In last official act, Gov. Ted Strickland eases way for Lake Erie wind turbines

Published: Friday, January 07, 2011, 12:01 AM Updated: Friday, January 07, 2011, 5:09 PM
By John Funk, The Plain Dealer


COLUMBUS, Ohio -- Ohio is giving a green light to the proposal to put wind turbines in Lake Erie.

In his last official act Friday, Gov. Ted Strickland signed an iron-clad lease option giving the Lake Erie Energy Development Co. the legal right to conduct extensive testing in the lake toward the construction in 2014 of five very large wind turbines.

Strickland has consistently supported the $100 million pilot project as a way to jump-start a new industry in Northeast Ohio. That industry would build turbines for the entire Great Lakes -- and create potentially thousands of new industrial jobs, many in companies already here and already building parts for turbines elsewhere.

The state owns the lake bottom and Strickland created an inter-agency task early on in his administration, for example, to speed up state permitting.

"I feel strongly about renewable energy and the potential of wind power on Lake Erie," Strickland said in an interview Thursday when asked if he was rushing to sign the document to frustrate incoming Gov. John Kasich.

"This is not being rushed. I think this is right for Ohio. And anything I can do while I have the authority vested in me as governor I am going to do. Until the very last minute."

After signing the lease on Friday, Strickland said the project would build "on the strengths of Ohio's manufacturing and maritime industries."

"I am very proud of the partnership we've developed with local and civic leaders to help us reach this point, and I strongly encourage the state to continue this collaborative effort."

By signing the lease option, Strickland has prevented Kasich from immediately withdrawing state support -- if that is in fact his intention.

Democratic strategists and green energy advocates across the state fear that the Republican maverick will try to undo green initiatives championed by Strickland and some Republican lawmakers.

They point to his remarks on the campaign trail about lake-based wind turbines last August.

"They're talking about putting some sort of wind turbine in Lake Erie in a spawning area. Not if I'm Governor," Kasich said in remarks that were videotaped.

"There's a spawning area that helps the fishing industry in Lake Erie work. . . . If the facts of that hold to be true, it isn't going to happen. We're going to fight it."

Kasich spokesman Rob Nichols said those remarks were about a proposal in western Lake Erie and the new governor has not decided to oppose the Cleveland lake project or renewable energy in general.

"He has said renewable energy is part of the portfolio, that we need it, but not to look at it as a panacea," Nichols said. Because the project holds so much manufacturing potential, it has been supported by manufacturers around the state, manufacturers who typically would support a Republican candidate.

If successful and on time, the project would be the first freshwater wind turbine farm in the nation. The lease option gives LEEDCo exclusive rights to 5,707 acres of Lake bottom about six miles offshore, north of Lakewood.


The test site chosen in conjunction with the Ohio Department of Natural Resources is the result of an extensive and sophisticated coastal wind mapping project that included known bird migration patterns and best wind speeds.


The lease option contract, previously signed by Attorney General Richard Cordray and Department of Natural Resources Director Sean Logan, will allow LEEDCo and its project builder, Fresh Water Wind I, to conduct extensive testing of the lake bottom and bedrock and to complete bird, bat and fish environmental studies.

All of that work must be done in order to apply for a long-term lease from the state for the permanent placement of the turbines.


For those exclusive rights, LEEDCo is paying $45,000 per year, or $90,000 for the first two years - financed by foundations and government grants.

In the coming two years, the contract requires the developers to:

• File for permission from interstate agencies that manage the nation's high-voltage grid to connect the turbines to high-voltage lines here.

• Complete bird, bat and fish studies (such as the effect of turbine foundations on spawning).

• Map the lake bottom of the leased acreage and its geological "substrate" to determine how best to anchor such huge structures.

• Apply and receive permits to build temporary foundations in the lake for further testing.

After two years, if LEEDCo has met these "performance metrics," it can extend its lease for another year and meet a new set of metrics. It can do this three times. In other words, if things go as planned, the project developers would have a lease for up to five years.

During these five years, the developers would not only have to prove the project is feasible but also obtain building permits from state and federal agencies, negotiate a power purchase agreement with a utility and apply for a long-term lease from the state.

In all, the document contains 25 such metrics stretching out through 2015.

Beijing TurbineTo Conquer Wind Power, China Writes The Rules

A worker entered a nacelle under construction at the Gamesa wind turbine factory in Tianjin in October.

Doug Kanter for The New York Times


By KEITH BRADSHER
Published: December 14, 2010

TTIANJIN, China — Judging by the din at its factory here one recent day, the Spanish company Gamesa may seem to be a thriving player in the Chinese wind energy industry it helped create.

Beijing Turbine
First of two articles.

Second Article in the Series »

====================================
Multimedia





Document From the Chinese Government,
a Requirement on Wind Farms







Wind Turbine Makers in China


But Gamesa has learned the hard way, as other foreign manufacturers have, that competing for China’s lucrative business means playing by strict house rules that are often stacked in Beijing’s favor.

Nearly all the components that Gamesa assembles into million-dollar turbines here, for example, are made by local suppliers — companies Gamesa trained to meet onerous local content requirements. And these same suppliers undermine Gamesa by selling parts to its Chinese competitors — wind turbine makers that barely existed in 2005, when Gamesa controlled more than a third of the Chinese market.

But in the five years since, the upstarts have grabbed more than 85 percent of the wind turbine market, aided by low-interest loans and cheap land from the government, as well as preferential contracts from the state-owned power companies that are the main buyers of the equipment. Gamesa’s market share now is only 3 percent.

