industries, the credit crunch is certainly having an effect on alternative energy development. If any industry still has investment potential, it's alternative energy."

Besides Noble, "We haven't seen any additional problems in New York," she said.

There are positive signs for the industry, Ms. Murphy said.

"I've certainly never heard more interest in the presidential and local candidate level on alternative energies. I've never seen it be a top-of-mind issue," she said.

The American Wind Energy Association, an advocate for wind energy development, said in a press release that 1,389 megawatts of wind energy power was constructed in the third quarter of 2008. The association expects a total of about 7,500 megawatts of power to be installed by the end of the year.

"With some 8,000 MW already under construction for completion this year or next, the wind industry remains relatively strong," the release said. "But because of the late extension of the wind production tax credit and the evolving financial crisis, new construction starts are expected to slow in 2009."