President Donald Trump’s trade war won’t wreck the U.S. wind industry, but it will raise the cost of power.
Tariffs on $250 billion of Chinese imports, as well as on metals from Europe and elsewhere, could raise the cost of wind power in the U.S. by as much as 10 percent, Tom Kiernan, chief executive officer of the American Wind Energy Association, said at a conference in New York. Executives from three of the world’s top turbine manufacturers agreed.
“If you close the country to tariffs, prices will increase,” Jose Antonio Miranda Soto, CEO for Siemens Gamesa Renewable Energy SA’s onshore business, said Tuesday at the Wind Energy Finance & Investment Conference. “Tariffs equal higher prices.”
Higher steel prices will be “a powerful driver,” said Josh Irwin, sales director for Vestas Wind Systems A/S’s Americas unit. “Those costs do have to manifest themselves someplace. There’s just no way around it.”
With federal tax credits for wind power winding down, strong growth is expected in 2019 and 2020 as developers scramble to qualify for the subsidy, according to Scott Stalica, general manager for North America equipment sales at General Electric Co.’s renewable energy unit. That pace is likely to be “disrupted” by trade levies.
“Whether we want to admit it nor not, there’s certainly disruption going on in the market right now,” Stalica said. “There’s a sense of urgency to get projects built. I expect that things will temper.”
Besides steel, the tariffs cover turbine blades, gearboxes, crank shafts and other internal components. Some of the impacts can be mitigated by seeking suppliers not covered by the levies, according to John Hensley, AWEA’s senior director for industry data and analysis.
“Consumers probably lose out because they’re not getting that ultra-cheap form of energy,” Hensley said.
Source: Bloomberg L.P.
