Gamesa to furlough 165 US workers with PTC fate unclear

Gamesa will temporarily furlough 165 workers at its nacelle and rotor blade plants in Pennsylvania to reflect current US market conditions amid uncertainty over whether Congress will extend the wind energy production tax credit.

The company, as required by law, on Monday gave 60-days notice to 92 workers at its Fairless Hills nacelle facility and 73 others at its Ebensburg blade plant of the impending furloughs on 2 September. Gamesa has about 250 employees at each plant. It has 1GW of US wind turbine production capacity.

“These are temporary furloughs, not dismissals,” David Rosenberg, marketing vice president in the US, tells Recharge. The plan is to bring the affected workers back after 10 weeks or so in anticipation that Congress will extend the PTC beyond 31 December.

“We are optimistic that Congress sees the benefits of the PTC and confident it will get renewed,” he says, adding the issue is when. “Sooner is better than later.” The tax credit pays $22/MWh, inflation-adjusted for a project’s first decade in operation. It has been the main driver for industry growth since first enacted 20 years ago.

The wind lobby wants the PTC extended until 2016, which would place the sector on an even footing with solar energy, whose main tax credit expires then. Federal support for renewable energy has become entangled in election year politics with President Barack Obama and most members of Congress facing voters on 6 November.

Obama favors a long-term PTC extension and strong federal backing for wind energy development, while his Republican Party opponent, Willard “Mitt” Romney, wants to curtail subsidies and have the Energy Department focus on basic research.

Rosenberg emphasizes that Gamesa is firmly committed to the US as a strategic market regardless of the PTC outcome. Meanwhile, the vendor is exploring opportunities in Canada, Central America and South America, where it has won several supply deals that will be sourced from the US plants.

Gamesa is looking at three or more other potential deals in this hemisphere, but he declines to provide details until contracts are signed. Even if those come through, “there is no way exports can make up for loss of the US market,” Rosenberg adds.

Gamesa this year expects to deliver 900MW of turbines in the US, roughly six times the 154MW in 2011, according to Borja Negro, chief executive for North America.