The new balance of power was unmistakable at the annual American Wind Energy Association conference in May, which drew a record 23,000 people to Chicago, Illinois. Among them were governors, economic development officials and public relations agents from 19 states or regions, there to make the case that they offer the land of opportunity for turbine, tower, component and other manufacturers of the approximate 8000 parts that comprise a utility-scale turbine.

‘We’re here to play offence,’ said Michigan Governor Jennifer Granholm, one of five governors to address the conference. Michigan’s banner, displayed high in the room, was hard to miss, even in a hall crowded with some 1280 exhibitors. ‘We see this as opportunity to diversify in manufacturing, to make the Midwest go from being a rust belt to green belt,’ Granholm added.

Ohio Governor Ted Strickland described renewable energy as the ‘zeitgeist’ while Wisconsin Governor Jim Doyle observed that the chant ‘drill, baby, drill,’ popularized by pro-oil forces, holds little value in his state which has no oil or gas. But, conversely, ‘turn, baby, turn’ means money for Wisconsin, a state that already has 75 companies working in the wind industry supply chain.

The states are offering incentives such as tax credits, loan guarantees and streamlined permitting to wind manufacturers that choose to locate within their borders. Many are boasting about their access to water or land transportation, their skilled labour force, their renewable portfolio standards and vast wind generation potential.

According to the Apollo Alliance, a coalition of labour, business, environmental, and community leaders, manufacturing jobs will account for 70%–80% of the new jobs created from the US renewable energy expansion over the next 20 years. In 2008 alone, over 55 wind turbine and wind turbine component manufacturing facilities announced, added or expanded in 24 states, according to the American Wind Energy Association (AWEA).

State leaders hope these new jobs will help heal US manufacturing, a sector that has suffered the heaviest blows of the recession. US production fell 22% in the first quarter of 2009 in non-high-tech manufacturing, and is expected to close out the year with a 12% drop, according to the Manufacturers Alliance/MAPI.

Accustomed to Bending Steel

Michigan, home of the collapsed US auto industry, faces some of the greatest economic hardship. The state’s unemployment rate reached 14.1% in May 2009, its worst level since 1983, and far higher than the national rate of 9.4%. In total, Michigan lost 274,000 jobs between May 2008 and May 2009, plummeting by 67.2%.

So it was no surprise that Granholm buttonholed 10 major wind companies in private meetings at the AWEA conference. Where most see a defunct auto industry, Granholm sees empty factories waiting for wind manufacturers. She sees a ready and able workforce that is accustomed ‘to bending steel.’

(See caption and credit information by clicking on this image in the image gallery at the bottom of this article.)

‘With an industrial base that has the capacity to support as many as 24,000 wind energy jobs, we are actively assisting auto suppliers to diversify into wind component manufacturing,’ said Greg Main, President and CEO of the Michigan Economic Development Corporation, adding: ‘We offer innovative incentives for wind energy investment and job-training grants, and have 10 Renaissance Zones available to support wind energy businesses.’

Michigan already has drawn more than two dozen wind-related manufacturers. Among recent arrivals are Global Wind System, which has begun building a US$32 million (€23 million) wind turbine assembly plant in the state. Meanwhile, Great Lakes Towers has announced plans for a $19 million (€14 million) tower factory. The state offers large opportunities, given that it has 700 auto industry suppliers that could manufacture wind components, according to state officials.

Similarly, Oklahoma is pitching not only its wind potential, but its workforce training. Several of its colleges already train technicians for wind-related work. And now, with a grant from the US Department of Energy, the state is developing a centralized curriculum for wind technician safety training. No national standard exists for safety training of wind turbine maintenance technicians currently, so Oklahoma hopes its safety curriculum will be adopted nationwide in due course. The hope is this will put it on the map as it tries to create 7000 wind-related jobs over the next five years and up to 18,000 jobs within 10 years. Wind component manufacturing jobs are particularly attractive in Oklahoma because they pay an annual average salary of about $40,000 (€29,000) per year, 15% higher than the average wage in the state, according to the Oklahoma Department of Commerce.

