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Posts Tagged ‘wind industry’

Tailwinds for the wind industry

Posted in alternative energy, climate change, Clipper Windpower, environment, green grid, green policy, offshore wind, renewable energy, wind power, tagged , , , , , on April 24, 2009| 3 Comments »

The wind industry has been getting a lot of love of late from the Obama administration.

The president spent Earth Day at an Iowa factory that makes wind turbine towers and announced new regulations for offshore wind farms. Meanwhile, Interior Secretary Ken Salazar has been talking up the potential of offshore wind to generate as much as 20% of the eastern seaboard’s electricity that is now provided by coal-fired power plants.

But such scenarios won’t come to pass unless the administration seriously tackles the transmission grid problems that are keeping wind from becoming a nationwide source of green energy, according to panel of wind industry executives who spoke at Fortune Magazine’s Brainstorm Green panel this week.

“The real challenge is to connect wind farms in the Great Plains with the population centers of the Midwest,” said Bob Gates, senior vice president of commercial operations for Clipper Windpower. California-based Clipper is one of two U.S.-owned wind turbine makers (the other being General Electric (GE) ).

For instance, Clipper and BP (BP) have signed an agreement to build a 5,000-megawatt wind farm – the nation’s largest – in South Dakota. But the deal is more a dream at this stage because there are no power lines to transmit such massive amounts of electricity to Chicago and other Midwestern cities. (Gates said there is enough transmission available to begin construction this summer of a small 25-megawatt portion of the wind farm.)

The Obama administration has devoted billions of dollars in stimulus package funding to transmission projects and the Federal Energy Regulatory Commission last week approved incentives for a company planning to build a $12 billion “Green Power Express” transmission project to bring wind to Midwest metropolises.

Gates and the other panelists — Andris Cukurs, CEO of Indian turbine maker Suzlon’s North American operations; Don Furman, a transmission executive with Spanish wind developer Iberdrola Renewables, and James Walker, vice chairman of French-owned wind developer enXco – said the development of wind offshore from East Coast cities would ease transmission bottlenecks.

“Connecting offshore wind to cities is relatively cheap and easy compared to bringing wind power from the Dakotas to New York City,” Gates said. Another way to work around transmission gridlock would be to develop highly efficient small turbines that could be placed near cities and existing power lines, said Gates.

Despite Obama’s embrace of wind, the executives said they don’t see the industry resuming its record growth in 2008 – when U.S. wind capacity more than doubled – until 2010 or later. The credit crunch delayed or scuttled numerous wind farms and turbine orders have fallen dramatically.

One bright spot: Growing interest from well-capitalized utilities in directly investing in wind farms.

“Utility ownership is about 15% of the U.S. turbine fleet,” said Furman of Iberdrola Renewables. “I see more utility ownership in the coming years,, perhaps up to a third of the fleet.”

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China: The new wind superpower

Posted in alternative energy, climate change, energy, environment, global warming, green collar jobs, the green economy, wind power, tagged , , , on February 3, 2009| 15 Comments »

img_1216_1photo: Todd Woody

The numbers are in, and as expected 2008 set a record year for the worldwide wind industry as new wind farms generating a total of 27,000 megawatts of greenhouse gas-free electricity came online, according to the Global Wind Energy Council.

The quick-click headline was that the United States overtook the world’s green superpower, Germany, by installing 8,358 megawatts in 2008  – a 50% jump from the previous year and enough wind energy to power two million American homes. But the big story this year will be China’s rapid emergence as the next global wind power.

China last year doubled its wind energy capacity – for the fourth straight year – adding 6,300 megawatts of new electricity generation for a  total capacity of 12,210 megawatts.  A third of the world’s new wind capacity last year was installed in Asia, with China  accounting for 73% of that power. China reached its 2010 target of generating 5,000 megawatts of wind-powered electricity in 2007 and is expected to hit its 2030 goal of 30,000 megawatts years early.

“In 2009, new installed capacity is expected to nearly double again, which will be one third or more of the world’s total new installed capacity for the year,” Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association, said in a statement.

Of course, 30,000 megawatts of wind is but a flicker in a country with more than 300,000 megawatts of coal-fired energy online but it’s huge by world standards and has spawned both a burgeoning domestic wind industry and growing investment by overseas companies. Denmark’s Vestas, the world’s largest turbine maker,  will open its fifth factory in China this year and it received orders for another 200 megawatts’ worth of turbines at the end of 2008. General Electric (GE), one of only two U.S. turbine makers, also operates a factory in China and in January the company announced a joint venture with China’s A-Power Energy Generation to make turbine gearboxes. In a separate deal with A-Power, GE will supply the company with 900 turbine gearboxes starting next year.

As the financial crisis slows growth in the U.S. and Europe, India is another potential wind power. It ended 2008 with 9,645 megawatts of wind energy and added more capacity that year – 1,800 megawatts – than former world leaders Germany and Spain. Indian turbine maker Suzlon also has been moving onto European turf, relocating its international headquarters to Denmark and acquiring German turbine manufacturer REPower.

Installed global wind capacity now stands at 120.8 gigawatts with the 2008 turbine market worth $47.5 billion, according to the Global Wind Energy Council.

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Wind jobs outstrip coal mining

Posted in energy, environment, green cars, green collar jobs, wind power, tagged , , , , on January 28, 2009| 33 Comments »

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photo: Todd Woody

Here’s a talking point in the green jobs debate: The wind industry now employs more people than coal mining in the United States.

