Monday, May 04, 2009

An Ill Wind Blowing

Free as the wind. That's the belief. Wind is free. Sunlight is free. Tides and rivers of running water are free. With all the free energy around us, it should be cheap and easy to power the country. But converting all that free energy is, unfortunately, expensive. However, a lot of people are slow learners. Or they know a gift-horse when they see one. The gift-horse, in this case, is the hapless American taxpayer, represented by Barack Obama, the president who wants Americans to believe in a free lunch.

Alternative Energy's Fortunes Shift With the Winds

Cedar Rapids, Iowa -- James Dehlsen has spent decades trying to build a bigger and better machine to convert a breeze into electricity.

"The industry has been impacted pretty heavily," says Mr. Dehlsen, chairman of Clipper Windpower, one of a few U.S. wind-turbine makers. Asked about the demand for turbines, he says: "It's not up."

Just a few months ago, Clipper Windpower's turbines were in high demand. The company recently laid off workers.

President Barack Obama and politicians of both parties vow a renewable-energy revolution. The ups and downs of Mr. Dehlsen's company show both the promise and the difficulty of that vision. Creating reliable energy from a fuel as fickle as the wind is difficult. Doing so without predictable and prolonged help from Capitol Hill and Wall Street is all but impossible.

Few industries are as hard to change as energy. Fossil fuel, entrenched and convenient, follows a boom-and-bust cycle that keeps interrupting the development and adoption of alternatives. Phasing in new energy sources on a scale big enough to matter would take consistent effort over decades -- something that, so far, hasn't happened in the biggest oil-consuming country in the world.

Europe has been more consistent. Longstanding subsidies there have incubated renewable-energy companies that now have gone global -- much like higher gasoline taxes have pushed most Europeans away from gas-guzzling cars.

Before the recession hit last fall, renewable energy, such as wind farms, were seeing a boom in jobs, growth and funding. But now financing has dried up and layoffs are occurring.

Today's recession is whipsawing renewable-energy companies regardless of their nationality. Layoffs and production cutbacks are spreading throughout the industry. In response, the U.S. is moving to boost its subsidies, largely to generate what Mr. Obama calls "green jobs."

That's a big opportunity for Clipper -- if it can get past the recession. In the past few months, Clipper has laid off one-quarter of the workers, and it has slashed its production of wind turbines by more than half. Like many of its competitors, it's spending huge sums fixing mechanical problems that couldn't have come at a worse time.

Today's wind turbines weigh more than 300 tons and stand some 300 feet tall. Their three fiberglass blades slice through a circle of airspace covering nearly two acres. The blades turn gears, which run generators, which produce electricity.

Mr. Dehlsen founded Clipper and began developing an even bigger turbine. In 2005, he tested it in a howling Wyoming snowstorm.

Clipper leased an abandoned printing-press factory in Cedar Rapids. The arrival of Clipper and other wind-energy companies was a blessing for Iowa, which had been losing manufacturing jobs.

In 2007, Clipper's first full year of production, cracks developed on the blades of some turbines the company had installed, and the teeth on some turbines' gears began to wear prematurely. In response, Clipper reinforced the blades of all its turbines. It also brought the gearboxes of all its turbines back to the factory to check and, if necessary, repair. Then, last year, more problems emerged with blades and with a few gearboxes. Clipper says the problems originated with suppliers.

But the industry can't control the economy. Last fall, the debt markets collapsed, the recession set in, and orders for new turbines screeched to a halt. Clipper halved production, to about four turbines per week. In January, it laid off about 80 workers.

Other wind-turbine makers also have had layoffs. Clipper is seeking a loan guarantee under the Obama administration's economic-stimulus plan. At the Cedar Rapids plant, Clipper's chief executive, Douglas Pertz, invokes national interest as a reason the government should help his firm. As the country assists its automotive icons, he argues, it also should help loosen up funding for its renewable-energy companies. It would be problematic for the country "for Clipper to not survive," he says.

Out behind Clipper's plant, shrink-wrapped in plastic, the finished pieces of wind turbines are piling up as they wait to be picked up by buyers facing financial difficulty themselves.

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