Like other states, Oklahoma also advertises the advantages of its location. The state is part of a major wind corridor that includes Texas, Colorado, New Mexico and Kansas. In addition, its taxes are low – the fifth lowest in the nation – and it offers financial credits for job creation and property tax exemptions for manufacturers. Oklahoma’s leaders have set a goal to make the state the second largest wind generator in the US by 2030. ‘Whenever I feel the Oklahoma wind whip my hair into my eyes, I remind myself, baby, that’s just money. Those blades are turning,’ said Natalie Shirley, state Secretary of Commerce and Tourism, in a programme introduction to a June 2009 wind conference held in the state.

Iowa already holds the position that Oklahoma wants, as the second largest wind generator in the nation behind Texas. Iowa got out of the gate early in fostering the industry and is now home to nine factories built by international wind manufacturers. For instance, Clipper Windpower says it decided to manufacture in Iowa because the state offers good transportation, proximity to markets, availability of suppliers and leaders who support renewables.

‘One of the things we have done, that I think is a real advantage, is we focused on work force development,’ said Ohio state Governor Chet Culver. He went on: ‘We are encouraging the next generation of Iowans to be part of the renewable energy revolution.’ Indeed, Iowa’s ‘green’ job force already totals 2300 people. Five state community colleges and three universities have also joined forces to create wind energy training programmes.

Minnesota doesn’t generate as many megawatts of wind as Iowa, but wind makes up a higher percentage of the energy mix in Minnesota – 7.5% – than in any other state. Dan McElroy, Commissioner of the Minnesota Department of Employment and Economic Development, also touts the state’s ‘long history of entrepreneurial leadership in industries like medical devices and food production,’ experience it now applies to wind manufacturing.

Several wind factories have moved into Minnesota, among them Suzlon Rotor, which produces blade and nose cones. The state won the India-based company in 2006 with offers of tax incentives, and Suzlon now employs 500 people there. Looking ahead, Finland-based Moventas also announced (in the autumn of 2008) plans to build a facility in Minnesota that will produce gearboxes, employing about 100 workers.

Manufacturing in the DNA

State governments outside the nation’s windy midsection also are competing for renewable energy jobs. In the northeast, New York and Canada want to attract offshore wind farms, each to their own side of the Great Lakes, knowing that manufacturers tend to locate close to projects to avert transportation costs.

The Ontario Power Authority calculates a potential to generate 34,500 MW at 64 offshore wind sites in the shallow water on the Ontario side of the Great Lakes. To help realize some of the potential, in May the Canadian province passed a law offering a generous feed-in tariff of 19 CN cents/kWh (16.5 US cents/kWh, 12 € cents /kWh) for offshore wind. The tariffs, also available for other forms of renewable energy, are part of a new Green Energy Act that Ontario forecasts will attract 50,000 jobs over three years and help the province achieve its goal of closing its coal-fired plants by 2014.

To further spur manufacturing, Trillium Power Wind, a Toronto-based developer, has created TaiWind Consortium, designed to bring together research, development, demonstration and deployment of wind technology. ‘With the recently passed Green Energy Act there will now be the demand that is necessary to support a thriving renewable energy supply chain in Ontario,’ said John Kourtoff, Trillium’s president and CEO. ‘By encouraging renewable energy generation, the Ontario government also makes it financially feasible for businesses to invest in the necessary components to feed these generation projects. In my view, the Green Energy Act will lead directly to Ontario becoming a global leader in green power manufacturing,’ he concluded. [For more on Ontario’s energy bill, click here.]

(See caption and credit information by clicking on this image in the image gallery at the bottom of this article.)

Not to be outdone, the New York Power Authority (NYPA) on Earth Day launched the Great Lakes Offshore Wind Project, an initiative that offers long-term contracts for offshore wind farms in Lake Ontario or Lake Erie. As part of the programme, the authority issued a Request for Expressions of Interest for projects of at least 120 MW. The solicitation drew 14 responses by the 15 June deadline. ‘That is an extraordinary number coming from companies all over the country that have great interest in this project,’ said Richard Kessel, NYPA president and CEO. As a next step, the authority plans to issue a solicitation for definitive project proposals in late 2009 or early 2010.

