Current industry weak but outlook strong

Taylor Johnson
RES Advocate

Each spring the American Wind Energy Association (AWEA) releases their annual wind-energy report outlining the state of the industry for the prior year. This past year was the first that’s seen declining growth since 2007. But, as the report points out, we still have some things going for us.

In 2010, the U.S. wind industry added 5,116 MW to the national electricity portfolio, an increase of 14.6%. While this is typically considered strong growth for an industry, the number pales in comparison to the 10,010 MW and 40% growth the industry saw in 2009. However, politically and geographically, wind power is gaining ground. There are now 38 states with utility-scale wind turbines installed in their borders—36 of which have renewable portfolio standards or goals.

Furthermore, wind-power generation throughout 2010 provided 2.3% of the nation’s electricity, an increase from 1.8% in 2009. While this may seem like a paltry number, it represents significant growth and support for renewable energies, which as a whole produced 10.3% of the U.S. electricity supply.

This last decade has seen tremendous growth in wind-power capacity. In 2000, over 60% of the U.S. wind-power capacity was clustered in just one state: California. Now, with 38 states involved, the U.S. boasts the second largest capacity in the world with 14 states above the 1,000 MW mark. A main contributing factor to this growth has been efficiency increases in technologies. For example, in 1990, not only did a typical turbine have a nameplate capacity of only 250 kW, it performed with relatively low capacity factors and availability. Over the last two decades, the technology has improved to the point where availability to generate is usually above 98%, while taller towers and better siting technology have enabled most project owners to achieve capacity factors in the range of 30 to 40% annually. This means that a turbine with a nameplate capacity of 1.75 MW, or seven times larger, can produce as much as fifteen times more electricity.

In addition to a strong installed capacity of wind-generated electricity, as 2010 came to a close there were over 5,600 MW worth of wind projects under construction in the U.S. That’s more than double the 2,750 MW that were under construction going in to 2009. Now, admittedly, the original deadline of the ARRA 1603 cash grant had some effect on these numbers, but not as much as you might think. AWEA reports that only 2,500 MW were initiated in the fourth quarter, indicating that the other 3,000 MW were likely scheduled to begin construction in 2010 regardless.

Supporting these projects, the U.S. financial sector delivered roughly $11.1 billion in project debt and tax equity deals throughout the year. The 20 tax equity deals struck last year amounted to $2.7 billion and supported about 3,800 MW of increased wind-power capacity. Also, with $8.4 billion invested in debt capital, 29 new deals were struck—delivering nearly 5,600 MW. An additional $820 million, supporting over 600 MW, was raised in 2010 but did not close before the calendar year end.

All of this growth in the wind industry has led to substantial growth in the manufacturing sector as well. In 2010, the United States employed about 20,000 workers in wind-related manufacturing across 400 facilities. Similarly, employment in permanent operations and maintenance jobs expanded during the year to help run the nation’s inflating wind-power fleet. Overall, even with substantial economic headwinds, the U.S. wind industry was still able to support 75,000 direct and indirect jobs in 2010, down from 85,000 in 2009.

To sum up the report in a few sentences, the wind industry in the United States is growing, and growing strong. We have some of the best natural wind resources in the world and we are just recently beginning to utilize them. State and federal policies are slowly but surely tilting in favor of wind energy. As these policies are implemented on a more consistent and long-term basis, the growth of the wind industry will grow stronger and faster than before. We truly have a lot to look forward to.

WPE

AWEA fall symposium: Phoenix

The U.S. wind industry, which just experienced its slowest quarter since 2007, is in the midst of a three-day Wind Energy Fall Symposium in Phoenix, Ariz., and will hear from General Colin L. Powell, U.S.A. (Ret.) in a keynote speech (open to attendees and trade press only).

Organized each year by the American Wind Energy Association, the Fall Symposium convenes members to share successes and lessons learned over the past year and provides the backdrop for members to build networks and relationships crucial to business success. That theme will be echoed in Powell’s speech, entitled “Diplomacy: Persuasion, Trust and Values.”

This event, at the Sheraton Wild Horse Pass Resort, takes place at a time of serious challenges for the industry. Lack of long-term U.S. energy policies such as a Renewable Electricity Standard, and resulting lack of certainty for business, has the country’s utilities failing to move forward with wind build-out plans. Such policies are already in place in China and Europe, resulting in more than $35 billion of expected investment in 2010 – nearly four times the investment the U.S. will see this year.

