photo: Todd Woody
As President Barack Obama embraced renewable energy in his inaugural speech Tuesday, Clipper Windpower laid off 90 employees – about 11% of its workforce – as the global financial crisis throws a spanner in the once-booming wind industry.
The Carpinteria, Calif.-based turbine maker has seen business slow as customers delay existing orders and put off new ones because they cannot obtain financing for wind farms, Clipper CEO Doug Pertz told Green Wombat.
“In the short-term, the impact to Clipper is a reduction in 2009 turbine production,” he said. “We know that 2009 will be a challenging year, however, remain optimistic that this economic situation is temporary. We trust that the new Obama administration will, in the not-too-distant future, enact policy to enable better financing options for wind energy projects and aggressively promote the growth of renewable energy development.”
Clipper is one of only two U.S.-owned turbine makers – the other being General Electric (GE) – in an industry dominated by European manufacturers and wind farm developers.
Like their counterparts in the solar industry – which also has been shedding workers in recent weeks – wind companies depend on tax incentives to lure investors. But with traditional investment banks all but extinct on Wall Street and other investors hoarding their cash, there’s been little appetite of late for investing in so-called tax equity partnerships to provide funding for massive wind farms or solar power plants.
Pertz said Clipper’s production is down 20% from the 750 megawatts worth of turbines it manufactured in 2008 and that he expects double-digit declines for 2009. “Customers with large balance sheets are being much more conservative and smaller independent wind developers are seeing that it is much more difficult to obtain tax-equity financing,” he noted.
Wind and solar industry lobbyists are pushing Congress to make the investment tax credit and the production tax credit refundable so those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance renewable energy projects.
Founded in 2001 by wind industry veteran James Dehlsen – his first wind company is now owned by GE – Clipper makes a 2.5-megawatt turbine called the Liberty at its Cedar Rapids, Iowa, factory that powers wind farms built by FPL (FPL) and BP (BP). Other customers include Queen Elizabeth II, who bought the prototype of a 10-megawatt offshore turbine being developed by Clipper in the U.K.
One bright spot for the wind industry, said Pertz, is an expected move by well-capitalized utilities to take ownership stakes in wind farms if a national standard is enacted requiring them to obtain a certain percentage of their electricity from renewable sources.
Green Wombat 
Layoffs Hit the Wind Industry. Does that mean Congress is getting laid off?
The sharp slow-down in the wind industry is only partly due to the credit crisis. It is also largely due to a sharp drop in the price for off-peak grid power (power in the middle of the night, when wind is often strongly productive) during the past two years and the projected further drop. This in turn is due to inadequate long-distance transmission capacity and the lack of a suitable energy-storage solution. However, an energy solution could be developed relatively quickly with adequate funding.
Scientists have recently shown that off-peak wind energy can be used to recycle CO2 into ethanol, gasoline, and jet fuel at up to 60% efficiency. Using off-peak renewable energy to recycle CO2 into transportation fuels addresses both the oil and the climate challenges, and it completely stabilizes the power grid, no matter how much wind and solar are added. It also provides a strong market for wind developers. These wind-generated carbon-neutral fuels, dubbed WindFuels, will compete when oil is above $40 to $90/bbl, depending mostly on the price of the off-peak low-carbon energy. Detailed scientific, engineering, and economics analyses are available at http://windfuels.com/ .
The grid stability challenge has become serious. In 2006 power producers had to start paying people to take their excess off-peak grid energy for the first time. During 2008 the energy sold had negative value ~3% of the time throughout the wind corridor. Some regions were seeing months with negative priced energy ~20% of the time. Our only hope for addressing all of these challenges is to begin now with a plan that can simultaneously address the energy storage, climate change, and transportation fuels challenges.
The essence of the grid problem is that electrical energy must be used when it is produced. To get rid of excess off-peak energy, the producers have been paying users to take it – up to $200/MWhr! Negative-price, low-carbon, off-peak energy will become increasingly available as long as wind is added more quickly than long-distance transmission capacity is expanded – or until many WindFuels plants start coming online.
The challenge with wind has been getting wind energy from good sites to where and when it is needed. Efficient conversion of off-peak wind energy and waste CO2 into standard liquid fuels solves these problems. Annual WindFuels production per land area in good wind regions will exceed biofuels production density in fertile farming areas by a factor of 4 to 30.
The cost of producing ethanol and gasoline from CO2 and wind energy will depend mostly on the cost of the off-peak wind energy. In some areas, the cost of off-peak wind energy is already below 2 cents/kWhr and it continues to drop as more wind is added. At this rate, the cost of ethanol and even gasoline from wind and CO2 can be below $1.50/gal. There is no net carbon dioxide added to the atmosphere from gasoline or ethanol that has been made from waste CO2.
With the taxes expected on CO2 emissions within a decade, WindFuels (ethanol, gasoline, jet fuel, diesel, etc.) will prove to be the most competitive solution to our transportation fuel needs. The best method for energy storage is WindFuels. The science is absolutely sound. Someone at Clipper or GE needs to wakeup to this opportunity.
now that, my friend, is a good comeback. perhaps the layoff should also include the windbag that posted after you.
Western Wind Farms lack peak load profitability.
I built EMS/SCADA and data archiving software for PNM/FPL wind farm in Eastern NM. Working with power engineers in NM, CO, CA, AZ we balanced load for the SW/US power grid. Wind has many problems.
Transmission is perhaps the most difficult. Southwestern wind farms do not meet peak demand (June – Aug) 4-7PM. Coastal wind farms might.
US power grid upgrades should maximize peak load to urban areas to improve profitability and reduce C02.
Some alternative energies allow T. Boone Pickens to recentralize power.
