Since 2002, global demand for wind turbines has tripled in value and growth in the U.S. has far outpaced that. With the stimulus of high fossil-fuel prices and the U.S. Production Tax Credit, wind-power-generation capacity is being added at a record pace. This growing market presents significant opportunities for forge shops that supply the wind-energy market.

Figure 1. Wind farms can be used to harvest the energy of the wind to supplement a region’s power grid and power households and businesses alike.
Courtesy: American Wind Energy Association


There is something unique about Rock Port, Mo., a rural town of about 1,400 inhabitants in the northwest region of the state. It is the first U.S. town powered solely by wind – specifically, four 1.25-megawatt wind turbines.

In the wake of rapidly escalating conventional fossil-fuel prices, the town’s adoption of renewable wind energy seems prophetic. Fifty years ago, nobody thought much about the price of oil or gasoline at the pump – it was just another cost of doing business or operating the family car. Back then, the price of crude oil was $3.00 per barrel ($22.33 in 2007 dollars). Then came the 1970s, a decade during which the cost of oil soared tenfold in current dollars (fivefold in constant dollars).

And the upward march on energy prices continues. Many will recall the assorted oil shocks of recent decades: embargos, lines at gas pumps, burning wells in Kuwait, OPEC, threats and acts of sabotage to the global petroleum infrastructure, and the manipulation of supplies and prices for the advancement of political or religious ideologies. The price per barrel of oil, which averaged only $11.91 in 1998, has skyrocketed to $116 in late August 2008 – a rate of inflation in excess of 25% annually.

Price jumps like these make businessmen, consumers and politicians take notice. In the current global market, increased demand for oil by large emerging economies such as China and India have affected global petroleum demand, much as OPEC countries have been affecting petroleum supplies for decades. The result has been the unprecedented spikes in energy prices seen.

Through this bewildering maze of energy politics and economics, American industry and consumers have, sometimes belatedly, looked for ways to reduce energy consumption and increase energy efficiencies. In the U.S., business has gotten smarter about the way it consumes (or saves) energy. In the last 10 years, petroleum consumption per unit of gross domestic product has fallen by 9% and by nearly 14% for natural gas consumption. Nonetheless, at each energy price spike, interest in alternative and renewable energy sources resumes.

Wind Energy Around the Globe

The rising prices of conventional energy sources have affected alternative energy production the world over, and wind energy is no exception. The wind-energy phenomenon took firm root in Western Europe in the mid-1990s and was largely confined to that continent during much of that first decade.

“Western Europe accounted for 90% of wind-turbine demand in 1997 and almost 85% of the total as late as 2002. Since then, the U.S., China, India and a number of smaller nations in Asia, Africa and Latin America have all experienced strong growth in wind-turbine demand,” said David A. Petina, industry analyst with The Freedonia Group, an industry research firm based in Cleveland, Ohio.

In fact, global installed wind generation capacity tripled from 31 gigawatts (GW) in 2002 to 94 GW in 2007. This represents an annual growth rate of nearly 25% for that period. Global additions to wind generation capacity in 2007 totaled 19.7 GW, generated by turbines valued at $18.4 billion, or roughly $930,000 of turbine investment per megawatt of power generated.

Although growth in the global market is expected to retreat from its torrid pace as it matures, the total installed wind generation capacity will continue to rise sharply, reaching 210 GW by 2012, according to the Freedonia report, World Turbines. The global market for all turbines will jump from $83.6 billion in 2007 to about $106 billion in 2012. Wind turbines’ share of this market, which increased from 9% to 22% since 2002, will remain constant through 2012 in response to moderating equipment costs and a moderating, though still significant, market growth rate. The principal factors stimulating this growth will be the presumed continued increase in the cost of fossil fuels and the environmentally benign nature of wind generation technology. Leading wind-turbine suppliers to the U.S. and global markets include: Enercon (Germany), Gamesa (Spain), GE Wind Energy (U.S.), Siemens Wind Power (Denmark), Suzlon Energy (India) and Vestas Wind Systems (Denmark).

