New rail yard moving blades for growing Grand Forks manufacturer

TP & L rail yard moving longer blades for LM Wind Power

Grand Forks Herald: Feb. 10, 2017

Those driving 3 miles north of Grand Forks may see something strange: long, narrow, pointed white giants sailing through the sky onto rail cars.

Don’t be alarmed. It may be difficult to tell for those who don’t know, but the 25,000-pound, 187-foot structures being loaded onto trains are some of the first wind turbine blades LM Wind Power in Grand Forks ships across the country by rail. The rail facility was completed in December, with LM sending out its first shipment of blades about two weeks ago.

“The more they produce, the more we can get out,” said Don Spicer, site coordinator for TP&L Management Solutions, a Casper, Wyo., company that built and owns the Grand Forks rail facility. “We have the opportunity with the rail to ship them out at a great price versus trucking them.”

A train carrying 36 blades for wind turbines will leave the facility once a week. That means 36 fewer semis meant to haul blades will be free to haul something else once a week, cutting down expenses, shipment time and truck traffic.

Dozens of blades are waiting at the railyard to be shipped to Kansas and California as staff work to load the white giants onto railcars.

The construction of the rail facility is just one indicator of the wind industry’s growth. The sector in the U.S. had its second-strongest quarter, and the American Wind Energy Association announced Thursday that near-record growth made wind energy the largest source of renewable electric capacity in the U.S. ahead of hydropower.

Out of the roughly 3,000 megawatts in wind farms that went online in the past decade, 1,000 megawatts were completed in the last 10 months.

“That’s the way it is just surging on us,” North Dakota Public Service Commissioner Randy Christmann said.

Wind boom

The construction of wind farms in North Dakota began in the late 1990s and only recently have started to surge in the past several years, Christmann said. The potential for capturing wind for energy in North Dakota is high, particularly in the western and south-central part of the state, according to the U.S. Energy Information Administration, which ranked North Dakota in 2014 sixth for wind energy potential and 11th in utility-scale generation.

“We see incredibly strong activity across the country,” AWEA senior analyst Hannah Hunt said. “We do expect to see this success story continue.”

Hunt said 89 percent of the wind farms installed last year occurred in the Midwest. AWEA estimated wind power could double its output over the next five years, supplying 10 percent of U.S. electricity by 2020 and 20 percent by 2030.

Texas is the leader in producing wind energy—last year, it became the first state to surpass a capacity of 20,000 megawatts. Of the 41 states that have wind farms, North Dakota ranked fourth in terms of installation of wind energy.

Hunt said building farms and producing wind energy has become more affordable in recent years. Wind towers are larger and produce more power than early models. As technology advances, more companies have looked to get into the sector, whether as manufacturers or customers, Hunt said. That means more jobs.

“We know now that—this is a statistic reported through the U.S. Department of Labor—the wind turbine technician position is the fastest-growing job in the United States,” Hunt said, adding there has been a two-thirds reduction in cost in building turbines in the past seven years.

Subsidies

While wind energy has become more economical than previous years, there is no doubt that subsidies from the federal government have helped it along.

Companies have used tax credits to subsidize wind projects across the country, including in North Dakota. After being renewed several times, the 2015 Congress agreed to phase out the Renewable Electricity Production Tax Credit on an 80-60-40 percent schedule, with the credit ending in 2019.

Christmann cited tax credits that have been extended to wind companies over the years as a catalyst for the wind energy’s growth, with many trying to qualify for subsidies.

Hunt called the tax credits a success policy that helped the wind industry grow and produce as much energy as possible.

“The phaseout is a done deal,” she said.

Competition and opposition

Not everyone in North Dakota has been receptive to the wind energy sector. Landowners in Stark County protested an 87-turbine wind farm last year that ultimately was approved by the Public Service Commission. Before that, the PSC maybe heard from one or two opponents. The Stark County project, proposed by NextEra Energy Resources, presented 15 hours of testimony, the longest PSC hearing on a wind project.

“It’s getting more noticeable,” Christmann said of opposition to wind farms in North Dakota.

As wind farms first came to North Dakota, they were seen as novelties. But as more were built, residents in certain areas became vocal, citing concerns of increased traffic during construction, as well as wind blade and shadow noise.

There also has been concern from the coal industry about wind saturating the market. North Dakota’s coal industry, one of the state’s top sectors, has the capability to produce 4,000 megawatts.

Capacity is how much energy can be produced, though most producers’ actual output is less. Wind farms average about 25 percent of their capacity.

The ability to capture wind may be one of the reasons North Dakota has seen growth in the industry. Some wind farms have the ability to capture 40 percent, or 1,200 megawatts per hour, of capacity.

U.S. Rep. Kevin Cramer said he doesn’t foresee the tax credit’s phaseout being dragged on or shortened. The former North Dakota public service commissioner and President Donald Trump’s energy adviser said he never imagined the wind sector would get as large as it did. He called wind farms a “serious threat” to the coal industry, which has seen rollbacks in production and the shuttering of plants—North Dakota’s Stanton Station in central North Dakota announced it would shut down by May.

“That seems like a saturated market,” Christmann said. “If we continue to build wind as it is being built, you will see less energy from coal.”

It’s hard to say how much the wind industry will expand, but subsidies will help the sector “explode” if the federal government wishes to offer tax credits, Christmann said.

“It doesn’t matter whether these are needed,” he said. “There is money to be made just for building them.”

‘Big deal’ for Grand Forks

A world leader in producing turbine blades, LM is one of the largest manufacturers in North Dakota with more than 1,000 employees, said Keith Lund, vice president of the Grand Forks Region Economic Development Corp. In the past four months alone, the company added 200 positions.

“In many cases, rail transportation is the most effective mode,” Lund said, adding the rail facility makes the company competitive across the country. “This facility provides the necessary options for customers of LM Wind Power.”

LM Human Resources Manager Tricia Weber told the Herald most of the employees hired in recent months would work on blades.

The addition of jobs is in sharp contrast to the company’s decision to lay off hundreds of workers in the early 2010s, leaving the Grand Forks plant with 270 employees.

LM added more employees in recent years and announced in October that General Electric would purchase the blade manufacturer for $1.65 billion. The sale likely will be finalized later this year.

Lund said North Dakota’s potential for wind development could create jobs not just in the wind industry but for construction, maintenance and manufacturing workers.

The rail facility can be used to ship other products. Business leaders in Grand Forks have been talking about the facility and what it could do for the city.

Spicer said he was happy to hear people thought the rail facility was a “big deal.”

“I think there are just opportunities all over the place,” Spicer said. “We definitely have the opportunity to put growth in Grand Forks.”

Herald reporter Sam Easter contributed to this report.