Show notes
Allen, Rosemary, and Phil discuss the state of wind energy development and the potential impact of the upcoming U.S. presidential election. They also cover TPI Composites' partnership with the University of Maine and Oak Ridge National Laboratory to utilize 3D printing technology for producing wind turbine blade tooling.
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Allen Hall: Alright, did you see this the situation in Colorado where someone who was just released from jail tries to steal a pickup truck? Or, I don't know what you call it in Australia. What do they call it in Australia? It's not a pickup truck. A ute. A ute. A utility vehicle. But! This thief.
Rosemary got into the truck and realized it has a clutch. It's got a third pedal. It didn't know what to do. They got re arrested that they tried to put the, tried to drive the truck, didn't know what to do. Got it in neutral and the truck rolled down the road and hit a fire hydrant. But, Rosemary in the United States, Clutch, a manual transmission vehicle is like non existent anymore.
You get to, it is very hard to purchase one. I don't know about Australia. You still have clutch cars?
Rosemary Barnes: Yeah. I know. Even when I lived in America and it was 20 years ago now, and there was nothing but automatics in America and in Australia, it's mostly manuals. It's also a point of pride. Like I don't imagine there would be many hardened.
Hardened criminals in Australian jails that wouldn't know how to drive a manual. That would just be like really, it would feel really pathetic to them. But it is something that I have thought about because obviously electric cars don't need gearboxes. Like my son he's one now by the time he learns to drive, it'll be all electric cars.
And certainly we're only going to have electric cars. And. He, yeah, he'll never learn to drive a manual unless I will most likely really have to go out of my way to find some classic car to, to teach him in and why he won't need that skill.
Philip Totaro: It's going to be like the inverse of Mad Max. It's like you're going to have to search for petrol.
Rosemary Barnes: There should be actually an energy transition version of Mad Max because now that we know about solar power and and wind energy, like a lot of the premise of Mad Max doesn't really, it's, it wasn't really future proofed, right? If we had, if we did descend into a Mad Max dystopia tomorrow, I think that energy wouldn't be the big problem.
It would be other stuff.
Philip Totaro: It's going to happen in November anyway, don't worry.
Allen Hall: GE Vernova reported a wider than expected loss in its first quarter post spinoff results. The company's win segment saw a significant 40 percent decline. Phil, this is a problem. 40 percent decline in orders, primarily due to lower demand for onshore equipment as North America customers continue to navigate the permitting process or permit process for their projects.
And this decline obviously was offset by GE Vernova's power segment, which experienced a 6 percent jump in sales. So the wind side is getting hammered because they can't get permits. And everybody's struggling and interconnects is with other Problem I assume, Phil, this is driving sales, not only at GE, but also at Vestas, right?
That they're having sales problems because the interconnect, the grid, there's no interconnects. And then the permit process has gotten a lot longer. What are we doing to ourselves here?
Philip Totaro: This is also what's plaguing Siemens Gamesa to a certain extent, although, again, yes, they're not selling onshore turbines, but they're, the rest of their kind of power generation business is bolstering the losses being seen by the wind segment.
So it's happened, like you said, it's happening to Siemens, it's happening to GE, it's happening to Vestas. And, everybody's suffering because the government hasn't sped up the permitting process. And, we've talked ad nauseum about the the interconnection queue issues where, there are something like two terawatts worth of wind and solar and battery storage projects in the interconnection queue in the United States right now.
And most of it's not gonna actually get built especially a lot of the solar I think like 1. 2 terawatts or something of that is, is solar. There's 81 gigawatts of wind in the U. S. right now that has actually been consented and is either already under construction or has the opportunity to start construction within the next 18 months or so.
But we're still suffering with lack of transmission availability to be able to get these projects in the ground and the the independent power producers are freaking out about it because they're losing the opportunity to collect production tax credit revenue. Having an impact on merchant power prices.
It's having an impact on as you just mentioned, turbine sales and being able to close deals. Because keep in mind the OEMs don't recognize revenue. They get a little bit of, an upfront payment when they signed a turbine supply contract, but they don't really collect the bulk of their revenue until they.
Deliver the turbines, and the project is officially commissioned.
Allen Hall: In the GE case, they're still forecasting revenues, total revenues, this year of 30, so they must be seeing an uptake or an uptick in wind orders over the next couple of months? Is that going to happen if the interconnects all
Philip Totaro: backed up?
Presumably some of the interconnection issues will be resolved. There's new transmission lines being built in the northeast, the midwest, and there are some upgrades going on in the the Southwest. And then obviously, Pattern is building the Sunzea project which will have a lot of, GE turbines.
But those, those orders were already announced and again, it's just, they weren't going to see any revenue off that until probably 2026 or so anyway when the whole thing's finally done. So yeah, they're they're expecting an uptick in orders. And it looks like it's still gonna be a fair amount of, 2.
8, 127s and probably some new these new 3. 6, 154s as well.
Allen Hall: I asked you on the show floor in Minneapolis who, or which administration, it's not who, but which administration has installed more wind. in their tenure, the last Trump administration or the current Biden administration? Because the feeling is that the Biden administration will have planted more wind turbines.
But I don't think that's the case, right?
Philip Totaro: No it actually was Trump which is fascinating. Installations went up until 2020 when COVID happened. And that obviously had an impact leading into the Biden administration, but they've had several years now to work out a lot of these issues that we're still talking about.
Rosemary Barnes: But isn't that partly because if you end a subsidy or end a tax credit, that is actually going to vastly bring forward a whole lot of Projects that, if you've got a project that you were planning to install in two years time, but the tax credit will end in one, then you're going to try really hard to bring it forward, is it we all know that Trump wasn't some like super pro wind energy leftist greenie. He, he's been pretty vocal about his opposition to, to wind turbines. So by, if he implemented policies that would have seen something to do then that might actually make it look like he was really great for wind energy, but then, the tax credit ended at some point.
Things died off for a while. And then the IRA is, in, I think in some ways we talked about it a few weeks ago, in some ways, the fact that the IRA is so generous to things like hydrogen is, pulling attention away from wind. And yeah, it's a bit, we ended up with a bit of a
Philip Totaro: surprising result.
Obviously with these interconnection issues we're talking about, it takes three or four years to get a project, developed, consented, permitted, and then, put in the ground. So it's not anything that was being built in 2016 or 2017, wasn't something that happened during, Obama's second term anyway.
The fact that it happened during Trump's term is one of those like political realities of being able to take credit for something that your predecessor did. But it's also a question where, it's dropped. Again, COVID had an impact, but it, the installations in for wind in the U S have dropped so precipitously in the past three years that one wonders what.
Biden's administration has really been doing. And to their credit, the fact that we've got 81 gigawatts of wind in that consent queue and construction queue is good. The challenge is still now the interconnection queue is bottled up to the point where we should be seeing more solar is going to overtake wind by everyone's predicting it's going to be this year, but it's not because they're not going to install 60 gigawatts of solar this year.
But by next year, solar will probably overtake wind in the U. S. in terms of capacity installed. And, you're right, Rosemary, that attention and, more importantly, resources have been diverted away from Easing the, queues for environmental permits and the interconnection queue for wind to be able to get on the grid faster.
Wind, the whole point with this is wind is a proven technology. So why are we giving tons of money? To anything that's not, I, it's I get why you want to,