The WINDS of opportunity

The wind power industry is poised to change the nature of energy production in Canada, creating new business opportunities for manu manufacturing facturing and materials innovation. This new direction was heralded by the announcement in February 2010 that a South Korean consortium led by Samsung C&T had reached a $7 billion deal with the Ontario provincial government to manufacture manu facture and deploy wind energy gear in Ontario over the next six years. On the heels of that, Toronto-based offshore wind developer Trillium Power Wind Corporation selected Denmark’s Ves Vestas tas Offshore–the world’s largest maker m a of wind turbines–as its preferred supplier sup plier on all four of its offshore wind projects under development on the Ontario side of the Great Lakes.

REALLY GREAT LAKES

All signs point to the Great Lakes being the focal point of the wind turbine technology boom. The biggest freshwater offshore wind resource on the continent, the lakes are a huge draw for wind power companies, offering enormous potential because of the mix of high winds, relatively shal shallow low water and the proximity of existing transmis transmission sion lines.

The Ontario government hasn’t missed a beat either, acting quickly to make the region investor-friendly. The province’s two-year-old Green Energy Act, designed to boost investment in renewable energy projects, makes it relatively simple for turbine makers to obtain wind farm permits. In this it’s been a huge success: The government has been so overwhelmed with applications for offshore wind projects that last fall it stopped accepting them.

In short, wind turbine manufacturing in North America seems set to go from cottage industry to large-scale production operation. It’s the beginning of a game-changer for innovative Canadian manufacturers, including mold makers and plastics processors looking for diversification and renewal.

STEEL SUBSTITUTE

The only questions are, exactly what’s in it for these and other firms, and how ready are they?

A typical wind turbine is made up of about 8,000 separate parts, from electronics to heavy metal components, each one of which offers manufacturing potential for any company with experience making precision components. Blades, for example, are primarily made of glass-reinforced plastic–an obvious manufacturing opportunity for processors right now. Blades aside, turbine material usage is currently dominated by steel, but opportunities exist for introducing aluminum or other lightweight composites like plastic, provided strength and fatigue requirements can be met.

A study underway in Ohio might point the way to a hugely expanded role for plastics in wind turbines in the future. Scientists at the University of Dayton Research Institute (UDRI) are designing and testing structures and materials for fibre-reinforced plastic composite turbine towers up to 330 feet tall, 65 feet taller than the steel wind towers currently used.

According to Brian Dice, division head for Multi-Scale Composites and Polymers at UDRI, the goal is to make the towers taller for access to greater wind speeds, but without the transportation and assembly headaches caused by trucking ever-longer sections of steel turbines to remote wind farm locations. “Instead, fiberglass and resin tower sections would be manufactured at the wind farm using raw materials sent to the site, with part molding carried out locally,” he said.

STANDARD PROBLEM

While the jury is still out on the UDRI project, the possibilities it suggests for plastics processors and mold makers on both sides of the border are hard to exaggerate–but there’s no shortage of Canadian firms preparing for wind turbine projects right now. Take a new cooperative venture called XAG Energy, for example. Founded by five Windsor, Ont. business leaders, XAG Energy is working to create a single source of access to a network of southern Ontario manufacturers, assemblers, construction professionals and service providers capable of working on wind turbine projects.

Since setting up headquarters in April 2009 in Oldcastle, Ont., XAG Energy has seen its membership swell to 200 companies, and has also joined Ottawa, Ont.-based trade organization the Canadian Wind Energy Association (CanWEA). The next steps, according to XAG Energy’s Ed Bernard, include an ongoing project undertaken with the Great Lakes Wind Network, a Cleveland, Ohio-based supply chain network for wind turbine manufacturing. The goal is to assess Canadian shops, determining which are currently capable of supplying wind turbine parts that meet international technical standards. “We’ve also formed a joint venture with Great Lakes Wind Network to establish North American quality and audit standards that meet global requirements,” Bernard said.

For manufacturers looking for access to the wind turbine industry, Bernard explained, the name of the game is measuring up to these often-formidable technical standards. “Each wind turbine is certified as a unit, and this means even the smallest component can’t be changed without affecting the performance of the entire turbine,” he explained. “Standards are everything in this situation, and before a foreign turbine supplier awards a contract in North America, it requires a company to show it can meet these standards by passing an independent assessment. Until Canadian manufacturers can build to international standards, they’re restricted in the short term.”

Restricted, but not shut out. Some Canadian shops, among them an XAG Energy board member, are already involved in parts production, making wind turbine towers, blades, nacelle covers and more.

These examples aside, how ready for these challenges is the average manufacturer? “Right now, Canadian companies have the skills, the equipment and the plant capacity for assembly of major and minor turbine components, but not always the culture,” Bermard said. “The cultural change comes when they realize that today’s wind turbine industry is at the same point as the auto industry 100 years ago–it’s that big an opportunity.”

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The Gasp Peninsula Example

In Quebec’s Gasp Peninsula region, where many traditional industries like fishing, agriculture, forestry and mining are in decline, wind energy has brightened the economic picture. To take advantage of strong, reliable onshore winds from the Gulf of St. Lawrence, eight wind farms with a total installed capacity of 422.25 megawatts have been in operation since 1998, with eight more slated for operation by 2015.

For the manufacturing community, $63 million of investment has already created 600 permanent jobs and spawned a further 200 jobs in research, training, transportation and other services. Gasp Peninsula firms are now producing turbine towers, turbine blades, nacelle covers, control panels and other wind energy components. Some of these companies are already exporting wind turbine components to the U.S. and other parts of Canada.

Source: Quebec Ministry of Natural Resources

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The Wind Energy Supply Chain

In simple terms, a wind turbine consists of a rotor that has wing-shaped blades attached to a hub; a nacelle that houses a drivetrain consisting of a gearbox, connecting shafts, support bearings, the generator, plus other machinery; a tower; and ground-mounted electrical equipment. A 2008 CanWEA survey of Canadian manufacturing capabilities and demand revealed hundreds of firms which have or could easily acquire the technical competence to supply components for wind turbines. Markets in which Canadian firms would enjoy a competitive advantage include:

TURBINE TOWERS–Due to high transport costs, turbine makers prefer to source towers locally.

ROTOR BLADES–Due to high transport costs and the risk of damage in transit, turbine makers prefer to source rotor blades locally.

CASTINGS–Canadian producers with the right equipment could supply
large castings for frames, gearbox housings and turbine hubs. Turbine makers compete with other industries for casting services and capacity is tight worldwide, offering an opportunity for new entrants.

FORGINGS–Canadian producers with the right equipment will have ready access to this market. Worldwide capacity is tight, and demand comes from various sectors. Canadian experience from hydroelectric turbine shaft forging will be an advantage.

NACELLE ASSEMBLY–High transport costs coupled with relative low setup costs favour local producers. The establishment of nacelle assembly facilities will stimulate development of a local sub-components supply chain.

NACELLE COVERS–High transport costs favour local suppliers with experience in large composite material construction, including plastics.

Source: CanWEA