BPA transmission lines on the Olympic Peninsula.

As oil prices continue to rise and support for clean energy development increases, 2008 could be a year of record growth for U.S. renewable energy companies. Yet with the West Coast’s increasing electricity demands straining the region’s transmission grid, the race to tap into the West’s best wind sites is getting tighter—and some developers are feeling the squeeze.

Investment in the U.S. renewable energy market is expected to reach an all-time high of $25 billion in 2007, following a strong 2006 when investments in the sector tripled, according to a recent report from research firm Packaged Facts. The report, “Renewable Energy Investment in the U.S.,” projects the rapidly emerging renewable energy investment market could reach nearly $50 billion by 2011.

Despite the industry’s rapid growth, wind developers in the West are being forced to work harder than ever to secure the region’s best sites. “The competition for sites is as fierce as any time since I have been in the business,” says Chris Taylor, director of project development for the Portland office of Horizon Wind Energy, a subsidiary of Energias de Portugal.

Passed with strong support from rural landowners anxious to host wind turbines, new state renewable energy standards in Oregon, Washington and other states have lured an increasing number of wind energy companies to Portland in recent years [see “Northwestern winds,” SI, November 2007].

Taylor, who has worked to develop strong relationships with Northwest landowners since Horizon landed in Portland in 2001, says the companies that established themselves early on are the ones best positioned in the current market.

Horizon, which was acquired by Goldman Sachs (NYSE: GS) in 2005, was sold in April to Energias de Portugal for $2.2 billion. Acquiring Horizon Wind Energy’s 560 gross megawatts (MW) of windpower generation provides EDP an entry into the rapidly growing U.S. renewable energy market. Yet even if the federal government passed a national RPS, further boosting wind–energy project development, transmission troubles in many parts of the country could raise the stakes even higher among developers.