Monday, April 02, 2007

More wind energy means more U.S. jobs

Elected officials across the country are waking up to the fact that wind farms not only generate clean electricity, but have the potential for creating a variety of new jobs as well. As a result, they are busy scrambling to attract turbine, blade and tower manufacturers to their municipalities. Competition is intense. For many states the stakes could not be higher: precious manufacturing jobs with the potential for reinvigorating ailing local economies.

Current U.S. policies hold this country's expanding industry hostage to unfortunate boom-and-bust cycles. This has a ripple effect on equipment suppliers around the globe. An extended and predictable Production Tax Credit (PTC) would help enhance the growth of the industry here and abroad. (GW)

U.S. wind industry growing, equipment supply stretched thin

By Jason Wiest
Arkansas News Bureau
April 1, 2007

LITTLE ROCK - Although legislation offering a tax break to windmill blade manufacturers quickly blew through the state Legislature, U.S. demand for wind energy equipment has been building steadily since 2000.

Spurred by federal tax breaks, the U.S. industry's growth has flooded suppliers, causing delays for some overseas wind farm projects.

"It's not possible to get even one turbine for love or money for two years because of all the investment in the U.S." Ian Hatton, managing director of Eclipse Energy, told a United Kingdom newspaper last week.

Eclipse is working to build a wind farm in Great Britian, but construction has been delayed for at least a year because American sites are lined up and waiting for turbines from the world's main manufacturers in Denmark and Germany, according to an article in the North-West Evening Mail.

Demand for wind energy has pitted states against each other to lure manufacturers of wind turbine components. Arkansas and another state are said to be competing for a manufacturing plant, prompting the Legislature to pass a bill exempting windmill blade manufacturers from state income taxes through 2033, with certain stipulations.

Under House Bill 2280 by Rep. Mike Patterson, D-Piggott, which passed the House and Senate and was sent to Gov. Mike Beebe's desk last week, the company would have to locate in Arkansas by the end of the year, invest at least $150 million in infrastructure, employ 500 workers within two years of signing a financial incentive agreement and hire another 500 within five years.

State economic officials have not said what company is being lured or what other states the company is considering. Patterson said the firm is interested in locating in Central Arkansas.

Wind turbine manufacturers have recently opened facilities in Iowa, Minnesota and Pennsylvania. Vestas, a Danish company, announced plans last month to open a $60 million windmill blade factory in Colorado. Wind provides 20 percent of Denmark's electricity, and President Bush has said it could do the same in the U.S.

Manufacturers have not only been attracted to the U.S. market, they have been overwhelmed by it. The U.S. market has quickly become the largest in the world for new wind installations.

"We've just had one record-breaking year after another," said Christine Real de Azua, spokeswoman for the American Wind Energy Association.

Wind was the second largest source of new power generation in the U.S. in both 2005 and 2006, behind natural gas.

By August 2006, American wind energy produced enough electricity to power the equivalent of more than 2.5 million homes, Real de Azua said.

"As a result of all of that, obviously there's a lot of job creation, not just for building wind farms, but for manufacturing and along the entire supply chain," she said.

States in the running for manufacturing facilities do not necessarily have to be windy, she said. Wind energy manufacturers are attracted to the same things as other types of manufacturers - transportation, cheap labor, incentives and a capable work force, she said.

Factories in the specialized wind industry are attracted to low-cost power, access to intestate highways and markets, an "excellent" sewer treatment system and "abundant" clean water, according to Wadley Donovan Group, a central Texas economic development corporation.

A site at the Little Rock Port Authority site could fit the bill, executive director Paul Latture said.

"We've got water transportation, rail transportation, fully developed industrial sites, no waiting," Latture said. "We're ready to build on."

A plant site in Arkansas, which has little for wind energy resources, would be centrally located for some planned wind farms.

A project in Mount Storm, W. Va. plans 200 turbines, which would make it one of the largest wind farms in the region. A plan to build 130 wind mills off the coast of Massachusetts won state approval Friday, clearing the way for the nation's first offshore wind farm, the Associated Press reported.

Texas has more wind turbines than any other state.

More wind energy projects and manufacturing would be planned if a federal tax incentive is extended for the long-term, Real de Azua said.

Current growth in the industry was made possible by a federal incentive in the Energy Policy Act, according to the AWEA.

The production tax credit provides a 1.5-cent per kilowatt-hour tax credit for the first 10 years of a renewable energy facility's operation.

In the past, the credit has been on-again, off-again, repeatedly set to expire but extended by Congress.

In 2005, the credit was extended through 2007, then again through 2008.

"So there's a window of stability that has really opened up all of this investment," she said. "A longer term extension would really unleash even more."

Because of the stability through 2008, "for the first time last year you had manufacturing companies opening facilities in the U.S. after over a decade when that type of investment hadn't been happening," she said.

Projects are being lined up for 2008, she said, but not as much beyond that.

"If we get the federal incentives in place for the long term, that will send a clear signal that the market is here to stay and companies will start investing and continue," she said.


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