Windfall for the Carolinas: Turbines Likely to Stay Rare in Region, but Firms Profit With a Piece of the Action
By Christopher D. Kirkpatrick, The Charlotte Observer, N.C.
Jul. 10–In the foothills of the Blue Ridge Mountains, where windmills are difficult to build because of state and local restrictions, an old-line manufacturer takes advantage of the wind to save jobs.
PPG Industries near Shelby is spending $20 million over three years to manufacture a high-tech fiberglass for windmill blades. The Western N.C. economy can use the boost, suffering job losses from a raft of layoffs this decade.
“It probably lets us hold on to jobs,” said Greg McInnis, PPG’s production manager. “The North American wind energy market is growing.”
The Carolinas might not be well-suited to host wind power, but their factories and manufacturing mind-set are perfect for making the tools, says the American Wind Energy Association, a nonprofit that promotes the industry.
A windmill, called a turbine, has traditional industrial parts, such as gears, that need to be manufactured. And the growing worldwide market means new jobs in the Carolinas and other manufacturing states hurt from plant closings, according to a federally funded 2004 study.
South Carolina and North Carolina are 10 and 11 on the list of states that would benefit most, according to the study from the Renewable Energy Policy Project.
Demand for wind-powered electricity is up globally. It has been popular in Europe for several decades, and demand is increasing in Asia and North America as pressure to cut greenhouse gases from coal-fired plants mounts. Wind-generated power is considered clean, and windmill construction cheaper and easier than coal-fired plants.
But obstacles remain, such as finding locales willing to accept the often-gangly machines that some say kill birds and mar landscapes. And the popularity of wind, coupled with surging worldwide demand for electricity, has taxed companies that make the turbines, causing a worldwide shortage and price increases.
A federal tax credit for producing wind-powered electricity expires at the end of next year, though it has been renewed by Congress in the past. Some manufacturers, waiting to see what will happen, are cautious about ramping up production.
Even so, a global bull market is underway with demand for parts skyrocketing, said Bob Leker, renewables program manager for the N.C. State Energy Office.
The PPG factory, about an hour’s drive west of Charlotte, used to rely on making a fiberglass for boats, shower stalls and other molded products. But Chinese competition reduced the factory’s workforce from 2,000 only five years ago to about 700, where it is holding steady, McInnis said.
The workers now make a high-tech fiberglass in an upgraded furnace that a Norwegian partner, Devold AMT, weaves into sheets used for windmill blades. The future is looking bright as demand for the windmill blade material increases by about 30 percent a year, McInnis said.
Helping fuel the domestic wind-energy demand are government requirements. Twenty-one states and Washington, D.C., mandate a certain percentage of electricity come from renewable energy, such as solar and wind. So power companies have to create it or buy it from other sources. The N.C. General Assembly is likely to pass its own version this year. And Congress is considering a national standard.
But beyond government mandates, wind’s growing popularity is powered by potential profits, giving it a leg up over some of its green cousins.
More utilities are investing in wind production to make a profit. Duke Energy this year purchased Tierra Energy, a wind company based in Austin, Texas. Duke plans to sell the wind-generated power in some Western states.
“The return on the (wind) business is quite attractive,” said Wouter van Kempen, president of Duke Energy Generation Services.
In South Carolina, General Electric saved jobs at its Greenville plant in 2005 by adding wind-powered turbines to its line of gas-fired turbines and jet engine parts.
The plant, with a peak workforce of about 3,300 earlier this decade, laid off about 1,000 five years ago, citing a decline in demand for the natural gas turbines. The company ran out of space for wind turbine production at its Pensacola, Fla., plant and added about 75 wind turbine jobs in Greenville. The company also moved its headquarters for turbine engineering, including wind, from Schenectady, N.Y., adding salaried engineering jobs, spokesman Mark Reilly said.
GE employs 2,600 at the plant and expects wind turbine demand to continue to increase, he said.
Investment in new U.S. wind projects increased from $50 million in 2000 to $3.5 billion last year, when U.S. wind energy reached its highest level, accounting for 0.07 percent of domestic power production, according to the American Wind Energy Association.
The 2004 jobs study from the Renewable Energy Policy Project analyzed the location of companies already able to produce one or more of 20 major parts needed to construct a windmill turbine. It concluded that if windmill installations increased eight-fold, North Carolina could see 4,661 new jobs and $1.55 billion in new investment, and South Carolina 4,964 new jobs and $1.65 billion in new investment.
John Clark, director of the state-run S.C. Energy Office, said the S.C. General Assembly is not debating a renewable energy requirement. He said the state has not actively recruited the wind business.
“It’s happening on its own,” he said.
Local utilities are not likely to sink large investments into Carolinas wind power generation. N.C. law forbids development at mountain ridgelines, where windmills might operate more effectively, and some lower areas, such as Blowing Rock, are outlawing or debating outlawing windmills as unsightly and noisy.
Another option for the Carolinas is to build them off the coast, an idea in early stages of research and certain to create extra cost and environmental protest.
Ethan Berkwits, director of marketing for the Winslow Green Growth Fund, said clean energy investment used to be a fad, but hard government mandates and improved technology have changed the story. The company has one-third of the fund’s portfolio in wind and other renewable energy, he said.
“When our fund was first launched a few years back, there weren’t many companies to choose from,” Berkwits said. “Now, on a monthly basis, we’re seeing new ones.”
Mandates for Renewable Energy
The list of states requiring renewable energy production is growing, with North Carolina likely to be added by the end of the current legislative session. The N.C. Senate passed a bill last Tuesday that would require 12.5 percent of power come from renewable energy, such as wind and solar, among others. The N.C. House also plans to take up the issue, but a bill is stuck in committee.
A recent study commissioned by the N.C. Utilities Commission said the state could produce 10 percent of its electricity from renewable sources, though wind generation is not easily accomplished in the Carolinas.
Clemson and Coastal Carolina universities, together with S.C.-owned utility Santee Cooper, are studying wind patterns on Waties Island, S.C., off the coast near the Carolinas border. The research into wind is prompted by its commercial possibilities, said John Clark, director of the S.C. Energy Office.
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