Comments on TommyWonk: John Carney and DelaWind

Latecomer here... A note about Amer Industrial Tec...

2010-12-10T08:56:45.741-05:00

Latecomer here... A note about Amer Industrial Technologies. If this company is allowed to assist in manufacturing components of this project under the guise of creating more jobs for tax credits, then some serious researh needs to be done as to how this company has historically shuffled employees in and out of employment in order to avoid having to pay benefits. Historically an unsafe place to work evident by any google search and by comments of former employees. Their practices as an employer are borderline unethical. It would only benefit this project to allow an american company to fabricate the turbines, but one with strong ethical standards and practices, and one that will treat their employees as an asset, not a liability.

I am becoming increasingly of the opinion that the...

2009-11-02T17:29:04.049-05:00

I am becoming increasingly of the opinion that the Delaware Economic Development Office is actually more of a vehicle for funneling money to the business ventures of the politically well-connected than it is about creating jobs.

While nowhere nearly as blatant and surreal as the $50,000 going to one of our state senator's neighbors to build a prototype of a french fry vending machine, the $350,000 going to this thing called DelaWind still looks pretty dubious to me.

There are hundreds of existing small businesses in Delaware already struggling to keep their heads above water and struggling to keep their employees who are far far more deserving of such largess.

I've sadly come to the conclusion that the DEDO is a joke, and a very bad one at that.

I do not agree with the comment that "the win...

2009-11-02T12:53:19.164-05:00

I do not agree with the comment that "the wind project is costing Delaware taxpayers money before it has generated one KWH of electricity."

The proposed financing is for DelaWind, not Bluewater. These are two different companies.

Bluewater can and will build the project whether the towers are fabricated in Delaware or elsewhere. The proposed $350,000 in financing would not go to Bluewater, but to DelaWind to create jobs in Delaware.

As for the second comment, the Bluewater Wind proj...

2009-11-01T12:44:59.924-05:00

As for the second comment, the Bluewater Wind project was also sold as an opportunity to create jobs in a new industry. $350,000 is probably no more than about 2 percent of the capital needed for DelaWind, so the risk and return to the state is likely to be pretty reasonable.

Whether or not the $350,000 is "reasonable" does not change the fact that now the wind project is costing Delaware taxpayers money before it has generated one KWH of electricity. This is not the same wind farm project that so many Delawareans stood up for, no matter how you try to spin it.

The economics of importing turbines is very differ...

2009-10-30T20:09:47.075-04:00

The economics of importing turbines is very different from fabricating towers. The relative cost of transportation and handling point to an advantage to fabricating and assembling the towers close to the project.

Thanks for the factual coverage. Williams certainl...

2009-10-30T20:00:19.786-04:00

Thanks for the factual coverage. Williams certainly left everyone 'twisting' in the wind.

My estimate of tonnage for a tower for a wind turb...

2009-10-30T20:00:10.989-04:00

My estimate of tonnage for a tower for a wind turbine is probably conservative on the high side, as I suspect they could be made quite a bit lighter.

Well anyway, $500 per ton versus $650 per ton is not all that far off after all. Even if you used $1,000 per ton, we're still not talking about a really huge amount of money spread over several years.

My main point, though, was that the making of plate steel towers isn't even remotely high-tech and is essentially a commodity steel product. The fact is that practically anybody with steel rolling capability within a reasonable transportation radius of Delaware could supply the same stuff. Nothing unique at all about it.

So, if and when wind turbines are actually going to be built at offshore Delaware (I'm not holding my breath), the procurement of the steel towers is going to be open to competitive bid, and this nascent Delaware company is going to be just another competitor.

Just to show you what we're up against, there was a blurb in today's New Journal about a Chinese company slated to supply 250 wind turbines for a wind farm in Texas. Nice .... so much for buying domestic! Essentially, making wind turbines is an exercise in relatively low-level heavy manufacturing. Practically anybody above a Third World country can do it. So, it is not clear to me how Delaware offers any unique advantage in that regard, other than lower transportation costs (something which can be far outweighed by substantially reduced overseas labor costs).

It is indeed an uphill battle to rebuild Delaware's manufacturing base.

I don't know if your estimate of the tonnage n...

2009-10-30T19:35:02.451-04:00

I don't know if your estimate of the tonnage needed is on target. But your estimate of $500/ton is clearly off. A ton of rolled plate steel cost $604/ton in July, and that does not include any fabricating costs.

As for the second comment, the Bluewater Wind project was also sold as an opportunity to create jobs in a new industry. $350,000 is probably no more than about 2 percent of the capital needed for DelaWind, so the risk and return to the state is likely to be pretty reasonable.

As for calling DelaWind "an untested, upstart company," you glossed over the point that Amer--an established steel fabricating company--owns 95 percent of DelaWind.

BWW was sold to Delaware as a project that wouldn&...

2009-10-30T19:02:30.598-04:00

BWW was sold to Delaware as a project that wouldn't cost tax payers any money until the wind farm was generating electricity. Now it may cost us $350,000.

It was also supposed to be "off the shelf technology" but it looks like now we're going to pay to teach an untested, upstart company how to make parts that already exist in abundance.

While it would be a very good thing if the steel t...

2009-10-30T17:06:54.272-04:00

While it would be a very good thing if the steel towers for local offshore wind farms could be furnished by a Delaware company, this is hardly going to be a huge economic benefit, at least not initially. Why? The steel towers are but a relatively small fraction of the total installed cost of a wind turbine.

A few numbers: a very rough calculation tells me that the steel portion of the tower of a moderately large wind turbine probably weight roughly 150 tons, give or take. So, if we build 200 such towers, that would call for 30,000 tons of fabricated steel, probably over a period of several years.

If the towers are built according to typical construction practices, the plant would probably furnish cylindrical sections, which would then be welded together in a horizontal position at the wind farm staging area, and finally shipped out to the site on a special construction barge. Or the steel compnay could just provide rolled plates that would be made into cylinders at the staging area by the erector contractor itself.

I don't know how much it costs to fabricate moderate size carbon steel cylindrical sections these days, but it is a simple shape, so I doubt it is all that expensive. I don't think a figure of $500 per ton (including the steel itself) would be out of line. Hence, we might be talking about something like $15 million worth of business over a several year period. Nothing to sneeze at, but not exactly a windfall for Delaware, either.