With their government-bestowed blessings, Chinese companies have flourished and now control almost half of the $45 billion global market for wind turbines. The biggest of those players are now taking aim at foreign markets, particularly the United States, where General Electric has long been the leader.

The story of Gamesa in China follows an industrial arc traced in other businesses, like desktop computers and solar panels. Chinese companies acquire the latest Western technology by various means and then take advantage of government policies to become the world’s dominant, low-cost suppliers.

It is a pattern that many economists say could be repeated in other fields, like high-speed trains and nuclear reactors, unless China changes the way it plays the technology development game — or is forced to by its global trading partners.

Companies like Gamesa have been so eager to enter the Chinese market that they not only bow to Beijing’s dictates but have declined to complain to their own governments, even when they see China violating international trade agreements.

Even now, Gamesa is not crying foul — for reasons that are also part of the China story. Although the company’s market share in China has atrophied, the country’s wind turbine market has grown so big, so fast that Gamesa now sells more than twice as many turbines in China as it did when it was the market leader five years ago.

So as Gamesa executives see it, they made the right bet by coming to China. And they insist that they have no regrets about having trained more than 500 Chinese machinery companies as a cost of playing by Beijing’s rules — even if those rules have sometimes flouted international trade law. It is simply the table stakes of playing in the biggest game going.

“If we would not have done it, someone else would have done it,” said Jorge Calvet, Gamesa’s chairman and chief executive.

Gamesa, an old-line machinery company that entered the wind turbine business in 1994,is a modern Spanish success story.

Its factories in Pamplona and elsewhere in Spain have produced wind turbines installed around the world. With sales of $4.4 billion last year, Gamesa is the world’s third-largest turbine maker, after Vestas of Denmark, the longtime global leader, and G.E.

With its relatively low Spanish labor costs, Gamesa became an early favorite a decade ago when China began buying significant numbers of imported wind turbines, as Beijing started moving toward clean energy. Gamesa also moved early and aggressively to beef up sales and maintenance organizations within China, amassing 35 percent of the market by 2005.

But Chinese officials had begun to slip new provisions into the bidding requirements for some state-run wind farms, requiring more and more of the content of turbines to be equipment produced within China — not imported.

Those piecemeal requirements soon led to a blanket requirement. On July 4, 2005, China’s top economic policy agency, the National Development and Reform Commission, declared that wind farms had to buy equipment in which at least 70 percent of the value was domestically manufactured.

“Wind farms not meeting the requirement of equipment localization rate shall not be allowed to be built,” stated the directive, known as Notice 1204.


Trade lawyers say that setting any local content requirement — let alone one stipulating such a high domestic share — was a violation of the rules of the World Trade Organization, the international body that China had joined just four years earlier. Joanna I. Lewis, a Georgetown University professor who is a longtime adviser to Chinese policy makers on wind energy, said she and others had repeatedly warned Beijing that the local-content policy risked provoking a W.T.O. challenge by other countries.











Turbine components from China are now being shipped by Gamesa to its customers in other markets.

Doug Kanter for The New York Times


But the Chinese government bet correctly that Gamesa, as well as G.E. and other multinationals, would not dare risk losing a piece of China’s booming wind farm business by complaining to trade officials in their home countries.

Rather than fight, Gamesa and the other leading multinational wind turbine makers all opted to open factories in China and train local suppliers to meet the 70 percent threshold.

Mr. Calvet said Gamesa would have opened factories in China at some stage, regardless of the content policy.

“If you plan to go into a country,” Mr. Calvet said, “you really need to commit to a country.”

Ditlev Engel, the chief executive of Vestas, said in an interview, “We strongly believed that for us to be competitive in China, it was very important for us to develop an Asia supplier base.”

A top executive at a rival of Gamesa and Vestas, who insisted on anonymity for fear of business retaliation by Beijing, said that multinationals had another reason for going along with China’s dictates: “Everybody was too scared.”

Local Production

There is a difference between setting up an assembly plant in a host company — as many European wind turbine companies, including Gamesa, have done in the United States, for example — and ceding the production of crucial parts to companies in the host country.

In the United States, where there are no local-content requirements, the wind turbine industry uses an average of 50 percent American-made parts. For its American operations, Gamesa relies somewhat more than that on American suppliers, but it still imports some parts from Spain, including crucial gearboxes.

Within weeks after Beijing’s issuance of Notice 1204, Gamesa sent dozens of Spanish engineers to Tianjin. The engineers did not just oversee the construction of the assembly plant, but fanned out to local Chinese companies and began teaching them how to make a multitude of steel forgings and castings, and a range of complex electronic controls.


















One Chinese supplier here became so adept at making a 10-ton steel frame that keeps a wind turbine’s gearbox and generator aligned even under gale-force conditions, and making it so cheaply, that the Spanish company now ships the Chinese frame halfway around the world for turbines that Gamesa assembles at its American plant in Fairless Hills, Pa. Mr. Calvet said the American manufacturing sector had been so weakened in recent decades that for some components there were no American machinery companies readily available.


It was not until the summer of 2009, when senior Obama administration officials started looking at barriers to American clean energy exports, that the United States pressed China hard about Notice 1204. The Chinese government revoked it two months later.

But by then, the policy was no longer needed. Some Gamesa wind turbines exceeded 95 percent local content.

