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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Siemens AG's (NYSE:SI) (Munich, Germany) U.S. wind-power business is gusting, propelled in large part by developers eager to build projects that are eligible for federal Production Tax Credits (PTCs). Those PTCs are worth about 2.2 cents per kilowatt-hour of electricity generated for a period of 10 years, assuming the projects are operating by yearend 2016.
Federal PTCs are not the only driver of U.S. wind-project development, of course, but they are a significant driver. Another longtime driver, state renewable portfolio standards (RPS), are becoming less important as states near or attain their mandated percentage of electricity produced by renewable generation. For more on the outlook for renewable generation in the U.S., see May 5, 2015, article - U.S. Solar, Wind Power to Continue Growth in 2015.
There is no federal RPS, but President Obama's Clean Power Plan could spur future renewable development, assuming it survives court challenges.
In recent weeks, several project developers have selected Siemens equipment for their projects, including the 150-megawatt (MW) Fowler Ridge Windfarm in Indiana, which will supply electricity to a web services data center operated by Amazon.com (NASDAQ:AMZN) (Seattle, Washington). Another recent wind-power win for Siemens Corporation (Washington, D.C.), a division of Siemens AG, is the decision by developer Wind Quarry (Montrose, Colorado) to use that supplier's equipment at the 103-MW Willow Creek Windfarm in South Dakota.
In mid-May, at the WINDPOWER '15 conference and exhibition organized by the American Wind Energy Association (AWEA) (Washington, D.C.), Siemens' executives unveiled a new turbine model, the SWT-2.3-120, which features a 120-meter rotor that will generate about 10% more electricity from slower wind speeds averaging 17 miles per hour. By producing more electricity from lower wind speeds, the new Siemens equipment will help lower the cost of energy from its windfarms, thus strengthening the economic viability of projects that lack high-quality wind resources. The new equipment also offers improved performance at higher altitudes and under a wider range of temperature conditions than predecessor models.
"With wind power becoming an increasingly important part of the U.S. energy mix, we have developed our new turbine to meet the needs of our customers in the United States and throughout the Americas," said Jacob Andersen, chief executive for onshore Americas in the Siemens Wind Power and Renewables Division, in a statement released at the WINDPOWER event. "Moreover, we are proud to support clean energy jobs in our blade manufacturing facility in Iowa, at our nacelle assembly plant in Kansas, our R&D center in Colorado and other locations throughout the U.S."
The company added that the SWT-2.3-120 was developed with an eye toward areas with medium to low wind conditions, which are prevalent in markets within the Americas.
Industrial Info is tracking 31 U.S. windfarm projects valued at $8.36 billion that are under construction. The states with the most projects under construction are:
It looks like Siemens will be getting a larger share of the U.S. onshore windpower market. Some of its other recent "wins" include:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Federal PTCs are not the only driver of U.S. wind-project development, of course, but they are a significant driver. Another longtime driver, state renewable portfolio standards (RPS), are becoming less important as states near or attain their mandated percentage of electricity produced by renewable generation. For more on the outlook for renewable generation in the U.S., see May 5, 2015, article - U.S. Solar, Wind Power to Continue Growth in 2015.
There is no federal RPS, but President Obama's Clean Power Plan could spur future renewable development, assuming it survives court challenges.
In recent weeks, several project developers have selected Siemens equipment for their projects, including the 150-megawatt (MW) Fowler Ridge Windfarm in Indiana, which will supply electricity to a web services data center operated by Amazon.com (NASDAQ:AMZN) (Seattle, Washington). Another recent wind-power win for Siemens Corporation (Washington, D.C.), a division of Siemens AG, is the decision by developer Wind Quarry (Montrose, Colorado) to use that supplier's equipment at the 103-MW Willow Creek Windfarm in South Dakota.
In mid-May, at the WINDPOWER '15 conference and exhibition organized by the American Wind Energy Association (AWEA) (Washington, D.C.), Siemens' executives unveiled a new turbine model, the SWT-2.3-120, which features a 120-meter rotor that will generate about 10% more electricity from slower wind speeds averaging 17 miles per hour. By producing more electricity from lower wind speeds, the new Siemens equipment will help lower the cost of energy from its windfarms, thus strengthening the economic viability of projects that lack high-quality wind resources. The new equipment also offers improved performance at higher altitudes and under a wider range of temperature conditions than predecessor models.
"With wind power becoming an increasingly important part of the U.S. energy mix, we have developed our new turbine to meet the needs of our customers in the United States and throughout the Americas," said Jacob Andersen, chief executive for onshore Americas in the Siemens Wind Power and Renewables Division, in a statement released at the WINDPOWER event. "Moreover, we are proud to support clean energy jobs in our blade manufacturing facility in Iowa, at our nacelle assembly plant in Kansas, our R&D center in Colorado and other locations throughout the U.S."
The company added that the SWT-2.3-120 was developed with an eye toward areas with medium to low wind conditions, which are prevalent in markets within the Americas.
Industrial Info is tracking 31 U.S. windfarm projects valued at $8.36 billion that are under construction. The states with the most projects under construction are:
- Texas, with eight projects totaling 2,795 MW
- Oklahoma, with six projects totaling 1,419 MW of projects
- Iowa, with two projects totaling 1,400 MW
- Maine, with three projects totaling 814 MW, and
- Colorado, with two projects totaling 526 MW
It looks like Siemens will be getting a larger share of the U.S. onshore windpower market. Some of its other recent "wins" include:
- Highland Windfarm, a 499-megawatt (MW) project in Iowa that is under construction. It is owned by Berkshire Hathaway Energy (Des Moines, Iowa), a subsidiary of Berkshire Hathaway Incorporated (NYSE:BRKA) (Omaha, Nebraska). Construction of this $900 million project is scheduled to be completed by yearend 2015. Berkshire Hathaway Energy will use 218 of Siemens' 2.3-MW turbines.
- Macksburg Windfarm, another Iowa project being built for Berkshire Hathaway Energy (formerly known as MidAmerican Energy), will use 108 of Siemens' 2.3-MW turbines. That 250-MW windfarm, valued at about $500 million, is scheduled to finish construction later this year.
- A third Iowa project, the Adams County Windfarm, will use 64 Siemens' 2.3-MW turbines. That 147-MW project, scheduled to kick off in early 2016, has a total investment value of $280 million. Once again, the client is Berkshire Hathaway Energy.
- Whitewater Windfarm, a 150-MW project in Indiana, will use 93 Siemens 1.3-MW turbines when the project kicks off construction in early 2016. That proposed windfarm, being developed by a subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida), has a TIV of about $250 million.
- Armow Windfarm, a 180-MW project being constructed in Ontario, Canada, is using 92 of the company's 2.3-MW turbines. The $360 million project is scheduled to be operating by yearend 2015.
- Another Ontario windfarm under construction, the Grand Bend Windfarm, will use 31 of Siemens' 3.2-MW turbines. That project, with a TIV of about $220 million, is scheduled to be operating in early 2016.
- Bison Windfarm, a 292-MW project in North Dakota, used 64 Siemens 3-MW direct drive turbines. That $345 million project was completed earlier this year. Minnesota Power (Duluth, Minnesota), a unit of ALLETE Incorporated (NYSE:ALE) (Duluth, Minnesota), owns that facility.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
