Vestas Stops Turkey Production, Avangrid Sells Kitty Hawk North, LS Greenlink Virginia Facility

Vestas in Turkey has suspended their generator factory project and
blade production in the country after loosened locality
requirements for wind. Avangrid has sold its Kitty Hawk North
offshore lease to Dominion Energy for $160 million. LS Greenlink
invests $681 million in a Virginia factory, creating 330 full time
jobs. Sign up now for Uptime Tech News, our weekly email update on
all things wind technology. This episode is sponsored
by Weather Guard Lightning Tech. Learn more about Weather
Guard's StrikeTape Wind Turbine LPS retrofit. Follow the
show
on Facebook, YouTube, Twitter, Linkedin and visit
Weather Guard on the web. And subscribe to Rosemary Barnes'
YouTube channel here. Have a question we can answer on the
show? Email us! Pardalote Consulting -
https://www.pardaloteconsulting.comWeather Guard Lightning Tech -
www.weatherguardwind.comIntelstor - https://www.intelstor.com Allen
Hall: I'm Allen Hall, president of Weather Guard Lightning Tech.
And I'm here with the founder and CEO of IntelStor, Phil Totaro,
and the chief commercial officer of Weather Guard, Joel Saxum, and
this is your NewsFlash. News Flash is brought to you by our friends
at IntelStor. If you want market intelligence that generates
revenue, then book a demonstration of IntelStor at intelstor.Com.
Avangrid, a subsidiary of Iberdrola, has announced the sale of its
Kitty Hawk North offshore wind lease area to Dominion Energy for
approximately 160 million. The deal includes a nearly 40, 000 acre
lease and associated assets with Dominion Energy paying 117 million
for the lease acquisition and reimbursing Avangrid for development
costs. Avangrid is retaining ownership of Kitty Hawk South Lease,
which it plans to continue developing. All right, Phil. There seems
to be a lot of swapping of of repurchased ocean land. Off the coast
of the United States here, what is going on? Why is Avangrid
selling one site and keeping another? What's happening? Philip
Totaro: Well, I simply put, this sounds like they, have a bigger
slice of cake than they can maybe eat by themselves so to speak. So
they just want to be able to, this is one way that they can kind of
divide up the site. a chunk of it without having to bring in an
equity partner on the full project site, which is actually pretty
clever, right? So I have to give them credit for that. Keep in mind
as well that, of the projects in the US that have now been
officially consented, Avangrid's got something like 20 something
percent of them. So, this is, uh, it's getting expensive. And
Iberdrola wants to be able to, control their costs. This is also
one way of doing that, too. Joel Saxum: Another thing to think
about here with Dominion Energy, if you've been following the
offshore wind plays along the east coast here for the last year,
two, three, four years, as we have here on the podcast, Dominion
Energy is one of the groups that has actually been able to go
through with their leases. Development costs, getting vessels
ready, getting some turbines getting ready for development, getting
ready for offshore without really too many hiccups. So the money's
there, the PPAs are right, everything is moving forward for
Dominion. So they're doing things without too many issues and that
may point to this as well. Allen Hall: South Korea based LS
Greenlink is investing 681 million to build a state of the art
facility in Chesapeake, Virginia. This facility will manufacture
high voltage subsea cables for offshore wind farms and is set to
create more than 330 full time jobs. It's a significant step for
the U. S. offshore wind industry as it'll be the first offshore
wind cable manufacturer in the country. Now, Phil, this obviously
has tax implications. What is driving LS Greenlink to really build
a facility in Virginia? Philip Totaro: Well, besides market demand
of which, this factory and fabrication facilities has a total price
tag of something like 681 million which is an awful lot of money.
But they're actually getting a 99 million 48C manufacturing tax
credit. So for those who aren't familiar, the 48C tax credits.