“The objectives of the local content requirement were achieved, and probably more achieved than anyone expected,” said Steve Sawyer, the secretary general of the Global Wind Energy Council, a trade group based in Brussels that represents wind energy companies from around the world, including China.

A Battle Takes Shape

China agreed to abide by the W.T.O.’s trade rules when it joined the organization in 2001. And Chinese officials, when willing to comment on such matters at all, typically defend their actions as being within the bounds of fair play.

Li Junfeng, an official at the National Development and Reform Commission who oversees renewable energy policy, defended the local content policy.

“It was localization support,” Mr. Li said in an interview. China is a developing country, he said, and developing countries need to do what they can to foster industrial development.

But the Obama administration takes a different view. It included the local content rule in the investigation it announced on Oct. 15, an inquiry into whether China’s clean energy policies had violated W.T.O. rules. The investigation was spurred by the United Steelworkers union, which has no qualms about taking on Beijing because it has no sales contracts at risk in China.


Zhang Guobao, the director of China’s National Energy Administration, said at an Oct. 17 press conference that the United States was wrong to cite the local content rule in its investigation — because China had already abolished it. Mr. Zhang did have a point: the W.T.O.’s main redress for a local content protection is to push the offending country to revoke it. But the United States investigation of China goes beyond local content, and the W.T.O. has other weapons at its disposal.

The trade organization, for example, has authority to order the repayment of subsidies a government gives to its export industries to the detriment of foreign competitors. The steelworkers’ petition cites various forms of subsidies and support that China has given to its industries in potential violation of international trade rules. That includes low-interest loans from state-owned banks and grants of cheap or free land, as well as other perks not available to foreign companies operating in China.

As for the state-owned wind farms that are the main buyers of wind energy equipment, China has many policies to preserve their dominance, while limiting market opportunities for foreign companies that might try to develop wind farms.

Those policies — all potential W.T.O. violations, according to some experts — are an open secret.

Earlier this autumn the Chinese wind turbine maker Ming Yang Wind Power Group made an initial public offering of its shares on the New York Stock Exchange, as prelude to entering the American wind energy market. The financial disclosures in the company’s prospectus acknowledged that “we obtained land and other policy incentives from local governments,” as well as deals requiring that the municipal governments’ wind farms buy turbines only from Ming Yang.

China Looks Abroad

Gamesa, among other multinational turbine makers, so far has benefited from the growing market in China, despite policies that have increasingly relegated those companies to fighting over ever-thinner slices of the pie.

But that dynamic could be changing. The Chinese government is now slowing the approval of new wind farms at home. The pause, whose duration is unclear, is meant to give the national electricity system time to absorb thousands of new turbines that have already been erected and not yet connected to the grid.

Gamesa had an ample order book lined up before the government applied the brakes. But the government policy means that the Chinese turbine makers, having become giants on the backs of companies like Gamesa, must now look beyond their captive national market for further growth.

Sinovel, China’s biggest wind turbine maker, has said it wants to become the world’s largest by 2015. The company’s chairman and president, Han Junliang, said in October at the annual China Wind Power industry conference in Beijing that his goal was to sell as many turbines overseas as within China.

Sinovel is among the Chinese companies now opening sales offices across the United States in preparation for a big export push next year. They are backed by more than $13 billion in low-interest loans issued this past summer by Chinese government-owned banks; billions more are being raised in initial public offerings led mainly by Morgan Stanley this autumn in New York and Hong Kong.

Multinationals are alarmed. Vestas, for example, is closing four factories in Denmark and one in Sweden, and laying off one-eighth of its 24,000-person labor force this autumn, in an effort to push its costs down closer to Asian levels, its chief, Mr. Engel, said.

The Chinese push, clouded by the Obama administration’s investigation of the steelworkers’ complaint, could complicate the climate change debate in the West. Wind farm developers in the West are worried that Western governments may be less enthusiastic about encouraging renewable energy requirements if these programs are perceived as creating jobs in China instead of at home.

The provincial government of Ontario in Canada now wants to take a page from China’s playbook by trying to require 25 percent local content for wind energy projects and 50 percent for solar power projects in the province. The Japanese government responded by filing a W.T.O. complaint against Canada in September, asserting that Ontario was violating the W.T.O. prohibition on local content requirements. By contrast, Japan has never filed a W.T.O. complaint on any issue against China, for fear of harming diplomatic relations with its large neighbor.

Meanwhile, the Chinese government is intent on turning its wind energy industry into the global leader, helping manufacturers coordinate export strategies and providing various sorts of technical assistance.

Mr. Li, the overseer of the Chinese renewable energy industry, publicly exhorted the leaders of the nation’s biggest wind turbine makers at the China Wind Power conference, a three-day event that drew hundreds of executives from around the world.

“You cannot be called a winner if you are the leader for three or five years,” Mr. Li told the Chinese executives. “You can only stand on the top line if you are the leader for 100 or 200 years.”

The Chinese presidents sat quietly and respectfully, chins down. Senior executives from the foreign manufacturers — including Vestas, G.E. and Gamesa — sat alongside them, staring straight ahead in stony silence.