Wind industry jobs jumped to 85,000 in 2008, a 70% increase from the previous year, according to a report released Tuesday from the American Wind Energy Association. In contrast, the coal industry mining employs about 81,000 workers. (Those figures are from a 2007 U.S. Department of Energy report but coal employment has remained steady in recent years though it’s down by nearly 50% since 1986.) Wind industry employment includes 13,000 manufacturing jobs concentrated in regions of the country hard hit by the deindustrialization of the past two decades.

The big spike in wind jobs was a result of a record-setting 50% increase in installed wind capacity, with 8,358 megawatts coming online in 2008 (enough to power some 2 million homes).  That’s a third of the nation’s total 25,170 megawatts of wind power generation. Wind farms generating more than 4,000 megawatts of electricity were completed in the last three months of 2008 alone.

Another sign that wind power is no longer a niche green energy play: Wind accounted for 42% of all new electricity generation installed last year in the U.S. Power, literally, is shifting from the east to west, to the wind belt of the Midwest, west Texas and the West Coast. Texas continues to lead the country, with 7,116 megawatts of wind capacity but Iowa in 2008 overtook California for the No. 2 spot, with 2,790 megawatts of wind generation. Other new wind powers include Oregon, Minnesota, Colorado and Washington state.

But last year’s record is unlikely to be repeated in 2009 as the global credit crisis delays or scuttles new projects because developers are unable to secure financing for wind farms. Layoffs have already hit turbine makers like Clipper Windpower and Gamesa as well as companies that produce turbine towers, blades and other components.

The Obama administration’s $825 billion stimulus package includes a three-year extension of a key production tax credit that has spurred the wind industry’s expansion. But given the dearth of investors with tax liabilities willing to invest in wind projects in exchange for the credits, the stimulus is unlikely to be stimulating to the industry unless the tax credit is made refundable to developers.

The U.S. wind industry is dominated by European wind developers and turbine makers – General Electric (GE) and Clipper are the only two domestic turbine manufacturers – and those companies’ fortunes rise and fall with the global economy.  As the U.S. market has boomed, European companies have been moving production close to their customers – the percentage of domestically manufactured wind turbine components rose from 30% to 50% between 2005 and 2008, according to the American Wind Energy Association.

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Blow back for the wind industry

Posted in renewable energy, wind power, tagged , , , , on October 28, 2008| 10 Comments »

photo: Todd Woody

CEDAR RAPIDS, Iowa – For the past four years, the global wind industry has grown at a Google-like 30% clip as wind farm developers and turbine makers met demand for the one renewable energy source that has become competitive with fossil fuels. In the United States alone, new wind capacity will have jumped 50% in 2008.

Now the credit crunch is taking its toll – at least when it comes to forecasts for the industry’s prospects in 2009. Over the past week, analysts and industry insiders have ratcheted back growth predictions due to uncertainty over whether developers will be able to secure financing for the ever-bigger wind farms on the drawing boards.

“There is little visibility into the project finance market over the next 18 months,” wrote HSBC analysts Robert Clover, Charanjit Singh and James Magness in a report issued last week. “Thus far, company management in the wind sector continues to say that it is not experiencing a slowdown in growth, although developers say that finance is more expensive than it was. We do not believe that the long-term growth story has been undermined, but expect a period of reduced growth.”

The HSBC analysts predict the industry won’t grow at all next year. Meanwhile, the American Wind Energy Association, a Washington, D.C., trade group, also expects a slowdown in 2009.

“Clearly the market’s perception of growth for the wind industry has declined dramatically, but against a backdrop of virtually no industry data points,” the HSBC analysts acknowledged.

Ah, there’s the rub. Aside from the fear of the future that threatens to paralyze just about every industry, absent a complete collapse of capitalism the wind industry would seem poised to continue its run, albeit at a slower pace. (The nascent Big Solar business, in contrast, finds itself in a more precarious situation.)

In the U.S., state mandates that require utilities to obtain a growing percentage of electricity from renewable sources will drive growth for years into the future. That’s the reason you’re seeing plans for gigawatt-sized wind farms like the 4-gigawatt one T. Boone Pickens is building in Texas. As analysts were souring on the industry’s prospects last week, oil giant BP’s (BP) wind subsidiary finalized a deal with California turbine maker Clipper Windpower to build a five-gigawatt project – the world’s largest, sorry T. Boone – in South Dakota. (Of course, that’s little comfort to investors who have seen wind stocks take big hits in recent weeks. Nor is it good news for two U.S. startups that have filed for IPOs –  First Wind and Noble Environmental.)

The wind developers and turbine makers Green Wombat has talked to in recent weeks for an upcoming Fortune magazine story say the long-term impact of the financial crisis remains unknown at this point. A large pipeline of orders for windmills – Danish turbine king Vestas’ orders spiked 52% from the first quarter to the second, according to HSBC – suggests that growth will continue unless wind farm developers start canceling projects – something that hasn’t happened to date.

The wombat happened to be at Clipper’s Cedar Rapids, Iowa, turbine factory on Tuesday and put the question to Bob Gates, the Carpinteria, Calif.-based company’s vice president of operations. Clipper is only one of two U.S. turbine makers, the other being General Electric (GE). (GE acquired its turbine operations from a bankrupt Enron, which itself had bought the business in 1997 from Clipper’s founder.)

“I think growth will be flat next year and that may continue to 2010 and then go back up,” said Gates as workers assembed gigantic drive trains for Clipper’s 2.5-megawatt Liberty turbine. “You have to put in your order for some components a year in advance, so if demand drops in 2009 you’ll have fewer turbines to bring to market in 2010.”

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