These challenges underscore how stable national incentives for investment in renewable energy are needed for domestic wind turbine manufacturing and installation to expand as they did in 2008-2009, employing 85,000 Americans and diversifying American’s energy portfolio.

“The importance of building a strong renewable energy manufacturing base in the U.S. cannot be overstated,” said Denise Bode, CEO, AWEA. “With domestic content increasing to over 50 percent, the U.S. wind industry creates American jobs and reduces our dependence on foreign oil—and is the fastest-growing manufacturing sector in the country. Even in the depth of the recession, our industry has been a bright spot in the U.S economy. The AWEA Fall Symposium is where the key players meet and recommit to powering a stronger and cleaner America.”

The symposium includes a full range of wind energy business topics in two main tracks: “Realities of the Market,” and “Managing Your Future for Profit.” It will also address the wind industry outlook from state and federal policy perspectives following the mid-term elections. Over 700 participants representing all facets of the wind industry are in attendance. General session speakers include Vic Abate, Vice President for Renewables, GE Energy; Thomas Carnahan, President, Wind Capital Group; Ned Hall, AES Wind Generation Vice President; Michael Skelly, President, Clean Line Energy Partners; and Mark Stoering, Vice President of Portfolio Strategy and Business Development, Xcel Energy.

During the symposium, AWEA is presenting annual awards to members outstanding in their fields. This year’s recipients are:

Supplier of the Year – John Grabner, President and CEO, Cardinal Fastener (Bedford Heights, OH)

Following President Obama’s visit to Cardinal Fastener in January of 2009, John Grabner has taken a strong role in spreading the word about jobs created in the U.S. from the U.S. wind industry. At Cardinal Fastener, all purchased steel is mined and melted in the U.S. and all secondary processes, including outside vendors/suppliers, are located in Ohio and Indiana; “When Cardinal grows, America grows,” is John’s standard statement. His meetings with Energy Secretary Steven Chu, Treasury Secretary Timothy Geithner, Sen. Nancy Pelosi, Sen. Harry Reid and numerous regional officials have served as a platform for him to share his success story and push for more legislation on wind. By positioning Cardinal Fastener within the wind industry, Grabner has increased his staff by 20% in 2009 and plans further increase in 2010.

Achievement in Operations – Jim Cusick, Site Manager, Vestas (Abilene, TX)

Jim Cusick has worked at Vestas for more than five years. Beginning in 2006, he served as the site manager for SMUD’s Solano Wind Project before moving to Texas this past spring to manage the service and maintenance of the Buffalo Gap site near Abilene, Texas. He is being recognized for creating a strong safety culture along with his outstanding technical skills, commitment to quality and excellent customer relations.

Outstanding Technical Contribution to the Wind Industry – Sandy Butterfield, CEO, Boulder Wind Power (Boulder, CO)

Sandy Butterfield, formerly the Chief Engineer at NREL’s National Wind Technology Center, has been a leader in the wind energy technical community for decades. His most recent achievement is leading the Gearbox Reliability Collaborative, a government/industry partnership focused on improving gearbox reliability through extensive test and analyses. Other work over the last 20-plus years at NREL has included providing technical leadership with international standards, modeling turbine performance and controlling stall, establishing testing procedures, and addressing gearbox/bearing issues. He recently left NREL to be CEO of Boulder Wind Power.

State Leadership – Governor Bill Ritter of Colorado (Denver, CO)

Governor Bill Ritter is honored for his leadership in the State of Colorado, as well as for urging the U.S. Senate to include a renewable energy standard in national energy legislation. In Colorado, nearly one-third of electricity generated by large utilities must come from clean-energy sources by 2020 – the second-highest renewable energy requirement in the nation.

Andy Linehan Award for Environmental Excellence – Mike Azeka, Director of Planning and Permitting, AES (San Diego, CA)

A wind industry veteran, Mike Azeka was the lead industry caucus negotiator on the Secretary of Interior’s Wind Turbine Advisory Committee. He spent thousands of hours representing the wind industry’s interests, and through his leadership, patience and skill, helped the Federal Advisory Committee reach consensus on siting guidelines submitted to the Secretary of the Interior in March of this year.

Special Achievement in Environmental Leadership – Rene Braud, Director, Permitting and Environmental Affairs, Horizon (Houston, TX)

Rene Braud is recognized for her long-standing commitment to environmental excellence. Braud has worked for three of the industry’s largest developers—FPL, BP and now Horizon Wind Energy—to establish or strengthen their environmental programs. In addition, she’s provided leadership on numerous committees over her wind career, including the AWEA Siting Committee, American Wind Wildlife Institute and, most recently, the Wind Turbine Guidelines Advisory Committee (FACA). She is a regular panelist and presenter at environmental conferences.

