The New Carbon Cycle

Consortium Proposes Transmission Development In Texas

Electric Transmission Texas LLC (ETT) has formed a consortium with subsidiaries of American Electric Power (AEP) and MidAmerican Energy Holdings Co. to jointly develop transmission facilities to enhance wind power development in Texas. Other transmission providers in the consortium are AEP Texas Central Co., AEP Texas North Co., LCRA Transmission Services Corp., Oncor Electric Delivery Co. and Sharyland Utilities LP.

The consortium has filed with the Public Utility Commission of Texas a comprehensive, coordinated proposal for development of transmission for competitive renewable energy zones under the scenario 2 plan recently adopted by the commission. This plan envisions the construction of approximately 2,400 miles of new 345-kV transmission lines and facilities at a projected cost of $4.9 billion.

The proposal filed outlines the transmission facilities that each member of the consortium will develop. Consortium members will assume responsibility for permitting, construction and operation and maintenance of the proposed facilities.

"With this filing, the parties express their willingness to work together to develop a comprehensive transmission solution to bring clean, renewable energy to load centers in Texas," says Calvin Crowder, ETT president.

ETT will build and own the transmission facilities within and around the AEP Texas North distribution service territory, including approximately 710 miles of new transmission facilities. AEP Texas Central and AEP Texas North will be responsible for another 145 miles of upgraded transmission lines. LCRA and Oncor propose to develop transmission facilities in and around their service territories, while Sharyland proposes developing transmission facilities in the Texas panhandle that are not currently in the Electric Reliability Council of Texas transmission footprint.

SOURCE Electric Transmission Texas, LLC

T Boone Pickens Mesa Power Makes Largest Wind Turbine Purchase for World's Largest Wind Farm

In a move that will define US and global wind power possibilities, T Boone Pickens' Mesa Power in a report in the Wall Street Journal placed the largest order of wind turbines from General Electric.  Mesa will buy 667 GE 1.5 megawatt wind turbines as part of the first phase of a reported $2 billion wind farm.  The wind farm is to be constructed near Pampa, Texas and will be the first 1000 MW step of a planned 4000 MW project.  This wind farm will be the largest in the world and will continue the role of Texas, an oil and gas state, as the largest producer of wind energy.

Google Announces Investment of Hundreds of Millions of Dollars in Renewable Energy

On November 27th Google announced a new strategic initiative to develop electricity from renewable energy sources that will be cheaper than electricity produced from coal. Below is the press release issued by Google.

The newly created initiative, known as RE<C, will focus initially on advanced solar thermal power, wind power technologies, enhanced geothermal systems and other potential breakthrough technologies.  RE<C is hiring engineers and energy experts to lead its research and development work, which will begin with a significant effort on solar thermal technology, and will also investigate enhanced geothermal systems and other areas. In 2008, Google expects to spend tens of millions on research and development and related investments in renewable energy. As part of its capital planning process, the company also anticipates investing hundreds of millions of dollars in breakthrough renewable energy projects which generate positive returns.

"We have gained expertise in designing and building large-scale, energy-intensive facilities by building efficient data centers," said Larry Page, Google Co-founder and President of Products. "We want to apply the same creativity and innovation to the challenge of generating renewable electricity at globally significant scale, and produce it cheaper than from coal."

Page added, "There has been tremendous work already on renewable energy. Technologies have been developed that can mature into industries capable of providing electricity cheaper than coal. Solar thermal technology, for example, provides a very plausible path to providing renewable energy cheaper than coal. We are also very interested in further developing other technologies that have potential to be cost-competitive and green. We are aware of several promising technologies, and believe there are many more out there."

Page continued, "With talented technologists, great partners and significant investments, we hope to rapidly push forward. Our goal is to produce one gigawatt of renewable energy capacity that is cheaper than coal.  We are optimistic this can be done in years, not decades." (One gigawatt can power a city the size of San Francisco.)