NYPA wants to see New York build one of the nation’s first offshore wind farms – none have yet been constructed in the US – and make western New York a hub of wind manufacturing for the eastern seaboard. The initiative is in-keeping with New York Governor David Paterson’s goal to meet 45% of the state’s energy needs through renewables and energy efficiency by 2015.

Nearby Pennsylvania made significant inroads into the wind manufacturing market several years ago, when it drew the attention of Gamesa. This Spanish company, which has 7200 employees worldwide, spent 18 months studying states in search of a site for a US headquarters and two manufacturing facilities. It settled on Pennsylvania in 2004 from a shortlist that also included Texas, New Mexico and New York.

So what made Pennsylvania stand out? ‘First,’ says Michael Peck, Director of Media, Institutional & Labor Relations for Gamesa North America, ‘the energy vision articulated by state government and bipartisan legislative leaders. Pennsylvania had just enacted an advanced energy portfolio standard requiring the state to produce 18% of its energy from alternative sources, including wind, by 2020.

(See caption and credit information by clicking on this image in the image gallery at the bottom of this article.)

The administration even committed to purchasing a percentage of the electricity needed for state government operations from clean energy sources. That commitment is 25% today. On top of that, Pennsylvania-based utilities agreed to purchase wind power generated by Gamesa wind farm developments.’ Peck also cited Pennsylvania’s transportation and wind resources and its position in the regional transmission system PJM Interconnection, near Maryland, New Jersey and New York, each of which has its own renewable portfolio standard (RPS) and is a large energy consumer.

Finally, the company was drawn by Pennsylvania’s workforce. ‘Manufacturing is in the DNA of Pennsylvanians, as well as many throughout the Rust Belt,’ Peck said.

Gamesa employs about 800 workers in Pennsylvania, where it manufacturers blades and nacelles. In all, the company has invested $200 million (€143 million) in Pennsylvania, including $34 million (€31 million) to convert a brownfield US Steel industrial site in Bucks County into a manufacturing centre.

Oil or a Plan?

Despite the dragging economy, wind manufacturers continue their migration to the US. For example, Siemens Energy made a splash at the AWEA conference when it announced its choice of Hutchinson, Kansas, for its first US nacelle production facility. Siemens Energy Sector, which employs 83,500 people worldwide, plans to begin construction of the 300,000 square foot (27,600 m²) nacelle facility and an 80,000 square foot (7360 m²) service and repair plant as this article goes to press. The facility is expected to create 400 jobs. Meanwhile, manufacturing giant Bosch Rexroth has opened wind facilities in Germany and China and is now eyeing the US as part of its plan to invest $450 million (€322 million) in wind manufacturing capacity by 2015. The company produces gearboxes, pitch and yaw drives, and electro-hydraulic controls.

With Europe and China also vying for manufacturers, will US growth continue? Craig Moyer, co-Chairman of the Energy, Environment and Natural Resources practice at law firm Manatt, Phelps & Phillips, says that challenges exist. The US needs to focus more on guaranteeing that turbines and other wind parts find buyers, he said. ‘The missing link is off-take. If I’m going to build 50 MW of turbines, who will be my customer?,’ he said. More utilities or state governments need to commit to purchases, particularly now while economy is faltering, he concluded, noting: ‘I would hate to see us devote so many resources to converting to this low carbon economy and not get manufacturing jobs out of it.’ Moyer added: ‘In my mind, that is going to be the metric for success.’

At this point, state governments – with strong backing from the Obama administration – appear determined to meet this metric. They want the jobs. And, still reeling from the high gasoline prices of summer 2008, American consumers continue to crave liberty from foreign oil dependence.

T. Boone Pickens, the former oil man and now a wind developer, says it comes down to elected officials having an energy plan: ‘If they don’t have a plan, then their plan is foreign oil, because that is what you are going to get.’

And with a plan? Look to the Americans to get back to work bending steel, this time to catch the wind.

Elisa Wood is the U.S. correspondent for Renewable Energy World.

---

RPS Boosting U.S. Manufacturing

If there is single policy that bolsters wind manufacturing in the US, it is the renewable portfolio standard (RPS).

So says GE Energy, a company that should know, given that it has been the dominant turbine manufacturer in the US for six years. In 2008 alone, GE accounted for 43% of the US-installed capacity, according to AWEA.

