Speculation that large scale renewable energy projects will find it increasingly difficult to find funding in the current economic climate turned to reality this week, when oil billionaire T Boone Pickens announced that his high profile plan to build one of the world's largest wind farms in Texas was facing delays.
Speaking yesterday in an interview on TV station CNBC, Pickens said that the combination of the credit crunch and falling natural gas prices meant that the 2010 start date for the 4,000MW wind farm project was likely to be delayed.
"I think it is all going to be put off, because we have got the credit crunch, one, but, two, natural gas prices [are down], so you are going to price wind off natural gas power and right now natural gas is so cheap there will be no new wind deals until natural gas price gets back up," he said.
In a second interview with the Charlotte Observer, Pickens – who's energy-related hedge fund, BP Capital Management, has posted 60 per cent losses so far this year – said that the project was struggling to meet estimated development costs of between $10bn and $12bn.
"I've started [the project], but let's not go into that, my project is getting ready to get downsized pretty quick," he told the paper. "You can't get financing, but that will all come back."
However, the billionaire insisted that he remained fully committed to his so-called Pickens Plan to enhance US energy security through a massive increase in wind capacity and wider use of natural gas.
In the CNBC interview, he argued that switching all US lorries to run on natural gas would reduce the country's dependence on foreign oil by 30 per cent, adding that such a switch could be made "very, very fast".
He also issued a statement reiterating his support for wind energy.
"The capital markets are problematic for everyone, and we are keeping an eye on them," he said. "We are committed to wind development projects and believe it's a viable business for us. The capital markets may lead us to scale back a bit, but we are still going forward with our wind business."
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