Archives

Could Wind Power Be The Wind Beneath Manufacturing's Wings?

BY CHARLES SHEEHAN, AP BUSINESS WRITER

PITTSBURGH (AP) Two industries traditionally at odds - one new and flourishing, the other older and stumbling - could help each other in the coming years if a recent series of multimillion-dollar deals are any indication.

The nation’s burgeoning wind power industry just might prove to be a much-needed shot in the arm for beleaguered American manufacturers.

As the percentage of power generated by wind increases, industry experts and manufacturers say energy companies will turn increasingly to U.S. manufacturers to supply the nuts and bolts for the high-tech turbines sprouting up along the country’s windiest ridges. So far, Europe has dominated the manufacturing of wind power equipment because it is a well-established energy source there.

As many as 2,500 megawatts of power capacity from U.S. wind farms is expected to be brought on line next year, a record, according to the American Wind Energy Association. Currently, the country has a capacity of slightly more than 6,300, according to the industry group.

Electricity generated by alternative energy is expected to reach 22,000 megawatts in the next decade, thanks in part to laws in 17 states that require utilities to purchase a portion of their power from those sources.

And states that have lost the most manufacturing jobs have the most to gain from wind power, according to a recent study. The 20 states that would benefit most are those that lost 76 percent of the manufacturing jobs over the past 3-1/2 years, according to a study funded by the Department of Energy and the Energy Foundation.

“What has been a boutique business is quickly turning into a mainstream energy source and there’s a huge opportunity for manufacturing here,” said Mike Vickerman, a member of Wisconsin Gov. Jim Doyle’s energy task force.

American manufacturers have slowly begun making components for towers and turbines. Ninety firms now do so, but more are on the way.

At Hodge Foundry Inc. in northwest Pennsylvania, a manufacturing region in a state that has been hammered by job losses, about two percent of production has been shifted to hubs and bed plates for the massive wind towers, said Joseph Simko, president and general manager of the Greenville foundry.

The market is just now reaching levels where investment is worth it, said G. David Przybylek, managing director of Pittsburgh’s Commonwealth Capital Group, which acquired the Hodge Foundry a few years ago.

“The next big market for the wind industry is the U.S. As a result, most of the leading wind equipment manufacturers are looking to increase or establish assembly capabilities in the states,” Przybylek said in an e-mail. “Assuming the forecasts for the wind industry hold true (even the most conservative of which seem quite bullish), we would anticipate an increase in employment at HFI.”

Two weeks after President Bush signed a one-year extension of a tax credit for the production of electricity from wind, GE Energy announced $1.3 billion in orders and commitments for new domestic wind projects.

“GE is always looking for qualified suppliers and obviously, we will be ramping up,” said Dennis Murphy, a spokesman for the Atlanta company.

In Pennsylvania, Gov. Ed Rendell announced late last month that industry giant Gamesa Corp., of Spain, will base its U.S. headquarters and East Coast development offices in Philadelphia and it will also open a manufacturing facility in the state that will create hundreds of manufacturing jobs.

Wisconsin is in the late stages of siting a facility that may yet become the first devoted solely to the manufacture of towers and components for the wind industry, said Vickerman, who is also the executive director of RENEW Wisconsin, a nonprofit that promotes renewable energy.

“There’s going to be a crying need for companies producing new components, from towers to gear boxes, cell covers, hubs, blades, because it’s only going to get more expensive to ship these things long distances,” Vickerman said.

According to the Renewable Energy Policy Project, which recently completed a study for the Department of Energy, there are 16,163 firms in 50 states that make items similar to those used in the wind industry.

Researchers reported that if the country created 50,000 megawatts in capacity from wind power, about half of the AWEA goal, and more than twice what is predicted in the next decade, it would create 150,000 new manufacturing jobs.

But manufacturers may remain hesitant to expand production if the federal tax credit is not extended for longer than two or three years, which has been the case in the past.

Researchers with the Renewable Energy Policy Project warn that manufacturers that do get into the wind industry face some of the same challenges that led to previous layoffs.

Archives