Vestas CEO Sees Stable U.S. Wind Turbine Market for Two Years

Jan 24, 2014 5:51 am ET

Jan. 24 (Bloomberg) -- The U.S. wind turbine market is likely to be stable this year and next even though the main government incentive to the industry has expired, Vestas Wind Systems A/S Chief Executive Officer Anders Runevad said.

The unpredictability of stop-start government incentives for wind in the U.S. has led to a boom-bust market in recent years. While the main incentive to the industry, the Production Tax Credit, or PTC, expired at the end of 2013, new criteria mean projects that were started last year can still qualify so long as they finish construction by the end of 2015.

“It actually provides a fairly stable market for the next two years,” Runevad said Jan. 22 in an interview at the World Economic Forum in Davos, Switzerland. “In a bit longer term of course, we are very keen to see the next stage of PTC.”

The U.S. market is Vestas’s biggest historical market, accounting for almost a fifth of all deliveries through the end of 2012, according to the company’s data.

Vestas has four factories there and a “very good uptick” in orders toward the end of last year means the Aarhus, Denmark- based manufacturer is hiring new workers in North America, Runevad said.

Orders dropped steeply in the U.S. market at the beginning of 2013 because project developers in 2012 rushed wind farms to completion ahead of the scheduled expiry of the tax credit, an industry incentive. The PTC was then unexpectedly renewed, though the pipeline for new projects was empty.

After installing a record 13,131 megawatts of wind turbines in 2012, the U.S. market then installed just 70.6 megawatts of new machines in the first three quarters of 2013, according to the American Wind Energy Association.

--Editors: Reed Landberg, Tony Barrett