Danish giant Vestas Wind Systems A/S is the largest wind turbine maker in the world, and has more than 1,000 of its towers installed across Canada. But the company, like so many others in the renewable energy business, has been struggling lately and recently laid off thousands of employees.
Martha Wyrsch, a lawyer who worked for conventional energy companies for many years, runs Vestas operations in Canada and the United States from the company’s offices in Portland, Ore.
Renewables have had a hard time lately. Are they losing ground to fossil fuels?
I come out of the fossil fuels industry. I believe in what it has done for our economy. But I also think we need to look to the future. Wind is a great choice for the marketplace as we look to reduce carbon in the environment and keep costs down. I see a very positive long-term future for the wind industry in North America. It is an opportunity to bring an environmentally friendly, very clean source of energy to the table, and to blend that with carbon-based fuels.
Vestas has had to restructure. What’s the reason for the current problems in the wind sector?
As you grow and mature in any industry, you go through periods where you need to assess your structure and organization, and the wind industry is no different. We’ve got a lot of competition. This industry, like so many, is going through a period of adjustment and we will come out stronger.
How damaging has the European financial crisis been to the company’s fortunes?
Around 50 per cent of our installations are in Europe. It has been a great growth market for us and [Europeans]understand the importance of reducing carbon in the atmosphere and embracing renewables. But when economic times are tough, countries step back.
Is it important that a price be put on carbon to make the wind industry viable in the long term?
It is important, not only for the long-term viability of the industry, but also for our environment. Price signals, like a price on carbon, give markets a way to make decisions about what kind of energy they want to purchase.
Should more pipelines be built to move oil sands crude to the U.S., or should most investment be going into renewables?
We need an ‘all-of-the-above’ kind of approach. New pipelines, I think, can help us ensure that we have a strong domestically secure energy portfolio in the U.S. Having the opportunity to have homegrown power sources like wind, in both Canada and the U.S., is [also]going to be very important for national security purposes.
Ontario’s green energy program has local content requirements. Are they a burden to your company because you have to source parts for your turbines in the province?
Local content rules, in general, are a challenge and are difficult. In Canada, you’ve got RIM and the BlackBerry. If you were to say to them, you’ve got to have local content in a given state, or province, or country, or region, that would make a pretty tough equation for them. The same is true for us.
Local content rules really run counter to the principles of free and open trade. They disrupt the natural flows of free markets. Having said that, I think Ontario is a great market and we have complied with the local content rules.
How tough is it to get the parts you need in Ontario?
We’ve got some really terrific suppliers there. Ontario has a rich manufacturing sector, and one that gave us a lot of options. But if [Ontario’s local content rules]were to be replicated over and over again [in other jurisdictions]it would make it pretty tough to operate on a global basis.
Wind farms are a divisive issue in rural communities. What is your response to people who say they cut property values and ruin aesthetics?
Many communities praise us because of the positive benefits from having a wind farm in their area, [particularly]royalties that are paid to land owners. I’ve had a farmer tell me this is the new cash crop for him.
We know there are folks who really would prefer not to have a wind turbine in their area. It is important that we as an industry, and the developers who are building these wind farms, work very closely with the communities. We do that in a very pro-active way. We go out and sit with folks, talk with them about where the wind turbines will be sited, and how we will manage the wind farm. It is really important for us to listen, and communicate effectively, and try to address issues as they come up.
What about the view that wind is unreliable and is driving up power prices?
Wind is actually a very economic form of power. It is [also]an intermittent form of power, so we need to be sure that we couple wind with other energy sources, so there is a steady stream of power going on to the grid. In Canada, you are blessed with great hydro resources, and great natural gas resources. Those are really good partners for wind.
Wind is not a big factor in driving up overall prices. In fact, over the long run it should help keep prices down, because the fuel source is free. And although natural gas today is very cheap, I lived through the spikes of natural gas prices, and know that $2.50 and $3 gas is probably not here to stay forever. You want to be sure you have a portfolio that can hedge against commodity price increases.
What technological breakthroughs are coming in wind power?
The next big shift [could be]a really efficient way to store energy when the wind is not blowing. And I think it is going to be quite important to find ways to ensure that we have very smooth grid integration, and ways to overcome the intermittency issue.
That is not to say there isn’t continued focus on increasing the power output from a turbine. A new offshore turbine that we have brought out is seven megawatts, a very large turbine. Those kinds of things will continue to be developed as well.