Houston (Platts)--9Mar2010/942 pm EST/242 GMT

Wind farm developers in the US and turbine manufacturers may be looking at a leaner year in 2010, compared with 2009, as a result of a fall-off in utility demand for power purchasing agreements, according to a series of analyst reports, the most recent released Tuesday.

In 2009, wind installations in the US hit a record of almost 10,000 MW, surpassing the previous record of 8,500 MW in 2008.

According to a Macquarie Equities Research report, 2010 will be "a weak year," with 7,500 MW of new installations. "We project a gradual recovery in market growth with installations exceeding 9,000 MW by 2013," the analysts said.

The US wind market, the analysts noted on Tuesday, has no feed-in-tariffs. They noted that wind farm developers "typically sell their output through power purchasing agreements" -- or PPAs -- with utilities.

"We argue that PPA demand will deteriorate significantly in 2010, lowering the growth of the US wind market overall and jeopardizing the expansion plans of some listed wind farmers," the report said.

The analysts, Angie Storozynski and Andrew Weisel, said that state renewable portfolio standards "are the key driver of the US wind market, but in many states the near-term quotas they stipulate have already been met or will be met very soon."

The Macquarie equity analysts said, "our deep-dive analysis of the US suggests that utilities' demand for PPAs in the Midwest and South will be very weak this year and next. Demand in the Mid-Atlantic market will be mixed. The Northeast and California should still demonstrate strong PPA demand."

While the analysts said they foresee a federal RPS passed by Congress before year-end 2010, "such potential legislation would have a very undemanding near-term obligation and therefore not solve the problem of exhausted state RPSs."

Because most wind farm developers are not prepared to see their US merchant risk rise significantly, "2010 will see many projects without PPAs indefinitely postponed, and, thus, aggregate demand for new turbines will be lower in both 2010 and 2011," according to the report.

Lower demand for turbines "will challenge the ability of turbine makers' order books to rebound strongly," the analysts said. "We have thus trimmed our forecasts for the wind turbine manufacturers stocks."