"If we meet this goal," said Page, "and large-scale renewable deployments are cheaper than coal, the world will have the option to meet a substantial portion of electricity needs from renewable sources and significantly reduce carbon emissions. We expect this would be a good business for us as well."

Coal is the primary power source for many around the world, supplying 40% of the world's electricity.  The greenhouse gases it produces are one of our greatest environmental challenges. Making electricity produced from renewable energy cheaper than coal would be a key part of reducing global greenhouse-gas emissions.

"Cheap renewable energy is not only critical for the environment but also vital for economic development in many places where there is limited affordable energy of any kind," added Sergey Brin, Google Co-founder and President of Technology.

Strategic Investments and Grants

"Lots of groups are doing great work trying to produce inexpensive renewable energy. We want to add something that moves these efforts toward even cheaper technologies a bit more quickly. Usual investment criteria may not deliver the super low-cost, clean, renewable energy soon enough to avoid the worst effects of climate change," said Dr. Larry Brilliant, Executive Director of Google.org, Google's philanthropic arm, "Google.org's hope is that by funding research on promising technologies, investing in promising new companies, and doing a lot of R&D ourselves, we may help spark a green electricity revolution that will deliver breakthrough technologies priced lower than coal."

Working with RE<C, Google.org will make strategic investments and grants that demonstrate a path toward producing energy at an unsubsidized cost below that of coal-fired power plants. Google will work with a variety of organizations in the renewable energy field, including companies, R&D laboratories, and universities. For example, Google.org is working with two companies that have promising scalable energy technologies: 

• eSolar Inc., a Pasadena, CA-based company specializing in solar thermal power which replaces the fuel in a traditional power plant with heat produced from solar energy. eSolar's technology has great potential to produce utility-scale power cheaper than coal.
• Makani Power Inc., an Alameda, CA-based company developing high-altitude wind energy extraction technologies aimed at harnessing the most powerful wind resources. High-altitude wind energy has the potential to satisfy a significant portion of current global electricity needs.

Ongoing Commitments

Today's announcement represents just the latest steps in Google's commitment to a clean and green energy future. 

Google has been working hard on energy efficiency and making its business environmentally sustainable.  Last spring the company announced its intention to be carbon neutral for 2007, and is on track to meet that goal. To this end, the company has taken concrete steps to reduce its carbon footprint and accelerate improvements in green technology, including:

• Developing cutting-edge energy efficiency technology to power and cool its data centers in the U.S. and around the world. 
• Generating electricity for its Mountain View campus from a 1.6 Megawatt corporate solar panel installation, one of the largest in the U.S.
• Accelerating development and adoption of plug-in vehicles through the RechargeIT initiative, including a $10 million request for investment proposals.
• Joining with other industry leaders in 2007 to form the Climate Savers Computing Initiative, a consortium that advocates the design and use of more energy-efficient computers and servers.   
• Working on policies that encourage renewable energy development and deployment, such as a U.S. Renewable Energy Standard, through Google.org.

Shell Wind and TXU Announce Plans to Build World's Largest Wind Farm in Texas

Shell WindEnergy Inc. and Luminant, a subsidiary of TXU Corp., announced today a joint development agreement for a 3,000-megawatt wind project in the Texas Panhandle and to work together on other renewable energy developments in Texas.

Shell and Luminant will also explore the use of compressed air storage, in which excess power could be used to pump air underground for later use in generating electricity. This technology will further improve reliability and grid usage and becomes more economical with large-scale projects, such as proposed for Briscoe County.

Recent testimony by Shell before the Public Utility Commission of Texas demonstrated the Briscoe County project could deliver the lowest-cost wind energy for consumers. This low cost is driven by excellent wind resources and the comparatively lower cost to bring that energy to market from the Texas Panhandle region.

"Shell is constantly looking for solutions to deal with climate change and increasing our energy diversity. Wind is part of the answer. Our approach is a cost-effective solution for consumers," said John Hofmeister, president of Shell Oil Company.

