Wind power hits economic storm

[January 28, 2009]  WASHINGTON (AP) -- Wind power has seen historic growth and the blessing of President Barack Obama -- but it's far from recession-proof.

The American Wind Energy Association reported Tuesday that the amount of electricity generated by wind turbines grew by 50 percent last year and 55 new manufacturing facilities were built to make turbine components.

But the association sees storm clouds ahead.

"The financial downturn has begun to take a serious toll on new wind development," said Denise Bode, the group's top executive, in releasing statistics on the industry's dramatic growth during 2008.

Last year, the U.S. industry gained 13,000 direct jobs in wind turbine and component manufacturing as a growing percentage -- now about half -- of wind turbines and components are now made domestically.

Overall wind-produced electricity still totals just under 2 percent of all electricity generated. But new wind turbines accounted for 42 percent of electricity growth in 2008, almost as big a share as new natural gas plants, said the association.

"Our numbers are both exciting and sobering," said Bode. She said the growth in wind energy production shows the industry is "ready to deliver" on Obama's call to double renewable energy production in three years.

But the industry is not escaping the tough economic times, largely because of the credit crunch that has delayed projects. "We are already seeing layoffs in the area where wind promise is greatest for our economy -- the wind power manufacturing sector," said Bode.

The industry's bittersweet scorecard comes as it argues on Capitol Hill for a chunk of the $825 billion economic recovery package that includes tax breaks for renewable energy investment and production.

"Quick action on the stimulus bill is vital to restore the industry's momentum," Bode contended.

Congress already has provided tax breaks for wind energy, but the industry maintains those credits aren't worth much if there is no taxable income.

Lawmakers in the House are considering, instead, government grants to cover 30 percent of upfront costs of wind energy investments. A draft Senate version has no such provision, although it would provide a 30 percent investment tax credit for renewable energy, including wind power.

Despite the robust growth in 2008, the wind association cited the following recent announcements of layoffs in turbine manufacturing because of the credit crunch and a slowdown in projects:

• Clipper Windpower, a turbine maker, announced it was furloughing 90 of its 830 workers mainly at a manufacturing plant in Cedar Rapids, Iowa;

• LM Glasfiber, a maker of turbine blades, is laying off 150 workers at one of two plants in Little Rock, Ark.;

• DMI Industries, which makes wind turbine towers at facilities in North Dakota, Oklahoma and Ontario, Canada, is cutting its work force by 20 percent.

• Aerisyn, also a tower manufacturer, announced in November a layoff of 54 workers at its plant in Chattanooga, Tenn.

• Trinity Structural Towers, a subsidiary of Trinity Industries of Texas, also in November announced the layoff of 131 workers at its plant in Tulsa, Okla.

[Associated Press; By H. JOSEF HEBERT]

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