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The goal for wind blade fabricators today is reliable quality and delivery to maintain trust because their customers are committing to very big contracts and need suppliers who will help them make good on their commitments. The challenge for suppliers is to support this need while also working on longer-term projects that can transform and grow the market.
(Published on May 2008 – JEC Magazine #40)
CLAUDE VAN HOORNWEDER GLOBAL WIND ENERGY MANAGER OCV TECHNICAL FABRICS
WISDOM DZOTSI MARKETING LEADER, AMERICAS OCV REINFORCEMENTS
Investors today are often accused of having a short-term focus and only being interested in this quarter’s results. Critics pine for the days when a longer-term outlook was more prevalent. In wind energy today it is clear that both perspectives must be aggressively pursued for long-term, profitable market growth. From our perspective as materials suppliers, here is an overview of the situation today in wind energy:
Wind turbine producers are currently obsessed with installed cost. They have a full order book and can sell everything they make. Production is currently being constrained by a lack of gear boxes and bearings. We are also seeing bottlenecks around the production of blades and other components. It is an oversimplification to say wind energy “sells itself” but it is certainly no longer unproven technology. Wind energy is by far the most widely used form of renewable energy and it has gained a certain momentum. The people who make equipment no longer need to sell the concept; it is getting a substantial push from governmental agencies, power companies, communities, investors and sustainability promoters.
Some years ago there was a lot of risk involved in the wind energy market. While there is still plenty of risk, more and more we are seeing capacity being built by companies with sales contracts already in hand. Richard Morrison, President and CEO of Molded Fiber Glass Companies (MFG), a privately held enterprise headquartered in Ashtabula, Ohio, USA, told us MFG is delighted to participate in the growth of the wind energy market today but it has been a bumpy ride. His company got into the market in the late 1980s and it was very up and down before several large companies got into the business and it took off.
In the wind blade fabrication business, companies don’t build capacity and hope that someone will buy. Wind blade fabricators – where they are independent from the turbine manufacturers – go into a market with a partner who will buy their initial production. This works well for both parties because there are assured sources of supply and purchase. How long the relationship lasts depends on how well they work together and therefore building trust is very important to both parties. In recent years some very large companies have entered the market and they are committing to very big numbers for turbine delivery. They need a reliable supplier who knows what he is doing to assure them they can make good on their commitments. The goal for wind blade fabricators is therefore now reliable quality and delivery to build or maintain trust. If a fabricator finds a problem in a blade, it can’t be shipped. The problem needs to be rectified before the blade goes to the field and damages the company’s relationship with its customer.
There is also a need for raw material supply security as the industry continues to grow. Significant investments in new raw material capacity will be needed to support the industry. Shortages of key raw materials such as glass fiber and steel could potentially reduce growth. Key enabling raw materials such as glass fiber are strategically important for long term market growth. As a supplier to fabricators in the wind energy market, OCV Reinforcements and OCV Technical Fabrics understand the focus on trust and raw material supply security, and we are committed to supporting the business with reliable quality and delivery.
As we write this article, the most recent open house was held in the US for a new wind blade fabrication facility built by Vestas Wind Systems A/S in Windsor, Colorado. Headquartered in Demark, Vestas first announced plans to establish a manufacturing facility in the US in November 2006 and broke ground in June 2007. Less than six months later the company announced that it was expanding production capacity at the factory from 1,200 to 1,800 blades annually.
Last November, GE Energy announced that it had signed a blade manufacturing agreement with TPI Composites, Warren, R.I. In support of the agreement, TPI plans to build a new 316,000-squarefoot (29,360m2) facility in Newton, Iowa. That announcement followed a groundbreaking ceremony in November by Molded Fiber Glass Companies for a new wind turbine manufacturing plant in Aberdeen, S.D. The plant will fabricate blades for GE’s 1.5-MW machine, one of the most widely used wind turbines in the world. GE recently reported that it has increased its wind turbine production by 500 percent since 2004. Its wind revenue was more than $4 billion in 2007. As may be evident from these projects, the US has become the fastest growing wind market worldwide. Twentyfour states have now adopted mandates and guidelines that require a certain percentage of energy be utilized from renewable sources in their states.
According to the American Wind Energy Association, the U.S. installed 5,244 megawatts of capacity in 2007, expanding the nation’s total wind power generating capacity by 45 percent in a single calendar year and investing over $9 billion into the economy.
The new wind projects account for about 30 percent of the entire new power-producing capacity added nationally in 2007 and will power the equivalent of 1.5 million American households annually. The U.S. wind power grid now totals 16,818 megawatts and spans 34 states. American wind farms will generate an estimated 48 billion kilowatt-hours of wind energy in 2008, just over 1 percent of US electricity supply, powering the equivalent of over 4.5 million homes. The Wall Street Journal recently reported that the US has overtaken Spain as the world’s second-largest wind power market, after Germany. A recent study by Emerging Energy Research, a consulting firm in Cambridge, Massachusetts, U.S., projected $65 billion in investment from 2007 to 2015. Hydro-Quebec in Canada recently released a tender to purchase 2,000 megawatts of wind power from private developers with wind-farm projects to be put into operation between 2010 and 2015. Supply contracts for the new wind farms will generate about $4 billion in investments. There will need to be several new facilities across Canada to build the blades and nacelle covers. And since 1 megawatt of capacity requires between 6.5 and 7 metric tonnes of glass fiber, that one contract will require the production of more than 15,000 metric tonnes of glass fiber. India and China have also been developing wind energy. In these countries wind power allows authorities to provide electricity to isolated rural populations. China is planning to produce 15 percent of its electricity with wind by 2020. And while this is the longest section of our article, it reflects only the tip of the iceberg. Similar activities are going on around the globe.