“Luminant is committed to providing Texans with clean sources of energy, and this agreement with Shell is a real next step in delivering on that commitment” said Mike Childers, CEO of Luminant Development. “Luminant is already the state leader in wind-energy purchases, and co-developing this project would take us a long way toward our goal of doubling our portfolio.”

American Wind Energy Association Puts on Full Court Press to Support Congressional Establishment of National Renewable Energy Standard

The American Wind Energy Association has put on a full court press to support the bill in Congress to establish a renewable energy standard for the entire country.  Today, states are left to impose renewable energy requirements.  Many of these states allow the trading of renewable energy credits among utilities and parties, like wind energy developers, that produce the renewable energy credits. 

The AWEA is even paying for television ads to try to convince 11 House members -- six Republicans and five Democrats -- to support a national renewable electricity standard when lawmakers debate energy legislation next week. The amendment would require utilities to provide 20 percent of their power from renewable sources like wind, solar and geothermal energy by 2020.

The add can be seen at http://www.awea.org/newsroom/video/AWEA_TV_ad.html.

Citibank Pledges $50 Billion Dollar Investment Program in Climate Change

Citibank has made a major decision on investing in climate change in a press release recenlty issued.  The press release in its entirety is provided below.

Citi Targets $50 Billion Over 10 Years to Address Global Climate Change

Includes Significant Increases in Investment and Financing of Alternative Energy, Clean Technology, and Other Carbon-Emission Reduction Activities

Builds on Existing $10 Billion Climate Change Activities

New York – Citi today announced that it will direct $50 billion over the next 10 years to address global climate change through investments, financings and related activities to support the commercialization and growth of alternative energy and clean technology among the clients and markets it serves, as well as within its own businesses and operations.

The $50 billion target is a realistic estimate based on market-based activities and transactions with clients as well as energy saving, “green” projects within Citi’s own operations. This target includes nearly $10 billion in activities Citi has already undertaken to address climate change to date, and is the latest example of Citi’s ongoing efforts in the broader environmental arena, including investments to control its own environmental footprint, advice to clients on risks and opportunities, and policy engagement.

“With a presence in more than 100 countries, Citi holds a unique position within the global community. This informs our commitment to bring forward the best solutions for our clients, while also benefiting the people and the communities where we operate,” said Charles Prince, Chairman and CEO of Citi.

“One area where we believe we have this opportunity is on environmental and climate issues, which pose a significant challenge to the world, to the global economy, and to clients and require forceful action,” Prince said. “The comprehensive program we are announcing today is not a wish-list, but a realistic, achievable plan that serves a critical global need and responds to an emerging investment opportunity.”

Citi has long been active on environmental issues, as evidenced by its initial and ongoing leadership in the development of the Equator Principles, which established best practices for assessing and mitigating social and environmental risks in project finance. Citi has also called for the development of global and U.S. frameworks that will help reduce greenhouse gas (GHG) emissions, drive innovation and opportunity, bring clarity and certainty to the markets and achieve a level playing field.

“As a global leader in financial services, we recognize our responsibility to confront climate change and the importance of identifying and helping implement new solutions for our clients and our businesses. We will continue to partner with environmental experts and clients as we address this issue,” Prince said.

“This new initiative is an excellent complement to Citi’s call for stronger, market-based climate policy in the United States and abroad,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Citi understands how profoundly climate change will transform the economy, and they are pioneering opportunities for the capital markets to meet the climate challenge.”

Citi’s activities in the area of climate change span its entire business and operations. They include:

Corporate-Wide
Citi will increase ten-fold, to $10 billion, its commitment to reduce its corporate environmental footprint through its own real estate portfolio, procurement and energy use, as part of its pledge to reduce GHG emissions by 10% by 2011. This ambitious undertaking across Citi’s more than 14,500 global facilities is driven by the creation of a Global Energy Council; purchase of 52,283 MWh of green power for operations; and its goal of achieving environmental certification (e.g. Leadership in Energy and Environmental Design or LEED in the U.S.) for the construction of all new office buildings and operations centers and evaluation of existing larger facilities.

In 2007, two major U.S. office facilities in Dallas and New York City are in the process of achieving LEED status, with a new office tower in Long Island City, NY, housing 1,500 employees, achieving LEED Silver rating, and a data center in Europe that is being designed to achieve LEED Gold status. Citi expects to open LEED-certified retail branches in 2008, and has already begun installation of 100% recycled materials.

Citi Markets & Banking
Citi’s Markets & Banking group plans to invest in and finance over $31 billion in clean energy and alternative technology over the next ten years through the expansion of existing activities and the launch of new client services. With committed investments and financings approaching $7.5 billion to date, the Markets & Banking group sees tremendous opportunities to support companies working in alternative energies such as solar, wind, hydro and geothermal; helping to commercialize energy efficiency ideas; and facilitating investments in aging infrastructure using clean and efficient technologies.

Citi has a growing portfolio of equity investments in renewable energy projects, including wind farms in Minnesota and New Mexico. Citi recently advised and financed the $2.15 billion acquisition of a major US wind portfolio by EDP - Energias de Portugal that plans to bring over 9,000 MW of new wind development projects to market. Citi also underwrote US Green Bonds for a green/carbon neutral real-estate development in Syracuse, NY, and will continue developing innovative financial products to support clients as they implement climate change initiatives.

Since 2006, Citi has also provided advisory services in targeted GHG-intensive sectors to help clients analyze and understand carbon exposure and reduction strategies, building on Citi’s industry leading environmental and social risk management (ESRM) capabilities.

Citi Alternative Investments
Various businesses at Citi Alternative Investments (CAI) have been active in making environmentally friendly investments. For example, as part of the Sustainable Development Investment Program, CVC International has invested $150 million to date, including such notable transactions as Suzlon Wind Energy, a wind turbine manufacturer based in India, and Sindicatum Carbon Capital, a developer of projects that reduce GHG emissions globally. Citi Property Investors (CPI) invests in sustainable building projects. Its first such investment was in the Loreto Bay Company, a 5,000-home community in Baja California, Mexico that is one of the largest sustainable resort communities in North America.

Underscoring Citi’s continued commitment to the environment, in April 2007, CAI created a standalone investment center called Sustainable Development Investments (SDI). SDI builds on Citi’s Sustainable Development Investment Program with an expected ten-fold increase in its capital commitment to over $2 billion of private equity over the next ten years in renewable and alternative energy, clean technologies, energy efficiency, carbon credit markets, waste and water management and sustainable forestry. Similarly, CPI intends to commit $500 million to investments in sustainable building projects over the next 10 years.

Global Consumer Group
Citi’s consumer franchise is offering climate friendly mortgage, card and commercial finance products to its clients. In the summer of 2006, CitiMortgage and Sharp Electronics Corporation, the world’s leading producer of solar cells and U.S. subsidiary of Sharp Corporation (Osaka, Japan), signed a joint marketing agreement that enables Sharp’s Solar Energy Solutions Group offer home equity loans and lines of credit through CitiMortgage as an additional financing option for homeowners to purchase and install solar electric systems. The home equity program offers customers an affordable alternative to make this energy-efficient upgrade to their homes.

Citi’s commercial finance and leasing division, CitiCapital, is more than doubling its commitment to facilitating the reduction of carbon-gas emissions and promoting sustainability by 2010. Its CitiCapital Energy Finance Unit has an existing portfolio of over $1 billion from underwriting energy efficiency upgrades for universities, local school districts and various municipalities in the United States, allowing clients to amortize the cost savings of improvement over a 15- to 20-year period generally without capital outlays.

In the workplace, Citi recently demonstrated its commitment to healthy work settings and environmental responsibility with its new Citi Cards facility in Elk Grove Village, Illinois, which was designed with numerous environmentally sustainable features.

In addition, Citi Community Development is building on its existing investing activities to include green-related investments, such as renewable energy tax credit investments and green private equity investments. And members of Citi’s popular “Thank you” points rewards program can redeem points for a range of environmentally responsible rewards.