“The renewable and non-polluting aspects of wind-power technology are being encouraged, and in some cases mandated, by governments worldwide,” Petina said. “The performance and cost effectiveness of wind turbines have been improved by the application of advanced technologies such as fiberglass materials, aerodynamic designs, computerized and electronic controls, variable-speed drives and other innovations.”



Fig. 2. Wind-power generation costs about $1.8 million per megawatt of installed capacity.

Wind Energy: The U.S. Market

The market for wind power in the U. S. has been erratic and largely dependent on the availability of the federal production tax credit (PTC). In 2001, the industry installed about 1,800 MW of new wind-power capacity; in 2002, the PTC expired and new wind-power capacity dropped to about 500 MW; in 2003, the PTC was again in effect and new installed wind power jumped to 1,800 MW; in 2004, the PTC expired and new installed capacity again dropped to about 500 MW; finally, in 2005, the PTC was reinstated and kept for three years running. New installed wind capacity rose to 2,500 MW in 2005 and 2006. In 2007, coupled with the huge spike in petroleum prices, new installed wind capacity rose to more than 5,200 MW, shattering all previous U.S. records.

The new capacity installed in 2007 alone was sufficient to generate 16 billion kilowatt-hours (kWh) of electricity in 2008. That’s enough juice to power more than 1.5 million American homes for a year. In fact, with the PTC in effect, the U.S. has led the world in new wind-power capacity installed for each of the last three years. In 2007, Spain and China ranked second and third, respectively, in new wind-power capacity installed.

Through the first quarter of 2008, Texas (5,316 MW) and California (2,484 MW) led the nation in installed wind-power capacity. Other leading states include Minnesota (1,300 MW), Iowa (1,295 MW), Washington (1,195 MW) and Colorado (1,067 MW). And given the healthy growth experienced by the U.S. wind-power market, it should not be surprising that the number of companies supplying wind turbines to the U.S. has grown from only six in 2005 to 15 in 2007.

This ambitious growth creates significant opportunity for industry, including forge shops. According to Kathy Belyeu, manager of industry information for the Washington, D.C.-based American Wind Energy Association (AWEA), it costs $1.8 million per installed megawatt of wind-power generation. Of this cost, an estimated $930,000 is for the wind turbine alone. If the U.S. were to hit its target of 16,000 MW of wind-power capacity added annually, the market for wind turbines would, at current costs, reach $14.9 billion annually, a considerable portion of which would reach forging suppliers who supply rotary shafts and bearing and gearbox components. However, the erratic renewable-energy policies of the U.S. have spawned a “hesitance” on the part of some suppliers – both domestic and foreign – to invest in the equipment and expertise needed to supply this market.

As demand for wind-turbine components heats up in the U.S. and around the world, the industry is facing shortages of parts. To combat this, the industry needs to develop a “robust” supply chain to support the growth potential of the wind-energy market. The lack of consistent and steady policy support has hampered wind-energy development in the U.S., which is why the industry hopes that the U.S. government will enact a long-term extension of the PTC, scheduled to lapse again at the end of 2008.

“We have only a short window of opportunity when Congress reconvenes in September to get the Production Tax Credit on the agenda for this Congress, and we are trying to do so,” Belyeu said. In the meantime, “supply-chain issues are a concern moving forward,” Belyeu added.

These need to be resolved if the country is to meet the DOE’s goal for 2030 (see sidebar).



Figure 3. Large-diameter rings for wind-turbine applications are rolled into shape on ring mills.

The Role of Forge Shops

Along with the growing demand for wind turbines comes commensurate growth in demand for forged parts that are integral to their operational efficiency. These include the pairs of bearing rings that affix the adjustable aerodynamic blades to the hub, the pair of rings that form the yaw bearing that turns the blades into the wind, the main shaft that converts wind energy into rotational energy and assorted components in the gearbox assembly that convert the slow rotation of the blades into more rapid rotation for the electrical generator.