At the end of the day, however, it is about dollars, euros and RMB. The environmental benefits of renewable energy are important but the real driver is the world’s appetite for energy. You can’t have double-digit growth year after year without the economics to support it. Subsidies have helped, but sooner or later wind energy will need to become a stand-alone business. In Denmark and Germany, wind energy is getting less and less support.
With all of the subsidies that exist for various forms of energy, it is difficult to really know the cost of energy. How do you quantify the real cost of nuclear energy, for example, with the unknown cost of long-term storage of waste? We expect growth in the near term to take place predominately in China, India and North America. There is a drastic need for power in China and wind is a good option there. It doesn’t add to their carbon footprint, which is already substantial, and it doesn’t require the infrastructure that other forms of energy require. India also has a growing appetite for energy. Denmark now gets an average of 20 percent of its annual energy needs from wind energy. On a windy day, the country is able to generate 100 percent of its energy needs with wind power.
Wind project performance has gotten better in recent years and we fully expect this trend to continue. Incremental performance improvements have come through a variety of refinements ranging from improved project siting to advancements in wind turbine and blade technology. New proprietary gel coats have improved blade weathering and UV resistance. Blade profiles have been designed to maximize the potential of whatever wind is available. Fabrication facilities are being built near major wind corridors to minimize delivery costs. Vacuum infusion has become a popular process choice for wind blade fabrication. Infusion has several benefits compared to hand lay-up, both from an environmental and efficiency point of view. It is well-known that infusion reduces VOCs in the work environment. Also important is its ability to evenly wetout very large parts with the correct amount of resin, thus making blades that are less expensive and lighter, and thus better. Other fabricators are using prepregs to enhance material use and performance. And wind blades have become very large. When MFG got into the business they were making what they thought were huge blades – 8.2 and 9.1 meters. Today, most of the blades they make are more than four times that size and the trend to longer blades continues, especially for off-shore installations. The larger 5 megawatt turbines have blades that are 61.5 meters long. A high-performing wind turbine blade must not only have an aerodynamic design, it must also meet mechanical requirements such as rigidity, torsion resistance, and resistance to material fatigue. The end of the blade must not touch the pole, and this gap must be maintained over its 20-year lifespan.
Transforming the Market
Why bother with innovation, new technology and ideas that might increase material, turbine or installed costs when the market is sold out for the next two years? The answer can be found in the potential for market growth. The composites share of the wind energy market is greater than it is in any other form of energy production. But wind energy is currently only a small percentage of all energy used at less than 2 percent. And the industry is currently dependent on subsidies to be competitive. The potential for sustainable growth will be huge when wind energy is able to stand on its own and compete with other forms of energy head-to-head on cost. Wind turbine producers currently think in terms of providing machines at a certain cost; for example, a 2.5 megawatt machine at $3.5 million (±$1.4 million/MW). Most producers are not interested in anything that will increase cost and they are reluctant to embrace innovation. Operators are concerned about installed cost, of course, but they are also focused on operating efficiencies and cost per kilowatt of the electricity they generate. From their perspective, the question is not about lower installed cost but, “How can we drive the cost per kilowatt from seven cents to four-and-a-half cents?” Owens Corning is now working directly with the developers and operators of wind farms. We are looking at the situation from their perspective and asking ourselves and our partners how we can respond. We know the operators are interested in more efficient turbines that can generate more electricity with the same amount of wind. We know they are interested in turbines that require less maintenance. Turbines today also use gearboxes that require attention. The gearboxes and their bearings can fail and need to be replaced. And with blades getting larger and heavier and turning faster, the loads and stress on gearboxes and their bearings have increased. We are working with a partner to develop blades that are lighter and reduce the load on bearings and gearboxes.
Owens Corning has also developed an affordable family of highstrength reinforcements. Trademarked WindStrand™, the products are made with a new high-performance reinforcements platform at a cost substantially lower than competitive materials.
WindStrand reinforcement allow turbine manufacturers to increase blade length by as much as 6 percent and deliver up to 12 percent more power – for up to 20 percent less cost than competing carbonglass hybrid solutions currently on the market. Providing specialty performance at a more affordable cost allows design engineers to take full advantage of the potential benefits of larger blades. We are also working with companies that are developing direct-drive systems that do not require a gearbox.
With 20 percent annual growth forecast for the foreseeable future, wind energy should continue to be an exciting and dynamic market for composites. The market has taken off in the past 10 years and the next 10 should be just as active. With our feet firmly planted in the reality of today’s challenges and our eyes looking to market transformation for the future, we could make wind energy the market that enhances perceptions of composites as an enabling material for the world of tomorrow.