Wind energy industry pulling back and shedding jobs

If the wind doesn’t blow, wind turbines can’t make electricity, and if credit markets don’t flow, the entire wind-energy business grinds to a standstill.

In a nutshell, that’s what’s happening to Suzlon Rotor Corp., which makes turbine blades in Pipestone, Minn. The facility is owned by India-based Suzlon Energy Ltd., the world’s fifth-largest wind-turbine manufacturer, with $3.8 billion in revenue last year.

Suzlon on Friday informed the city of Pipestone that as a result of the downturn in the economy, it would lay off 70 of its 324 workers by Aug. 2, and another 90 between Aug. 30 and Sept. 12. The Pipestone plant was the company’s first blade-manufacturing facility outside of India.

“It’s a disappointing blow to the city,” City Administrator Jeff Jones said. “As a city, we have limited options, other than to hope the economy turns around.”

Suzlon is one of Pipestone’s three largest employers and the layoff announcement comes on the heels of the closure in March of the city’s Bayliner boat manufacturing plant, where 260 people worked.

Officials at Suzlon said the banking crisis has dried up the credit markets for wind-farm developers who buy their equipment, causing sales to fall.

Suzlon’s problems aren’t unique. Clipper Windpower, a California-based wind-turbine manufacturer, cut 90 employees in January, the majority of them from a plant in Cedar Rapids, Iowa, where 309 people worked.

Denmark-based Vestas, the world’s No. 1 turbine maker, in April cut 1,900 jobs, or 9 percent of its work force, due to a worldwide slowdown in demand.

The slowdown in construction of new wind projects is all the more painful because last year was a banner year, with the industry adding a record 8,300 megawatts of wind capacity, or enough to power 2 million homes, according to the American Wind Energy Association.

But of the 18 banks that once provided financing for projects, only about four are still doing so, said Clayt Tabor of Midwest Wind Finance, a Minneapolis company that finances community wind projects.

Banks and developers are waiting for the U.S. Treasury Department to finalize regulations next month that can free up valuable federal grants for renewable energy projects, but the money likely won’t start flowing until September at the earliest, said Gregory Jenner, a partner and tax specialist for Stoel Rives, a law firm that works with wind energy projects.

The credit crunch means projects that developers may have wanted to get into operation this year will be pushed off until next year.

National Wind, a Minneapolis-based developer, has more than 4,000 megawatts of potential capacity tied up in a dozen proposals. It isn’t expecting to get any of them in the ground this year and may start only two or three next year, said Tryg Sarsland, the company’s finance vice president.

The wind-energy association is banking on a national renewable energy standard similar to Minnesota’s, which calls for utilities to produce 25 percent of their electricity from wind or other renewable resources by 2025. But the legislation in Congress has been so watered down that it may not have a dramatic impact on job development in the next five years, said Rob Gramlich, AWEA senior vice president for public policy.

By Leslie Brooks Suzukamo

Pioneer Press

8 June 2009

Tags: Wind power, Wind energy

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