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Wind woes go beyond tax credit
Credit: Dennis Darrow | The Pueblo Chieftain | via www.energycentral.com 25 August 2012 ~~
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Even if a federal tax credit is extended, the U.S. wind energy market appears headed for a lull.
Far fewer U.S. wind turbine orders appear in the offing for 2013 and 2014, according to the agency’s latest Wind Technologies Market report released Aug. 15.
The forecast isn’t good for Vestas and other U.S. wind turbine makers, who in recent days have announced some layoffs while leaving the door open for more job cuts as orders slip.
“Even with a (Production Tax Credit) extension . . . most predictions are for more modest wind power additions in the near term,” the report states.
Several industry analysts expect orders to drop by more than half in 2013 and 2014 even if Congress votes to extend the tax credit, according to the report.
Absent the credit, orders could sink 80 percent, some of them say. Vestas CEO Ditlev Engel also warns of a potential 80 percent dropoff in orders, citing past sales slowdowns and analysts’ forecasts.
The challenges facing the industry extend beyond the tax credit. The Energy Department report lists a number of
them:
–Continued low natural gas and wholesale electricity prices, which make wind energy less attractive to utilities and independent power providers.
–Less unmet demand under state renewal energy mandates.
Some of the most aggressive renewable energy states, such as Colorado, are ahead of schedule in meeting their mandates while other states aren’t as driven to boost renewable energy supplies.
–A lack of electricity transmission lines.
–A slowdown in the growth of electricity demand.
–In some regions, growing demand for solar.
The coming slump will jeopardize the wind industry’s announced 2008 goal of providing 20 percent of the nation’s electricity by 2030, the agency said.
Even benefiting from a surge in projects through this year, “All of the projections . . . even those that assume PTC extension . . . fall short of the annual growth envisioned,” the agency said.
The U.S. downturn comes with Vestas also in the grips of slowdown in its non-U.S. sales.
This week, the Denmark-based company announced plans to eliminate another 1,400 jobs globally. The cuts come on top of 2,335 job cuts announced in January.
The Danish company now expects to employ 19,000 employees worldwide at the end of the year, down about 20 percent from nearly 23,000 at the end of 2011.
The company has remained largely silent on its plans for its estimated 1,600 U.S. workers.
The company two weeks ago cut about 90 workers at its 450-worker Pueblo tower plant and last week laid off about 30 employees in Brighton.
It also has cut about 100 of the 400 jobs at its U.S. sales and service headquarters in Portland, Ore., according to the Oregonian newspaper in Portland.
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