Vestas Wind Systems A/S won a second major U.S. order in three days before the country is due to end a tax break for wind-farm projects at the close of the year.
The Danish producer clinched a 220-megawatt deal to equip two Texan projects by Electricite de France’s U.S. renewables unit, the manufacturer said today in an e-mailed statement. The company may also supply EDF Renewable Energy with as much as 1,174 megawatts of turbines under a “master-supply” agreement that was expanded from 750 megawatts, Aarhus-based Vestas said.
Developers have until the year-end to begin building to qualify for the so-called production tax credit, which pays wind-farm owners 2.3 cents for every kilowatt-hour produced. Vestas has won 1,110 megawatts of orders in the U.S. in just over three months, after taking none in the first eight months. That’s a boon for its factories, which are hiring workers.
“We’re looking at a high activity for our factories in Colorado, which is why we’re hiring hundreds of people,” Chief Marketing Officer Morten Albaek said today in a telephone interview. “We also predict high activity level for our employees in construction and service” for 2014.
Albaek said that while it’s “impossible” to predict when onshore wind power will be able to compete with conventional generation without subsidies, more efficient technology makes the need for assistance “less and less and less.”
“Onshore wind is becoming more and more competitive across the globe,” he said. “It depends on what subsidies are given to other energy forms. If everything was equal, then it’s not in too distant a future.”
Two days ago, Vestas won a 350-megawatt wind-turbine order from Enel Green Power SpA in Oklahoma, its second-biggest deal of the year. It’s hiring workers for three of its factories in Colorado, where earlier in the year it was firing employees.
The U.S. market has been stop-start because of government flip-flopping on the tax credit. The break was allowed to expire at the end of 2012, leading to a rush of orders, with the U.S. adding a record 13,124 megawatts of turbines last year.
That led to a dearth of new projects at the start of 2013, even when the credit was unexpectedly renewed on Jan. 1.
Under Internal Revenue Service rules, developers can qualify for the credit by beginning construction this year, including road-building, pouring concrete or off-site assembly of turbines. They can also qualify if they incur 5 percent of the total cost of the project this year, leaving the bulk of spending and construction for 2014 and 2015.
Vestas shipped 1,313 megawatts of turbines in the U.S. in 2012, more than double its next biggest market in Germany.