November 7, 2012

Wind tower sales in Manitowoc rise as developers rush to complete projects

By Thomas Content of the Journal Sentinel | Nov. 7, 2012 |

Sales of wind towers made in Manitowoc accelerated in the third quarter as wind developers rushed to complete projects before federal tax credits expire at the end of the year.

Broadwind Energy Inc. said Wednesday that sales of the wind towers it makes in Manitowoc rose 26%, to $37.4 million, in the third quarter. Sales are expected to contract somewhat this quarter, the company said.

The Naperville, Ill.-based firm also said that it remains committed to the wind market despite the industry’s expected contraction next year.

Wind developers are installing a record number of wind turbines across the country this year, with the American Wind Energy Association’s most recent report saying 13,000 megawatts are set to be installed this year, boosting the nation’s wind power capacity to more than 60,000 megawatts by year-end.

Wisconsin has seen construction of small wind projects this year but hasn’t seen a wave of construction of big projects because utilities have already built or bought enough to comply with the state’s 2015 renewable energy mandate.

Broadwind said the overcapacity in the wind tower manufacturing sector has been addressed a variety of ways – with some manufacturers closing plants, others shifting to production for other industries.

In addition, imports of towers from Vietnam and China have slowed substantially after the U.S. Department of Commerce imposed tariffs this year, said Peter Duprey, president and chief executive.

“We are not looking at a material slowdown in our tower facility in the first half of next year,” said Stephanie Kushner, Broadwind’s chief financial officer, during an investor conference call Wednesday.

The increase in production in Manitowoc also helped extend the sailing season for the S.S. Badger car ferry, because the ferry was shipping tower components from Manitowoc to Ludington, Mich.

Meanwhile, the re-election of President Barack Obama and Democrats’ retention of control in the U.S. Senate could prompt action to extend wind energy tax credits during the lame-duck session of Congress.

The American Wind Energy Association this summer signed on to a plan that would extend the credits but call for their phaseout.

“If anything, it’s likely to be a positive,” Duprey said of Obama’s re-election. “Our hope is that messages were sent to the Congress yesterday that we need cooperation, and we need to resolve some of these issues. There has been bipartisan support” for the wind tax credits.

Across the country, wind component suppliers have been laying off workers and scaling back production as wind developers have moved to complete construction of wind projects by the end of the year.

For Broadwind, production may slow somewhat in the second half of this quarter as a result, but the company has secured contracts to help it weather the contraction.

Broadwind was awarded $11 million in new tower orders in the last quarter, but solidified its production schedule for 2013 when it won a $31 million order for towers last month.

“We had to navigate through a very difficult period in the wind energy business,” Duprey said. “We are feeling more confident about this business segment in 2013.”

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