Despite uncertainty, Portland keeps wind industry bet

Enlarge Image

Steve Casey, general manager for Moventas' Portland operations, says uncertainty over the Production Tax Credit won't stop his company's initiatives.

Moventas, a Finnish maker of wind turbine gears, has been repairing wind turbine gear boxes from a North Portland plant for years.

Last year, the company invested heavily to expand the 70,000-square-foot Portland plant so it could now manufacture new gearboxes for the U.S. wind energy market.

That it comes at a time when the fate of a key federal tax credit has made the U.S. wind industry’s future uncertain doesn’t seem to shake the company.

The federal Production Tax Credit gives owners of wind energy farms a 2.2 cents-per-kilowatt credit on their U.S. income taxes. Speculation is that Congress won’t even deal with the issue until after the election.

“But that in itself, whether it happens or doesn’t, won’t stop us in our initiatives,” said Steve Casey, general manager of Moventas’ Portland plant.

The Portland Development Commission is also standing firm in its commitment to the city’s cleantech cluster.

“For us, we’re not scared off by what we’ve seen as a very short-term variation in the market,” said Patrick Quinton, the PDC’s executive director. “If you’re not willing to take risks, then you’re not in the business to grow (young) industries. It’s part of the business we’re in.”

The PDC has committed significant resources to retain two of the cleantech cluster’s anchor tenants that in recent weeks have laid off sizable numbers of employees.

On Wednesday, the PDC board voted 4-0 to issue a $1.1 million grant as part of a deal to keep the North American headquarters of energy developer Iberdrola Renewables in Portland for 10 more years.

Just a week earlier, Iberdrola laid off 25 in Portland, citing a down cycle in the market. The company — a U.S. subsidiary of Spanish energy developer Iberdrola Renovables S.A. — downplayed any concerns over its long-term future, with spokeswoman Jan Johnson noting that the Portland operation manages more than 5,000 megawatts of energy assets nationwide. Despite the layoffs, the company has more than 20 open jobs.

Vestas A/S, the Danish wind turbine-maker that keeps its U.S. headquarters in Portland, received an $8.1 million, 15-year interest-free loan from the city two years ago for its $66 million Pearl District headquarters now under construction.

Vestas last month said it will lay off 2,335 workers worldwide — including 182 in North America — and said it could lay off another 1,600 at its Colorado manufacturing plants if the federal Production Tax Credit is allowed to expire at the end of the year.

The wind energy industry is a major driver of investment in Oregon.

The 1,920 megawatts of installed wind power in Oregon, as of January 2010, brought the state an estimated $3.1 billion in new capital investment, according to PDC data. Though current data isn’t available, the figure could only have gone up since the state’s installed wind capacity has risen to more than 2,300 megawatts over the past two years.

The PDC notes that Moventas is among close to a dozen international wind energy companies to open offices in the city over the past five years.

Wind energy developer E.ON Climate & Renewables North America, a division of German utility E.ON AG, moved its Western wind energy development offices last fall to Portland.

And, after several years in temporary office space, Boston-based developer First Wind’s Portland office signed a long-term lease last summer on a 5,000-square-foot downtown office, where development director Ben Fairbanks said the company oversees wind energy projects along the Western U.S.

Still others are struggling under the uncertain wind energy policy environment.

Dutch wind turbine installation firm KR Wind, which has an office in Vancouver, Wash., employed 200 in the U.S. two years ago. It now has 25, with only Willem van der Ven, its chief operating officer for North America, in Vancouver.

“The future doesn’t look bright in the U.S.,” van der Ven said.

Quinton believes the market is going through a typical down cycle that’s recoverable.

“We just think of this as a relatively young industry,” he said. “We still think of it as a great long-term industry and a great long-term bet.”

@ErikSiemers | 503.219.3418 | esiemers@bizjournals.com