News

The Economic Reach of Wind

April 17, 2009

The wind industry creates jobs across multiple sectors and lures still more from overseas -- and the numbers are there to show it.
by Elizabeth Salerno and Jessica Isaacs, AWEA
Washington, DC, United States [RenewableEnergyWorld.com]
In the current economic climate, we are confronted with daily reminders of dwindling demand for products and escalating job losses that are impacting many American industries. Yet in this unsure time characterized by factories closing their doors and laying off workers, the wind industry continues to shine as a testimony to American innovation and manufacturing might.
Across the U.S. economy in 2008, nearly 2.6 million jobs were lost; while wind industry growth alone of course did not singlehandedly counteract the losses, it did counter the negative trend. And better still, some of those companies that had laid off workers are already hiring some of them back.
This trend is illustrated by the numbers: as the U.S. economy hemorrhaged jobs in 2008, the wind industry enjoyed 70% job growth - growth that supported a 60% surge in new wind capacity installation over 2007. The wind industry installed 8,358 MW last year, which accounted for roughly 40% of all new electricity capacity. This incredible growth led to the addition of around 35,000 new jobs, creating a total of 85,000 people now employed in the wind industry. More impressive still, even though the new jobs were wind power jobs, they were added across myriad sectors, such as manufacturing, construction and operations, among others.
The wind power jobs story is also one of "on-shoring" (as opposed to offshoring). In 2008 a continued shift toward domestic production resulted in nine new facilities opening across the country and many more on the way. But manufacturing is merely one area of wind's job creation.
The Growing Supply Chain
On the manufacturing side, the job creation starts at the very beginning of the supply chain - natural resources - and continues through to the assembled turbine. The installation of 8,358 MW of wind translates to around 5,000 turbines erected in 2008, creating enormous demand for both raw materials and finished components. Approximately 8,000 components make up a single utility-scale wind turbine; materials range from the high-tech composites used to make light and aerodynamic blades, to the symbolic mainstay material of old industry, steel, which accounts for around 90% of a turbine's weight.
In the past, the U.S. wind industry relied largely on imported components; however, there has been a remarkable shift towards domestic manufacturing in the past few years that is likely to continue. Since 2005 many of the leaders in turbine manufacturing have opened U.S. facilities; of the top 10 global suppliers in 2007, seven - Vestas, GE, Gamesa, Suzlon, Siemens, Acciona, and Nordex - have an American manufacturing presence. (The other three - Enercon, Goldwind, and Sinovel - do not yet sell into the U.S. market.) In addition, the homegrown Clipper Windpower has joined GE Energy as a major domestic player in the production of utility-scale turbines, with the two companies together capturing 50% of the 2008 domestic market.
Domestic manufacturing for large components in particular, such as towers and blades, has increased significantly over the past several years, with the majority now produced in the U.S. As for the thousands of smaller and midsized components, while the U.S. continues to import some of them (mostly from Europe) many more can now be sourced from American companies.
Once again, the numbers tell the story: between 2005 and 2008, the percentage of domestically produced components in a turbine increased from around 30% to nearly 50%, based on cost. Continuing that trend, nacelle components will increasingly be produced domestically.
This trend has resulted in well over 100 companies now producing components for wind turbines, employing thousands of workers in the manufacture of parts as varied as towers, composite blades, bearings and gears. Thus, many existing companies in traditional manufacturing states have retooled to enter the wind industry and produce components for the green economy. Their manufacturing facilities are spread across 40 states, employing workers from the Southeast to the Steel Belt, to the Great Plains and on to the Pacific Northwest.
And with plans for 30 new manufacturing facilities announced in 2008, the wind industry expects to see a continued shift towards domestic manufacturing in the coming years. In total, 70 manufacturing facilities have come online, been expanded, or announced since January 2007. Yet although enhanced manufacturing capacity and associated jobs are part of the foundation for a strong U.S. wind industry and contribute to strengthening the U.S. economy, wind jobs reach far beyond component production.
With those 8,300-plus MW of wind installed at over 100 different wind projects in 2008, many construction workers found work in the wind industry. Wind project construction jobs are often a blend of specialized wind industry construction companies and management that work alongside local construction companies near the wind project site. In 2008 alone, approximately 8,000 construction workers were needed for the many aspects of wind farm construction, including those for building access roads, securing turbine foundations that typically use 900 tons of steel-reinforced concrete, erecting towers made of up to 300 tons of steel plate, and driving massive cranes to secure 100-ton nacelles and rotors to towers. Given that new wind projects came online in over 25 different states in 2008, these construction jobs were widely distributed across the country.
