Will a 100-year supply of natural gas hinder the renewable energy sector?

This may be a better time than ever for renewable energy. The climate for passing laws that would create subsidies for it are promising: last year, the Production Tax Credit for wind power was extended, along with a hefty longterm-Investment tax credit for solar power. A loan guarantee program was put into place (although it was subsequently raided to finance the "cash for clunkers" program). Last week, Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced more than $500 million of grants, mostly for wind-project developers, as the first phase of a $3 billion grant program for developing renewable energy. This and the $2.3 billion Advanced Energy Manufacturing Tax Credit are expected to help build the wind-energy sector.

But Bruno Mejean isn't feeling the winds of change just yet. The managing director and deputy general manager of Nord/LB, New York, a German financial institution, Mejean is on the front lines for financing large utility-scale solar and wind power projects. (Among the top 20 banks lending funds for renewable energy, Nord/LB and three others are German; only one American institution -- ING Bank -- makes the top 50.) Mejean anticipates obstacles for the wind-energy sector in particular, and the biggest drag on developing renewable-energy projects, he says, is the prospect of a longterm low price for natural gas.


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