States Don't Have to Decide Between Wind Development and Environment

Date: 12/13/2010 Location: OHIO

Source: Stacia Cudd, National Association of Farm Broadcasting News Service. Audio with Tony Logan, USDA Rural Development Director for the state of Ohio (MP3 1.3MB)


Ohio was the 26th state to create a renewable portfolio standard — or RPS. The legislation requires electric utilities to increase their use of renewable energy sources — like wind — from .25-percent in 2009 to 12.5-percent in 2025. The measure is expected to support 5,000 to 7,000 megawatts of new wind energy installations or investments with a value of 10 to 14-billion dollars. In the near-term, before 2012, the legislation was expected to result in 650 to 750 megawatts of new wind energy investments worth about 1.3 to 1.5-billion dollars. USDA Rural Development Director for the state of Ohio Tony Logan says the RPS has had an even bigger impact than that. "During this past year, our Ohio Power Siting Board has approved over 800 megawatts of new wind projects and there's some 2500 megawatts still in the queue, so that's a lot of wind turbines." Logan says the Ohio Wind Working Group was very active in discussing the benefits of a robust wind future for the state. He says they provided a forum for conflict resolution and consensus building, which set the table for widespread wind development. In the end, he says the economic development benefits of wind energy development were too great for folks not to get behind the RPS. "Here's why. According to the American Wind Energy Association, Ohio, given its existing metal working infrastructure and factories and manufacturing capabilities, is one of four states naturally which stand to benefit the most in terms of new jobs from a wind energy economy." At this point, Logan says there are no major regulatory barriers to Ohio's wind future. He says there are some environmental concerns however. Logan was formerly with the Ohio Department of Natural Resources. He says it is possible for wind development and the environment to co-exist in the state. "We've been studying, through our wildlife division at the Department of Natural Resources, the effects of wind turbines on birds and bats. And these studies have been going on for several years now, and as a result, we may have ruled out a few sites that are off limits because of eagle nests and endangered species and the like. But we have identified vast areas in Ohio's best wind regions that now, after all the study, are open for sustainable wind production. And that includes some choice sites out on Lake Erie." Logan says that's where the best winds in Ohio are, which is why there is an effort to create an industry for offshore freshwater winds. This information was last updated on 12/13/2010

Wind power's growth is blowing Europe toward green goals

Europe is installing more wind power capacity than any other form of energy, and wind is leading the way to making the continent's electricity generation 100% renewable by 2050


Today, only five percent of Europe's electricity comes from wind. But that will not be the case for long. For the past two years, 40 percent of all new electricity generating capacity in Europe came from wind turbines. From Spain to Sweden, so many new turbines are being erected that Europe is on target to produce 15 percent of its electricity from wind by 2020. By 2050, half of Europe's electricity is expected to come from wind.

In an interview with Yale Environment 360 senior editor Fen Montaigne, Christian Kjaer — CEO of the European Wind Energy Association, an industry group — describes the combination of government policies, entrepreneurial vision, and public support that have enabled wind to become Europe's leading form of green energy. The 27-member European Union has passed a host of progressive policies — including tax credits, financial incentives, and priority access for renewable energy to the electricity grid — that have encouraged the growth of wind, solar, and other forms of green energy. But the EU also wields a stick, requiring member states to set renewable energy targets and retaining the right to sue those countries that fall short.

Increasingly, says Kjaer, as old power plants fired by coal and natural gas reach the end of their lives, they are being replaced by wind and solar power. The economic benefits of this transition, says Kjaer, are indisputable, with nearly 200,000 people currently employed in the European wind power sector. By 2020, Kjaer estimates 450,000 Europeans will have jobs in the wind power industry.

Kjaer is confident that, as green energy competition from Asian nations intensifies, Europe can retain its edge, thanks to its high-quality manufacturing sector and strong government support. "The winners of tomorrow's energy wars," he says, "are going to be those who understand how to develop new technology, deploy new technology and get the benefits of exporting that technology to the rest of the world."

Yale Environment 360: I was wondering if you could paint a picture of the state of the European wind industry and describe what kind of growth you've been experiencing in recent years.

Christian Kjaer: For the past two years, the 27 member states of the European Union, taken as one, have installed more wind power capacity than any other power-generating capacity. So wind energy is currently meeting 5 percent of the electricity demand in the European Union. But in terms of new power plants, new capacity — which of course also is an indication of new jobs and economic activity in the power plant manufacturing business — 40 percent of all new capacity last year was wind. And if you add other renewables — and this is primarily PV, solar photovoltaics — 63 percent of all new capacity installed last year was from renewables. So I think that's the most significant.

It's even more telling that more than 75 percent of the [wind] installations last year were in five countries: Spain, Germany, Italy, France, and the U.K. We're installing 40 percent [of new capacity], and we're actually doing that not even looking at all the member states that have the potential to install wind energy.

In terms of the overall status of the power market, we need the European Union to install new capacity between now and the next 10, 15 years equal to about 50 percent of currently installed capacity. We need to replace existing power plants that are getting old, but also to meet expected increases in demand in the future. We believe it's a great opportunity to make a real change in the way we supply our energy. Because we need to do investment in new power plants anyway, so we might as well invest in technologies that are compatible with the very strong and changed political agenda on renewables and on reducing carbon emissions.

e360: When you talk about the 50 percent installed capacity, are you talking about new wind generation meeting that requirement, or all renewables?

Kjaer: The European Union adopted last year legislation which mandates that each member state has a specific target for its share of renewable energy in the energy mix by 2020. And what that means collectively is that we need to increase the share of renewables in electricity from currently about 15 percent — that includes 10 percent for large hydro and about 5 percent wind energy — to 35 percent by 2020. Our large hydro can't increase much more, because it's already utilized. So that means if you take large hydro out, you need to increase non-large hydro renewables from currently 5 percent to about 25 percent. And of course wind energy will be one of the big contributors to that.

e360: Can you briefly sketch out how you think, in the wind sector, those very ambitious goals can be met?