Another area that saw inevitable job growth was in operation and maintenance, or O&M. With the 2008 capacity addition, the U.S. now has over 25,000 MW of wind in the ground, all of which must be operated and maintained. Wind turbines are massive and complex machines, and skilled workers are needed to keep them running for 20 years or more. In 2008 approximately 800 "wind technicians" joined the existing 1,600 workers in long-term, full-time jobs operating and maintaining the nation's wind turbine fleet.
In addition to such positions, the wind installations completed at over 100 wind projects in 2008 were possible only with the participation of thousands of highly skilled workers across varied professions to work in the areas of site assessment, permitting, siting, developing, financing and electric grid interconnection.
Finally, the entry of 35,000 new employees within a single year into the various facets of wind energy has continued to make training a key focus of the industry. At the end of 2008, over 100 different educational institutions offered or were developing programs for wind and renewable energy, ranging from certificate programs and two-year associate's degrees to bachelor's and graduate degrees. For example, the specialized wind technician jobs require months and sometimes years of training in a wide range of areas including hydraulics, electronics, safety, and troubleshooting. In addition to having to possess this valuable skill set, workers must use such skills at heights of 250 feet in the air, either on top of the turbine in the elements or inside the nacelle, which is the size of a relatively small office.
Strong Net Gains
Now in 2009, announcements of job losses in various industries have become a familiar part of daily media reports - yet bright spots continue to shine through in the form of more news of new jobs in wind, even during the first few months of this year. Not surprisingly, the wind industry is not entirely insulated from a declining economy, and some companies in fact have announced job losses following short-term industry challenges such as increased difficulty financing projects due to the banking credit crisis and the devaluation of the production tax credit (enough companies need to be earning a profit and paying taxes in order to utilize such credits).
Still, net growth in wind power remains in the double digits-even in the face of an economic downturn that has hit manufacturing (and even construction) hardest. Across the U.S. economy in 2008, nearly 2.6 million jobs were lost; while wind industry growth alone of course did not singlehandedly counteract the losses, it did counter the negative trend. And better still, some of those companies that had laid off workers are already hiring some of them back.
Only a Demo
While 35,000 jobs is clearly nothing to sneeze at, perhaps just as important is that the job numbers the industry produced in 2008 serves as a telling indicator of potential. Last year the wind industry demonstrated its remarkable potential for both generation capacity growth and job creation. Investing in the wind industry creates a new engine for the nation's economy, driving growth in manufacturing, supporting construction jobs, and promoting economic development; thus, its potential cannot be ignored.
The wind industry can and will continue to grow, given a stable policy environment that levels the playing field for all generating sources. Legislators have the power to ensure continued expansion of wind power and jobs though a national renewable electricity standard (RES) and legislation to create a national transmission system that accesses the nation's vast renewable energy resource. As shown in a 2008 Department of Energy report, policies that will help the U.S. reach 20% wind penetration by 2030 will create at least 500,000 jobs in our economy; all that is needed is a signal that we are ready and willing to make this commitment.
For More Information
Wind energy's impact on the economy will undoubtedly be a topic of discussion at the WINDPOWER 2009 Conference & Exhibition, which takes place May 4-7 in Chicago. One particular session-"Wind Industry, Jobs, and Education"-will bring together a panel of experts from government, industry and academia to take a look at such issues as education and training, recruitment and other topics.
"We've got a bunch of great speakers [comprising] the different segments of the market," said session moderator Ian Baring-Gould, senior engineer at the National Renewable Energy Laboratory. "It should be a really good session."
Additionally, a meeting will take place on May 4th on the topic of workforce development implications with respect to the U.S. achieving 20% wind penetration by 2030. The purpose of the meeting is to examine the challenges going forward as well as work toward an action plan to tackle those challenges. Hosted by AWEA along with the U.S. Department of Energy and the National Renewable Laboratories, the meeting will also look at how more grant opportunities are becoming available in the area of workforce development as a result of passage of the stimulus plan. All WINDPOWER registrants are welcome but are asked to RSVP to [email protected].
Elizabeth Salerno is manager of policy analysis and Jessica Isaacs is policy research analyst at AWEA.
This article first appeared in the March 2009 issue of Windletter and was republished with permission from the American Wind Energy Association (AWEA).