Shepherd Advisors Clean Tech Articles
Governor Granholm announced the recipients of the state of Michigan's Clean Energy Advanced Manufacturing program, which awarded a total of $15M in grants and $5M in loans. The program isdesigned to help Michigan businesses diversify into high-growth, clean-energy industries. Shepherd's client has a specialized coating capability for high-wear metal components, and needed to expand production to meet growing demand by a Tier 1 European manufacturer of wind turbine braking systems.
Shepherd Advisors took the lead in preparing a successful proposal that led to an award of over $300,000 in grant and loan financing to purchase machinery to increase production.
In the spring of 2009, Shepherd Advisors coordinated and launched Wyandotte Municipal Services' (WMS) "Save a Watt for Wyandotte" residential, retail-based CFL program. The goal of the program is to distribute roughly 100,000 CFLs to its 10,000 customers. The goal of the project was to quickly saturate the community with CFLs to accomplish the following:
- Give every Wyandotte resident a chance to reduce their energy costs today by installing approximately 10 CFL bulbs per household
- Evaluate the impact of the CFL saturation on residential energy demand
- Design a CFL distribution model that can be replicated by communities across the state
Please click on case study for a summary of the methodology and mid-term results of this innovative energy efficiency program.
For more information on Shepherd Advisors' Energy Efficiency Practice, please contact Shanna Draheim at (517) 337-4847 or shanna@shepherdadvisors.com.
In April, Shepherd Advisors hosted a no-cost webinar to update manufacturers and service companies supplying the large, "utility-scale" wind industry. Key topics included:
- Major market events, trends and dynamics in 2009/early 2010
- Federal stimulus dollar allocations
- Highlights from a recent Wind Industry "Buy-Chain" Market Survey of manufacturers and service companies conducted by Shepherd Advisors
Loch McCabe and Tim Kumbier shared their sense of takeaways and implications for wind industry manufacturers and service firms. Please contact Tim Kumbier at 734-975-0333 or tim@shepherdadvisors.com if you are interested in a copy of the presentation.
On January 8 President Obama announced the award of $2.3 billion in Recovery Act Advanced Energy Manufacturing Tax Credits for clean energy manufacturing projects across the country. Overall, 183 manufacturing projects in 43 states received awards.
The tax credits, worth up to 30% of each planned project, correspond to total company investments of nearly $7.7 billion in high tech, clean energy manufacturing. In total, the projects are expected to create more than 17,000 jobs.
Based on the program's success, The White House has proposed expanding the tax credit program by $5 billion. Senior administration officials expect to move the proposal through Congress quickly.
Thirteen Michigan manufacturers received tax credits totaling more than $240 million, representing over 10% of the national total, with individual awards ranging from $300,000 to $142 million. Among these projects, tax credits for solar and wind accounted for 88% and 12%, respectively. Awardees included:
Company, Tax Credit ($ mil), Clean Energy Manufacturing Area
Dow Chemical (two projects), $20.0, Solar-PV
Dow Corning -- Solar Silane, $27.3, Solar-PV
Energetx Composites, $2.0, Wind Turbines
Flame Metals Processing, $1.4, Wind Turbines
Great Lakes Industry, $1.3, Wind Turbines
Guardian Industries (two projects), $3.6, Solar-Concentrated
Hemlock Semiconductor, $141.9, Solar Components/Materials
ilumisys, $1.3, Buildings
Kaydon, $1.8, Wind Turbines
Merrill Technologies Group, $22.0, Wind Turbines
Rogers Foam Automotive, $0.3, Battery
Stirling Energy Systems, $9.8, Solar-Concentrating
United Solar Ovonic, $13.3, Solar-PV
Shepherd Advisors provided assistance to Merrill Technologies Group, based in Saginaw, MI, in securing the tax credit. In addition, Shepherd worked with several other manufacturers to assess feasibility of applying for the credit.
Selection Process
The winning projects were selected through a rigorous merit review process. The program was oversubscribed by a ratio of more than 3 to 1; over 500 applications were received with tax credit requests totaling over $8 billion.
Qualifying manufacturing facilities will produce:
- Solar, wind, geothermal or other renewable energy equipment
- Electric grids and storage for renewables
- Fuel cells and microturbines
- Energy storage systems for electric or hybrid vehicles
- Carbon dioxide capture and sequestration equipment
- Equipment for refining or blending renewable fuels
- Equipment for energy conservation, including lighting and smart grid technologies
- Plug-in electric vehicles or their components
- Advanced energy property designed to reduce greenhouse gas emissions
The statutorily specified review criteria included:
- Greatest domestic job creation (direct and indirect)
- Greatest net impact in avoiding or reducing air pollutants or emissions of greenhouse gases; lowest levelized cost of energy
- Greatest potential for technological innovation and commercial deployment
- Shortest project time from certification to completion
Projects selected for the tax credit generally must be placed in service by 2014.
For the award announcement, including access to the full list of selections, please visit:
http://www.whitehouse.gov/the-press-office/president-obama-awards-23-billion-new-clean-tech-manufacturing-jobs
A fact sheet related to the announcement can be found at:
http://www.whitehouse.gov/the-press-office/fact-sheet-23-billion-new-clean-energy-manufacturing-tax-credits
For additional information regarding the clean energy manufacturing tax credits, please contact Tim Kumbier at 734-975-0333 or tim@shepherdadvisors.com.
At the Supply Chain Workshop of the AWEA Small and Community Wind Conference in Detroit last month, there was quite a bit of discussion about the current pace -- or lack thereof -- of growth in the US large wind turbine manufacturing sector. Supply chain managers from several established European OEMs (Vestas, Nordex, and Nordic Windpower) said that building their US supply chains are a priority. Yet, it's clear that the current pace of domestic supply chain expansion in the US is very slow.
Contributing factors include:
- The decline of new orders for turbines in the US has been pronounced, from nearly 8500 MW of new capacity in 2008 to an estimated 5800 MW through 3Q09. The slower US market has lowered OEM production forecasts compared to a year ago.
- The wind market has declined globally, creating excess production capacity in Europe.
- European OEMs are in a very conservative stance right now, driving to get better pricing and more fully utilizing current (mostly European) supplier capacity. OEM attention is now focused more on improving current production systems, and less on future expansion.
- In addition, some OEMs are digging through a financial squeeze caused by customer pressure for lower prices and high costs for steel that OEMs locked-in a year or two ago.
All of the OEMs presenting at the conference asked suppliers to nonetheless contact them, to be persistent, and not to be discouraged if OEMs do not call back in a timely manner. They just don't have much offer right now.
While it was not stated as such, it looks like most established utility wind OEMs will not be adding too many new US suppliers until financing becomes easier and there is clear evidence of a solid rebound in the US wind turbine market.
There are encouraging signs to be sure. For instance, Nordex broke ground on its Jonesboro, Arkansas assembly facility in September, with production scheduled to begin in mid-2010. In October, Mitsubishi announced its intention to build a wind turbine manufacturing facility near Ft. Smith, Arkansas, with construction scheduled to begin in early 2011.
This speaks well for the long term. Yet, it's probably safe to assume that it may be not be till 2Q10 or later before most OEMs start to return the phone calls.