Kjaer: We believe that we will reach about 230 gigawatts of wind by the end of 2020, and that's up from approximately 80 gigawatts today. That will produce somewhere between 14 and 17 percent of our electricity, depending on the electricity demand. We need to install approximately 9.5 gigawatts of new wind capacity each year between now and 2020. Now, given that we installed more than 10 gigawatts last year, technically this is not a big challenge. If we just do what we've been doing the last two years in terms of new installation, then we will have 15 percent of our electricity coming from wind energy in 2020.

Now we believe that you can reach a higher level, and the European Commission has also indicated that it believes that wind energy could contribute 20 percent of European electricity in 2020. But then we really need to make a serious effort in terms of changing the way we operate our grids. Also, we would need to be a bit faster in developing an offshore grid for utilizing the offshore wind energy. That will require some additional efforts from politicians mainly, related to optimizing and expanding our grid infrastructure to accommodate a larger amount of variable wind power in the system, and also other renewables.

e360: Why is it that wind has taken off at such a respectable rate, ahead of solar?

Kjaer: The reason wind will be the main contributor to reaching these targets is that onshore wind is the cheapest of the new renewables. So the majority of this will be met by wind turbines on land. Offshore is still more expensive, but we do expect that to play an increasing role as well. But in terms of wind versus photovolyaics, we're still significantly lower in terms of producing a kilowatt-hour of electricity.

e360: Can you say a few words about this proposed North Sea supergrid and how important that might be?

Kjaer: There's a very strong [desire] to develop offshore wind energy. So one main element of the North Sea supergrid is that we need to accommodate a large expansion of one of our biggest future energy sources in order to avoid increasing our [oil] imports from unstable regions of the world.

One of the main reasons for the strong political support for a supergrid is also that we want to create an internal [European] market for electricity, which of course, in the end, should give consumers the most affordable electricity. That's the whole idea about the internal market, is that it would create the free movement over borders of goods, services, and in this case electricity at the lowest cost. And in order to create an internal market for electricity you need the infrastructure, just as you need roads to move goods around the European Union.

The European Union and the United States are very similar here. In the United States you have the same challenge, that electricity is governed mainly at the state level. And it's the same problem we have in the European Union, getting the member states to cooperate on cross-border issues, the same as between the states in the United States.

What is really needed is for member states to have much stronger collaboration, and what we have seen also recently is that a group of ten countries surrounding the North Sea, and also countries that are a bit further away from the North Sea which have an interest in it as well, have formed a group discussing, at the government level, how should we create a North Sea grid and how should we integrate offshore wind energy into that grid?

e360: When you look at the five countries that you listed that are really leading the way in wind so far, why is it that they have become the leaders? And, secondly, what government policies are necessary to have a robust wind industry?

Kjaer: Of the five countries I mentioned, there are two main groups. Germany and Spain — and we can add Denmark there, as well — started early. Spain and Germany are still large contributors to wind energy installations in the European Union. Spain was 24 percent of the market last year and Germany was 19 percent of all installed capacity in Europe last year. Denmark is not because it's a small country, but they already get more than 20 percent of their electricity from wind energy. So there's also a size element in this. But Germany, Spain and Denmark are leading because they started early, starting with Denmark back in the '80s and then also Spain and Germany in the '90s. They are now reaping the commercial benefits of starting early. And this is also where you see the majority of wind turbine manufacturers, but also further down the supply chain, with German, Spanish, and Danish companies dominating.

And the second group of countries — the U.K., France, and Italy — each installed approximately 10 percent of the European market last year. Of course, they are there also because their countries are very big compared to many of the other European Union countries. Both Italy and France installed about a thousand megawatts the last couple of years, and it could go much, much faster. Those countries that are really growing fast are countries like Portugal. It installed 7 percent of all [EU] capacity last year, but that's quite a lot for a country the size of Portugal, and it's one of the countries getting the largest share of electricity from wind energy in the European Union.

e360: In terms of the policies that need to be in place for a robust wind industry, what would you say are the top three or four, keeping in mind lessons the U.S. might take from what Europe has done in wind so far?

Kjaer: I think if there were one word to communicate to U.S. policymakers, it is that you need stability. I'm saying that because the U.S. framework for investing in renewables is very unstable — I mean, it cannot be predicted more than one or two years ahead. And that also means that the United States is not reaping the job creation benefits of wind energy, because a lot of components, a lot of manufacturing is imported because no one's going to invest in a factory in the United States if they don't know how the market looks beyond the next two years. So a long-term stable framework is what is most desperately needed in the United States. What has given rise to those [EU] markets is that you have stable frameworks and they have been long-term. The problem in the U.S. is that the framework expires every year or every second year.

e360: In terms of tax credits?

Kjaer: Tax credit, yes. Tax credit is a major source of uncertainty in the U.S. The second element of any effective legislation should be access to the grid. And what European legislation does, it mandated all 27 member states to give priority access to wind energy, which means that if you have a wind farm and a gas plant, and they're planned projects, the wind energy should be connected first. And also, if you have plants operating on the system, electricity from the renewables plant gets fed into the grid first. And the third element is administrative procedures, building permits, et cetera. We have examples in some European countries where you need 50 different institutions to agree on approving a wind farm. So what we are promoting is one-stop shops, that you can send in an application somewhere, that there's a deadline for how fast this application should be processed rather than having it tied up for years.

