StarTribune.com
WIND072306

Last update: July 22, 2006 – 8:14 PM
Everything's all upwind at Pipestone

Gregg Aamot, Associated Press
PIPESTONE, MINN. -- When Suzlon Energy Ltd. officials were looking for a place to build turbine parts for the booming U.S. wind energy market, they could see as far as the flat horizon here allows.

With Minnesota among the top five states in wind energy generation, and primed to double its capacity by 2010, the company is setting up its first American plant in this windswept farm town.

"With green energy the way it is, and the huge U.S. market, we can see 100 years of life for our plant," said Jim Streiff, a vice president for Suzlon Rotor, the subsidiary that will run the Pipestone operation.

By the end of 2006, Suzlon Energy hopes to make the leap to third place in turbine sales in the United States, (up from fifth last year). GE Energy, based in Atlanta, is the biggest domestic seller of wind turbines.

The company reported worldwide sales of $830 million for the year ended March 31. In the United States, Suzlon commissioned 80 turbines over the past year and hopes to sell more than 200 over the next year. All of their turbines are being sold to local investors and farmers, who pay between $1 million and $2 million for each.

A mix of federal and tax incentives, not to mention high fuel prices, are drawing local investors into the wind market. The federal government, for instance, offers a 1.9 cents-per-killowatt hour tax credit; the state of Minnesota offers another 1.5 cent credit. Small investors in Minnesota can negotiate with utility companies for further production credits.

According to the Minnesota Department of Employment and Economic Development, one or two turbines can generate profits of $100,000 per year, once the capital expenditures are paid off.

Last fall, Suzlon Rotor broke ground on a $14 million plant on the edge of Pipestone. It will employ 275 people and churn out its first rotor in October. The rotor comprises the three blades of a turbine, the nose cone and the mechanics inside the cone.

Suzlon Energy already makes the rotors in India. But the high cost of shipping the parts and the chance to get in on the ground floor in the U.S. market -- where just 1 percent of the electricity comes from wind energy -- proved enticing.

GE Energy, Spain-based Gamesa Eolica and Clipper Windpower of Carpinteria, Calif., are among the other turbine makers hoping to capitalize on the growing U.S. market. Clipper recently opened a plant in Cedar Rapids, Iowa.

"What we are seeing is more investment among manufacturers in opening plants, and that is a reflection of the speed of the North American market," said Christine Real de Azua, a spokeswoman for the American Wind Energy Association. Among the new power plants that came on line last year, wind power was second after new natural gas, she said.

Inside a corner building in downtown Pipestone, Streiff worked on the project with Bhupen Babaria, Suzlon Rotor's president. Babaria, who is from India, has been living in Pipestone for about a year.

The Bhuj, India, company sees little downside to its investment. "The wind blows here every day -- like it has for 1,000 years," Babaria said, smiling. "And it will continue to blow."

Beyond Minnesota, other windy states beckon. California has the most installed capacity, followed by Texas, Iowa and Minnesota, according to the American Wind Energy Association.

Suzlon Energy installed 32 rotors in Minnesota last year and another 24 in Texas and Oklahoma. Eventually, Suzlon Rotor hopes to make one rotor a day at the Pipestone plant, selling them to local investors who will then sell the energy to power suppliers like Xcel Energy Corp.

In Minnesota, there's enough capacity to generate about 750 megawatts of wind energy, and about 200 of that is owned by local investors (the rest is owned by utilities or energy companies). The Legislature and Gov. Tim Pawlenty have set a goal of 800 new megawatts of community-based wind energy by 2010, and many of those projects will use Suzlon rotors.

About 5 miles east of town, three 6-ton blades mounted 200 feet off the ground on white towers slice through the air as a driving wind blows across the southern Minnesota prairie.

Woosh, woosh, woosh.

"They're beautiful," said Dan Juhl, a Woodstock man whose family owns two dozen wind turbines in the Pipestone area. And profitable, he adds. "Wind is now a cash crop."

©2006 Associated Press. All rights reserved.