Crisis cuts costs for big wind players

By Daniel Fineren

LONDON (Reuters) - Wind farm costs have fallen significantly for companies big enough to finance their own projects as the economic crisis cripples competitors for turbines, an executive from RWE Innogy said on Wednesday.

A global surge in demand for wind turbines drove up development costs until last year's credit crunch slashed financing for many projects that had been competing for a limited supply of turbines.

Multi-billion dollar economic stimulus packages announced by the United States and China could revive demand again next year but the supply bottleneck has gone for now.

"Every cloud has a silver lining ... Those who can actually weather this storm and those that are balance-sheet investors such as RWE are actually now seeing the positive effects," RWE Innogy Chief Operating Officer Kevin McCullough told the Reuters Energy Summit in London.

"There are now, I wouldn't quite say a glut of turbines on the market looking for a good home, but I can say that, as a developer that will develop throughout this, it's very pleasing to see that we are getting vastly improved terms and conditions and in some cases hard price reductions."

McCullough said the renewable energy arm of German utility RWE had seen a 15-20 percent reduction in prices for onshore wind turbines as a result of the economic downturn, with suppliers that until last year could barely meet demand now competing to sell to the surviving developers.

"SERIOUS PLAYER OFFSHORE"

Offshore turbine prices have not fallen as markedly, with the market dominated by just two German suppliers Siemens and REpower.