So those are the three elements: the financial predictability, the grid access, and the administrative procedures, combined with an overall target. In the case of the European Union, the national targets are mandatory, meaning that if a member state falls short of its target, it can be taken to the European Court of Justice. The European Commission can sue a member state that doesn't meet a target, and that was one of the strongest elements of the directive that was passed.

e360: Do you feel that the European wind industry has lived up to the promise of creating new jobs?

Kjaer: There are about 190,000 people employed in the European wind energy sector. This is the employment that can be attributed to the manufacture of the turbines installed in Europe, plus the maintenance of those turbines. So, for instance, the world's largest wind energy company is a Danish company called Vestas. This doesn't include jobs created in Europe from wind turbines put up in the United States. So the turbines put up in the 27 member states of the EU, that's about 190,000 jobs. The majority of those are in onshore, of course. In the past five years we have created approximately thirty new jobs every day of the year. So that's the level of employment we're talking about. We expect with the 2020 targets — if we're meeting those targets, we would be employing about 450,000 people in the European Union. And almost 300,000 of those would be in onshore and the rest in offshore.

e360: So this element of green energy that President Obama's been trying to sell, that it can be an engine of job creation, you feel has been shown in Europe.

Kjaer: There's no doubt that it's an engine of job creation. And if you go to Germany or to Denmark or to Spain, wind turbine manufacturing and all the follow-ons from that is an enormous part of their economies — certainly in Denmark, which is a small country. The United States, the European Union, and the vast majority of countries in the world are importing energy. And the share of imports is increasing. In Europe we import more than 50 percent of our energy. I think it's getting clearer to many people in the world that rather sending the citizens' money abroad to pay for imported fuels, it makes much more sense to put the money to work at home, and then export technology.

And I think this is what we will see, which will be the big difference between the last century and this century. In the last century, those who won the energy wars were those who either had the resources or controlled them in some way, and the winners of tomorrow's energy wars are going to be those who understand how to develop new technology, deploy new technology and get the benefits of exporting that technology to the rest of the world. They're going to need it very soon, because the fuels are not going to last forever and no one knows what the cost of those fuels will be 5, 10, 15 years from now.

e360: Do you feel that European companies are well-positioned to compete against Chinese wind turbine manufacturers?

Kjaer: It's important to say that there's a lot of talk about Chinese manufacturers, but it's not only about increased competition from China. Japan — Mitsubishi has been in this for a long time. South Korea is moving, India has one of the largest wind companies in the world. So there are challenges to the European leadership position. That competition makes us all stronger. And we need that competition in order to beat the real competition, which is fossil fuel and nuclear and other ways of producing electricity.

E360: As the wind industry grows onshore and offshore in Europe, how big of a problem is it that, with the spread of turbines on the landscape and the seascape, the public may become more opposed to the expansion of turbines in many areas?

Kjaer: It is an issue. In some countries it's a significant issue, and the problem is related to NIMBYism, or "not in my back yard." When you take overall polls on people's attitudes towards different energy sources, solar always comes first [in popularity], wind comes second, and then all the others afterwards. So, in general, when we see the opinion polls in the European Union, it's always between 75 and 85 percent that think this is a very, very good idea.

Now, the problem comes when you start down at the project level. There have been many polls suggesting that you poll people prior to the turbines being built and after they were built, acceptance actually increases dramatically after the turbines are built. And this is because people are concerned about the unknown. That's just a part of human nature. In some countries it's a bigger problem than in other countries. Onshore, in the U.K., is very difficult because of local opposition.

But it's my feeling that the concern from locals is biggest in the beginning of a new market taking off. So the first thousand megawatts are much more difficult to install than the next thousand megawatts. Because people get used to them, they understand that they don't make noise anymore — the turbines twenty years ago made quite a lot of noise, today you can't hear them, almost, if you're more than two hundred meters away. So it is an issue, and we have a responsibility as a sector to inform people [and] maintain the dialogue with local communities.

e360: My final question is, what is your industry's goal for 2050 in terms of what percentage of electricity production would come from wind? And given what you've seen so far and given the 2050 goal, has this given you a hope that it is possible for our societies to move off of fossil fuels?

Kjaer: Yes. We believe we can meet 50 percent of Europe's electricity demand by 2050 with wind energy. Denmark is currently at 20 percent — they have an aspiration to reach 50 percent in Denmark by 2020 or 2025. Can we power our economy solely on renewables? I certainly believe so, and this goes back to something I said at the beginning of this interview. Almost two-thirds of our new capacity is from renewables. That figure was about 20 percent in the year 2000. So in nine years we've gone from 20 percent to 62 — by 2020 of course we can get to 100 percent of new capacity. And if we can get in 2020 to a situation where all new capacity is renewables, then we will, by definition almost, have 100 percent renewable electricity by 2050 because all the other power plants will be taken off [line].

So I'm quite confident that it can be done, but it would require a major change in our infrastructure. The infrastructure here is the absolute key to this — we need to build an infrastructure that is different. But, again, our infrastructure in Europe is aging — we haven't been building power lines since the '60s or '70s. It needs to be replaced anyway. So we need to make sure that the infrastructure is changed in a way that it accommodates 100 percent renewable electricity by 2050.