Global Wealth Management
Citi Investment Research issued over 70 climate-related notes in 2006. A major thematic investment research report by Edward Kerschner, Chief Investment Officer of Citi Investment Research, highlights the investment opportunities and implications of a changing climate. Based on this report, Citi is holding a two-day conference on June 5-6, 2007, that will bring senior executives from the corporate, political, regulatory and advisory arenas together with influential global investors to discuss the issue.

Citi Smith Barney and Citi Private Bank also advise clients on opportunities in the socially responsible investment arena, including climate-friendly opportunities.

Citi Private Bank and the Financial Times have created an Environmental Award for businesses from around the world that have significantly improved their environmental performance. The focus in 2007 is on GHG reductions, and the inaugural awards event will be held in London on September 19, 2007.

Additional Activities

• Citibank, Citi Smith Barney, and Citi Cards now offer paperless statements to customers. For each client who elects to take advantage of this opportunity, a tree is planted.
• Citi actively engages on the issue of climate change with stakeholders, including clients, employees and non-governmental organizations and socially responsible investors.
• In 2006, the Citi Foundation provided $2 million in grants for sustainable enterprise, including climate-related programs in alternative energy and sustainable forestry and agriculture, and expects to continue to develop and grow this portfolio. The Citi Foundation currently supports projects such as the Ecologic Development Fund, which works in Honduras and Panama to produce community-based carbon offsets via the reforestation of a reserve.
• Citi endorses industry-wide efforts to advance climate solutions, and is actively involved with other corporations on climate change in such groups as Columbia University’s Global Roundtable on Climate Change (GROCC), the Pew Center on Global Climate Change’s Business Environmental Leadership Council, the 3C initiative led by Vattenfall, the World Resources Institute (WRI), and Renewable Energy and Energy Efficiency Program (REEEP).

Citi’s stock is part of Dow Jones Sustainability Index and FTSE4Good, both of which acknowledge leadership in setting standards in sustainable growth and in demonstrating exceptional environmental, social and economic performance.

Citi has been working with Sustainable Finance Ltd., leading advisors on sustainability opportunities to the financial sector, to develop and implement Citi’s environmental strategy, including the climate change commitments announced today.

American Wind Energy Association Issues Press Release Ranking Texas as the Biggest Wind Energy Producer

The following press release was issued by the American Wind Energy Association stating that Texas leads all states with wind energy generation.  Having recently returned from Lubbock, Texas, its clear the production of wind energy in West Texas may only be limited by the transmission lines.  For any information on wind energy opportunities in Texas, please contact me.

ANNUAL U.S. WIND POWER RANKINGS TRACK INDUSTRY'S RAPID GROWTH

Wind continues to rank as one of the largest sources of new power
generation and a mainstream option to meet growing electricity demand

The American Wind Energy Association (AWEA) today released its annual rankings of wind energy development in the United States. The U.S. wind energy industry installed over 2,400 megawatts (MW) of new power generation in the country, an investment of about $4 billion, making wind one of the largest sources of new power generation in the country at a time of growing electricity demand. Total installed U.S. wind power capacity is over 11,600 MW, or enough to serve the equivalent of 3 million average households.

The rankings include the states that generate the most electricity from wind, the nation’s largest wind farms, leading suppliers of wind turbines, largest owners of wind projects, utilities that use the most wind power for their customers, and other industry information. Following a growing number of inquiries, this year’s rankings also feature a new category: Congressional districts with most wind power installed.

“These wind power rankings tell the story of a vibrant industry that is growing fast, competing hard, gaining market share, and all the while powering a cleaner, stronger America,” said AWEA executive director Randall Swisher. “Our new Congressional district rankings also serve as a reminder of the many benefits that wind power brings to local communities--new jobs, more local revenue, cleaner air, and an essential, home-grown contribution to meeting the challenge of global warming.”

However, a long-term extension of the renewable energy production tax credit (PTC) is crucial to sustain this growth. Previous short-term extensions have led to a boom-and-bust cycle in the wind industry, increasing costs along the entire supply chain and preventing businesses from growing to their full potential.

