Governments faced with the task of providing cleaner energy to power assembly lines, operate lathes, keep homes warm and illuminate the streets are turning increasingly to old technologies.

Windmills and the burning of wood, which until a century ago provided some of the main sources of energy, are enjoying a revival as man seeks to combat the fresh threat of global warming.

Concerns over the cost and unreliability of solar power and over potential ecological and social damage of large hydro projects (water power was another important mediaeval energy source) has made these technologies less attractive.

By comparison, Biomass - the cultivation of green energy crops such as fast-growing willow to burn in power stations - is becoming more popular. But it is wind that is leading the way.

The total cost of electricity produced from the best onshore wind farms in the UK has fallen from about 9p to 11p per kilowatt hour (kWh) to about 2.5p kWh, making it only slightly more expensive than coal and natural gas fired generation.

But wind generation - particularly if it moves offshore - will still require a subsidy if it is to compete on price against conventional fossil fuel power stations.

The US, which has lagged behind Europe in the renewable energy development, recently extended its federal wind energy production tax credit (PTC) - worth 1.5 cents kWh - for another two years to the end of 2003.

Randall Swisher, executive director of the American Wind Energy Association (AWEA), says the extension means that about $3bn of wind energy projects forecast for the next few years should be able to proceed.

The US is potentially the most important market for manufacturers such as Vestas and NEG Micon from Denmark - the world's first and fourth largest wind turbine manufacturers respectively.

They could be facing tougher competition, however, following a $225m bid by US energy giant GE Power Systems for the turbine manufacturing interests of Enron Wind in the US, Germany, Spain and the Netherlands.

GE was involved in wind energy in the late 1970s as a contractor for the US Department of Energy but withdrew from the programme after it found there was an insufficient market for wind power. Technological improvements since then, notably the development of large turbines, have made projects more economic.

"For the first time in our industry's history, the cost of producing electricity from wind is within spitting distance of the cost of generating energy from the lowest-cost fossil fuel, natural gas," says Adam Umanoff, president of Enron Wind.

Analysts believe the purchase of Enron's turbine business by GE could trigger an industry consolidation, particularly if the US group decided to move beyond building turbines into wind farm development itself.

Other big players such as Siemens and ABB are also thought to be considering expanding wind generation interests. Shell, the Anglo-Dutch oil group, is planning to step up its investment in renewable energy. It wants to expand its wind farm capacity from 140MW currently to 1,000MW by 2005.

"We are looking at a whole raft of projects," says Robert Kleiburg, vice-president of strategy and planning at Shell International Renewables. "Our plan is to invest $500m to $1bn in new energy technologies over five years to the end of 2005, subject to ongoing review."

More than 10m homes worldwide are already powered by wind, currently the fastest-growing energy source, according to a joint US, European and Indian report published last month.

The number of wind turbines installed rose by 45 per cent last year, increasing total global capacity to 24,000MW. This still represents less than 1 per cent of total world electricity capacity, leaving plenty of room for growth.

Europe, which accounts for about 70 per cent of all wind farm output, is currently the biggest regional market followed by the US, which last year installed a record 1,700 MW, increasing its total capacity by 60 per cent to 4,258 MW according to the joint report by American, European and Indian wind power industries.

The main driver behind the European expansion has been the desire of increasingly green-tinged governments to reduce greenhouse gas emissions without resort to further nuclear power.

Germany is by far the world's biggest single market with 8,754MW of wind power capacity, more than half the total European wind power capacity of 17,241MW. Spain with 3,337MW and Denmark with 2,417MW are also large markets.

However, Denmark's right-of-centre government has decided to halt further price guarantee subsidies for windfarms from 2003, saying that these could harm industrial competitiveness. Schemes in future will have to compete on price with other producers.

Britain, despite having some of Europe's best wind resources, had installed only 474MW by the end of last year. This may be about to change with the government requiring electricity suppli ers to increase the proportion of power bought from renewable sources from less than 3 per cent currently to 10 per cent by 2010.

A report to the prime minister by the Cabinet Office's Performance and Innovation Unit in February recommended this target be increased further to 20 per cent by 2020.

Nick Goodall, chief executive of the British Wind Energy Association, says this could mean the construction of up to 1,000 new wind turbines a year.

The Crown Estates, the body responsible for the English and Welsh coastlines, last year granted options to build 18 offshore wind schemes expected to cost more than £1bn.

"Britain is Europe's windiest country with enough wind power to meet its electricity demands seven times and it could be about to become the world's fastest growing wind farm market," says Mr Goodall.

"This could be a marvellous opportunity to develop an important indigenous industry. We led in oil and gas technology in the 1960s and a similar opportunity is presented to us now.

"It will be particularly attractive to oil and gas companies, which can transfer their technology and reinvigorate traditional dockside engineering centres."

One of the biggest obstacles to growth remains planning objections with local populations often opposing schemes based on their visual and noise impact.

The military in both Britain and Norway have expressed concerns that projects could block radar and telecommunications.

However, the likelihood of a wind turbine appearing somewhere near you is increasing.