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Breakbulk April 2017

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8 THE JOURNAL OF COMMERCE APRIL 2017 onshore installations and 80 meters long for offshore units. The longer blades and more powerful turbines reflect the wind energy industry's push to improve its per-unit costs and reduce its reliance on subsidies and tax credits that have been employed to help the industry get started. Capital costs of wind energy have dropped in recent years through increased economies of scale, more competitive sup- ply chains, and technical improvements. In a recent conference call with ana- lysts, Jim Robo, CEO of Florida-based utility Nextera Energy, said he expects US wind energy to be effectively competi- tive with traditional sources by 2020, even without federal subsidies. Iowa, South Dakota, Kansas, Okla- homa, and North Dakota sourced more than 20 percent of their energy from wind during 2016, according to the US Energy Information Administration. Wind and other renewable energy in the US got a boost in late 2015 with the government's extension of production and investment tax breaks through 2020. Forty US states now have wind energy installations, with total power generation approaching levels from US hydroelectric power, the USEIA reported. Government incentives, including revenue guarantees to investors, spurred early development of wind power in Europe. Last year, wind accounted for 51 percent of new power capacity in the European Union, and generated 10.4 percent of EU electricity requirements, according to WindEurope, an industry advocacy group. The cost of building an offshore wind farm has fallen 46 percent in the last five years, including a 22 percent drop last year, making it less expensive per mega- watt hour than nuclear developments in Europe, and close to the cost of a new coal-powered plant, according to Bloom- berg New Energy Finance. Much of the Europe's recent wind power expansion has been in Germany, which has moved to decommission its nuclear power plants, and in the North Sea. Companies such as Siemens and Dong Energy, a Danish utility that pio - neered offshore wind technology, are investing heavily in offshore wind energy. The US is just beginning to tap offshore wind power. Last year, the Block Island wind farm off Rhode Island began producing the first US electricity from wind power. Leases have been awarded for several other sites off the Atlantic coast, but construction is at least several years away. The extended slump in oil prices has generated interest from companies that developed expertise in installing oil and gas drilling rigs and production platforms. Offshore specialists based on the US Gulf Coast had a big role in construction of the Block Island wind farm. As the industry has expanded in scale and scope, it has followed the lead of other industries, such as auto manufacturing, and established integrated manufactur- ing, supply chain, and construction. Ma nufacturers also have located component-manufacturing plants closer to demand. Denmark's Vestas, one of the largest wind farm builders, has US three plants in Colorado that employ nearly 5,000 workers. Most of the wind farm development in the North Sea is supplied from the European continent and the UK. Com- panies such as Fred.Olsen Windcarrier and Siemens have invested in specialized ships for delivery and installation of wind towers, turbines and blades. Spain, an early leader in wind power manufacturing, has reacted to slower domestic demand and increased EU competition by seeking new markets in Latin America and eastern Europe. However, local-content requirements in countries such as Turkey, Brazil, and India have cut into demand for long-distance transportation of components. The biggest market for wind energy installations is China, which in 2015 overtook the EU in total installed wind energy capacity, according to the Global Wind Energy Council. Most of China's wind energy installations are supplied by domestic companies, some of which have dipped their toes into other markets. Last November, shipments totaling 70 Chinese-made wind turbine blades mea- suring 59.5 meters long were delivered to Newcastle, Australia, and transported 550 kilometers to the White Rock wind farm in New South Wales. l Contact Joseph Bonney at and follow him on Twitter: @JosephBonney. COVER STORY

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