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German wind conference

Thursday 20 December, 2012

The German American Chamber of Commerce of the Midwest hosted a Wind Energy Business Conference with a focus on supply chain & service industries.  Nico Heinemen, of the Federal Ministry of Economics & Technology, greeted everyone & provided the 20 year history of wind energy in Germany & how the German government has supported it’s development.  They had 4 objectives:  1.  disseminate expertise 2. advance renewable energies  3.  boost the wind energy market  4.  provide comprehensive support for German companies.  60% found partners & they reduced the cost of entering the market by 30%.

Janos Buechner, of Energiewaechter, added that an additional aim was knowledge transfer.  His organization sponsors trips to Germany for research which lead to pilot projects.  In reaction to the Fukishima disaster, Germany will eliminate nuclear power by 2022.  72% of energy is used to simply heat space, so more R&D is needed on energy storage, efficiency, & grid expansion.  12.5% of energy consumed is of renewable energy, wind provides 2%, biomass 8.4%.  Renewables are 20% of the electricity market.  The benefits of more wind energy are less fossil fuels & more jobs.  40% of owners/investors in renewable energies are private individuals, 11% are farmers.  93% of Germans want an intensified energy turnaround.

Tom Lange, Policy Advisor to the German Wind Energy Association (DWEA), noted that DWEA is the largest wind association in the world with 20K members.  Cumulatively by 2012, the German wind industry has provided 30,016.47 MW of power with 22K wind turbines.  Germany has an installed capacity of 29K MW;  Spain is next in Europe with 22K MW, & then France @ 7K MW.  In 2012, Germany had 102K jobs in the wind sector.  Germany has led a big media campaign for wind energy & creating new standards for grid expansion & storage.  Europe has a pilot grid, but needs a common EU energy policy.  Improvements in wind-turbine technology have resulted in turbines growing from 100m high which produce 600kw of power in 1995 to 180m which produce 2K kw of power now.  German expertise leads in forecasting in complex terrains like forests, using new materials, technology integration, & test facilities.  Challenges in offshore wind production are logistics, cable connections, grid expansion, & financing.  The outlook for wind energy depends on Germany’s 2013 elections &  common EU wind energy growth decrease.

Dr. Nancy Dahlke, of Key Wind Energy, discussed operations & maintenance (O&M) of wind farms in Europe.  The main difference is inthe costs between being reactive to solve problems or using reliability-based service which seeks to eliminate problems before they occur.   Condition-based maintenance requires CMS, a Condition Monitoring System.  The best is to combine a reliability-based system with CMS.  Siemens earns the highest grades for service & Enercon the worst.  Full maintenance contracts are being required by banks.  Costs vary by manufacturer.  An energy information/distribution center provides status reports, scheduling of maintenance tasks.  All this requires highly-qualified staff, so it helps to minimize employee turnover.  This increases predictability & accuracy.  Wind farm operators are becoming energy traders.  As quality requirements increase, maintenance is becoming more important than repair.

Luke Lewandowski, of Make Consulting, offered an overview of the American wind energy market.  The long-term policy outlook is unclear while macroeconomic trends create headwinds.  Services markets are optimistic.  Comprehensive tax reform is expected soon.  Growth is supported by renewable energy standards programs.  2007-2012 were big building years.  A new comprehensive energy policy is needed.   2-5 year warranties which have been driving the market are set to expire.  As the installed base grows, it slows growth.  As the serviceable market grows, so does competition.  The US market can be divided into 3 segments with advantages & disadvantages for each:  2011->2016

  1. 1. independent service providers 16%->12%
  2. 2. turbine OEM’s (GE, Siemens) 48%->42%
  3. 3.  self-performers 36%->46%

For all, financial & technical risks must be balanced.  Wind service business models evolve into hybrids of those just mentioned.  The largest US owners favor self-performance service.  It’s the owners who are learning service that are driving warranties.  Overcapacity is driving OEM’s to diversify & focus on O&M.  Turbine OEM’s are serving warranty extensions.

Kimberley Smith informed us that Acciona Energy works in 13 countries on 5 continents with 225 wind farms, 6K wind turbines.  They’ve achieved this by using a global multi-sourcing strategy.  The US challenge is how to excel when going from a Boom market to a Gloom market.  Supply chain management points to increasing globalization over localization, systems overcoming tiers, & necessitating industrial standards.

Martin Lubahn, of Winergy Drive Systems, let us know US content in wind turbines is 70%.  Growth in Canada & Latin America are offsetting weakness in the American market as service’s importance grows.  Supply chain management requires 90% uptime in North America & ISO 9001 certification.  The life cycle of services logically leads to a focus on costs.  Should a town provide service?  What about spare parts & quality assurance, & reporting?  Decreasing visibility, investment & reaction time come @ the same time as increasing volatility & currency risk in the industry.

The following German companies also made presentations:

  • Rewitec GmbH
  • cmc gmbh
  • Directtech global GmbH
  • windigo GmbH
  • Saarteco GmbH
  • Trendelkamp Technologie GmbH
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