Wind Power Faces Zero Margins, U.S. `Boom and Bust,' Suzlon Says

Nov. 14 (Bloomberg) -- Wind-turbine makers have seen profit margins wiped out, and the potential end of tax credits in the U.S. will see its "boom-and-bust" market persist, Suzlon Energy Ltd. Chairman Tulsi Tanti said today.

"Today everyone is selling just at cost level," Tanti said in an interview in Mumbai. "You're almost getting Chinese prices in the U.S. Nobody is making any margin whether it's a supplier, a turbine company or a project construction company."

Tanti's remarks add to concerns voiced last week by the heads of Vestas Wind Systems A/S and Gamesa Corp. Tecnologica SA, Suzlon's rivals in Europe, about the health of the world's second-biggest wind-turbine market. The companies already are coping with slimmer margins caused by cuts to subsidies across Europe and the growth of Chinese competitors led by Sinovel Wind Group Co., which benefit from state funding to expand abroad.

You will also notice that three of the others on Jé̂rôme's list are quoted saying the same. What they are talking about is the failure of AWEA to capitalize on the industry's strength over the past five years, and a return to the traditional insanity of the US boom and bust cycle.

Some of the 2nd tier companies are already under intense pressure to survive. Vestas is downsizing as we speak, and Spain's socialist turncoats have effectively cut off much of 2012 for development, which will hurt Gamesa more than it already is.

In the US i've seen this boom and bust cycle three times already, each time driving key players into bankruptcy or near. I stopped fighting after a while, as it was fruitless. One not only had to fight the entrenched conventional energy interests, but they owned some of the wind industry's key players, and made sure not to upset the parent's apple cart. Since the industry had no where else to support, it had to let players like NextEra have their way. Now see what that's brought.

There is now also in the UK a concerted effort to skew the debate with false new analysis. Jé̂rôme likely knows better how successful the UK attack is going, since it's relatively new i can't say.

At the end of the day, the fate of the wind industry has nothing to do with engineering or finance. It's all political, with the biggest global firms in the game, and the politicians a veritable sideshow, with some notable exceptions.

I haven't been so frustrated in a decade or more. I haven't been so feisty either, especially this early in the morning.

(But see the next comment for some good news.)

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin