After three days at the RETECH conference one leaves the United States with a sense of jubilation from all the talk about the new energyThe ability to perform work, mainly kinetic, potential, thermal energy, but also in forms of gravitational, sound, elastic and electromagnetic energy. economy. While the bailout and newly proposed budget are providing light at the end of the tunnel, the question remains: “How long is the tunnel?”

T. Boone Pickens’ wind farm can’t raise the necessary debt finance. Developers of a 300MW wind farmA group of wind turbines interconnected to a common power provider system through a system of transformers, distribution lines, and (usually) one substation. Operation, control, and maintenance functions are often centralized through a network of computerized monitoring systems, supplemented by ... off the coast of Texas can’t get access to bank financing.

What are these wind developers going to do?

They are waiting for the Department of Energy to establish the procedures and protocols required to process applications for the $6 billion loan guarantee program that President Obama signed into law on February 24th (as part of the $747 billion economic stimulus package).

Lehman Brothers was going to finance the first 150MW of the T. Boone project, but since their collapse all other banks have walked away. Meanwhile, Valero Energy, is in the process of building their first 50MW windWind occurs due to different temperature levels in the atmosphere (troposphere) which are heated up by the sun. A typical example are the trade winds at the equator where the sun is most powerful.. farm next to one of their existing oil refineries, at a cost of $100 million.

While the Production Tax Credit (PTC) was extended for 2009, wind developers are now looking to the Investment Tax Credit (ITC) to provide upfront grants of 30%. Currently the Department of Treasury is drawing up the guidelines for the ITC’s application to wind farm projects (the ITC was formerly for solar projects only).

On the transmissionThe delivery of electricity to the retail customer's home or business through low voltage distribution lines. front, Texas, California, Colorado and Minnesota are all in various stages of initiating new transmission linesThe delivery of electricity to the retail customer's home or business through low voltage distribution lines. in areas known as “renewable energyRenewable energy is power generated from infinite sources, such as wind or solar power. Conventional energy is generated from finite sources, such as natural gas or fossil oil. zones”. Texas is leading the efforts with an approved plan to build $4.9 billion in transmission to bring more than 18,000 MW of wind from the unpopulated western portion of the state to the populous eastern side.

While the U.S. is becoming more attractive for wind farmsA group of wind turbines interconnected to a common power provider system through a system of transformers, distribution lines, and (usually) one substation. Operation, control, and maintenance functions are often centralized through a network of computerized monitoring systems, supplemented by ..., the UK could be losing its attractiveness due to the pound’s weakness compared to the euro. Pieter Wasmuth, Chief Financial Officer for German wind turbineA wind turbine is a rotary engine that extracts energy from the flow of wind. The simplest turbines have one moving part, a rotor assembly, which is a shaft with blades attached. Wind energy acts on the blades, or the blades react to wind, so that they rotate and impart energy to the rotor. ... manufacturer REpower stated “I think that in the coming year, there is a risk that customers might recalculate the economics of their projects, and decide that it makes more sense to invest in another country entirely.”

RBS (Royal Bank of Scotland) was one of Europe’s biggest debt financers of wind farm projects. However, the bank announced yesterday the largest net loss in UK corporate history - $34.4 billion.

Five American utilities were interviewed by Energybiz magazine about their debt financing requirements for 2009 and the combined amount stated was $15 billion. All of five of them have good credit ratings and they believe they will be able to raise the capital. However, they all stated that plans to construct new generation capacity have been put on hold.

They are facing higher costs of capital, with interest rates expected to be 7.5% for 10 year notes, up from 4.5% a year earlier. At the same time, it’s not a good time for them to raise additional equityEquity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics. since the stock market is so low. So, the cost of capital is going up on both sides.

Duke Energy has put on hold plans to construct a new $11 billion nuclear powerUseful energy can be mechanical energy, for example powering a fan. plant. American utilities are under a lot of pressure to increase demand side managementDemand side management focuses on the idea that whatever doesn’t have to be use at peak times (morning and evening highs) should be programmed to run at a later time (a washing machine). This would reduce peak loads often supplied by peak load boilers running on more expensive and less ... activities, as without a strong DSMDemand side management focuses on the idea that whatever doesn’t have to be use at peak times (morning and evening highs) should be programmed to run at a later time (a washing machine). This would reduce peak loads often supplied by peak load boilers running on more expensive and less ... program it would be difficult to ask permissions to build new generation capacity. So, a positive impact of the lack of capital for expansion appears to be an increased focus on energy efficiencyUsing less energy/electricity to perform the same function. Programs designed to use electricity more efficiently - doing the same with less..

U.S. utilities are in process rolling out of smart meters to their customers in order to facilitate customer behaviour change in order to lower energy demandDemand is measured in kWh and describes the requirement for energy as an input to provide products and/or services of an economy. Electricity suppliers run their power station accordingly..

Obama’s $3.6 trillion proposed budget has a proposal to eliminate or scale back a range of tax-production incentives for the oil industry which is expected to cost oil and gas companies such as Exxon Mobile $31.4 billion in taxes over the next 10 years. According to the Wall Street Journal, the energy industry is also a big beneficiary of a tax-accounting principle known as LIFO (last in, first out) which would be repealed raising an additional $61 billion.

This shift in support is all part of the new administration’s reordering of priorities within the federal government, steering energy use away from oil and gas.

It seems that the United States still has a lot of work to do, and there will be struggles along the way, but renewable energy and energy efficiencyUsing less energy/electricity to perform the same function. Programs designed to use electricity more efficiently - doing the same with less. could be soon playing on a more level playing field against conventional energy sources.