Regulatory Leadership – Southwest Power Pool Board, Regional State Committee and Staff, Nick Brown, President and Harry Skilton, Vice Chairman of the Board (Little Rock, AR)

The Federal Energy Regulatory Commission (FERC) recently approved filings by the Southwest Power Pool (SPP) that have the potential to dramatically reduce hurdles to transmission construction by providing a reasonable approach to cost allocation and a new proactive planning process. SPP’s adoption of the proactive, flexible approach to planning for and investing in transmission across its region is a model for other regions to follow. In addition, the SPP filing and order may have been a crucial reason for the improvement of the Midwest ISO (MISO) cost allocation proposal subsequently filed with FERC. According to FERC, SPP’s plan will facilitate investment in new transmission facilities, reduce congestion, efficiently integrate new resources in the region and accommodate growth in demand while providing greater certainty of cost recovery. The work of the staff, members and working groups, with leadership from states, resulted in an innovative process for dealing with complicated issues facing the electricity industry, and one which is already showing results of getting new transmission built to connect windy regions with load centers.

Wind energy manufacturing association sets goals on job creation and more

The Wind Energy Manufacturing Association (WEMA), Inc. has been established to help enhance and promote the wind energy industry in the U.S.
WEMA goals are:

• Job creation – Create manufacturing jobs as companies are able to locate and/or expand their wind energy manufacturing in the U.S.
• Unite – Bring those interested in manufacturing together to have an impact on the industry.
• Educate – Provide educational opportunities to those just starting in the wind energy industry.
• Network – Bring together new and existing manufacturers with OEM’s in the industry.
• Joint ventures and technology transfers – Support opportunities to bring foreign tools to the U.S. via business partnerships, and technological transfers.

Offices will be in Muncie, IND.

“Alternative energy is a targeted industry sector for our county,” said Terry Murphy, Vice President, Economic Development for the Muncie-Delaware County Economic Development Alliance. “We are excited by WEMA’s decision to join our community and look forward to building a strong partnership with them. WEMA’s presence will increase the number of business opportunities we see, and that will ultimately lead to new job creation in the city, county, region, and state,” added Murphy.

DOE Invests Another $200 Million In Wind and Solar Power

U.S. Department of Energy Secretary Steven Chu announced that the Department will invest more than US $200 million over five years to expand and accelerate the development, commercialization, and use of solar and water power technologies throughout the United States.

Community College Soon to Generate Wind Workers

There’s good news and bad news in the wind industry. The bad news is that some of its jobs are physically demanding, such as climbing a 180-ft tower in winter to nurse an ailing drivetrain. A director at a support company familiar with the industry’s working conditions says the turnover for the more vigorous jobs is about 18 months. That brings us to the good news: There is plenty of work erecting towers and maintaining turbines.

A few schools have recognized the potential and initiated training programs for wind turbine technicians. One school, Lorain County Community College in Lorain, Ohio, put together what it says is the first associate’s degree credit program in the state in the field of wind-turbine power generation. It’s underway with a full class of 48 students for the 2009 fall semester. The Associate of Science degree in Alternative Energy – Wind Turbines will train students to become installation and maintenance professionals.

LCCC program coordinator Duncan Estep says, “This is a mechatronic program – a combination of electrical, mechanical, and computer skills. It’s what’s required of a technician in today’s world. One frustration I had as a manager was the specialization of technicians. One could solder but not swap out a mechanical component.”

The program will focus on all wind technologies. Small wind (1 kW to 100 kW) is important to Ohio because of the lower inland wind speeds. The class WT1 looks at the technology in small wind while class WT2 looks at larger turbines. “The skills are somewhat similar. “Rigging is applicable to both, although alignment is more of an issue on large turbine gearboxes. In WT1 we put up met poles to measure wind, a task applicable to both. We’ll put up a number of small turbines for experience. And we’ll work on a nearby 500-kW unit. What’s more, students can volunteer to work with installers so they gain experience. And we will do safety certification that involves climbing and rescue. That typically is more useful in the larger turbines, says Estep.

The courses that all technicians take will form a foundation for other possibilities. “If a student gets a degree in wind turbines, they are prepared for related jobs. Even a few classes in another area would allow a degree in something else, so you have a reasonable amount of portability. After graduation they could work for an erector, go into sales, or work for a manufacturer because they understand what makes a turbine good or bad,” he says.