AWEA’s annual rankings provide a standard reference for tracking the growth of wind power in the U.S. The rankings (as of December 31, 2006) are listed below (one megawatt of wind power produces enough electricity on average to serve 250 to 300 homes):

States with most wind energy installed, by capacity (MW)

1.	Texas	2,768
2.	California	2,361
3.	Iowa	936
4.	Minnesota	895
5.	Washington	818

Texas is firmly established as the leader in wind power development, with over 2,700 MW installed at the end of 2006 and some 1,000 MW currently under construction. Washington moves into fifth place (ahead of Oklahoma) with the addition of two large projects, Big Horn and Wild Horse. Iowa and Minnesota look likely to break the 1,000 MW mark in 2007. Washington will come close, with the 140-MW Marengo project that is currently under construction there.

Largest wind farms operating in the U.S. (MW)

Wind farm	Size (MW)	Project owner
Horse Hollow, TX	736	FPL Energy
Maple Ridge, NY	322	PPM Energy/Horizon Wind Energy
Stateline, OR & WA	300	FPL Energy
King Mountain, TX	281	FPL Energy
Sweetwater, TX	264	Babcock & Brown/Catamount

Horse Hollow, completed in 2006, is the largest single wind farm in operation in the U.S. The portion of Horse Hollow added in 2006 was 1/5 th the total capacity in the country. We are seeing more multi-phase, very large projects, such as Horse Hollow and Maple Ridge. Building large projects in several phases provides time to verify the resource and optimize costs.

Manufacturers’ installed capacity for the past five years(MW)¹ 

2006	GE Energy	Siemens	Vestas	Mitsubishi Power Systems	Suzlon	Gamesa
	1,146	573	465	128	90	50
2005	GE Energy	Vestas	Mitsubishi	Suzlon	Gamesa
	1,433	700	190	55	50
2004	GE Energy	Mitsubishi	Vestas
	171	120	97
2003	GE Energy	Vestas	Mitsubishi	NEG Micon2	Gamesa
	903	359	201	129	56
2002	Vestas	NEG Micon	GE Energy	Mitsubishi	Bonus3
	175	98	62	61	48

Top five “managing owners” of wind energy installations (MW)⁴

1.	FPL Energy	4,016
2.	PPM Energy	1,058
3.	MidAmerican Energy Holdings Co. of which MidAmerican Energy owns 460 MW and PacifiCorp 133 MW	593
4.	Babcock & Brown	559
5.	Goldman Sachs/Horizon Wind Energy	452

FPL Energy continues to dominate the U.S. wind energy market with the construction of 777 MW of new wind power projects in 2006 (about a third of all new installations in the U.S. that year). Wind projects owned by FPL Energy generated more than 9.4 billion kWh of electricity in 2006, according to the company (the average U.S. household uses about 11,000 kWh per year, making 9.4 billion kWh equivalent to powering 850,000 households).

Utilities/power companies with the most wind power on their
system (power purchased or projects owned with the power going
to the utility’s customers) (MW):

Xcel Energy is again in the lead after moving ahead of Southern California Edison last year. Xcel Energy is committed to increasing its use of renewable power throughout its eight-state service territory, according to the utility. MidAmerican Energy, which includes MidAmerican in the Midwest and PacifiCorp in the Northwest, moves into third place, with the acquisition in 2006 of several large facilities.

