Is Detroit the next "windy city?"

July 12, 2007
You'd think Amir Mikhail would be a happy guy. His employer, Clipper Windpower Inc., just came out with an innovative wind turbine hailed as a breakthrough for producing electricity economically.

Its Liberty Turbine carries a gearbox and generator that are considered groundbreaking and which Mikhail helped design. Fans of green energy think so much of the 2.5-MW turbine that production is sold out through 2009. Better yet, the Liberty is made in the American heartland of Cedar Rapids, Iowa, and represents new U.S. manufacturing jobs.

But Mikhail, Clipper's engineering vice president, has mixed emotions about all this success. It bugs him that his company was forced to source a lot of Liberty's key components and assemblies overseas. He figures the work and jobs behind these components could just as easily have been done in the U.S.

"We designed our generator here but we had to go to Brazil to get it manufactured," he fumes. "We couldn't get all the gears we needed from U.S. suppliers. We had to go offshore for some of them, too. The U.S. has almost lost the ability to manufacture high-tech gears."

Mikhail sees this lack of U.S. manufacturing capability as a lost opportunity. "If we could make key parts and assemblies here we could produce wind turbines more cheaply than the Europeans," he claims.

Being a cost leader in wind turbines would be no small thing. In 2003, every second wind turbine made worldwide was installed in Germany. The situation has changed, but Europe still accounts for a big chunk of windturbine sales.

Wind energy could be the catalyst thatreverses the decline in U.S.manufacturing infrastructure. Steve Tabor, CEO of Nordic Windpower LLC, certainly thinks so. Though Nordic's 1-MW-turbine design comes from Sweden, the company is in the process of setting up U.S. manufacturing facilities. Tabor's eyes light up when he talks about these plans. "We could unhollow-out U.S. manufacturing by just creating a stable environment for windpower generation here," he says.

There's something to be said for this idea. Wind-turbine manufacturing is analogous to automaking. The Big Three depend on a network of Tier-1 and Tier-2 suppliers for assemblies and critical parts. Windturbine makers are no different. But wind turbines operated by utilities are huge, as are many of their subassemblies. Logistics favor keeping part suppliers close to the point of assembly.

Wind proponents say this proximity argues for a U.S. wind industry. A recent study by windrelated manufacturers and the U.S. National Renewable Energy Lab concluded it would be feasible for the U.S. to eventually get about 20% of its energy from wind turbines. The group also foresees 3.7 million jobs created by a U.S. wind industry. They figure Michigan and Ohio would be among the biggest beneficiaries because these states have the right industries in place for turbine components.

But I think the study missed one large group that would also come out ahead: Long-suffering newspaper readers no longer barraged by reports of Rust Belt economic woes.

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