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  • 09.02.09

What Does Iberdrola’s $295 Million Grant Mean for U.S. Wind Power?

The Department of Energy gave a big boost to solar and wind projects across the United States yesterday when it handed out nearly $503 million to companies in an attempt to raise their prospects of receiving outside capital. The luckiest recipient is Iberdrola, a Spanish wind energy company working on five projects in the U.S., including the Penascal Wind Farm in Texas and Locust Ridge II in Pennsylvania.

wind turbine

Wind energy companies have been in dire straits ever since banks started to fail last fall. Investment money dried up, and as a result turbine manufacturers and developers had to hold back on potential projects. But now that the government has injected significant amounts of cash into clean energy projects, investors have an incentive to provide capital. Such a big incentive, in fact, that Morgan Stanley and Citigroup are each underwriting wind farms worth over $100 million.

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The government’s willingness to give the big bucks to wind power has given investors newfound confidence, and they are now willing to pony up for projects. At the same time, the government cash has convinced foreign companies like Iberdrola to stay the course. The company plans to invest $6 billion in the U.S. wind energy sector in the next four years.

There are still hurdles up ahead for U.S. wind power–it’s not always easy to find consumers for the wind energy produced, which is on average more expensive than fossil fuels. But the government grants have at the very least kept the industry from shriveling up altogether.

[Via Earth2Tech]

About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more.

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