World’s wind-power leader eyes Weld site for factory

WINDSOR (UPDATED) – A Danish company that dominates the global wind-energy market is close to announcing it will build a plant near Windsor that will provide at least 500 high-paying jobs and help put Northern Colorado at the forefront of the renewable-energy industry.

Sources privy to the negotiations with Vestas Wind Systems A/S of Randers, Denmark, said the company is near a deal for 100 acres of land east of Windsor in the Great Western Industrial Park, a 700-acre business center owned by The Broe Cos. The diversified Denver-based company has developed the tract just east of the Kodak Colorado Division plant.

Vestas executives outlined their plans at a meeting with a group that included Weld County commissioners, Windsor town board members and Colorado economic development officials held on Jan. 19 in Windsor.

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At the Windsor plant, Vestas workers would sculpt wind-turbine blades, each one about as long as half a football field, to supply a booming North American wind-energy market, much of it in the Rocky Mountain region.

Economic development officials who attended today’s meeting with Vestas leaders said the location in Northern Colorado could ignite a renewable-energy rush to the region.

“Every once in a while, you get these catalytic moments, where a world leader walks into a community and says, ‘We choose you,’´ said Tom Clark, executive vice president of the Metro Denver Economic Development Corp. “That can turn the entire regional economy around.”

Vestas first approached Clark’s organization last year, part of a site-selection tour that a company official said included about 40 other North American locations. Lacking sufficient land served by rail service, a Vestas requirement, Clark referred the company to Upstate Colorado Economic Development, the agency serving Weld County.

Upstate Colorado President Larry Burkhardt late last week described a prospective project, without naming either Vestas or Broe, that would result in at least 500 primary manufacturing jobs.

“This is the biggest project we have worked on in a very long time,” Burkhardt said. “It would be very good news for the entire region, not just Weld County.”

A Vestas spokesman earlier this week confirmed that the company was looking at a Northern Colorado location, but stopped short of saying Vestas would locate here.

“We are looking at Colorado, but have not yet made that decision,” Peter Wenzel Kruse, the company’s vice president for communication and investor relations, said earlier this week. “As soon as we have anything final, we will announce it. But we cannot do anything right now.”

A Broe senior executive said his company was negotiating with Vestas, but that a land deal had not yet been concluded.

“We are working actively with this company, and we would like to see them locate here,´ said Alex Yeros, Broe’s managing director for the Great Western Industrial Park.

“If Vestas decides to come here, it would be a great thing for Colorado, and a fantastic thing for Northern Colorado. My objective is to show these folks the real advantages that our region has, and convince them that this is the place to make their investment. We have an enormous opportunity here.”

Local sources familiar with the Vestas project said the company would build a 180,000-square-foot plant on the acreage served by Broe’s Great Western Railway. The proposed project is in the vicinity of the glass-bottle manufacturing plant operated by O-I Inc. and an ethanol plant owned by Front Range Energy Inc.

An American wind-energy boom, one that a trade group says will put enough additional wind-generated power on the grid this year to supply nearly a million homes nationwide, is part of the rationale for Vestas’ decision to build its first American manufacturing plant.

Two blade plants

The company in November announced in a filing with Danish securities regulators that it would build two additional plants to produce the huge turbine blades, one in Spain, the other in the United States.

Vestas’ Kruse told the Business Report that the decision to build in the United States, a reversal of a company stance taken a year earlier, was dictated by global market forces and the prospects for a boom in U.S. wind-power projects.

While Vestas has plants in China, India and Australia, the bulk of its manufacturing operation is in more than a dozen plants in European Union countries.

“Our production and manufacturing framework is far too E.U.-heavy,” Kruse said.

In the securities filing, Vestas officials said the two new blade factories would produce a total of 2,400 blades annually, and would cost a total of 90 million euros, or $116 million at today’s exchange rate, to build. Assuming plans for the two are similar, one plant in Windsor would require a $58 million investment.

Colorado wind-energy experts said having the world’s largest manufacturer enter the U.S. market with a Colorado location would mean huge benefits for the state.

“They’ve talked about locating a manufacturing facility in the U.S., and I’m really happy to see these people commit to having a factory here,´ said Bob Thresher, director of the National Wind Technology Center. “There is a huge market in the U.S. right now.”

Thresher’s research center south of Boulder is the wind-power research arm of the Golden-based National Renewable Energy Laboratory, and is the nation’s leading force in developing and commercializing wind-energy technology.

Thresher and other wind-power advocates say public-policy decisions, both at the state and national level, would lead to a steep rise in wind-derived power production in Colorado and that Vestas would be well-positioned to take advantage.

Colorado quota

Colorado voters in November 2004 approved a measure that requires utility companies to generate 10 percent of their power from renewable energy sources by the year 2015. And in December, Congress extended a tax credit for the wind-energy industry for another two years, a move that helps keep wind power on par with other energy sources, such as natural gas-fired generators.

The credit gives producers a tax break equal to 1.9 cents per kilowatt hour for power generated from so-called wind farms – clusters of wind-turbine generators that connect to a utility’s grid.

“Having two more years of those credits makes a big difference,” Thresher said. “That really helps to make wind energy competitive.”

The two measures have already jolted the wind energy business to life, with huge wind-farm projects set to break ground in Colorado.

One with a high regional profile is the Cedar Creek Wind Project in northern Weld County, east of the town or Grover.

Gov. Bill Ritter in a Jan. 12 speech said projects like the 300-megawatt Cedar Creek wind farm represent a “perfect example of how we are going to create a new energy economy in Colorado.”

But one project, or even one state, does not mean a market sufficient to support Vestas’ planned U.S. manufacturing capacity. Kruse said his company is taking a much broader view of projections for wind-energy expansion throughout North America, in the next year and the next 20.

The U.S. wind-power industry will boost the nation’s generating capacity by a record 2,750 megawatts in 2006, according to the American Wind Energy Association, the industry’s main trade group. That figure includes a Texas project that will account for 735 megawatts, a new American wind-farm record.

With a single megawatt of wind power supplying enough electricity for 250 to 300 homes, the Texas project would supply the needs of about 200,000 households, or a city of 600,000 residents.

Good Vestas bet

University of Colorado economics professor Jay Kaplan, a longtime advocate of boosting state spending to attract worthy employers, especially in renewable energy industries, said Vestas’ entry, if it occurs in Colorado, would jump-start the sector in the state.

“We can use this as a footprint in the state to really begin developing alternative energy as an economic sector,” Kaplan said. “I would say it has the potential to be catalytic.”

Kaplan said he was so sold on prospects for wind-energy development, and on Vestas’ role as a global leader, that he bought Vestas shares several years ago. The company’s stock has risen in value sevenfold since early 2003, and currently is near the top of a 52-week range between 130 and 244 Danish krone ($22.50 and $42.20).

“It’s done very well,” Kaplan said. “Vestas was the one company I thought would benefit most from the growth in the wind-energy industry. …If you’re betting on wind, bet on Vestas.”