On Sept. 20, the Internal Revenue Service (IRS) ruled that wind projects started by Dec. 31, 2013 – and placed into service by Dec. 31, 2015 – are eligible to qualify for the production tax credit (PTC). The IRS guidance means that wind developers planning PTC-eligible wind farms have a bit more cushion built into construction planning than previously thought.
With the urgency to complete projects alleviated, some wind developers tell NAW that they haven’t begun to worry about securing main erection cranes, which are critical components for wind farm construction.
John Lamontagne, spokesperson at Boston-based developer First Wind, says the company does not expect to begin construction on wind projects until “mid-2014 at the earliest.”
Blake Nixon, president at Minneapolis-based developer Geronimo Wind Energy, agrees that developers are in no rush. The 2015 deadline, he says, alleviates much of the urgency that was previously thought would happen in the beginning of 2014.
While crane procurement is not top of mind for wind developers (at least not yet), you can bet it is for their contractors and service providers charged with providing the machines.
Generally speaking, while some deep-pocketed developers own their cranes outright, most wind developers rely on their construction service providers to rent a crane (or several) on their behalf.
Chris Hanson, vice president of wind energy at H.B. White Construction, a subsidiary of Infrastructure & Energy Alternatives, sees 2014 as another demanding year in wind turbine construction.
“Crane availability will be a hot topic,” confirms Steve Klatt, crane manager at Mortenson Construction. In fact, the Minneapolis-based construction services provider is already beginning to see tightening in the crane market, specifically for crawler and main erection cranes.
Klatt predicts the real challenge will come between May 2014 and November 2014, when there will be a shortage of cranes in the 300-ton and above classifications.
Further complicating matters, a boom in civil engineering projects means obtaining some main erection cranes, such as the Manitowoc 16000 and 18000 and Demag CC 2800, is no longer a given. In addition, these same cranes used in wind farm construction are already being used elsewhere, such as the Gulf of Mexico, where a spate of new petrochemical plants have started construction.
Then there’s the fact that wind farm construction is rough on cranes.
“The crane’s undercarriage takes a beating,” Klatt says, explaining that cranes could possibly travel – or, using the parlance of crane operators, “walk” – more than 50 to 75 miles over the duration of the project. Therefore, some crane suppliers may have concern about renting the crane for the purpose of wind farm construction and can now be more selective about their customers.
Conversely, a crane building a petrochemical plant may only be required to travel 300 feet before setting its permanent picking location.
“It’s all about wear and tear on the machine,” Klatt says. As an example, he tells a story about two employees meeting in Las Vegas for a conference. One employee flies to Las Vegas – and then rents a car locally – while the other employee drives to Las Vegas from the East Coast. “If you were the car company, who would you rather rent to?” he asks rhetorically. “The same principle applies here.”
With the demand for cranes likely to be high next year, it’s never too early to begin planning. Here are a few tips to ensure you have the crane you need, when you need it.
Get in the game early. Plan your strategy to secure the cranes you need as soon as you can.
Work with a trusted provider. This sounds like a no-brainer, but Klatt says working with a contractor that has established relationships with crane suppliers and manufacturers will keep your wind project on track if and when problems occur.
Be prepared. The old Boy Scout motto applies here. Out in the field, anything can happen – and typically does, explains H.B. White’s Hanson. He is a strong believer in also having a Plan B. “Cranes can break down, and having a backup crane plan to maintain schedule is important to keeping a client’s trust,” he says.
Avoid “over-craning”. Review your projects so that you understand two things: turbine size and the crane needed to erect the turbine chosen for the project. The rationale, says Klatt, is that when you go to rent or lease the proper crane, you procure only what you need. Otherwise, you run the risk of “over-craning and costing the project more money,” he explains.
Create an assembly line. Try to line up projects back-to-back so that crane equipment can move from one project to the next, explains Brian Thomas, vice president of business development at Barnhart Renewables. “Doing so mitigates the risk of project delay if the main crane is lagging behind on the prior project on account of wind or weather,” he says. w
Got Cranes? It’s Not Too Early To Begin Planning
By Mark Del Franco
Recent IRS guidance for the production tax credit may have resulted in more time to complete projects. However, proactive firms should leave nothing to chance when it comes to crane procurement.
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