This expensive wind farm model would require large transmission networks to move wind power from the US midwest. The cost of transmission will be very expensive. Electric transmission can cost millions of dollars per mile due to right-of-way (ROW) issues. The Midwest wind would not meet peak demand. Wind in the US/Midwest blows when you least need it. Strong in spring and fall and not at all in summers when peak load is needed. Coastal wind is a better balance as it blows in off shore and on shore cycles. Build wind farms on the coast and decentralize the grid. Build it in the West and recentralize it. Right of way (ROW) issues in the US will make new transmission lines very expensive. Green washing is allowing power grid operators to rip off “Green” transmission lines for coal by wire profits. CA PUC caves to grid operators. Great PBS power struggle video:
http://www.pbs.org/now/shows/503/index.html
Many wind advocates have never been in a power grid control room monitoring wind power. Power operators call them rogue generators.
They are constantly going up and down.
The wind power/sun power that will pay for itself will be near the customer and will provide power during peak load of summer months.
Advocates need an understanding of the profits that green energy must make to be viable. It must compete and sell to customers. State utility regulators must restructure pricing in summer so that the Air Conditioning electric costs are set at fair market prices. 1/3 of all power is used for two months (June 15 – Aug 15) to meet AC demands. Miami, Phoenix and LA need to wake up to the fact that they create the most carbon to power AC. The local AC customer must finance the green power to meet their needs. Importing coal by wire is no longer viable.
Generally speaking, the banks are again at the core of our economic disaster. First they take substantial risks with other peoples money, fraudulently lending, which created the mess. Now that they’re flush with taxpayer $’s that can and should be used to invest in our energy independance, they refuse to lend (but don’t refuse the cash).
Scumbags, the whole lot of ’em
When lightning hits your windmill, you will really shine.
It’s not just wind energy but Wind Engineering that is taking a hit. Construction of large buildings is down as is construction of condos along the coasts. Both RWDI and CPP (the leading US firms) have had to reduce staff. Wing energy (wind turbine micro-siting, tower loads, profile assessment, and aerodynamics) is just a small part of wind engineering. Wind loads on structures varies from applications like Marina Bay Sands to solar panels installed on building roofs.
Gene Machine, you’ve made the most sense that I’ve heard in a long time. Require new homes to be built with solar panels might be a good start. Rebates for installing them on your home might be another.
How about small urban wind turbines like the qr5 from http://www.quietrevolution.co.uk . Are they more peak-friendly than wind farms? How about their overall cost structure?
WindFuels are an interesting idea. Smart Fuel Cells, for example, transform methanol directly into electricity that can be stored in batteries.
http://www.sfc.com/en/sfc-fuel-cells-technology.html
http://en.wikipedia.org/wiki/A123Systems
Solar cooling seems like a very promising way to produce the energy needed for air conditioning. It’s a natural peak solution.
Solar thermal energy, btw, can be stored in solar ponds over several months. Are there innovations in this field planned as well?
The only reason why people talk about “Peak Season”, whether in summer in sunny states in US/southern Europe or winter in snowy states in US/northern Europe, is related to cooling/heating demand, not lighting or electrical appliances.
The truth is if you need to cool or heat your house : it’s poorly insulated from start and you’re pooring in energy that’s just leaking out of it.
Get a house insulated like a Thermos (with 50-80cm thick insulation, shade roof and smart air management) and your need for cooling/heating will be down to almost zero.
But that goes against the interest of energy producer lobbies, whether old-school or green ones.
They need you to consume energy so they can sell their products and boost sales for quarterly reports.
The best way to cut your energy bill is to not use energy when you can avoid it.
Period.
To manage e-peaks also see the VRB Energy Storage System – http://www.vrbpower.com
What I don’t get; and I understand very much that ‘wind’ and such becomes too expensive short term with dirt cheap fossil fuels; is now, when oil & such has become so much cheaper and we are sending trillions less dollars to the Middle East, why are we NOT taking these savings and insisting they be used to SPEED up the conversion to wind, solar, and other alternative energy sources BEFORE gas is $5.00 a gallon again! Duh, dammit!
All I hear is the US has changed. No it hasn’t. Nothing has changed.
8 years of sustained hatred for a man is a lot of misdirected effort. Will you now direct that effort towards green energy and sustainable earth efforts or other community sustainability projects? I thought not.
Just what was the carbon footprint of that inauguration?
I hope to God green energy is where 99% of this stimulus package is going to.
Forget roadbuilding and that junk, 80% of those workers are illegals anyway.
But please do not insulate for insulation’s sake. Do it with smart & healthy materials (Miscanthus, Poroton-T9, etc.)!
http://www.eifel-haus.de/EN/ (uses Miscanthus)
miscanthus-haus
http://www.schlagmann.de/besserbauen/produkte/t9.html
And to add solar heating support to existing homes see, for example, the Paradigma CPC/OPTIMA AquaPackage:
http://www.paradigma.de/3617237–%7Een%7EProdukte%7ESolaranlagen%7Eindex.html
Paradigma CPC/OPTIMA AquaPackage
Wind and solar should balance each other in alternative power generation. If peak wind is not an option from SW/Midwest farms, then how about balancing from a grid connected to SW solar farms? Don’t tell me the sun doesn’t shine during peak summer months? Better PV sun to electricity conversion is always needed, but for the time being, couldn’t that be offset by bigger PV farms, then decrease size as efficiency increases?
Of course, all this infrastructure/power transmission technnology upgrade will be expensive, but any infrastructure change is. Going to some alt fuel is going to cost a fortune also, but it will eventually be required when dino-fuel goes away.
not a huge surprise…
Clipper doesn’t really make a very good product and they were overpaying their executives before their first turbine even went online….
What did they expect?