‘The RPS provides a long-term signal that demand will exist for projects. And because of the scale in the industry, manufacturing likes to locate near projects,’ says Seth Dunn, GE America’s Policy Leader for renewable energy. ‘About 90% of our turbines in 2008 landed in a state with an RPS. Clearly what this means for manufacturing is that, by and large, it is almost a requisite,’ Dunn adds.

More than half of the US states now have RPS requirements — mandates that a certain amount of a state’s energy need be met by renewable energy. Typically, the requirement escalates over several years. Congress was considering a similar national requirement when this article was published.

‘Other factors come into play: state incentives, labour and such. But certainly the demand provided by a state RPS makes a compelling case, and it is a consideration we look at,’ Dunn continues, saying: ‘A state can still be part of the supply chain if it doesn’t have an RPS, but it is much less likely to be a big player.’

According to Dunn, federal loan guarantees, grants, tax credits and other stimulus money will serve as a ‘near-term bridge’ to keep the wind industry growing until the capital markets revive. But long-term, it will take passage of a national portfolio standard to ensure growth.

While wind development is now centred along the central plains, look for more action along the east coast as the offshore wind industry develops, Dunn says. ‘Longer-term, you could see the Eastern Seaboard become an offshore wind manufacturing base. Maine, Rhode Island, ship builders, they are perking up and seeing what might be on the horizon,’ he observes.

How well the nation does in building a wind manufacturing base, whether inland or coastal, depends largely on wind supporters making their case now for a national renewable portfolio standard, he notes, concluding: ‘This is really a critical time for the industry. We’re in the news a lot. This is a great opportunity. But if we don’t take steps now, the US will probably fall behind Europe and China and other regions. Our hopes of establishing a domestic manufacturing base will quickly disappear.’

---

Sidebar: Colorado’s Crucible 

Pueblo, Colorado with a population of 155,000 people is a small community that’s used to big thinking.

Situated some 100 miles (160 km) from Denver, Pueblo was considered the ‘smelting capital of the world’ in the early part of the 1900s; it later became ‘The Steel City’ and the ‘Pittsburg of the West.’

The steel industry brought Pueblo’s citizens a comfortable living until the early 1980s when the industry faltered and the city saw significant job cuts. In response, businesses dug into their pockets to form the Pueblo Economic Development Corporation (PEDCO). Voters approved a half-cent sales tax and continue to use the revenue to draw industry with incentives, capital projects and equipment purchases. ‘We decided to not feel sorry for ourselves,’ said Keith Swerdfeger, a former PEDCO President. The plan has apparently worked, so far bringing in 15,000 to 20,000 jobs, many in electronics, aviation and a reorganized steel industry.

In the early part of this decade, Pueblo began to suspect the wind industry was a good bet and started courting Denmark-based Vestas. It took eight years, about $18 million (€13 million) in incentives, and a lot of help from local utilities and state officials, but Vestas finally arrived – and in a big way. The world’s largest wind turbine manufacturing company is now constructing the world’s largest wind tower manufacturing plant in Pueblo, a 600,000 square feet (55,200 m²) facility on 300 acres (121 ha). The $240 million (€172 million) project, due to be operational by November 2009, will have the capacity to produce 1000 towers per year and support 500 jobs.

‘Everybody at the table worked their tail end off, and just got it done,’ said Swerdfeger.

Pueblo credits Governor Bill Ritter’s commitment to renewable energy for much of its success. The state has attracted three other Vestas facilities, representing a total capital investment by the company of $700 million (€500 million), which has produced 2500 jobs.

Manufacturers which serve the European market see ‘an awakening here in the US; this new energy economy is really starting to grow,’ explained Tom Plant, Director of Ritter’s energy office.

Ritter went to Spain in July 2008 to meet with renewable energy companies, and to China and Japan in November. Andrew Spielman, partner in Hogan & Hartson’s Environmental practice, and Chairman of Colorado’s Regional Air Quality Council, was among the 40-member business delegation that journeyed with Ritter to Asia. ‘Some states are promoting themes; others are getting on planes and visiting with the captains of industry who control investment dollar overseas,’ he said, adding: ‘A lot of major players in the industry are not US-based. But they are coming to North America, and we want them.’