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Uncovering opportunities, challenges for distributors working in wind energy market

By Bridget McCrea

The U.S. wind energy market has been on a tear for the last five years, having added 35% of the nation’s new generating capacity and ranking second only to natural gas. According to the American Wind Energy Association (AWEA), the third quarter of 2012 saw 1,833 megawatts (MW) of wind power capacity installed, bringing the first three quarters of 2012 to 4,728 MW.

The U.S. wind industry now totals 51,630 MW of cumulative wind capacity (and more than 40,000 turbines) through the end of September 2012, the AWEA reports, noting that there are over 8,400 MW currently under construction spanning 29 states plus Puerto Rico. That means U.S. wind power capacity represents more than 20% of the world’s installed wind power.

Photo gallery: New wind turbines 

Today, the U.S. wind industry signifies not only a large market for wind power capacity installations, but also a growing market for American manufacturing. Over 470 manufacturing facilities across the U.S. make components for wind turbines, and dedicated wind facilities that manufacture major components such as towers, blades, and assembled nacelles can be found in every region.

Geographic Picks

According to the AWEA, the wind energy market is largely concentrated in specific regions (see related article ). South Dakota and Iowa lead a record five states that received more than 10 percent of their electricity from wind in 2011, it reports, and seven states have at least 4,000 wind-related jobs each. According to Steve Schanne, president of Broadway Electric Supply Company in Woodbury, N.J., New Jersey is not one of the states where electrical distributors will see opportunity in the wind energy market.

Related: States where wind energy projects abound 

“There’s not much opportunity here in wind energy. Our state seems to be against it, in fact, based on all of the red tape that companies have to go through to get wind turbines up and running,” says Schanne, whose distributorship has been active in the alternative energy market since 2004. “We were one of the first to jump into it by working with the electrical contractors who brought their customers – and their engineering and design work – to us.”

Tom Acker, professor of mechanical engineering at Northern Arizona University and founding director of NAU’s Sustainable Energy Solutions Group, acknowledges the fact that not all electrical distributors will benefit from the growth in wind energy projects. After all, Acker says, not all states are “windy” enough to produce the power needed to justify such projects. (Check out the U.S. Department of Energy’s online wind maps here.)

“The market for wind power has grown tremendously over the last 12 years,” says Acker. “It’s gone from being a fledgling industry to a much more mature entity.” Growth within that entity tends to align with the government’s production tax credits – an issue that was hotly debated during the recent presidential election.

“These credits give breaks to wind power plant owners per megawatt or kilowatt hour generated,” Acker explains. In January, Congress to the end of the year a production tax credit for wind energy on any facility under construction before the end of 2013. That development should help bring more wind projects online and also help those that were “mothballed” in 2012 due to uncertainty over the credits.

Opportunity Ahead

Despite the challenges facing the wind industry – and the fact that selling opportunities are often centered on specific U.S. regions – Acker says electrical distributors are well positioned to tap into the opportunities that it presents. He points to the AWEA’s annual WINDPOWER Conference, which will take place in May 2013, as a good starting point for companies looking to break into the market.

Within the wind power market, Acker sees two different opportunity areas for distributors. The first are the traditional wind power plants that are producing anywhere from 50 megawatts up to a few hundred megawatts of power, and that are positioned in areas where land and wind resources are plentiful. “Distributors should keep an eye out for these types of projects going in around them,” says Acker, “and target them with electrical suppliers and other goods.”

The second area of opportunity lies in the “very windy Midwest,” says Acker, where wind generation plants are being built in remote areas. “In those areas there will be a need for additional, high-voltage transmissions and the interconnection and transmission equipment that go along with them,” Acker says. “If the production tax credit passes we’ll likely see more projects along these lines and more opportunities for distributors.”

McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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