Market Uncertainty Dominates Atlanta Wind Conference

Wind companies expect the domestic market to slow down until at least the second quarter of 2013 amid regulatory uncertainty as to whether the US Congress will extend its production tax credit for the industry.

A bipartisan panel of politicians urged Congress to extend the credit, which expires at the end of this year, at the national American Wind Energy Association convention in Atlanta June 4-6.

Keynote speakers included Karl Rove, senior advisor and deputy chief of staff to President George W. Bush, and Robert Gibbs, former press secretary to President Barack Obama.

Other speakers included Govs. Sam Brownback, a Kansas republican, and Mike Beebe, an Arkansas democrat.

The conference boasted a strong international presence from manufactures and supply companies with more than 14,000 attendees and over 900 exhibitors at the conference, which is the largest annual industry gathering in the country.

Atlanta was chosen as the host site thanks to its large conference space as well as its growing role in the wind energy’s domestic manufacturing supply chain.

Georgia as a whole hosts more than 30 countries that manufacture wind energy components and service products, which compares well to the nearly 100 wind-related factories in the entire Southeast, according to AWEA and the Georgia Department of Economic Development.

A plethora of industry executives said a quick extension of the 2.2-cent-a-kilowatt-hour credit for renewably produced electricity was especially crucial to market expansion and job creation in the United States in 2013.

That’s because industry order schedule cycle and construction planning process typically lags behind delivery by around 18 months, which means that companies have to plan years in advance, according to Denise Bode, CEO of AWEA.

So while GE Wind, a division of General Electric Co., expects to have a busy 2012 and first half of 2013, it expects domestic business to slow down considerably by the end of next year, said Victor Abate, vice president of GE Energy’s Renewables division.

Mr. Abate also said the company would be offsetting the slack in its to domestic market with increased business internationally, particularly in countries like Canada, Brazil and Turkey for 2013.

Other companies like ZF Wind Power said the uncertain nature of the PTC has created a boom-bust cycle in the wind industry that makes its innovation and expansion difficult, particularly locally where it operates a $100 million gearbox factory that opened last November in Gainesville, Ga.

“We would like to employ more,” said Elizabeth Umberson, chief materials officer for ZF.

However, the factory, which currently employs about 150 people, has held off from hiring an additional 100 jobs until it can better anticipate the market, Mrs. Umberson said.

“The expiration of the production tax credit at the end of this year has had a very negative effect on our orders and backlog,” she said.

 

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