German mechanical engineering giant ZF has decided the opportunity in wind power is too good to resist. "We're in the process of building a new production facility to produce gearboxes for wind turbines in Gainesville, Georgia," Bryan Johnson, ZF's Marketing/Communications Manager for North America, said. "It's a brand new business for us."
The U.S. has slowly but steadily been giving birth to a wind power manufacturing industry over the last five years. Though the failure of Congress to sustain policy support for the renewables this year has slowed the process, plans for the new ZF facility are moving ahead, thanks to a purchase agreement with the world's biggest turbine manufacturer.
ZF has, for the last few years, put the company's century-long experience in mechanical engineering to work doing service and maintenance for wind projects in Europe. What the group saw in the field led them to the conclusion they should be making turbine gearboxes.
"We have nearly a hundred years of experience making transmissions for almost everything that moves," Johnson said. "Looking into a new market like wind power is a natural fit."
"ZF saw an opportunity," Elizabeth Umberson, President of ZF's Commercial Vehicle/Special Driveline technology Division for North America, explained. "Reliability is the key issue with wind turbine gearboxes, and ZF's automotive background has enabled us to make improvements in design, testing, and production."
Having seen the wisdom of and opportunity in getting into wind, ZF, one of the world's leading automotive driveline and chassis technologies suppliers, chose Gainesville for the site of its first turbine gearbox plant because it has been making transmissions and axle systems there since 1987 and is confident it can fill out the new facility's anticipated 200-person workforce with quality employees.
Though ZF will not elaborate on the details, the company also liked the deal Gainesville offered. "Any manufacturing facility that is bringing jobs is going to receive some type of incentives from local government," was all Johnson would say. "We don't disclose that."
Asked if what Gainesville offered was part of ZF's decision, Johnson said, "Of course they were part of the decision-making process. Any kind of incentive that is going to save the company money in their manufacturing and construction process is an influence." The city's offer was not the only factor, he added, but it was clear that getting in on the birth of the U.S. wind manufacturing industry will require localities to put something on the table.
The if-you-build-it-they-will-come theory seemed to have worked. Denmark-based Vestas, the world's biggest wind turbine manufacturer, has chosen ZF to supply its gearboxes. "Vestas' suppliers are selected based on a combination of price and quality. The goal is to increase business-case certainty," Aili Jokela, Vestas' American Wind Vice President for Communications, wrote by email about the ZF selection. "The gearbox is a major component in achieving this goal."
The gearbox is located in the turbine's nacelle, the one-car-garage-sized operations box at the top of the turbine's tower. The blades and rotor, affixed to the front of the nacelle, exert over a million Newton meters of torque at 12 to 20 revolutions per minute. The gearbox ramps that into 1,500 to 2,000 revolutions per minute, allowing the nacelle's generator to produce electricity.
Vestas is confident ZF will deliver. "ZF has high quality and productivity standards," Jokela added.
This ZF-Vestas deal is an example of the need turbine makers have for a U.S. supply chain. The company is "working with domestic suppliers such as ZF," Jokela wrote, "to drive down the cost of energy -- measured both as the price per megawatt-hour and the environmental footprint -- to ensure wind can compete favorably with traditional energy sources."
According to Jokela, Vestas isn't yet certain what the scale of the purchase will be or where in North America the ZF gearboxes will be used. "We are still evaluating which specific sites and turbines they will be used in."
ZF's Johnson said Vestas has time to allocate its supply. Though the $90 million Gainesville facility's 200 employees will eventually make 2,000 gearboxes a year and construction has already started, the plant is not expected to be completed before January 2011. A year of testing will follow. Commercial gearbox production will only begin ramping up sometime in 2012, when ZF engineers are certain gearboxes can be produced to the company's exacting standards.
"It's a new process, it's a new facility, it's a product that requires precision and quality," Johnson said. "We'll ramp up as our process gets better."
Johnson agreed the deal with Vestas was key. "To invest in a new business, you have to find a partner to work with." On the other hand, he doesn't expect Vestas to buy the plant's full-capacity output. "Long term, we hope to sell to other customers."
What happens in the long term, many in the renewables industries are now saying, depends greatly on what policies they can coax out of Congress. ZF's Umberson had a broader and more optimistic perspective. "Although the U.S. has not adopted a national Renewable Energy Standard (RES), many states have a goal of increasing the amount of energy derived from alternative and renewable sources," she pointed out. And furthermore, she added, "We believe that Congress can still encourage growth of alternative energy through infrastructure projects and tax credits for production."