Written by Jennifer Kho
, which owns utility
Florida Power and Light Co.
, said Monday it would build less wind-power capacity than previously expected as part of a 25 percent cut in its planned 2009 capital expenditures.
Citing "the slowing economy," the company said it now plans to spend $5.3 billion on capital expenditures. Part of that budget will go toward adding 1.1 gigawatt of new wind-power generation, which is a drop from the 1.5 gigawatts previously expected.
FPL is still on track to install a total of 1.3 gigawatts of new wind capacity this year,
The announcement comes at a time of economic uncertainty, when companies are struggling to create forecasts and are wondering whether investment in greentech will dip.
, a Spanish wind-turbine manufacturer, last week said it had temporarily halted production and would wait for customers to confirm their purchase plans before providing sales or production guidance for next year. Meanwhile,
went ahead and built its solar parks after its customers backed out and now hopes it will be able to find new buyers for the projects.
And a number of executives, including
wind and solar CEO Reyad Fezzani, have said that financing for renewable-energy projects has dried up -- although some hope that funding from utilities could help refresh the market. (Don't miss "
Tyler Tringas, a wind analyst at New Energy Finance, said clients have been calling to ask if this FPL news is the forerunner of a major decrease in wind.
While future U.S. outlooks are important, the news isn't a major decrease in terms of megawatts, he said, adding that he has been reassuring clients that the news isn't a sign of a trend.
"I don't see that this is going to be indicative of all developers; I don't think we're going to see a 25 percent cut from everyone," he said. "I don't think this is a forerunner of doom for installations in the U.S. There are quite a number of other players willing to step up and take the place of FPL."
Companies such as
MidAmerican Energy Co.
ticker: MDPWK) in Iowa,
in Kansas and the California utilities are becoming more active in wind, for example.
FPL is trying to show it is being cautious, Tringas said, to counterbalance the fact that it had a "terrible" third quarter -- the worst in 35 years -- in terms of its wind resource.
"Honestly, I would have been surprised if the biggest player in the industry had just kept trucking along," he said. "FPL has huge exposure to wind, obviously, so
the fact that they would try to cut that back is not really surprising. We might be seeing more different players fielding the bulk of that growth
Ron Pernick, a principal with Clean Edge, said that while he expects to see more of this in the short term, he is still bullish on clean energy in the long term.
"Companies are cutting investments across the board, so it's not just about renewables," he said. "I think there's no doubt that there's significant uncertainty in the marketplace, that credit is tight and that that's impacting the decision-making processes of quite a number of organizations. Renewables don't exist in a vacuum and aren't separated from the vagaries of the market."
The markets don't have clarity, he said, adding that he believes they will be on firmer ground after the election next week.
Still, while there may be a tightening of capital for these projects, the projects in the field have not been decimated in any way, he added.
"You have a clear investment and
return based on the cost of electricity," he said. "Mid- and long-term, clean energy has a number of very favorable foundations that in fact has
prompted more people to start looking at these opportunities," he said.
The FPL news came out as part of the company's third-quarter earnings, which missed expectations.
The company's net income grew 45.2 percent to $774 million, or $1.92 per share, from $533 million, or $1.33 per share, in the year-ago quarter. Excluding one-time items, the per-share earnings came to $1.25 per share. Analysts expected $1.35 per share, according to
Shares of the company fell 5.8 percent to $40.68 per share Monday.
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