Vestas Wins Second U.S. Wind Turbine Order in Three Days

December 21, 2013 by  
Filed under Green Energy News

Vestas Wind Systems A/S (VWS) won a second
major U.S. order in three days before the country is due to end
a tax break for wind-farm projects at the close of the year.

The Danish producer clinched a 220-megawatt deal to equip
two Texan projects by Electricite de France’s U.S. renewables
unit, the manufacturer said today in an e-mailed statement. The
company may also supply EDF Renewable Energy with as much as
1,174 megawatts of turbines under a “master-supply” agreement
that was expanded from 750 megawatts, Aarhus-based Vestas said.

Developers have until the year-end to begin building to
qualify for the so-called production tax credit, which pays
wind-farm owners 2.3 cents for every kilowatt-hour produced.
Vestas has won 1,110 megawatts of orders in the U.S. in just
over three months, after taking none in the first eight months.
That’s a boon for its factories, which are hiring workers.

“We’re looking at a high activity for our factories in
Colorado, which is why we’re hiring hundreds of people,” Chief
Marketing Officer Morten Albaek said today in a telephone
interview. “We also predict high activity level for our
employees in construction and service” for 2014.

Albaek said that while it’s “impossible” to predict when
onshore wind power will be able to compete with conventional
generation without subsidies, more efficient technology makes
the need for assistance “less and less and less.”

Stop-Start Market

“Onshore wind is becoming more and more competitive across
the globe,” he said. “It depends on what subsidies are given
to other energy forms. If everything was equal, then it’s not in
too distant a future.”

Two days ago, Vestas won a 350-megawatt wind-turbine order
from Enel Green Power SpA in Oklahoma, its second-biggest deal
of the year. It’s hiring workers for three of its factories in
Colorado, where earlier in the year it was firing employees.

The U.S. market has been stop-start because of government
flip-flopping on the tax credit. The break was allowed to expire
at the end of 2012, leading to a rush of orders, with the U.S.
adding a record 13,124 megawatts of turbines last year.

That led to a dearth of new projects at the start of 2013,
even when the credit was unexpectedly renewed on Jan. 1.

Under Internal Revenue Service rules, developers can
qualify for the credit by beginning construction this year,
including road-building, pouring concrete or off-site assembly
of turbines. They can also qualify if they incur 5 percent of
the total cost of the project this year, leaving the bulk of
spending and construction for 2014 and 2015.

Vestas shipped 1,313 megawatts of turbines in the U.S. in
2012, more than double its next biggest market in Germany.

To contact the reporter on this story:
Alex Morales in London at
amorales2@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

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