CRS Report Released: U.S. Wind Turbine Manufacturing: Federal Support for an Emerging Industry
The Congressional Research Service (CRS), the public policy research arm of Congress, recently issued the report U.S. Wind Turbine Manufacturing: Federal Support for an Emerging Industry (Dec. 18, 2012). The 38-page report authored by Michaela D. Platzer discusses the following:
U.S. energy supply diversity has been the goal of many Presidents and
commitment has been prompted by concerns about national security, the
environment, and the U.S. balance of payments. Investments in new energy
sources also have been seen as a way to expand domestic manufacturing. For all
of these reasons, the federal government has a variety of policies to promote
use of wind energy requires installation of wind turbines. These are complex machines
composed of some 8,000 components, created from basic industrial materials such
as steel, aluminum, concrete, and fiberglass. Major components in a wind
turbine include the rotor blades, a nacelle and controls (the heart and brain
of a wind turbine), a tower, and other parts such as large bearings,
transformers, gearboxes, and generators. Turbine manufacturing involves an extensive
supply chain. Until recently, Europe has been the hub for turbine production,
supported by national renewable energy deployment policies in countries such as
Denmark, Germany, and Spain. However, support for renewable energy including
wind power has begun to wane across Europe as governments there reduce or remove
some subsidies. Competitive wind turbine manufacturing sectors are also located
in India and Japan and are emerging in China and South Korea.
foreign manufacturers have expanded their capacity in the United States to
assemble and produce wind turbines and components. About 470 U.S. manufacturing
facilities produced wind turbines and components in 2011, up from as few as 30
in 2004. An estimated 30,000 U.S. workers were employed in the manufacturing of
wind turbines in 2011. Because turbine blades, towers, and certain other
components are large and difficult to transport, manufacturing clusters have
developed in certain states, notably Colorado, Iowa, and Texas, which offer
proximity to the best locations for wind energy production. The U.S. wind turbine
manufacturing industry also depends on imports, with the majority coming from
European countries, where the technical ability to produce large wind turbines
was developed. Although turbine manufacturers’ supply chains are global, recent
investments are estimated to have raised the share of parts manufactured in the
United States to 67% in 2011, up from 35% in 2005-2006.
for wind turbine manufacturing in the United States is more uncertain now than
in recent years. For the past two decades, a variety of federal laws and state
policies have encouraged both wind energy production and the use of U.S.-made
equipment to generate that energy. One apparent challenge for the industry is
the scheduled expiration at year-end 2012 of the production tax credit (PTC),
which the industry claims could reduce domestic turbine sales to zero in 2013.
In anticipation, at least a dozen wind turbine manufacturers announced layoffs
or hiring freezes at their U.S. facilities in 2012, citing uncertainty around
the renewal of the PTC as one reason. Other factors affecting the health of the
U.S. wind industry are intense price competition from natural gas, an
oversupply in wind turbines, and softening demand for renewable electricity.
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