Alternative energy hurt by a windmill shortage by Keith Johnson

Iberdrola's strategic advantage stems in part from a €3 billion, or $4.09 billion, bet it made last year to lock up most of the order book of Spanish turbine maker Gamesa SA -- the world's second largest -- through 2009. Iberdrola also holds a 24% equity stake in Gamesa.

In addition to Community Energy, Iberdrola snapped up two other small U.S. developers last year in Iowa and Virginia, both of which lacked the funding and the turbines to get going. Last month, it entered into a deal to buy its first regulated U.S. utility company, Energy East Corp., of Portland, Maine, for $4.58 billion, in part to take advantage of U.S. tax credits for wind.

European utility firms, meanwhile, are buying up U.S. energy firms. They say they believe growing consensus on the need to fight climate change will lead to a more stable regulatory framework for renewable energy.

In the U.S., there's another potential threat to growth -- erratic government support for wind power. Even though wind power has made technical strides recently, energy firms still rely on subsidies because it costs more to generate electricity with wind turbines than other power plants such as coal, natural gas or nuclear. Wind power requires intensive capital investment in a short period of time, and has added costs like upgrading transmission systems. According to the International Energy Agency in Paris, wind farms cost between four and 14 cents to generate a kilowatt hour; coal-fired plants cost between 2.5 and six cents.

Earlier this year, Portuguese utility Energias de Portugal SA, or EDP, paid about $2.7 billion for Horizon Wind Energy of Houston. Acciona Energia SA of Spain bought EcoEnergy LLC, a unit of the Morse Group in Freeport, Ill., last month; it plans to roll out about 1,500 megawatts of wind power in the Midwest over three years. And BP Alternative Energy, a division of U.K.-based BP PLC, snapped up Virginia-based Greenlight Energy Inc. last year for about $100 million.

European companies are estimated to own 20% of all the wind energy in the U.S., says Emerging Energy Research, a wind-power study group based in Cambridge, Mass.

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