Submitted by New Energy News Blog
Will the U.S. wind energy industry recapture its momentum after Congress restores its production tax credits (PTCs)? Vestas Wind Systems, the world’s biggest wind turbine manufacturer, seems to think so. It is building more than half-a-billion dollars worth of new manufacturing plants in Colorado.
On the strength of enormous demand for clean, emissions-free power, world turbine prices have grown 74% in 3 years. The major manufacturers have 18-month waiting lists and are expanding to meet worldwide plans for more and bigger wind installations. While this is putting upward pressure on the cost of building wind, it is also driving manufacturing plant expansion. Because production capacity is growing, supply/demand factors will stay balanced and projected costs for wind-generated electricity will remain competitive.
Tom Gray, Dep. Exec. Dir., American Wind Energy Association: “The U.S. Department of Energy, in a report published in May, found the total extra cost of providing 20% of U.S. electricity from wind power in 2030, versus a no-new-wind scenario, to be $43 billion, which works out to 50 cents per month for the average utility ratepayer. This is because wind’s capital costs (and added transmission costs) are largely offset by fuel cost savings.”
China, in particular, is building manufacturing capacity. It is building so fast, in fact, it may soon take over industry leadership.
U.S. national political leaders have chosen to do what they can to ignore and discourage wind’s booming growth. State and local leaders, on the other hand, have welcomed wind with open arms. Case in point: Colorado Governor Bill Ritter.
The U.S. Department Of Energy’s National Renewable Energy Laboratory in Golden, Colorado, has spawned New Energy innovation in Colorado’s economy and New Energy labs and think tanks at many of the state’s universities. On the strength of this remarkable intellectual wealth, Governor Ritter set out to build a “new energy economy.”
Vestas’ expansion is a cornerstone of Ritter’s plan for Colorado. A Windsor blade plant will soon be up to six production lines and 650 workers. A new Brighton turbine complex will employ 1,350 more. A new wind-tower manufacturing plant, probably in Pueblo, will add another 450 jobs. Those are good jobs, with benefits. Production workers earn $30,000/year. Engineers and managerial employees bring the average salary up to ~$37,000.
Total Vestas investment in Colorado: $680 million; total employment: 2,450.
And the Vestas investments are drawing more New Energy development to them. Dragon Wind will open a tower-making plant. ConocoPhillips will build a biofuels research facility.
Don Elliman, director, Colorado Office of Economic Development and International Trade: “Vestas is the first flag planted in the state for manufacturing in the wind-energy sector…We hope they’ll prove to be something of a bell cow.”
All of this points to one thing: It does not in the long run matter how irresponsibly current national political leaders treat New Energy, hopelessly mired as some are in the 1950s belief that if it isn’t fossil fuels it isn’t energy. Leaders at the local and state levels (like Governor Ritter and Texas Governor Rick Perry and Kansas Governor Kathleen Sebelius and Michigan Governor Jennifer Granholm – the list goes on and on) know that New Energy has what their communities need and what their constituents want.
Vestas became a world leader because it saw the wind opportunity in Europe coming and built for it. Now Vestas sees the same wind opportunity coming in the U.S. There may be a slight delay due to a handful of recalcitrant Republicans in the U.S. Senate, but even they cannot hold back tomorrow.
Vestas cites huge order book in wind turbines
August 15, 2008 (Reuters via International Herald Tribune)
and
Vestas to employ 1,350 in Brighton
Steve Raabe, August 15, 2008 (Denver Post)
WHO
Bill Ritter, Governor, Colorado; Vestas Wind Systems
WHAT
Governor Ritter announced a half-billion-dollar-plus plant building expansion by Vestas for Coloradop as the world’s biggest wind turbine manufacturer announced Vestas announced multi-billion dollar growth in net income and order backlogs, indicating expectations for long-term strength and growth.
WHEN
– 2007 mid-year net income: E51 million ($74.94 million)
– 2008 mid-year net income: E65 million ($95.52 million)
– 1Q 2008 order backlog: E4.8 billion ($7.05 billion)
– 2Q 2008 order backlog: E7.2 billion ($10.58 billion).
WHERE
– Vestas is based in Denmark.
– In addition to the announced plants in Colorado, Vestas has announced plans for further expansions in the U.S. and China.
– Vestas now has a wind-blade factory in Windsor.
– The Brighton site will be 178-acres and make blades and assemble turbine gears and electronics. It will also have a technology and production engineering office.
– The new wind-tower manufacturing plant will probably be in Pueblo.
– Dragon Wind is based in Beaumont, Texas, and will build its plant in Lamar.
– ConocoPhillips’ biofuels research facility will be in Louisville.
WHY
– Vestas share value rose 8% on the strong profit and growth numbers. It reported its expected sales for 2008 to be E5.7 billion ($8.38 billion).
– Share value of Spanish turbine manufacturer Gamesa, one of Vestas biggest competitors, rose on the report of Vestas’ numbers.
– The Brighton turbine complex will cost $290 million.
– The wind-tower manufacturing plant, probably in Pueblo, will cost $240 million.
– The Windsor facility employs 650 people at peak production and makes ~1,800 blades/year.
– The Vestas plant in Brighton will build will 900 towers/year.
QUOTES
– Jacob Pedersen, analyst, Sydbank: “I think there are some very strong growth signals in these results, stronger than I can ever remember seeing in Vestas…In particular I want to highlight the order book of E7.2 billion, I might have bid E5.5 billion if I had been optimistic.”
– Colorado Governor Ritter: “This expansion reinforces Colorado’s standing as a national and international leader in clean, modern energy for the future…”
– Vestas statement: “The continuing improvement in profitability is attributable to the higher prices which Vestas initiated in 2005 and the ongoing enhancement of operational efficiency…”