2/6/2012 11:12:00 AM
NEWS BRIEFS
With key federal tax credit expiring at year’s end, suppliers to the wind energy market are feeling unsettled about long-term growth prospects, Crain’s Cleveland Business reports.
Power developers are pushing to complete their U.S. projects this year, but few have any plans for installations in 2013.
“The production tax credit expires in 2012 and, with uncertainty going into 2013, it’s caused many developers to accelerate their turbine installations this year. So we’ll have a bumper year this year,” Cardinal Fastener president John Grabner told Crain’s. “But if the (credit) does not get passed for an extension, it could be a cliff in 2013.”
Cardinal Fastener supplies large bolts used in wind turbines.
Observers point to recent announcements as proof that the order pipeline is rapidly emptying.
Not could be — will be, says Ed Weston, director of the Cleveland-based Great Lakes Wind Network.
“The pipeline is already emptying fast,” Mr. Weston said.
Because it takes so long to site, permit and develop a wind farm, Mr. Weston, said developers plan their projects years in advance. That means they’re either pushing to finish installations this year before the tax credit expires, or are not pushing them at all in the United States, Mr. Weston said.
Recent announcements support Mr. Weston’s assertion.
Last month the Danish turbine maker Vestas began cutting 2,335 jobs worldwide, including 182 in the U.S. The company could end up cutting another 1,600 of its U.S. workers if the United States does not extend or renew its production tax credit, according to Crain’s.
Spanish wind energy developer Iberdrola Renewables made a similar prediction.
For companies that make bolts and other parts for final turbine installations, the slowdown will take the longest to reach them. Grabner predicted his company will be busiest in August and September this year as it makes bolts for final installations, with a slowdown in its wind business to follow.
“We are all nervous about this tax credit issue,” an unnamed manufacturing executive told Crain’s. “All the big wind companies are rushing toward the cliff right now.”
A central reason for concern among wind energy producers? The plunge in natural gas prices, which have outstripped the efficiency of electricity produced from wind.
“Who would have guessed that natural gas would go from $11 to $2” per thousand cubic feet, stated Ed Weston, director of the Cleveland-based Great Lakes Wind Network.
But the wind industry hopes to persuade Congress to renew its tax credit.
MEDIA SPOTLIGHT — With key federal tax credit expiring at year’s end, suppliers to the wind energy market are feeling unsettled about long-term growth prospects, Crain’s Cleveland Business reports.
Power developers are pushing to complete their U.S. projects this year, but few have any plans for installations in 2013.
“The production tax credit expires in 2012 and, with uncertainty going into 2013, it’s caused many developers to accelerate their turbine installations this year. So we’ll have a bumper year this year,” Cardinal Fastener president John Grabner told Crain’s. “But if the (credit) does not get passed for an extension, it could be a cliff in 2013.”
Cardinal Fastener supplies large bolts used in wind turbines. The company was purchased at auction by the Würth Group in November 2011.
Observers point to recent announcements as proof that the order pipeline is rapidly emptying.
Last month the Danish turbine maker Vestas began cutting 2,335 jobs worldwide, including 182 in the U.S. The company could end up cutting another 1,600 of its U.S. workers if the United States does not extend or renew its production tax credit, according to Crain’s.
Spanish wind energy developer Iberdrola Renewables made a similar prediction.
For companies that make bolts and other parts for final turbine installations, the slowdown will take the longest to reach them. Grabner predicted his company will be busiest in August and September this year as it makes bolts for final installations, with a slowdown in its wind business to follow.
A central reason for concern among wind energy producers? The plunge in natural gas prices, which have outstripped the efficiency of electricity produced from wind.
“Who would have guessed that natural gas would go from $11 to $2” per thousand cubic feet, stated Ed Weston, director of the Cleveland-based Great Lakes Wind Network.
But the wind industry hopes to persuade Congress to renew its tax credit.
Editor’s Note: Articles in Media Spotlight are excerpts from publications or broadcasts which show the industry what the public is reading or hearing about fasteners and fastener companies.
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