Wind turbines on Lake Erie face many challenges, including ice

Published: Wednesday, July 21, 2010, 9:58 PM Updated: Thursday, July 22, 2010, 6:11 AM

John Funk,
The Plain Dealer


CLEVELAND, Ohio -- Some of the world's biggest wind developers were in Cleveland this week to talk about something none of them has ever done - building wind turbines in fresh water such as Lake Erie, where ice flows promise to pose significant problems.

A three-day national conference focusing on the business potential and the problems of freshwater wind farms drew 170 engineers, attorneys, academics and contractors. It wrapped up Wednesday.

The summit coincided with the Lake Erie Energy Development Corp.'s first ever public meeting Tuesday, co-sponsored by development group NorTech Energy Enterprise, to lay out some of the details of the proposed $100 million project involving putting five very large turbines in Lake Erie by the end of 2012. Many more hearings will be scheduled.

Lorry Wagner, president of the corporation also known as LEEDCo, told more than 300 people packed into the auditorium at the Great Lakes Science Center that he hopes to announce a developer within four weeks.

"I hope it is sooner," Wagner said in an interview Wednesday about some of the issues raised by the public at the hearing and by the experts at the national conference at the Wyndham at Playhouse Square hosted by private conference organizer Infocast, of California.

Building the correct foundation to deal with the stresses of ice, wind and wave action will be crucial -- and could be a significant part of the cost of any off-shore project, Case Western Reserve University engineering professor David Zeng told the conference.

In an interview, Zeng said building a foundation strong enough to keep a turbine centered could amount to 25 percent of the total cost, depending on what conditions must be overcome.

Zeng, who heads up the Wind Foundation Center at CWRU's Great Lakes Energy Institute, is already testing some reinforced concrete structural parts for General Electric. GE has an agreement with LEEDCo to supply the largest turbines every used in North America, each of the five machines rated at 4 million watts, or 4 megawatts.

Ice stress could become a real problem, said Zeng, and he wants to test real pilings in the lake for one winter to see how they will do.

The trouble is that he probably won't have the money to do that experiment until next summer, Zeng said, giving the test just one winter before LEEDCO's ambitious construction schedule would begin.

Wagner said Zeng's test would give the project more information but construction could be done without it, by simply overbuilding the foundation.

"If we are able to secure grant money, all of us would like to put in a test foundation next summer," Wagner said.

Even before foundations are researched, LEEDCo has to get a better idea of what is under the lake bed.

Wagner hopes Cuyahoga County will approve a contract by mid August with a company to use sonar to map the lake bottom in the area where the turbines will probably go.

Test data show that Lake Erie appears to have the best wind in the state, especially in the middle of the lake where winds are estimated at the second best nationally.

But the cost of so-called "deepwater" wind could be about $180 per megawatt-hour, said another conference lecturer, Carole Womeldorf, director of the Wind Energy Assessment and Visualization Laboratory at Ohio University.

Womeldorf said that even with lower winds on land, on-shore turbines in many situations might be a better business case.

Wagner said there is no argument that at present onshore wind is cheaper --
for now -- but LEEDCo's proposal is merely a pilot project.

Denmark to Build $2.3 Billion Offshore Wind Farm

The $2.3 billion plant, located in the Kattegat sea, will have production capacity of 400 MW.

By Agence France-Presse




The Danish energy agency said on June 22 there had been a "political consensus to let DONG Energy develop the Anholt offshore wind farm, which will be able to provide 400,000 households with environmentally-friendly power."

The 14-billion-kroner (US$ 2.3 billion) wind farm, one of the world's largest, will be built offshore of Denmark's Anholt island in the Kattegat sea and have a production capacity of 400 megawatts (MW).

DONG energy said the farm would first start supplying power at the end of 2012.

It added Germany's Siemens Wind Power would supply the farm's 111 turbines, which have a capacity of 3.6 MW each.

The state-owned company was the only one to take part in the call for tenders, Climate and Energy Minister Lykke Friis said.

"I would have liked for there to have been more candidates and a lower price. But it the current competition situation, we received the best offer possible," she said.

An independent analysis by audit cabinet Ernst&Young said DONG's offer was "reasonable" and that its high price was due to high global demand for wind turbines.

The climate and energy ministry said that construction of the wind farm would create up to 8,000 jobs.

5 turbines in the works for wind power project in Lake Erie

By John Funk,
The Plain Dealer
May 24, 2010,






A boat rides the North Sea near a wind farm off the coast of Denmark.


The Lake Erie Energy Development Corp., has reached an agreement with General Electric Co. to supply five turbines for a $100 million demonstration project in Lake Erie. The turbines would be placed six miles or so off Cleveland's shore, northwest of the city's drinking water crib



With Tom Breckenridge

A local nonprofit development group racing to erect the first offshore wind turbine in the Great Lakes has reached an agreement with General Electric Co. to supply five turbines for a $100 million demonstration project in Lake Erie.

The Lake Erie Energy Development Corp., known as LEEDCo, and Gov. Ted Strickland are to announce the deal in Dallas today during the annual conference of the American Wind Energy Association.

The cutting-edge turbines would stand 300 feet above the lake and be clustered six miles or so off Cleveland's shore, northwest of the city's drinking water crib.

Each of the colossal machines, at 225 tons apiece, would generate 4 megawatts, making them the largest in the nation. The total generating capacity of 20 million watts, or 20 megawatts, is enough to power up to 16,000 homes, at least while the wind is blowing.

