By Richard Martin, Contributing Editor

The fate of a heralded wind farm in Northern Colorado, on land owned by Colorado State University, could be a gauge for the state of the wind-power industry in 2009.

Being developed by Wind Holding LLC, one of the largest wind-power builders in the U.S., the half-a-billion project’s future is in doubt after CSU officials acknowledged that Wind Holding has missed several deadlines and has been sent a breach-of-agreement letter by the Colorado State University Research Foundation.

“The would-be developer of a $500 million electricity-generating wind farm at CSU is financially ‘overextended,’ facing construction liens from its vendors and in danger of seeing its deal with the university cancelled,” The Coloradoan reported last week.

Having built multiple projects around the country, Wind Holding – a consortium of developers and financiers – has apparently run into two problems that are plaguing the broader wind industry: a cash crunch and a lack of transmission lines to get the electricity it produces to market.

Other companies are facing similar headwinds. First Wind, a Massachusetts-based developer that applied to launch an IPO last year, has not yet gone public and earlier this summer secured two loans for a total of $191 million to continue its operations. First Wind CEO Paul Gaynor acknowledged that his company is “in the midst of very difficult financing markets,” and said that the new loans will enable First Wind to “continue to develop, build, and operate wind farms in our target markets.”

First Wind is building a large wind farm at Milford, Utah. That project is reportedly on schedule and construction is scheduled to completed by November.

Wind-power installations grew at an average of 32% from 2003-2008, and 30 new projects were announced in 2008, according to the American Wind Energy Association. Now many of those projects are stalled, and orders for new wind turbines have essentially gone to zero. In its  “Windpower Outlook 2009,” the Wind Energy Association predicted that installations will grow by 20% this year – a forecast that now looks way over-optimistic. Financial group HSBC said in a report last March that the global wind market would decline 20%, in terms of new installations in 2009, and that the United States would be particularly hard hit, dropping by 40%. Renewable energy stimulus funding from the federal government, said HSBC analysts, “will merely stem the decline in markets, rather than stimulate growth in wind and solar.”

The wind-power industry also faces a growing problem from an unexpected quarter: environmental groups. While they may have a carbon footprint of essentially zero (once erected), wind turbines exact a fearsome toll on birdlife. The Altamont Pass wind farm in Northern California, one of the oldest wind-power plants in the country, “slices up more than 4,500 birds a year—about 1,300 of them birds of prey like golden eagles,” according to Newsweek.

Newer wind farms, with larger turbines, tend to be less deadly to wildlife, but still wind-power developers must cope with a growing backlash.

“Should the lesser prairie chicken become listed as threatened or endangered — and it’s close now — there would be significant restrictions,” the Associated Press reports,“on companies hoping to plant towering turbines across a five-state region believed to have some of the nation’s best wind energy potential.”

That region comprises eastern New Mexico, eastern Colorado, western Kansas, northwest Oklahoma, and parts of the Texas Panhandle. Environmental costs mean more costs for developers; already the industry is experimenting with “radar technology that detects approaching migratory birds and shuts down the turbines accordingly.”

 That all adds up to a fairly gloomy outlook. Taking a longer view, however, provides some room for continued optimism about wind power’s prospects. The HSBC report estimates the U.S. will install only about 5000 megawatts of wind power this year – which is way under the record 8000 installed in ’08, but about the same amount built in 2007.

A combination of economic recovery, the effect of government stimulus dollars, and renewed demand growth will lead to robust growth for the wind industry in 2010. That’s the belief of the researchers and academics who have created the Boulder-based Center for Research and Education in Wind,  part of the Colorado Renewable Energy Collaboratory partnership between CU, CSU, the Colorado School of Mines and the National Renewable Energy Laboratory to foster R&D on renewable energy technology. Gov. Bill Ritter was in Boulder last Friday to kick off the wind center’s first symposium. 

So, the wind-power industry is on hiatus rather than facing a lasting downturn. One advantage of wind power is that, unlike fossil fuels, exploration and development don’t cease when the economy slows down. The wind will still be there when the economy picks up.