2 new turbine contracts, but neither in U.S. by Gregory R. Norfleet · News · August 03, 2012
A Washington energy official’s visit to Acciona Windpower last week highlighted a point the Obama administration wants to make about tax credits for the wind industry and others: the West Branch facility is on the verge of announcing two new contracts for its turbines, but neither are inside the United States.
David Sandalow, acting U.S. under secretary of energy, visited the local assembly plant July 25 to attract more media attention to the Production Tax Credit, which is set to expire on Dec. 31 unless Congress votes to extend it. President Obama called for the extension, but both Republican and Democrat members of Iowa’s Congressional delegation — all of whom want the PTC extended — say election-year politics stalled the bill. Baker told Sandalow that wind energy runs about 8.5 to 9 cents per kilowatt hour; the PTC gives 2.2 cents credit for each kilowatt hour for 10 years.
“There’s no question that the loss of the PTC would have a damaging effect on (wind turbine) orders in the United States,” Sandalow said.
Acciona Windpower CEO Joe Baker and Vice President of Operations and Services Bill Morgan gave Sandalow a tour of the plant, telling him that they have no new contracts inside the United States.
“I’ve traveled around the world, talking to other countries, and places like China and Germany are investing heavily (in wind energy),” Sandalow said. “The United States has been a historical leader in (alternative energy) but we can’t take that for granted. We must maintain that edge.”
Acciona already has 3MW turbines operating in Europe and other nations, and Baker said that the two new contracts would put more 3MW turbines, built in West Branch, in Canada and Mexico. Acciona has only sold 1.5MW turbines in the United States; the 3MW versions are designed to produce electricity in lower wind conditions. He said the first contract will keep production and staffing at current levels and carry Acciona through 2013; the second contract would extend production into 2014 and would likely require Acciona to hire more staff. Official announcements could come in less than two months.
Sandalow also that day visited the Keystone plant in Des Moines, learning more about wind energy in Iowa. He said that 20 percent of Iowa’s electricity comes from wind, and the industry supports more than 5,000 jobs. Baker said 114 of those jobs are in West Branch.
The under secretary said he was surprised at the up-close size of the turbines, and the complexity of the technology.
Baker also asked about finding qualified workers. Baker said that, with the University of Iowa nearby, Acciona has “no problem with recruiting.”
“We can get what we want,” he said during the tour.
Baker said Kirkwood Community College and UI work well with the wind industry.
“The University has a terrific College of Engineering,” he said, “and they have strong theoretical (emphasis). (The students) are really jazzed about the (wind energy potential) and what they do. I worked in other industries where it wasn’t that exciting.”
Acciona last month began construction on two 3-megawatt wind turbines in Mechanicsville — a demonstration site for potential investors — and plans to formally show its progress to the community in August. Baker said that about 80 percent of its 1.5MW turbines are built with local components and, though construction of 3MW is limited to the two for Pioneer Grove, Acciona has 8 percent of the components made locally.
The wind farm in Mechanicsville will include the first concrete tower for a wind turbine in the United States. If it proves successful, Acciona believes the 100-meter concrete tower will mean less-expensive construction since concrete towers can be built on-site. The second tower, made of steel, will be 92 meters tall and being manufactured by one of Acciona’s plants in Spain.
Sandalow said he hopes Congress can “come together” on the PTC.
“It ought to be bipartisan,” he said. “It’s low taxes and more jobs.”
U.S. Sen. Chuck Grassley (R) and U.S. Rep. Dave Loebsack (D) visited Acciona this summer prior to Sandalow’s visit. Baker said he hopes the attention from their visits will help “make the public more aware” of the industry’s desire to see the PTC extended.
Baker said Acciona, in the United States, is a “niche player” against giants like General Electric, because it controls less than 5 percent of the market.
“But we believe ... we have high-quality machines,” he said. “We’re not trying to take a big share.”
Globally, however, Acciona is “up there with the rest” of the large wind turbine companies, Baker said.
Baker said UI, Kirkwood, the State of Iowa and the City of West Branch were all “helpful and useful” in helping them choose the West Branch location.
“They presented 40 to 50 people in the room” to convince Acciona’s representatives, he said.