We're included as part of a production, a U. S. based production
and investment tax credit package that was passed. I forget exactly
what year, but many years ago, where there were, I think it was
actually 2008 or 9 in the financial crisis recovery package where
we wanted to basically incentivize domestic production of
components for both onshore offshore wind, solar batteries, et
cetera, et cetera. So this is actually Alice cable and system,
which I believe is the biggest cable manufacturer in the Asia
Pacific region outside of China. I think Ningbo orient is probably
the biggest within a pack. But they're, L. S. Cable and system
wants to have a big presence. They obviously with this level of
investment, they expect to be able to take advantage of a
significant amount of transmission build out in the U. S. And
they're going to have both, I think, inter array and export cable
manufacturing capability with this with this factory. So they are
really well positioned and, taking advantage of the tax credits
that were designed to bring. Foreign direct investment to the
United States. Joel Saxum: One of the important things here, guys,
330 full time jobs being brought to the U S that's fantastic.
That's what we want to see. That's what a lot of these tax credits
and everything are built upon is creating jobs in the U S of
bringing manufacturing back here. Another thing to think about here
as well as yeah, everybody's focused on what's going on the East
coast, right? We've got all kinds of wind farm developments with
what Phil was saying. Exactly. Massive. Export cables, but also the
inter array cables, which they'll be building both of. However,
where the big cable play is offshore west coast. When we get into
floating wind, there's much more cables to be put out in the water
than there is in the fixed bottom. So, and they're a little bit
different design. Everything's a little bit, custom made for the
application. But there's a ton of cables to be built here for
offshore wind in the States. Allen Hall: Vestas Turkey CEO has
revealed that they've suspended their generator factory project and
blade production in the country. This decision comes as a result of
loosening locality requirements for wind investments. The situation
in Turkey highlights a broader issue in the wind industry, the
delicate balance between promoting local manufacturing and
maintaining market competitiveness. Okay, Phil. So, Turkey has been
at a real impasse the last couple of months with GE Vernova, LM
Wind Power, and now Vestas. It would seem like, where winds are
strong in Turkey, they should be having some manufacturing in the
country, but they're loosening their requirements. What's driving
that? And is that a play to bring more Chinese manufacturers in?
Philip Totaro: Potentially, yes. So there's a couple of things at
play in the Turkish market at the moment. One is for years they had
a very generous subsidy if you did actually have local
manufacturing and local content. They'd give you I wanna say it's
up to the equivalent of about 80 euros per megawatt hour if you had
your nacelle, your tower. And your blades all assembled within
Turkey, which, by the way, Enercon is still doing although
Enercon's market share is a little bit a little bit down, but
there's still, so there's still plenty of domestic production and
fabrication in Turkey, even from Vestas, who is still sourcing
towers. In Turkey but with the reduction of those local content
requirements and the associated tax credits for domestic content,
it creates that scenario, like you just mentioned, Allen, where it,
you can have other companies and Goldwin's already got some
turbines in Turkey, they're going to be installing more throughout
the course of this year and next year. At a few different project
sites. They don't have a very big market share there yet. This
would encourage production from lower cost markets like China or
even India, where you could bring turbine technology into the
Turkish market. So the wind market there is still strong, still
growing. Albeit at a bit of a moderate pace compared to what we
would hope for they still haven't unlocked their offshore wind
market yet, which actually would probably encourage companies to
redomesticate some of that that production capacity. In the
country, but for now this is the current scenario. It's unfortunate
for the job losses but they want cheaply made goods and they're
going to get them. Joel Saxum: Yeah, what Phil is saying about the
possibility of things happening and opening back up there. In the
future for offshore wind. The other thing to think about here is
there's another empty factory with the LM blade plant closing down.
So Turkey's been hit by kind of a one two punch in the wind sector
here. Just hope that there's no more of this fallout in the future
form. Allen Hall: In South Korea, GS Intec is making waves with a
217 million investment over the next two years. to upgrade its
plants and manufacture offshore wind turbine substructures. They're
focusing on enhancing their production capabilities for monopiles,
which are becoming increasingly popular among global offshore wind
operators due to their cost effectiveness and shorter production
times. All right, South Korea, which has plenty of manufacturing
capability. All the ships pretty much in the world are manufactured
in South Korea at the moment. Plenty of steel. Plenty of knowledge
there. South Korea is really set up to be an offshore wind giant
and GS Intech is definitely making investments to do that, right,
Phil? Philip Totaro: Yeah,