The parts required to make a wind turbine run efficiently add up to a lot of potential business for forges as wind-power generation grows in importance. For the 5,200 MW of new wind-power capacity added in the U.S. in 2007, approximately $4.8 billion was spent on the wind turbines. If forged components represent as little as one-third of this total value, that represents a forging market of about $1.3 billion for forged wind-turbine components in the U.S. market alone. This is a significant number with lots of good financial and employment implications for successful companies that supply this market. And if the DOE realizes its goal of 20% wind power by 2030, the market numbers improve dramatically.

A premier supplier of forgings for wind-turbine applications is Frisa Forjados of Monterrey, Mexico. The company manufactures the full assortment of ring products used in wind turbines, as well as other applications, to the U.S. and other markets.

“In the last two years we have seen a considerable increase in our wind-turbine activity, with annual growth above 30%,” said Florentino Fernandez, technology manager at Frisa Forjados. “We foresee a similar increase in the years to come, and to back that increase we are investing heavily in new technologies, equipment and personnel. Because of our location, investment and experience in this field, we expect considerable opportunity in the U.S. market.”

Figure 4. Matching set of machined rings will mate to form one pitch bearing used to adjust the aerodynamic profile of each wind-turbine blade.

And yet AWEA reports that it takes about two years from the time a windmill is ordered until it is up and generating electricity. Even with existing suppliers running at full tilt and some investing in expansion, the wind-power industry is not exactly the fastest in getting to market. The lack of a long-term alternative-energy policy in the U.S. has kept some potential suppliers on the sidelines. The supply of basic raw material, or the lack thereof, is another part of the problem.

Consider the case of Aurora, Ohio-based Rotek Inc. (a ThyssenKrupp Technologies company), a producer of bearings for wind energy and other applications that operates large captive and commercial forging operations. The company purchases cylindrical steel ingot for their applications – continuous-cast or bottom-poured. Their minimum-diameter requirement for raw material is 10 inches, up to a maximum of 42 inches in standard carbon-steel specifications. Although smaller-diameter ingot is readily available, suppliers of larger ingot are precious few.

“Continuous-cast material in large diameters is hard to find,” said J. Kevin Quinn, Rotek’s senior sales manager of rolled-ring products. “In 1981, we had eight suppliers of large-diameter ingot. Now we’re down to two, though two more are coming on this year.”

Figure 5. Close-up of finished pitch bearing for wind turbine.

Steel producers are slowly filling the bill, but demand will also grow and supplies may be tight for some time to come. Still, the short supply puts strong upward pressure on costs. Some industries may be in a position to defer steel purchases until prices lower, but activity in the energy market has been so brisk that product is needed immediately.

Any commodity in short supply is one whose price is rising, and large-diameter ingot is no exception. This lack of raw-material availability has pushed material prices up, made evident by the fact that Rotek has experienced seven raw-material price increases in 2008 through the month of August alone. This, in turn, will ultimately put pressure on prices for wind turbines that factor into payback calculations and cost comparisons relative to conventional power-generation techniques.

But David Morton, Rotek’s plant manager, has a broader view. “The competitiveness of renewable energy is not only about cost,” he said. “The carbon footprint and long-term effects – the total life-cycle cost – must also be considered.”

Figure 6. Wind-turbine nacelle sits on top of a tubular-steel tower. The nacelle is the equivalent of an engine cowling.

Conclusion

There is no question that the scenario for future growth in the global and domestic wind-turbine market is in place. The complexities of energy economics, political considerations and the growing awareness and attraction of green energy sources have created the impetus for expanded use of these alternative energies. Wind-power generation is no exception.

Wind power has experienced a serious growth spurt since the 1990s. This growth is likely to continue, and if the DOE’s goal for 2030 is to be met, thousands of tons of forgings valued at billions of dollars will be required. It appears that the existing component supplier base is running at or near full capacity. Some suppliers have already begun expansions to meet growing demand. They are confident in their long-term view of the market and will be poised for its future growth.

Forged components are critical to the efficient operation of modern wind turbines. The forging, rolling, machining and thermal treatments inherent in finished, forged components result in high-integrity parts free of internal defects. They are designed to have the appropriate metallurgical microstructures, strong mechanical properties and tight dimensional tolerances to provide years of reliable service.

Figure 7. Cutaway schematic of a typical 1.5-MW wind turbine.