1.	Xcel Energy* with the following on its system: Public Service Co. of Colorado - 307.70 Northern States Power - 679.72 Southwestern Public Service - 335.16	1,323
2.	Southern California Edison (SCE)	1,026
3.	MidAmerican Energy Holdings Co.(of which MidAmerican Energy owns 572 MW and PacifiCorp 289 MW)*	861
4.	Pacific Gas & Electric (PGE)	793
5.	TXU Energy	705

Largest wind turbines installed (rated capacity, in MW)

Rated capacity	Turbine manufacturer	Locations installed
3 MW	Vestas	Sacramento Municipal Utility District, Calif.
2.3 MW	Siemens	Minnesota., North Dakota, Texas
2 MW	Gamesa, Suzlon	Pennsylvania, Minnesota
1.8 MW	Vestas, Suzlon	Massachusetts, Minnesota, Washington
1.65 MW	Vestas	Minnesota, New York
[average installed nationally: 1.6 MW]

The wind industry installed 1,524 turbines in 2006, with a total generating capacity of 2,454 MW, bringing the average capacity to 1.6 MW. With 764 units installed, the GE Energy 1.5-MW is still the most widely installed. The second most widely installed in 2006 is the Siemens 2.3-MW, with 249 units installed.

These turbines all stand 100 meters to 145 meters tall (330--490 feet). Within each rated capacity, the length of the blades and height of the towers can vary to accommodate specific location and wind speed needs. Larger, taller turbines catch better winds at higher elevations and are more powerful because of the larger area swept by the blades; advances in technology such as sophisticated power electronics and high-tech materials also increase productivity. Wind turbines installed in 2006 average 1.6 MW in rated capacity and are at least twice as powerful as the average turbine installed in 2000.

Congressional districts with most wind power installed (MW)

1.	Texas - 19th	1,419		Rep. Randy Neugebauer (R)
2.	California - 10th	920		Rep. Ellen Tauscher (D)
3.	Texas - 11th	847		Rep. Mike Conaway (R)
4.	California - 22d	707		Rep. Kevin McCarthy (R)
5.	Minnesota - 1st	537		Rep.Tim Walz (D)

AWEA is launching this new ranking in response to a growing number of inquiries and interest from Capitol Hill. Wind farms boost the tax base, helping to pay for schools, roads and hospitals. Wind farms also revitalize the economy of rural communities by providing steady income to farmers and other landowners. Each wind turbine contributes $3,000 to $5,000 or more per year in farm income, while farmers continue to grow crops or graze cattle up to the foot of the turbines.

These rankings are for House Congressional districts. The Senators from the states with most wind power installed are from California, Texas, Iowa, Minnesota and Washington.

Information for these rankings was reported to AWEA by Association members. For more detailed data on existing wind power projects in the U.S. please go to www.awea.org/projects. 

The fast-growing U.S. wind market is attracting large new manufacturing companies. GE remains in the lead. Siemens carves out the second-largest market share after entering the market with its acquisition of Bonus in 2004 (Bonus last sold wind turbines in the U.S. in 2002). Another indicator of the heated competition playing out in the U.S. market: fourteen manufacturers, including eight of the world’s top ten, will be exhibiting at the WINDPOWER 2007 Conference & Exhibition.

Offshore Wind Project in the North Sea Demonstrates Risk Management Through Multiple Lenders

The article set out below from Renewable Energy Access demonstrates how the use of multiple lenders can reduce the financing risk and permit the development of offshore wind projects in the initial stages of the offshore wind industry.

March 16, 2007

Dutch Offshore Wind Project Sets Financing Precedent

The Q7 wind farm financing structure includes features that lower the risks associated with construction of wind turbines in the North Sea.

Haarlem, The Netherlands

Located 23 kilometers off the Netherlands coastline in the North Sea, the 120-megawatt (MW) Q7 wind farm is already garnering attention and awards -- not because construction is ahead of schedule with 42 mono piles already in place -- but rather because of the project's unique financing structure.

"Q7 appears to be the financial engineering template for getting funding until lenders become more comfortable with the relatively new offshore technology risk."

-- Jaap Groenhof, Energy Investment Holding

The $510 million offshore project, which recently won the prestigious Deal of the Year Award, an initiative of Euromoney in cooperation with Project Finance Magazine, is financed completely by a group of international banks.

"Without bank loans we would not have got involved in this project. Although the negotiations on the various agreements were long and tough, the final result is a package that balances the risks and rewards for all those involved: sponsors, contractors and banks," said Toon Meijers of ENECO Energie. "Q7 demonstrates that limited recourse financing is possible for offshore wind and should help boost the development of similar projects."

