A Second Wind for Aging Wind Turbines

[OKIsItJustMe]

http://www.businessweek.com/globalbiz/content/jun2008/gb20080625_515024.htm?chan=globalbiz_europe+index+page_top+stories

June 25, 2008, 1:38PM EST

A Second Wind for Aging Wind Turbines

A two-year wait for new turbines is forcing some buyers into the secondhand market to meet the EU's carbon reduction targets

The 100 or so inhabitants of the Isle of Gigha, off the west coast of Scotland, aren't your typical trendsetters. Yet when this small island community spent $870,000 for three secondhand Vestas (VWS.CO) back in 2004, it became one of the first buyers to tap Europe's blossoming market for used wind turbines.

Now churning out enough power to meet almost all of Gigha's annual electricity needs, the 675-kilowatt wind farm has significantly cut the island's carbon dioxide footprint while generating an annual $150,000 profit for Gigha Renewable Energy, the locally owned company that operates the turbines. "To be honest, we bought them for financial reasons," says Jacqui MacLeod, manager of the Isle of Gigha Heritage Trust.

The success of Gigha's reconditioned turbines—known locally as the Dancing Ladies—highlights a fast-growing new market created by the global boom in wind-generated power. The http://www.businessweek.com/globalbiz/content/feb2008/gb20080227_935182.htm">almost two-year waiting period (BusinessWeek.com, 2/27/08) for new turbines from the likes of General Electric (GE) and Siemens (SI) is forcing some buyers into the secondhand market to meet the http://www.businessweek.com/globalbiz/content/jan2008/gb20080123_051988.htm">European Union's CO2 reduction targets (BusinessWeek.com, 1/23/08). Moreover, used turbines cost 40% less than new turbines, and their typically smaller size makes it easier to get local approval for their installation.

Strong Demand from Corporate Customers

While secondhand turbines have been sold in Europe for almost 15 years, the slow trickle now reaching the market will soon turn into a flood. Utilities such as Germany's E.ON (EONG.DE) and Spain's Iberdrola (IDRO.F) plan to http://www.businessweek.com/globalbiz/content/feb2008/gb20080225_985105.htm">upgrade their existing renewable capacity (BusinessWeek.com, 2/25/08) over the next five years. That means more than 5,000 secondhand machines are expected to go on the market by 2013. At roughly $230,000 each, that's more than $1.1 billion worth of Dancing Ladies.

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[nomorenomore08]

1. With some European countries getting one-quarter of their energy from alternative sources,

the U.S. is looking more and more backward all the time. Among the many reasons to vote for Obama (or at least vote against McCain), this is probably one of the biggest. He's already mentioned massive investment in alternative energy as part of his economic policy.