Vestas bullish on building wind turbines in U.S.

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Fri, Jun 10 2011

By Timothy Gardner

WASHINGTON (Reuters) – The United States is ripe for a boost in wind power that would create domestic manufacturing and maintenance jobs as long as the right policies are adopted, said the chief of Denmark’s Vestas Wind Systems, the world’s top supplier of wind turbines.

“The potential over here is enormous,” Ditlev Engel, the president and CEO of Vestas, who visits Washington periodically to meet with lawmakers and others, said in an interview on Wednesday.

Many countries are envious of the United States with its strong wind corridors from South Texas to North Dakota and along the coasts, Engel said.

He said the United States also has lots of available land for wind turbine farms and reliable suppliers.

But first the country has to get serious about improving its aging transmission lines.

“No doubt transmission is major concern,” Engel said.

And after a comprehensive energy bill failed in the Senate last year, Washington must keep renewing tax credits aimed at encouraging development of wind power at the very least. A credit created in 1992 that has been extended in one and two year intervals is set to expire at the end of the year.

Vestas is happy with its decision a few years ago to invest in U.S. manufacturing of turbines for the U.S. market rather than to ship them in from China or Europe, Engel said.

Soaring shipping costs due to high oil prices, and the fall in the value of the dollar have made building turbines in the United States cheaper than importing them.

Vestas, which depends on suppliers for much of the 9,000 components it needs for turbines, sees rising costs structures in Asia but steadier ones in the United States, he said.

MAKE IT IN THE U.S.

The company, the No. 2 wind turbine maker in the United States last year behind GE, employs about 3,000 workers in the country, has a big factory in Colorado, and relies on suppliers from 30 U.S. states for the thousands of components.

The Colorado plant has rail tracks that go right through it that have helped cut domestic shipping costs

As companies in China and India vie for market share, it’s these types of cost cuts that will keep the company competitive, he said.

“Our view is that the competition will further intensify, so being in the region for the region is important for us,” Engel said. “If Vestas had not gone down this path, it would have been very difficult for us.”

Vestas had record North American orders of more than 1,880 megawatts in 2010, but Engel stopped short of saying Vestas would boost U.S. output or build more plants there in the future.

He said the industry has to work harder at communicating the benefits of wind power.

“It seems that many people can more easily relate to a lot of oil in the ground than to a lot of wind in the air,” he said.

Part of the problem is the belief that if you expand renewable power in the United States, the manufacturing jobs would be created in China.

“I think the good news from our industry … is that it is not a worry people need to have. If you want to have more wind in the United States, the best way to do that is make it in the U.S.” he said.

(Reporting by Timothy Gardner; Editing by Marguerita Choy)

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