The five-year extension of the production tax credit ensures that there’s going to be some serious wind construction occurring over the next five years. Just the same, the expected flurry of demand could spell difficulty for wind developers – and their supply-chain partners – in procuring the main erection and hydraulic cranes needed for wind farm construction.[adright zone=’190′]
Procuring a crane can be tricky – not to mention expensive – even in normal business cycles. And the period the U.S. wind industry is about to enter will be like wind power on steroids.
According to the American Wind Energy Association, more than 15.2 GW of wind capacity was reported as under construction or in advanced stages of development during the first quarter, with more than 3.5 GW of total new announcements. And digging into the numbers a little deeper reveals that project developers reported more than 10,100 MW of construction activity across 81 projects in 25 states, including more than 2,000 MW of new construction announcements.
The expected demand is not unfamiliar to wind developers. During previous demand periods, such as in 2012, developers pulled out all the stops necessary to ensure projects were energized and grid-connected by the end of the year to qualify for that year’s expiring tax credit. Although the tax credit is again in play, there are some factors working against developers.
First, the tax credit’s extension is longer than in previous iterations – meaning the build cycle for wind farm construction will be longer. And elongated time frames mean more construction, which exacerbates demand. [adleft zone=’190′]
Second, a boom in civil engineering projects means there’s also competition for the heavy-duty machinery coming from outside the wind industry. For example, several petrochemical plants being built along the Gulf of Mexico have tied up the same main erection cranes, such as the Manitowoc 16000 and 18000 and Demag CC 2800, used to hoist towers and nacelles and attach rotors.
Then there’s the turbine technology itself. Wind turbine towers have continued to grow taller as the nacelles have become heavier. As such, these components call for highly specialized machines, explains Dave Schwalm, executive vice president at construction services provider JPW Riggers.
“The current crop of wind technology requires cranes up to and over 1,000-ton capacity in both the crawler and hydraulic configurations. Unfortunately, there’s simply not a lot of availability with these machines,” he says, citing the Manitowoc 21000 crawler crane and Liebherr’s LR 11000, a crawler crane that debuted in 2013.
“Everything always gets bigger – and in the wind industry, it’s no different,” notes Jim Strobush, product manager of crawler cranes for Liebherr USA. What used to be requests for 80- to 100-meter towers has now increased to 120 to 140 meters, he says.
Generally speaking, although some deep-pocketed developers own their cranes, most wind developers rely on their construction service providers to procure the cranes. Therefore, during these critical times, it’s imperative that wind developers choose their suppliers accordingly, confirms Steve Klatt, crane manager at Mortenson Construction. This sounds like a no-brainer, but Klatt says working with a contractor that has established relationships with crane suppliers and manufacturers will keep your wind project on track if and when problems occur. In addition, he says, the major crane original equipment manufacturers, such as Manitowoc and Liebherr, are in close contact with the major construction service providers. “Those conversations [about cranes] are already happening.”
With the demand for cranes likely, it’s never too early to begin planning. Here are a few tips to ensure you have your crane when you need it.
Place your future orders yesterday. Thinking about a 2018 wind project? Better get that order in now, notes Liebherr’s Strobush. “From a manufacturer’s point of view, the more visibility we have on our production schedule, the better,” he says, adding that it could help the wind developer’s supplier, too. “If we begin to see a lot of activity in one area or one region, we could ramp up production of crane units.”[adright zone=’190′]
Say no to “over-craning.” Review your projects so that you understand two things: turbine size and the crane needed to erect the turbine chosen for the project. The theory, says Klatt, is that when you go to rent or lease the proper crane, you procure only what you need. Otherwise, you run the risk of what’s referred to as “over-craning” and spending more money as a result.
Don’t think outside the box. During previous crane crunches, some intrepid wind developers headed outside the country, recalls Schwalm. However, at $250,000 and above, going to Canada or Mexico is often a last-resort strategy, as such options are not inexpensive and add time to the schedule.
Consider group maintenance. “Customers have been doing group maintenance when possible,” according to Schwalm. “The owners don’t like a turbine to be down, so normally, when a turbine is down, they are hot to change it or have it repaired – sometimes they can wait for a few to be done at the same time, which does save them money.”