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| 05 Nov 2009 10:03:05 pm |
 Shining some light on the Chinese wind farm deal |
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In recent days, there has been much debate over the announcement by a Chinese firm and a Texas wind developer that the two intend to cooperate on a 600-MW (generates the equivalent of the electricity needs of 180,000 average homes) wind farm with turbines to be manufactured in China.
Concern about this announcement, and the green manufacturing jobs it might create in China, is understandable. Still, the larger picture of wind energy and foreign imports into the U.S. tells a very different story:
* In 2008, China accounted for less than 5% of the imported value of turbine components for the U.S., according to data from the US International Trade Commission.
* In recent years, the trend has been towards more domestically manufactured components and wind turbines in the U.S. Overall, about 50% of the value of turbine components was made in the U.S. in 2008, up from less than 30% in 2005. Given the growth in the U.S. market during that same period, this means that in three years, the U.S. increased its domestic manufacturing 12-fold, from producing $450 million worth of components in America to $5.6 billion in 2008.
* Leading global wind turbine manufacturers like Vestas (#1 globally) and Gamesa (#3 globally) have opened major manufacturing facilities here in the U.S.; Mitsubishi just recently announced its intention to open a U.S. factory.
* In all, as of October 2009, there are nine original equipment wind turbine manufacturers (OEM)s (Acciona, Clipper, Dewind, Gamesa, GE, Nordic, Siemens, Suzlon, and Vestas) now operating U.S. manufacturing facilities, with Siemens and Vestas also investing in additional facilities. An additional six turbine manufacturers (Continental, EWT, Fuhrlander, Global Wind Systems, Mitsubishi, Nordex) have announced plans to open manufacturing facilities here in the U.S.
* This welcome trend toward investment in manufacturing facilities in the U.S., which creates local jobs, needs to be nurtured.
* The reality is that we need to catch up after decades of energy policy neglect in the U.S., and we are in a race to build up a wind turbine manufacturing base here in this country. The wind energy market is global, and leading companies such as Vestas, GE, Gamesa, Suzlon and many others operate on a global scale. These companies will direct their investments to where markets are certain to grow—-and that in turn is where there is a firm renewable energy policy in place.
* A strong national Renewable Electricity Standard will provide the market and policy certainty that is still needed in the U.S., and will ensure that our nation competes effectively in attracting investment and building up its manufacturing base.
* The U.S. is at a time of historic opportunity: passing comprehensive climate and energy legislation including a meaningful RES will give us the means to stay in this race, compete with other strategic markets like Europe and China, avoid carbon, and create jobs.
* It's important to understand how American Recovery & Reinvestment Act (ARRA) economic stimulus funding works: 100% of the Treasury grant funds are allocated on the basis of projects built here in the U.S. These projects create construction, engineering, operation and maintenance, and a host of other jobs here in the U.S. The ARRA process is NOT a zero-sum game—if a company is awarded a grant for a project, it does not mean that another company won’t get funding for a project for which it might apply. To protect taxpayer money, a company that applies for funding for a particular project needs to go through a detailed checklist to ensure that the project will actually be built and produce electricity. The grant funding for which a project is eligible is equivalent to the value of a 30% investment tax credit. The stimulus grant helps leverage the additional funds needed to finance a project.
* A healthy mix of global (Iberdrola, EDP Renewables) and U.S. (NextEra, AES, First Wind) companies are receiving ARRA grants or have announced their intention to apply for such grants. Nothing is keeping more U.S. utilities and companies from applying.
The economic stimulus legislation is providing the short-term support needed to keep the U.S. wind energy market alive. A strong Renewable Electricity Standard would build upon that short-term base and ensure American clean renewable energy job growth into the future. |
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Category : AWEA News
| Posted By : Tom Gray |
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| 05 Nov 2009 03:38:38 pm |
| A supply chain guru spreads the good word in Detroit |
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There have been record crowds at the AWEA conference and exhibition in Detroit this week—the number of attendees registered edged over 2000, not including the general public who came in every afternoon to see the small wind turbines displayed on the exhibition floor.
In part, the attendance stems from the fact that three distinct subjects are being discussed—small wind, community wind, and the wind energy supply chain—and each brings its own constituency. But more than that, the numbers are driven by the hunger for jobs, and the desire to become part of the new energy economy.
The supply chain, despite its dry economics-department designation, is what makes wind attractive to the Midwest. The region’s manufacturing capabilities and skills are going unused due to the slow demise of the auto industry and the brutal severity of the current recession. Because of the need to manufacture the 8000 components that comprise a turbine, wind energy holds the prospect of rekindling America’s manufacturing might.
So hundreds came to this week’s conference to learn how to make the journey from the "rust belt to the greenbelt," as Michigan’s Gov. Jennifer Granholm aptly describes it. Dan Radomski, vice president of NextEnergy and one of the supply chain conference program chairs, is helping to draw the map. A former machinist also who spent a decade at the Society of Manufacturing Engineers, he has both the training and the innate ability to “see how any product is made,” as he puts it. He also can put it into plain English and adds a dose of passion that brightens a potentially boring subject. Mostly, he makes the supply chain sound like a living entity.
If you want to enter the supply chain, he explained at a session this week, you should understand (among other things) how wind energy technology is evolving, which components need the most repairs, and which components the large turbine manufacturers “outsource” rather than build themselves.
This week, Radomski used the latest research—some of it available only for a hefty price—to show attendees how to analyze the wind supply chain in great detail: know who the players are, what they make, what they outsource, and where, and whether it is a durable component.
If, for example, you want to enter the “aftermarket repair business.” Radomski will tell you that gear boxes are a good choice because they wear out more often than other components. But you also have to know how long it takes to repair one, and have on-the-shelf inventory to provide a working unit while you repair the non-working one, so the turbine is not out of service for long.
One of Radomski’s persistent messages these days is that the wind industry, while mature, is not perfect. The component “failure rate” is too high and the industry “better get a handle on durability.” He has been a key actor in Michigan’s efforts to land the DOE funding to build a national wind turbine drive train testing center here in Detroit. While it would cost more than $100 million, Radomski says, it would contribute to the development of turbines that fail less often. (Radomski’s vision of the supply chain includes design engineering and testing as part of the manufacturing process.)
At his core, Radomski is an optimist. He believes that most products can be redesigned to work better. So it is not a surpise to learn that he believes Michigan's image as a failed state is overblown. He was a key player in the state's efforts to help Michigan suppliers transition to the wind industry, resulting in over $670 million in new business awarded to Michigan suppliers in alternative energy markets since 2006. (There are 70 Michigan companies involved in the wind industry now, compared with 20 in 2006.)
“I think Michigan will rebound just fine. Michigan is not just about the auto industry. We are already diversified. We just need to be diligent and smart,” he says. |
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Category : AWEA News
| Posted By : Chris Madison |
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