Owned and developed by subsidiaries of ENECO, a Dutch energy company, Econcern and Energy Investment Holdings, two Dutch renewable energy developers, the project is being financed on a non-recourse basis.

This means that the leading banks involved -- Dexia, Rabobank and BNP Paribas -- rely solely on the project to generate the revenues needed to service the interest costs and principal repayment of the financing with very limited additional sponsoring support.

Another unique aspect is that the financing also covers the construction phase of the wind farm. This has resolved an issue which has bogged down a number of other similar projects in Europe, where contractors have been wary of providing fully wrapped Engineering, Procurement and Construction (EPC) contracts, normally a standard requirement of project finance and sponsors.

"Q7 is based on proven technology and an EPC contract with a renowned international offshore contractor (Van Oord group). Rabo was involved at the outset and later joined by Dexia, in a combination that is beyond doubt one of the cornerstones of the project. Both banks are really 'putting their money where their mouth is' -- they are not only proving that they are taking climate change seriously, but also that they can earn money," said Dirk Berkhout, a board member of Econcern.

The financing structure includes a number of features that lowers the risks associated with the construction and long-term operation of wind turbines in the North Sea. These include:

-- The availability of a contingent facility to cover potential cost overruns or delays. If it is required, this will be shared 50/50 between the project company and the banks, so the banks fully share the construction risk.

-- Tailored availability guarantees under the operating contract with Vestas, allowing debt service to continue even during periods when the availability is lower than expected.

In addition to the sponsors' equity, a significant part of the project is financed by loans from Rabo, Dexia and BNP Paribas acting as Mandated Lead Arrangers (MLA). Eksport Kredit Fonden, the Danish export credit agency supported the export of the Vestas turbines by also participating in the financing.

The debt financing for the project includes an EU 189 million [US $251 million], 11-year, long-term project finance facility as well as an EU 30 million [US$ 39 million] standby facility to cover contingencies.

"Q7 appears to be the financial engineering template for getting funding until lenders become more comfortable with the relatively new offshore technology risk," said Jaap Groenhof of Energy Investment Holding.

Built by Vestas Wind Systems, the Danish wind turbine manufacturer and Van Oord Dredging and Marine Contractors, the Dutch offshore construction contractor under separate construction contracts, the Q7 wind farm will initially be operated by Vestas Offshore, an affiliate of Vestas, under a 5-year warranty, operations and maintenance contract.

The 60 Vestas V80-2MW wind turbines will be placed at a depth of 19 to 24 meters. Once completed in March 2008, the wind farm will produce approximately 400 GWh per year.

Texas To Become the Wind Capital of the World?

Recent leases of large areas of land in West Texas indicate a huge rush is on to build some of the largest wind energy projects in the world in the windblown plains of Texas.   Royal Dutch Shell Group, BP PLC, and a wind-development company owned by Goldman Sachs Group Inc. have entered into leases of vast areas from local ranchers. These entities are planning to build some of the largest wind farms in the world, with thousands of wind turbines, each costing about $2 million.  A recent article in the Wall Street Journal reviews these developments in detail.

With renewable energy requirements increasing in the various states, including Texas, renewable energy credits along with tax incentives will increasingly drive more wind energy projects.  With the future potential passage of climate change legislation, more demand for greenhouse gas emission reduction credits will further drive demand for renewable energy and emission reduction or carbon credits.  Wind energy will be a signicant source of these carbon credits.

We have seen an increasing interest in wind projects at Thompson & Knight LLP in our Texas offices.  More and more clients and potential clients are evaluating investment in wind energy, biodiesel, ethanol, and other renewable energy projects in Texas.

Ironically, long known as an oil and gas state and world leader in the fossil fuels industry, Texas is becoming a world leader in wind and other forms of renewable energy that will reduce the potential effects or serve to offset the effects of the burning of those fossil fuels.