New jobs powered by wind
During the presidential debates earlier this year the candidates all had their say about what they would do to help Detroit's suffering automotive industry. Mitt Romney said he'd bring back the old jobs. He didn't last long. Others pledged to bring create new manufacturing jobs. Just how was not made clear.
One way to do that is to realize the Department of Energy's scenario of achieving 20% Wind by 2030. (GW)
By Sven Gustafson
Oakland Business Review
September 18, 2008
The state's manufacturing sector, struggling with a slumping automotive market, is angling for business making parts for the booming wind energy industry even as windpower generation in Michigan is in its infancy.
More than 30 manufacturing companies in Michigan have picked up business making parts or providing design or engineering work in wind, said Dan Radomski, vice president of industry services for Detroit-based NextEnergy.
Wind turbines may be the most environmentally friendly form of energy available, but coastal landowners often balk at the possibility of offshore wind turbines, complaining they ruin scenic views.
But one Ann Arbor startup is forming plans to develop, own and operate offshore wind farms that can't be seen from land.
Deep Water Wind, a startup led by former DTE Energy vice president Chris Brown, has investments from private equity firms.
Brown, also former executive vice president of DTE Energy Resources, said the under-the-radar 2-year-old startup, which has 13 employees, is "totally funded."
Deep Water Wind licensed proprietary technology from Norway-based OWEC Tower, which allows wind farms to be installed 50 miles to 125 miles offshore -out of sight of the naked eye.
"What we're trying to do is get it far enough offshore so it's not viewable from the shore," Brown said. "What we should be focusing on is solutions that are beyond the horizon, because if we do, what can the objections be?"
Brown, the CEO, acknowledged that his company doesn't have much reason to be in Michigan - except that he lives here. He said if the state approved a renewable portfolio standard, which would require utilities to derive a set percentage of their electricity from renewable sources, it might help his cause.
But the company at first is targeting East Coast markets - including Massachusetts, Rhode Island, the coast of Manhattan and New Jersey.
Brown cited projections estimating that offshore wind energy could provide 330 gigawatts of power to the East Coast, enough to power 40 million homes.
The financial implication is significant: Results from a recent survey indicate that meetings the alternative energy accelerator arranged with solar and wind companies such as General Electric and Siemens helped generate more than $100 million in new contracted business for companies across Michigan.
That survey also found that companies who had successfully taken on work in wind stressed the need for others considering the field to do their homework, understand the market potential and the supply chain dynamics and know the major players.
"These suppliers, they know who the OEMs and Tier One suppliers that they supply are in the automotive industry, but it's a whole new market when you're entering into wind," Radomski said.
While it can be difficult for small suppliers to break into the business, not all wind energy supply chains are developed, and wind turbine makers "are constantly looking for new suppliers" in the U.S., Radomski said.
One company benefiting from diversification is Three M Tool & Machine Inc. in Oakland County's Commerce Township. The company recently won a five-year, $7 million contract to produce gearbox housings and forward housings for California-based Clipper Windpower, an expansion of work already under contract.
To prepare to meet its new production deadlines, Three M bought a 42,000-square-foot building in nearby Wixom equipped with a pair of 30-ton cranes for $2.5 million. It's spending $7.5 million on new milling and turning machines large enough to handle the massive cast-iron castings, which weigh 20,000 and 15,000 pounds, respectively.
Co-owner Michael Medwid said the new facility and equipment will enable the company to machine the parts much faster than before. He anticipates a need for about 20 new workers over the next year to keep up with demand.
"It's a lot different than automotive," he said. "We're forming basically partnerships with our customers where automotive has always been (a situation where) they really haven't been willing to partner up."
Michigan has a little more than 55 megawatts installed through wind turbines in the Thumb, in Traverse City and in Mackinaw City. Another 60 megawatts are currently under construction, according to the American Wind Energy Association.
Much more could be on the way if state lawmakers, as expected, approve renewable portfolio standard legislation that would require that a certain amount of the state's electricity come from renewable sources.
Jackson-based Consumers Energy has already cobbled together more than 20,000 acres in easements for locating future wind farms, which would each require about 30 to 40 wind turbines on 3,000-acre parcels. Preliminary studies show that those wind farms would create thousands of new construction jobs and hundreds of new operation jobs, to say nothing of manufacturing work, said Dennis Marvin, a communications director for the utility.
For now, much of the work in utility-scale turbines is coming from outside the state.
Pittsburgh-based Allegheny Technologies Inc. is spending $15 million to upgrade a foundry in Alpena to cast and machine large iron hubs and baseplates for large wind turbine makers based in the U.S. and Europe. The project, which last year won state and local tax incentives worth about $3.4 million, is expected to create 150 jobs.
"It's an interesting transition story," said company spokesman Dan Greenfield. "It was a company that was in the automotive business, (the foundry was) vacated and then from there we bought the facility and we've been upgrading the facility."
The plant will double production capacity for subsidiary ATI Casting Service, he said.
"We have another facility in La Porte, Ind. that reached maximum capacity and we needed another facility very rapidly as demand from the wind energy market grows. The Alpena facility was kind of ideal to make that transition," Greenfield said.
In Albion, Patriot Solar Group, a spinoff of a company that makes parabolic satellite dishes, is manufacturing photovoltaic collectors, PV panels, mounting systems and frames. And Ann Arbor-based Danotek Motion Technologies LLC plans a move to a larger facility in Plymouth, where it will manufacture variable-speed permanent magnet generators for use in wind turbines. The new facility is expected to eventually employ 141.
While the upfront expenses for retooling have been considerable for Three M, Medwid said it's been worth it.
"I think we have the potential to get as much business as we can do for the foreseeable future," he said.