New Projects, Renewables, Wind


20 April 2010 — Canada must develop its own supply chain to support market opportunities related to wind energy before the United States’ market and supply chain become too large and have too great a competitive advantage.
That conclusion comes from a new report issued by the Canadian Wind Energy Association (CanWEA) and Canadian Manufacturers & Exporters (CME). The report, “Wind Industry Supply Chain Opportunities for Canadian Manufacturers,” is the first product of a partnership between CanWEA and CME aimed at exploring the opportunities, challenges and actions required to ensure Canada attracts new global investment in wind energy manufacturing and component production. 
The report said the presence of wind turbine OEM’s in Canada will require stable, consistent and predictable long-term opportunities in regional markets that are located relatively close to one another, that have supply chain access and that are also within “striking distance” of the U.S. If the Canadian market is not large enough or centralized enough and if it also fails to provide a business case for penetrating the U.S. market, then a Canadian supply chain may well fail to emerge, the report said.
“Canadian suppliers will have to develop and manufacture stronger, lighter, longer-lasting components and assemblies that are of lower cost, shorter lead time and higher quality than their U.S. competitors to ensure they are competitive at home and also achieve significant U.S. market penetration,” the report said.
Tower sections, rotor blades, nacelle assemblies and covers, casting and forgings offer the most promising opportunities for Canadian manufacturers, the report said.
“The high cost to transport these components due to their large size and often irregular shape provides some incentive for manufacturing facilities to be relatively close to wind farm developments and to have access to good quality transportation routes that can accommodate the products.”
More importantly, several wind farm developments over the long must be within reasonable access to the large component supply chain so that it can remain competitive once the initial wind farm development is complete.
The report said the presence of nacelle assemblers in particular provide an added opportunity for lower-tier levels of the supply chain due to the variety and quantity of sub-components required to complete their assembly.
A second supply chain opportunity may come from the need for engineering procurement and construction services, logistics, craning, transformers and geotechnical and site preparation services. The report said gears and generators also offer a good supply opportunity. “Technology and manufacturing standards can be easily transferred from experience in applications other than wind turbines,” it said.
Canada is the sixth largest electricity producer in the world, producing 600 TWh annually and is the fourth largest exporter of power, with all of its exports going to the U.S. Canada’s electricity generation capacity in 2009 was 125,485 MW, with 60 percent derived from renewable resources (mainly hydro), 20 percent nuclear, 15 percent coal and 5 percent natural gas. Wind power currently supplies about 1 percent of Canada’s electricity demand.
Canada ranks 18th in the world for the contribution of wind to meeting domestic electricity demand. In 2009, every province counted at least one wind farm contributing power to the grid. By the end of the year, Canada added 950 MW of new wind generating capacity for a total of over 3,300 MW.

If provincial governments meet their stated targets and objectives for new wind energy development, Canada will have a minimum of 12,000 MW of installed capacity by 2015. The report said almost 5,000 MW of new wind energy projects have signed power purchase agreements and are scheduled to be built over the next few years.

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