U.S. WIND BUILDS U.S. JOBS

U.S. and Foreign Wind Companies Create Good American Jobs; Wind energy needs stable policy support in the United States in order to keep creating jobs.
Lutz Weischer, March 16, 2010 (World Resources Institute)

"Recently there have been some questions in the media…and in the U.S. Senate about stimulus grants for wind energy projects going to foreign countries…Empirical evidence demonstrates that predictable support for wind power improves local manufacturing capacity and creates local jobs. Consistent support in the form of the stimulus and long term programs such as a Renewable Energy Standard will give investors the certainty they need to plan and create jobs in the United States…

"…As the state-level programs have grown more numerous and ambitious and the federal support has stabilized (the production tax credit has not been allowed to expire since 2005), the wind industry has experienced a period of rapid growth. In 2008 alone, 55 new facilities producing wind turbines and components opened and there are now a total of 85,000 jobs in the American wind industry, up from 50,000 in 2007…Of the 15 leading global wind turbine manufacturers, 11 operate production facilities in the US or plan to begin operating this year…[The Recovery Act] grant program has funneled more than $2.2 billion and has attracted $10 billion in foreign investment…"

Investment leads to a chain of economic impacts. (click to enlarge)

"…[E]very country that has put in place sufficiently large and predictable mechanisms to create demand for wind power has seen the increase of its domestic manufacturing capacity – and thus domestic jobs. That is mainly because regional production hubs close to installations sites are the most efficient way for the wind industry to organize its supply chain…[T]owers and blades are very heavy and expensive to transport…[T]he domestic content of turbines installed in the U.S. has risen from an average of less than 20 percent in the period 2001-06 to over 50 percent in 2008…

"…The United States does not yet have the capacity to produce every part for every wind project, but it can develop this…In West Texas, for example, American and Chinese companies are jointly developing a 600 megawatt wind farm with some parts supplied by a Chinese company. But 70 percent of the turbines used in the Texas project, including the blades and towers, will be manufactured in the U.S. Furthermore, they plan to build a new turbine plant in the U.S., creating 1,000 American manufacturing jobs. While their long term objective is a 100 percent American turbine, it will take time to ramp up manufacturing. Suspending the Renewable Grant Program could pull the rug out from under projects like this…"

These plants and many more, providing thousands of U.S. jobs, will be the outcome of sustained federal incentives. (click to enlarge)

"…[P]olicy makers should not assume that a foreign-owned company does not create jobs in the United States. First of all, grants go to domestic project developers, not turbine manufacturers. The developer will use part of that money—our working paper estimates around three quarters of it—to buy the equipment, including the turbine. But the rest of it is spent on other up-front costs: paying the project developer’s own staff, construction workers and engineers. In other words, at least 25 percent of a typical grant goes to directly creating American jobs. The other 75 percent may support some manufacturing abroad, but very likely will support U.S. manufacturing as well, especially as domestic capacity increases…

"A closer look reveals how the recent development of the U.S. wind market has been good for local job creation…With the new grant program, the U.S. is beginning to catch up, attracting foreign investment and building domestic manufacturing capacity. To continue on this path, long-term programs, such as a Renewable Energy Standard, would provide investors the certainty they need to plan. However, because it takes time to build local manufacturing capacity, companies will continue to source components globally to overcome local supply constraints and meet deadlines. That’s why the American Wind Energy Association and leading executives from the industry have come out with strong statements against Buy American provisions, saying they could slow down wind power deployment and job creation in the U.S…"