While the competitiveness of wind power in the U.S. continues to improve, its gains are being achieved at a painful cost to some U.S. manufacturers' market share. That is the feedback from companies that are struggling due to plunging price points for turbine components and the growing trend toward imported alternatives.
Beginning in 2007, Kocsis Brothers, a full-service machine shop based in Alsip, Ill., was encouraged to add new capacity by its major wind turbine customers. The company responded with nearly $6 million in new equipment, including one machine capable of handling a turbine's largest parts with state-of-the-art computer-numerical control. However, the company's volume has fallen from a high of 16 hubs per week in 2008 to a total of two this year.
Abrasive Blasting and Coating Services, a South Carolina-based provider of coating services, recently opened a second Elkhart, Ind.-based plant to handle the expected growth in wind turbine business. But volume has fallen off this year and the firm says it is now manufacturing fewer original equipment pieces.
The downturn can be blamed on steep price erosion for wind turbines caused by global oversupply and on the impact of rock-bottom U.S. natural-gas prices for new power purchase agreements for developers. What follows is a need to compensate with lower costs on the component end.
This is especially frustrating for supply-chain managers for wind turbine original equipment manufacturers (OEMs) with domestic-content goals who have worked hard to develop a strong local supply chain and realize that their partners are under fire like never before.
To address these supply-chain issues, wind turbine OEMs, key supply-chain leaders and policy experts will meet July 13-14 in Cleveland to examine key issues that are slowing growth prospects.
The conference, sponsored by the Great Lakes Wind Network (GLWN), will feature town-hall-style forums on key issues threatening supply-chain growth, such as increasing global competitiveness, leveling the international playing field, lowering costs through new design and managing foreign specifications.
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Ed Weston is executive director of Cleveland-based GLWN. He can be reached at (216) 920-1965 or firstname.lastname@example.org.