Show notes
GE Vernova closes a Brazilian blade factory as installations drop 30%, while Australia faces issues with trailing edge serrations falling from turbines. Also, cultural differences between European and American work environments, blade recycling challenges, and the need for decommissioning bonds as the industry matures.
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You're listening to the Uptime Wind Energy Podcast, brought to you by BuildTurbines. com. Learn, train, and be a part of the clean energy revolution. Visit BuildTurbines. com today. Now here's your hosts, Allen Hall, Joel Saxum, Phil Totaro, and Rosemary Barnes.
Allen Hall: Manufacturing capacity in the wind energy sector continues to contract as GE Vernova's LM wind power continues to grow.
Plant down in Brazil is being closed and that affects about a thousand workers, Joel. And it's coming because the demand in Latin America for GE, Vernova wind turbines and all them products is diminishing quite a bit. Now it's also part of a broader trend down in Brazil where installations have fallen by about 30 percent in 2024 compared to previous years.
So there's a big slowdown in Brazil. And. GE, Vernova, slash LM are ceasing operations there. I don't see how this is going to last very long. There's a number of operators that are coming into Brazil, especially Chinese manufacturers. You think this factory will get gobbled up like some of the other ones that LM has closed recently?
Joel Saxum: Yeah, I think this one, we heard about this whisperings of this. We before it happened, we've got some pretty good connections down in Brazil. With some people that are in the factories and it is, it's just following that trend. I think one of the interesting things about the Brazilian market as well is that, A lot of big turbines down there.
People may not know that, but the majority of turbines, I think, are over like three megawatt machines. They're big down there. They don't have a whole lot of legacy old stuff like we do here. So there was this big ramp up to create all these bigger blades down there. Of course, making those big blades locally saves a lot of logistical costs.
But you're going to see this changeover, right? Like in the States, we don't really, we don't allow the Chinese manufacturers to come in. And in Europe, they're not really allowing the Chinese manufacturers to come in, but in Brazil, they've been all over the place. And to be honest with you, some of the big asset owners down there have to, They're not just Chinese OEMs.
It's Chinese owned asset owners like CGN and things like that. So there's a, there is a big tie to China and I believe, like you said, Alan, I think this a blade factory is a kind of a pain to build. And one that's just sitting there and all you really have to do is, Build some new molds and repurpose a couple of things and you're ready to roll.
I think this will get scooped up pretty dang quick.
Allen Hall: Yeah, which should be good news for the employees down there because there is still a need for people who know how to build blades that are hard to find right now. Now, Phil, is this a broader move by LM that they're going to be closing some of the factories because of GE's demand more recently?
Phil Totaro: Yes, and let's keep in mind too that, GE stopped selling their turbines down there and that LM factory was largely just producing blades for Vestas V150s. It looks like it might be rough sledding for for some of the folks at LM. The good news is, so going, pivoting back to Brazil for a second, they're suffering a little bit from some of the in 2024, they terminated the guarantees that the independent power producers got for curtailments.
And that's also what kind of led a lot more investment in, other forms of power generation solar displaced, some of the wind, hydro displaced, some of the wind And, we just couldn't get enough wind contracts to make that a worthwhile market. So you've seen a massive slowdown across the board.
It is likely that a factory like that will be gobbled up by somebody like Goldwind or, Sonoma has been poking around the market. They've already got one factory. But why not Look at a second one in a market that just like China takes advantage of cheap labor and has reasonably good access to raw materials down there.
They can also start using that as an export hub. Should they need to.
Joel Saxum: Phil, what do you do? Okay. So let's just take the broader context of Brazil. Now I know we're talking about building blades here and the export markets and all these different kinds of things, but in Brazil.
What has to happen for, basically, 30 new wind farm installations down 30 percent in 2024. What has to happen to get that back up on pace? Is it what we're sitting here like ERCOT, right? I was just talking about this a little bit ago off air, but batteries, do they have to get batteries in to avoid this curtailment issues?
And does that make sense for you? economically down there?
Phil Totaro: Potentially, yes. And the, I guess the reality of it is that either they need to go back to the old law, which basically gave, a certain amount of payment to the or certainty, at least to the independent power producers that they were going to receive some type of compensation when they were being curtailed.
They're still, potentially exposed to if they're not largely on a merchant power market down there, it's mostly fixed price offtake at least as part of the auctions that they've previously had but they just had an auction down in Brazil and there was no wind that was even bid into the auction.
Because nobody wants to build wind farms down there right now. So it's something has to change. Storage would help. But it's not a cure all necessarily for a larger fundamental issue down there. I was going to ask
Allen Hall: about that swap over to TPI, because TPI is going to open or is opening their facility in Iowa.
And is that part of the move with Brazil closing? They don't really even need it if Iowa is opening and TPI is going to be the main source of blaze over the next couple of years. What happened,
Joel Saxum: but it but a blade factory TPI I think if you're GE you're looking at it like we it's a little bit closer to home Of course, we can control QA QC a little bit better.
We can it's we can take some trips from Schenectady or trips from North Carolina up there, South Carolina. Sorry Greenville a lot easier And then you're serving your biggest market right your biggest market of course for GE is the US and Canada And so everything's close to home here. You're going to be able to knock some things out, buy a factory in Iowa.
It may not be you know, that perfect optimization economically, but the things that you're going to make up in QAQC and cost support quality and these other kind of logistical issues, I think that's a winning move in my mind to give more to TPI.
Phil Totaro: Yeah, you also face the logistical cost and time, frankly, of, even though you're getting cheaper capex on blades that are manufactured in a low cost market like Brazil, You still got to get them up here and if somebody needs a blade fast, they're going to get it faster from Iowa than they are from anywhere south of the equator.
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Allen Hall: There's more safety concerns down in Australia as Australia's largest wind project lost a set of trailing edge serrations from a Vestas wind turbines at the Golden Plains Wind Farm, which is down in Victoria. It's the second time that trailing edge serrations have fallen off at this facility.
And the site is a little under a year old, right? It's about six months old, roughly which is creating all kinds of problems. Now, I've seen trailing edge serrations come off if you're driven around the Midwest, where they do occasionally use serrations. You do see them missing from time to time. I guess my top concern wouldn't be safety on those Joel.
They just don't seem, they're not that heavy. I wouldn't like to get hit in the head with them, that's for sure. But the panels themselves are not particularly large or heavy. They're going to Mostly flutter down to the ground, but it does raise concerns like it's stuff falling off of turbines. What's going on?
And what are the probable fixes for it?
Joel Saxum: I think to be honest with you a young wind farm like this losing Serrated trailing edge pieces right to me. That is something that happened in construction, right? They put like when these when these things are moved they put those Kind of yeah, transport like socks over some of them to keep them in place.
And then you got to pull that whole thing off. And I think that they probably got the glue, got cracked, messed up, something got peeled up or whatever in that process. So to me, this is a, it's a construction issue. It's a quality issue at that level, right? That should be found. Or it's a lifting problem at that same point in time, a strap or something like that, or,