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Wind Turbine Manufacturers Say U.S. Market Will Grow in Time

The wind energy market in the U.S. will stay alive with or without an extension of the Production Tax Credit (PTC), say executives from eight of the largest wind turbine manufacturers with a U.S. presence. During a June 6 session focused on large wind turbines during Windpower 2012, executives from Gamesa, GE, Goldwind, Mitsubishi Power Systems, Nordex, Siemens, Suzlon and Vestas expressed that they view the U.S. wind market as a strong one.

The U.S., currently the No. 2 wind market in the world, installed 6,810 MW in 2011. This year is expected to be a record-breaking year for installations, as the expiration of the PTC requires developers to complete projects by year end. All eight executives agreed that 2012 will likely see anywhere from 9 to 12 GW of wind power installations.

Beyond 2012, the market is likely to slow, but the panelists said that won’t keep their companies from staying in the U.S. 

The wind energy market could be down 80 percent next year, said Duncan Koerbel, interim CEO of Suzlon. “But Suzlon is in this for the longest of the long hauls. If you’re going to be in wind, you have to be in North America.”

Goldwind, whose business is focused mainly in China, has increased its market share in the U.S. in recent years. “We’re looking to the U.S. as the place to expand first because it’s one of the premier competitive markets,” said Tim Rosenzweig, CEO of Goldwind. 

Harm Toren, vice president and chief service officer of Mitsubishi Power Systems, said about 90 percent of Mitsubishi’s wind turbines are installed in the U.S., but expressed concern regarding the unpredictable nature of the market due to policy uncertainty. “The stop-start nature of the U.S. regulations really prohibits the long-term nature of R&D and planning for sales. If we have a repeat of 2004, it will be difficult for us to deliver due to the suppliers and supply chain not being able to catch up.”

Borja Negro, CEO of Spanish company Gamesa, said the supply chain in the U.S. has been built steadily over the last decade, and a lack of policy certainly could hinder continued growth. “Uncertainty doesn’t just affect employment; it affects supply chain.”

A one-year extension of the PTC is likely to occur after the November presidential election, said Christian Venderby, chief operating officer of Vestas. However, the panel executives expressed concern that a one-year extension would not be helpful to the growth of the industry, since most wind projects take 18 to 24 months to complete from start to finish.

“This every 12-month hopscotch doesn’t do anything for long-term strategy. We’ve got to have a playing field that brings some stability,” Koerbel said.

The panelists suggested two policy approaches that would encourage the continued expansion of the wind energy industry: a national energy policy, or a 2-year extension of the PTC.

“Give us a target; set a policy,” Venderby said. “If it expires in three to five years, we can figure out how to compete.”

The panelists agreed that cheap natural gas is now the biggest competition to wind power. However, gas prices will not stay around $2 forever, panelists said, and wind energy prices will only continue to fall.

“We’re all investing in new products and innovations to drive down the cost of energy and make it more in parity with other fuels,” said Michael Revak, vice president of technical sales and proposals for Siemens.

Some technology advancement the panelists mentioned their companies are exploring include larger rotors, higher towers, improved batteries, the use of compressed air, as well as advancements in areas like forecasting, interconnection and storage. Negro said developments such as these will help Gamesa meet its target to reduce the cost of wind energy by 30 percent by 2015.

“There is also lot of room for reduction of the cost of energy through O&M,” Negro said. 

Keith Longtin, general manager of the wind product line at GE, said the company’s focus has not been on taller towers and bigger rotors lately, but on O&M. “Being able to minimize losses has a huge impact; being able to uprate the machine without adding costs.”

Toren of Mitsubishi echoed a similar message. “We need to start with what we have already. Maintain the units.”

Revak said Siemens has been able to lower the cost of its turbines by switching from a gearbox platform to direct drive. “We view the direct drive product as the product going forward.”

While concern over the short-term future of the U.S. wind industry was a common theme among the panelists, each company said they would not pull out even if Congress abandoned all renewable energy subsidies.

“We have a commitment to the market here,” Venderby said.

Image: Watch face via Shutterstock

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