The Atlanta Journal-Constitution
Virus takes wind out of booming renewable energy business
Disrupted global supply chains wallop wind business, leaving once thriving companies struggling.
Even as businesses around the world shutdown this spring, executives at EDF Renewables were hopeful they would finish installing 99 wind turbines in southern Nebraska before a year-end deadline. Then, in early April, the pandemic dealt a big blow to the company.
A manager at a factory that was building the giant cylinders on which the turbines sit had died of the coronavirus, shutting down the plant and delaying EDF’s work by five weeks. That and other setbacks— including construction workers at the site in Nebraska contracting the virus — have hampered EDF’s efforts to finish the $374 million project by the end of the year. A prolonged delay could increase costs, threatening the project’s financial viability.
The company’s struggles are emblematic of howthe pandemic has disrupted global supply chains and imperiled tens of billions of dollars of investments and millions of jobs, with retail stores and oil and gas companies among those hit hardest. But EDF’s challenges show how the pandemic has walloped even thriving industries like renewable energy.
The American Wind Energy Association estimates that the pandemic could threaten a total of $35 billion in investment and about 35,000 jobs this year. The losses could grow if the coronavirus continues to disrupt the economy well into next year.
“Every part of the supply chain has been hit by this,” said John Hensley, the wind association’s vice president of research and
analytics. “Certainly if we see major delays, it can take a major economic toll.”
Wind turbines provide more than 7% of U.S. electricity and are the largest carbon-free energy source after nuclear power plants. Nebraska gets about 20% of its electricity from wind, and when it is complete, EDF’s project will have the capacity to meet the electricity needs of about 115,000 homes.
The wind energy business was growing about 10% a year before the pandemic. But industry officials now fear that projects under construction might be postponed or canceled because of the pandemic. The industry had hoped Congress might provide aid to renewable energy, but it got little from the stimulus bills passed in the spring.
The industry did receive some help from the Treasury Department, which in May gave wind energy developers more time to complete construction in order to qualify for a federal tax credit. Businesses now have to finish projects they began in 2016 and 2017 within five years, up from four years previously. EDF began its project in 2016.
“Everybody is trying to figure out how everything is going to land,” said Benoit Rigal, a vice president of engineering and construction for EDF.
A virus scare in a small Nebraska town
On March 13, EDF was preparing the site to receive three dozen blades that harness the wind. These are some of the first components the company had expected to arrive in the village of Milligan, Nebraska, less than an hour southwest of Lincoln.
But three days before the blades were scheduled to arrived, Dwynne Igau, an EDF planning and construction manager in charge of the project, received worrying news: one of her workers had taken ill. Igau quickly called off the delivery and ordered about 30% of her crew into quarantine.
The areas around Milligan experienced an early surge in coronavirus cases, driven in part by infections at meatpacking plants. Just a few hundred people live in the village, a railroad community incorporated in 1888 that is surrounded by rows of cornfields and is known as the “Hospitality Capital of Nebraska” because it has services like a salon and spa.
According to EDF, at least three workers tested positive for the virus this year. Several people who worked as contractors and equipment suppliers have also gotten sick.
“We didn’t really think it would spread that much and that fast,” said Gilles Gaudreault, a transport and logistics manager who also oversees the project.
Normally, Igau would have been at the construction site to manage the work. But the pandemic had forced her to work from her home, in a suburb of Austin, Texas, more than 800 miles away. Igau also had to deal with an outbreak closer to home: Her daughter’s college roommate came down with the coronavirus, forcing the family to shuttle her daughter back and forth multiple times from Texas A&M University, about two hours away.
Igau had spent seven years leading project operations but had never encountered anything like this. It was the first time she lost access to her crew for days on end.
“There was so much uncertainty in the March, April time frame about what our deliveries would look like,” Igau said. “Would we have components in that time frame to start putting these components together?”
The blades that were delayed in mid-March were on their way from China and sat for days at a railway yard in central Nebraska. But that delay was hardly the last of Igau’s problems.
Another set of blades, from India, was delayed when the government there closed a factory because of a coronavirus outbreak. The plant eventually reopened, but the shutdown had a lasting impact, and the last seven of those blades just arrived at a Houston port last week.