Show notes
Allen, Phil, and Joel cover the low turnout at American Clean Power in Phoenix, the US House's budget bill affecting renewable energy incentives, security concerns over Chinese equipment, and a patent infringement lawsuit filed by 3S Lift.
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You are listening to the Uptime Wind Energy Podcast brought to you by build turbines.com. Learn, train, and be a part of the Clean Energy Revolution. Visit build turbines.com today. Now, here's your host. Allen Hall, Joel Saxum, Phil Totaro, and Rosemary Barnes.
Allen Hall: Welcome to the Uptime Wind Energy Podcast. I'm Allen Hall, and I'm joined today by Phil Totaro and Joel Saxum.
Rosemary Barnes is over in Sweden, and Rosemary's gonna miss out on a very active week in renewable energy, at least in the United States. we should probably start with American clean power, which as we are recording, just finished the day. It was in Phoenix, Arizona. Things I've seen online, Joel, were that they were expecting around 10,000 people to attend that event, but watching LinkedIn, and I did not attend it this year, unfortunately, or fortunately, is my daughter's graduation.
So [00:01:00] I wanted to be there. I. But it looked like the hallways were pretty empty, which was a little shocking.
Joel Saxum: Yeah. So Allen, I wanna preface what you said there by, changing, a CP was in Phoenix too. A CP was in 106 degrees Phoenix today. it was a little bit toasty walking around in the suit jacket, but, of course, everybody, had theirs on.
but no, you're, a hundred percent correct. I was there all week, of course, weather guard brand there, talking lightning with everybody and, strike tape. And we had the uptime wind energy banner. We talked to a ton of podcast fans, which was really cool. so the hallways were, Tuesday morning was great.
Tuesday afternoon, Wednesday, Thursday. It just got slimmer and slimmer. and, there was some kind of logistical things there too. This trade show was oddly on two different floors that were separated by four escalator sets. I think like it was a, maze to get up to the other thing. Yeah, it was, pretty wild, in that respect.
[00:02:00] And you saw some of the same players that you always see at these trade shows, right? But there was quite a few new ones walking around, doing a little, tour day, exhibit, exhibition floor. A lot of different new companies, that I wasn't used to seeing, in the solar space.
some software, some, a lot of little AI software things that you've been hearing about as well. battery storage, quite a few battery storage companies and that battery storage supply chain starting to spread out. You had some battery safety companies and stuff like that, which was great to see.
I know I talked to some of our insurance friends and they were bouncing around talking with all the battery storage people and the solar people and that kind of stuff. but yeah, it wasn't very heavy, heavily wind as it has been in the past we're, which we're, usually used to. another factor.
to walk the show floor was $1,600. [00:03:00] So that's, that, deters quite a people. And when, we had talked before we go to the show, of course we wanna connect with our clients, connect with colleagues, connect with old friends, and you start sending out these emails and there wasn't a whole lot of asset owners and operators coming as they, as we usually see, and it showed on the show floor.
I didn't talk to that many asset owners and asset operators as we usually do. I'm talking probably. A quarter of the traffic that we're used to from those people.
Allen Hall: I Is that just because the, operators are trying to pull back on the travel budgets or was it more about just the state of the industry at the minute or were, because of the time of year and where it was the people that wanna travel to Phoenix, what.
What was the feeling there?
Joel Saxum: I think it was a bit of all the above. OOMS, the ac, other a CP event, the operations and maintenance, which is, where a lot of our, focus is on the commercial side. That was a good event. That was a well attended event, Nashville this year. A [00:04:00] lot, quite a few asset owners and operators there.
So I think that, they used their budget on that one a little bit more this year than this. of course you're in Phoenix, which is an odd place. it's. Button up against Memorial Weekend, which is graduations, right Allen? so, it's a, it's not an awesome time of the year to be putting something like this on, in my opinion at least.
Phil Totaro: At least we're going to do it in Houston next year, when it's gonna be in June and even hotter.
Joel Saxum: Yeah, it's first week of June next year for a CP in Yeah, in Houston. But in Houston, if you think about it this way too, there's quite a few wind companies there. There's ISPs there. There is operators there.
Dallas isn't far down the road that's got a bunch of ISPs and operators. Same thing with Austin, R-W-E-E-D-P-R-E-D-F, or stead. There's a bunch of players over in that area, so I, would expect that one next year to be more well attended because travel budgets, you can hop into car and drive [00:05:00] over there.
Allen Hall: you were in Phoenix. The US house passed a budget bill. that was, Approved this morning as we're recording, that would effectively end the clean energy production, tax credits, and the quote unquote boom in the United States that were spurred on by the IRA bill. And the, for the most part, there's, still a lot of discussion about this, so none of this is hard fact yet, and it has to go to the Senate.
So there's gonna be changes made and some bartering back and forth. but some key things here, the production tax credit gets shortened if you don't have projects started, roughly 60 days after the enactment of this bill. You're not gonna account for anything. So you gotta hurry up and start digging.
it, it eliminates a, big piece, which is the tax transfer. So when you get these. Production tax credits, you could sell them and [00:06:00] all the tax credits could be transferred and you could re get that cash upfront. the bill changes all that. So you would have to get a tax equity partner upfront, which generally is a bank, and that can be hard to go do in today's world.
So it's making it much harder for renewable projects to be developed if this bill were to be signed by the president, which. Who knows where it's gonna be a couple of weeks from now. Now, Phil, how big is the tax transferability piece of that? Because the discussion in the renewable crowd is that's probably the most important piece.
Phil Totaro: It, it is, setting aside the fact that this is gonna obviously have a big impact on. Greenfield project development, the, complete removal of any tax transferability, for PTC credits is a bit problematic in that not [00:07:00]everybody was taking advantage of it because it was a relatively new thing and enacted through the, inflation reduction Act in the first place.
So it's only been in place for three years at this point. Now, on the flip side of it. For anybody involved in operations and maintenance. This is probably a good thing. but again, setting aside the repowering question for now, and I'm again, as we record, there's no final language to this bill and this law.
it hasn't been signed in into law yet, so there's, all we can do is speculate on it. And assuming that they're gonna change the, immediate, as Allen said this, 60 day, window to start digging for your project, assuming they're going to kill that bit of it, which is likely, because that's just too fast of a ramp down.
what it's good for, what this bill is potentially good for, despite the fact that we [00:08:00] might be losing a production tax credit and investment tax credits. It will spur more companies to try and accelerate their plans for repowering and or life extension.
Allen Hall: I wanna pause here. Take a quick break 'cause I want to come back.
I wanna talk about how much power production the US needs to add every year and what the breakdown is and what it's likely to be and why changing these. Production tax credits and all the existing IRA bill matters in the growth of the power network in the United States. Don't let blade damage catch you off.
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Visit OGs ping.com [00:09:00] and take control of your turbine's health today. All right, we're back and I have been doing a, good bit of research prior to this. IRA bill change that's likely to happen to see what. The power requirements are for the United States and what generally has been the growth because remember during a recent conversation with Rosemary, we were talking about the growth of AI and how is that gonna affect the amount of power usage and Rosemary's opinion was, is that gonna affect it that much?
I'm still not sure about that based on the research I'm doing, but just to give you some numbers here, the US needs to add about 33 gigawatts of production every single year over the next 10 years. just to stay even with the growth of technology and electricity usage plus, as older facilities get turned off, you gotta bring new ones on, right?
that creates a,