Wind turbine manufacturer will furlough 500 workers at its new blade plant near Ft. Collins, Colorado.
It seems like just yesterday when, commercial wind energy developers were lining up outside the gates of wind turbine manufacturing plants like the one that Vestas opened in the Spring of 2008 in Windsor, Colorado. The problem, besides there being not enough factory gates to line-up outside of, is that the credit markets dried up and as a result, demand has fallen off — sharply.
The latest victim of falling demand in the turbine industry is global wind industry leader, Vestas Wind Systems A/S confirmed yesterday it will temporarily halt production at its Windsor plant in early 2001 and furlough some 500 workers. While the Danish company said no one was getting fired, they also confirmed that the plant shutdown would last for an unknown period of time.“There will be no layoffs,” Vestas spokesman Peter Kruse said of the operations at the shuttering Windsor plant.
Vestas company officials said they have also frozen the hiring process for the two manufacturing plants in Brighton, which remain under construction. The company had planned to create 1,350 jobs at its Brighton facility by 2010.
The sluggish turbine market and political opposition to large-scale wind development in the UK are also being cited as reasons for Vestas plant closures at the Isle of Wight.
“The first quarter historically is always a slow quarter,” said Kruse, explaining that the anticipated dip has been exacerbated by a tight credit market and the relatively low price of gas. The tightening credit markets caused by the economic and financial turmoil of the past 18 months have created a serious obstacle for wind energy developers. Large-scale commercial wind farms require lots of up-front financing, financing that essentially has not been made available by most banks.
As a stop-gap measure, the Obama administration stepped in with $3 billion in financing for renewable-energy projects, grant payments that will be made in lieu of the federal tax benefit the wind farm would earn once in production. Ten of the first grants in that program went to large-scale wind farms and ranged from $28 million to $114 million. But it will likely take a while to get projects moving again and rebuild demand.
“We’re building up slowly due to the lack of orders,” said Vestas' Kruse. “We would all prefer to make ourselves our useful, but that’s impossible.”