Last year, ten new wind turbine manufacturing facilities came online in the U.S. Another 17 expanded, and wind turbine manufacturers announced plans for 30 more, according to the American Wind Energy Association. Meanwhile, the Institute for Supply Management's survey of manufacturers continues to show that the U.S. manufacturing economy is contracting.
With these kinds of economic winds blowing, small wonder that component suppliers of all stripes are trying to figure out how to get their products designed into megawatt-scale turbines or to earn a spot on the supplier list for wind farms.
Until recently, getting a place on a wind turbine bill-of-materials required a close association with business partners in Europe because most turbine markers are European. And most wind turbine design offices were on the Continent as well. Moreover, wind turbine designs have a long lead time, so suppliers interested in the wind market had to be patient. “Wind turbine makers have had a backlog of orders spanning a year or two. So their design window is longer than you'll typically see in project work,” says Harting Inc. North America Senior Product Manager Richard Carlson. Harting builds cable assemblies for the wind industry as well as connectors, slip rings, and lights.
One payoff for becoming a turbine component supplier is that once in production, turbines don't change much. “A turbine is going to be manufactured for years,” says Carlson. “But if you aren't there in the initial stages of engineering, you aren't going to be successful later on as manufacturing moves to other parts of the world.”
The supply situation is changing as the wind market in the U.S. has mushroomed. Many European wind turbine makers have opened design facilities in the States. And while a connection to the Continent still helps, it is becoming less imperative for some kinds of components thanks to the nature of wind farm operation.
Wind farm operators are typically called operations & management companies. O&M outfits have clout with turbine manufacturers, particularly in matters affecting maintenance, reliability, and wind turbine up time. So suppliers able to demonstrate a pay-back in one of these areas often can get a hearing with U.S. operators, regardless of whether or not their product line is priced in Euros.
But most wind turbines are sold with a one or two-year warranty. Consequently wind farm O&M organizations may have less at stake on their newer installations. Responsibility for maintenance and repairs on freshly minted turbines frequently falls on the manufacturer. And in some cases, wind farm operators may contract for upkeep with the turbine OEM which, in turn, may have its own O&M organization handle these chores.
With these various relationships, part suppliers say it can be difficult to figure out where responsibilities lie for purchasing decisions. And wind turbine makers generally won't clarify these relationships. For example, most won't talk about how maintenance and repair duties are taken care of on wind farms containing their equipment. Turbine maker Vestas Wind Systems, for example, says it doesn't comment on how it handles its warranty work or how it works with wind farm operators.
No surprise, then, that suppliers have trouble navigating through channels to see the right people. “It's a lot of hard work getting parts spec'd in,” says Jeff Bernthisel, general sales manager for EGC Enterprises Inc. EGC supplies tensioning fasteners called RotaBolts for wind turbine towers. Bernthisel claims EGC strives to get in front of both OEMs and O&M firms when trying to crack a wind account. “We've built a story not on technology but on a broader base pertaining to long-term benefits of cost and time savings,” he says.
Bernthisel also has found that many design decisions still reside in Europe. “Though there are design facilities here, in the end, the specification is still written in the parent office. But we have been appealing to the O&M groups as much as the engineering groups. Wind turbine makers do some of the maintenance on the units they sell so they have their own O&M people. They are the ones who are concerned with maintaining the equipment over time.”
Bernthisel figures the biggest allure of RotaBolts to the wind industry is in the opportunity to cut maintenance costs. “We can show a payback at the end of 500 hours of use. That is often enough to get the attention of wind turbine operators,” he says. He also shares advice for other suppliers interested in the wind market: “It is a fast-growing niche. You have to be patient and understand that it takes time to get recognition. But there is a tremendous opportunity for component suppliers as the wind industry builds supply chains in the U.S. This is particularly true for standard commodity items because the wind purchasing community is looking for these kinds of items.”
EGC's RotaBolt fasteners are not really a commodity item, but they don't need to be designed-in initially in order to make a sale. Suppliers that have cracked the wind market in more heavily engineered components say the environment for getting on a turbine supplier list differs from that for more widely used items such as fasteners.
“In highly engineered parts like bearings, turbine makers are hesitant to let their American counterparts take care of things,” says NTN Bearing Corp. of America Marketing Manager Joe Kahn. “Even when the purchasing function for those types of components is in the U.S., the engineering control still tends to be in Europe. With the exception of GE and Clipper Windpower, there is no engineering design control taking place here.”
NTN has the advantage of a European division that has been working with turbine makers for years. The firm supplies bearings for turbine drive shafts, yaw drives, generators, and other assemblies. For engineered components like these, the design cycle can be lengthy, says Kahn, much like the automotive business. And no two wind turbine makers do things exactly the same. “Sometimes they'll continue to source in Europe, sometimes they move work here. There's little commonality in how companies handle their sourcing,” he says.
And the sourcing hot buttons in the wind industry periodically change. “Last year it was capacity, this year it is cost. But I suspect it will trend back toward capacity,” he says.
EGC Enterprises, RotaBolt page, http://egc-ent.com/html/rotabolt.html
NTN Bearing Corp. of America, www.ntnamerica.com
Harting Inc. of North America, www.harting.com