Not long after announcing its first U.S. order of the year, Vestas Wind Systems announced a second large domestic deal for a multitude of projects.
Vestas announced today it has received an order for 30 wind turbines that would generate 60 megawatts from affiliates of Renewable Energy Systems Americas Inc., based in Broomfield, to be used for wind-energy projects throughout the country. Vestas could ultimately supply RES Americas up to 610 MW overall, according to the agreement announced in a news release.
Earlier this month, Vestas announced another potentially large-scale deal in the U.S. with an 80MW order from EDF Renewable Energy, with the potential of climbing to 750MW.
Each project will use the V100-2.0 MW turbine. Deliveries and commissioning for the projects are expected to occur in 2014 and 2015. The new projects’ names and specific locations are not being released, but their components will be built in Colorado — the blades in Windsor, the nacelles in Brighton and the towers in Pueblo. Vestas has a second blade plant in Brighton, but it specializes in building much larger models than this specific project.
“Transactions like this underscore the value delivered by the Production Tax Credit and the importance of extending it beyond its current expiration at the end of 2013,” said Chris Brown, president of Vestas’ sales and service division in the United States and Canada in the release. “Our U.S. manufacturing facilities will produce blades, nacelles and towers for these projects which will help keep our factory workers busy. Vestas has a strong partnership with RES Americas and we appreciate their confidence in our products and services.”
The RES contract is outsdie of the four Colorado projects Vestas hopes to win this year.
“We are very pleased to have finalized this agreement with Vestas,” said Susan Reilly, president and CEO of RES Americas, in the release. “This is a great example of how the ‘start-of-construction’ language in the current production tax credit for wind energy is generating increased spending and creating U.S. manufacturing jobs. This purchase, which we expect to increase as these projects move forward, would not have occurred but for the decision Congress made to qualify any project that starts this year.”
Vestas has previously worked with RES to supply 139 V90-1.8 MW turbines for the Cedar Point wind-energy project near Limon. The project became operational in 2011 and was the first commercial-scale wind power plant in the state to use Vestas turbines made in Colorado, the release stated.
Vestas is gearing up for another push on Congress as another sunset of the Production Tax Credit approaches. At the last minute last year, Congress renewed the PTC for all projects started in 2013, even if they stretched into 2014 or 2015.
“The PTC is an important driver for the U.S. wind industry and extending it remains a top priority,” said Vestas spokesman Andrew Longeteig in an email response to questions. “A predictable, stable, pro-growth tax policy is imperative for the U.S. wind industry to continue to drive more efficient technology development, domestic manufacturing, and private sector capital into the U.S. economy. Vestas has made significant U.S. investments through new manufacturing facilities in recent years. These investments help to create American jobs and contribute to enhancing the U.S. industrial base the PTC extension helps to sustain.”
The PTC doesn’t necessarily benefit turbine producers as much as it does for projects that generate the electricity, but it enticing enough to get the orders rolling. It’s a 10-year credit based on the amount of electricity their wind projects create. The credit is 2.2 cents per kilowatt-hour of electricity a wind farm produces.
In its extension of the PTC, Congress did give some wiggle room to find a way to phase out the PTC over time, but nothing definitive has been put on the table.