SIDEBAR: Wind Energy Basics

Wind power is not a future vision. It is today’s reality, and the equipment required to convert wind into electricity is improving all the time. In fact, more than 5,200 MW of wind generation was installed in the U.S. in 2007 alone. That’s enough to power 1.5 million households for a year.

The operating principles for wind power are fairly simple. To start, the power available in the wind is proportional to the cube of its speed. More wind speed means more power generation, and higher altitudes generally mean higher wind speeds, which is why wind turbines are perched on towers often located on mountains or hilltops.

A wind turbine is driven by aerodynamically designed blades that are bolted to the hub of a wind turbine. As the wind passes the blades, their aerodynamic profile creates lift, which causes the blades to rotate about the hub and drive the turbine’s rotor shaft. The main shaft of a wind turbine is forged from steel, which becomes hardened and tempered in the forging process. The blank shaft has an integral flange, to which the hub is later bolted. Following forging, the shaft is again heated and quenched in water or oil. This gives the shaft a hard, but brittle, surface that is again thermally treated so the metal can regain some of its former strength.

Between the rotor shaft and the generator is the gearbox, whose task it is to increase the relatively slow rotational speed of the turbine blades to a nominal generator rotational speed of 1,000-1,500 rotations per minute (rpm). This happens through a coupling between the gearbox and the generator. The generator is the wind-turbine unit that transforms the mechanical energy into electrical energy, which can then be “plugged” into the power grid for service to consumers. All these components are housed in an enclosure called the nacelle, which can be pivoted as needed (yaw) to turn the blades into the wind. Similarly, the blades themselves can be turned (pitch) to maximize their aerodynamic lift profile to the wind.

In this oversimplified scenario, kinetic energy from the wind is transformed into mechanical energy through the rotation of the blades. This movement drives the transmission sequence of the wind turbine, eventually turning copper windings in a magnetic field and generating direct current. In actuality, wind-power generation is more complex, involving computerized controls, high-technology materials, braking mechanisms, periodic care and maintenance safety issues. Today’s wind generators are designed for an operational life of about 20 years.

The average wind turbine installed in 2007 had 1.6 MW of capacity, a number that has increased with time and more sophisticated designs. Wind turbines installed last year are, on the average, twice as powerful as those installed in 2000. The largest wind turbines installed in the U.S. are located in Texas and California. These have a capacity of 3 MW per turbine.



SIDEBAR: The Goal for 2030

Wind energy in the U.S. got its start in California during the 1970s when the oil shortage increased electricity costs. With the aid of federal and local tax credits, California installed more than 1.2 GW of wind power by 1986, accounting for about 90% of global installations at the time. By the mid-1990s, however, expiration of tax credits brought wind-power investment to a halt in this country. By this time, wind investment activity was strong in Europe, where Germany became the international leader in wind generation capacity.

In 1992, the U.S. Congress passed its Energy Policy Act, part of which was the Renewable Energy Production Tax Credit (PTC). The PTC gave power producers 1.5 cents per year per kilowatt-hour of electricity produced from wind during the first 10 years of operation. The PTC expired in 1999, was extended for brief periods ending in 2003 and was again reinstated in late 2004. It is due to expire at the end of 2008, adding some uncertainty to the industry’s future growth prospects. Intermittent policy support such as this has led to choppy, sporadic growth in the industry.

A report prepared by the U.S. Department of Energy (DOE), 20% Wind Energy by 2030 – Increasing Wind Energy’s Contribution to U.S. Electricity Supply, proclaims that wind power “can play a major role in meeting America’s increasing demand for electricity.” The scenario outlined in this report is to achieve wind-power generation equivalent to 20% of the nation’s electricity consumption by 2030. To do this, new wind-power installations would need to increase to 16,000 MW per year by 2018 and increase at that rate through 2030.

Achieving this scenario would require, at very least, that Congress enact a more permanent PTC-type incentive to stimulate wind-power investment and attract resources necessary to grow the wind-power generation industry. The scenario would also require improved turbine technology to generate the power and significant changes in transmission systems to deliver it through the electrical grid.