The plan is to have the turbines generating power at the end of 2012, said LEEDCo president Lorry Wagner.

"This is not just about making power, it's about creating jobs," Wagner said in an interview.

If the turbines are running by then, northern Ohio will have a chance to become the hub of an offshore wind power industry, LEEDCo and Lake Erie Energy Task Force officials say.

Both GE and LEEDCo see the project as the first step in standardizing and lowering the cost of building very large wind turbines in the Great Lakes.

Financing has to be worked out, but state and federal tax credits and possibly loans or grants would be needed.

The turbines would account for about half the project's costs. The rest would be in the purchase of the towers, foundations on the lake bottom, an underwater power line to the shore and engineering expenses.

LEEDCo is interviewing finalists for project developer this week and expects to select one within a month. Several of the contractors have global experience.

The project is step one of a 10-year plan to build more than 200 turbines in the lake by 2020, generating a total 1,000 megawatts.

GE open to putting plant near site

"Our hope would be after the demonstration project that GE finds it desirable to manufacture here," Strickland said in an interview.

GE has agreed to give "strong consideration" to building an assembly facility in the region if there are enough orders. A company official did not say exactly how many orders the company would need but noted that offshore turbines are so large -- much larger than typical land-based turbines -- that they must be built close to where they will be installed.

One thousand megawatts -- the 2020 generating goal -- is slightly less than the amount of power generated by FirstEnergy Corp.'s coal-fired power plant in Eastlake but more than by its Davis-Besse nuclear power plant near Toledo.

For conventional power plants, one megawatt is enough to supply the electrical needs of 800 homes. For wind turbines, the equation is not so simple because wind does not blow every minute of the day.

The design of the GE turbines will be based on slightly smaller turbines that have been operating in the brutal winters of Norway overlooking the Norwegian Sea since 2005.


Project faces variety of obstacles


But LEEDCo faces daunting hurdles. Among them:

Approval from at least 16 federal and state agencies, including the U.S. Army Corp of Engineers, the Ohio Department of Natural Resources and the Public Utilities Commission of Ohio. LEEDCo has yet to file any permit applications but does meet weekly with an interagency task force, the Lake Erie Offshore Wind Team, that Strickland created 18 months ago.

Concerns that the turbines will harm birds and bats. A $350,000 study is under way, including radar, laser and acoustic identification of bird and bat flight paths. The proposed site will need a four-mile radius of air space in which few if any birds have been detected.

How to anchor the towers in Lake Erie. Engineers must determine whether to sink steel piles down to bedrock, typically some 60 to 80 feet below the "glacial till" on the lake bottom. If pilings are needed, officials are uncertain whether the region still has the capacity to produce enough of the heavy steel that would be required.

A way to get the power to shore. Underwater cables from the turbines to shore would need right-of-way approval from the state.

The impact of winter ice. Plans call for an ice cream-cone shaped foundation at the water's level, which forces the ice down and breaks it, hopefully saving on cost, LEEDCo's Wagner said.

A means of paying for the project. Financing details are still tenuous -- and could be more complicated than the engineering, said Wagner.
Nationally recognized wind-farm financing experts from KeyBank, who are members of LEEDCo's related organization, the Lake Erie Energy Task Force, are analyzing all the financing proposals, said Wagner.

Financing would include hefty federal tax credits, state tangible-tax credits still pending before Ohio lawmakers and cash from a power purchase agreement that LEEDCo must still negotiate.

LEEDCo has identified two electrical substations on shore close to the proposed lake site. One is owned by Cleveland Public Power, the other by FirstEnergy.

Both are interested in buying the power.

"We've had discussions with the developer and are certainly interested in wind facilities in our region," said FirstEnergy spokeswoman Ellen Raines.

State law requires that by 2025, FirstEnergy's power deliveries include 12.5 percent generated by renewable technologies, such as wind turbines.

CPP spokeswoman Shelley Shockley said the city has been in discussions and hopes to buy the power. The city has set even higher renewable energy standards than the state law.

Wagner and LEEDCo consultant Richard Stuebi of NorTech, a regional technology-development group, would not divulge the asking price of the power they hope to sell.

Turbines made in Norway

A GE official said the turbines would be made in Norway and shipped here, down the St. Lawrence Seaway. They would probably be delivered to Cleveland's port, officials said.

A specialized ship needs to be built to haul the massive turbine components to the demonstration site. LEEDCo is talking with several companies about building a large, pontoonlike vessel. One of the firms is believed to be Great Lakes Towing Co., which operates near the mouth of the Cuyahoga River.

LEEDCo is the only wind developer hoping to build in the lake but not the only such developer in the state. Wind developers in Ohio have focused much of their attention on rural western regions where there is consistently more wind at the 300-foot level.

In March, the Ohio Power Siting Board approved permits for three land-based wind farms with a total generating capacity of 500 megawatts. While not in Northeast Ohio, one of them, for 27 wind turbines generating 48 megawatts, was proposed by Cleveland-based JW Great Lakes Wind for Hardin County, east of Lima.

Despite the hurdles of building here, LEEDCo believes it will have a permit-ready site by next year and win the race to erect turbines in the Great Lakes.

"It's not like going to the moon," Wagner said, "but it's a difficult challenge."

The group's pact with GE culminates a four-year effort, officials said.

"The first project will be a good project but will have things that nobody has ever done before in Lake Erie," said Wagner.