The 3 Week Diet System

Wednesday, May 13, 2015

Mortenson, the power in American wind EPC

May 13:

Pattern Energy is a Mortenson client
Pattern Energy is a Mortenson client

“This business is not for the faint-hearted; it’s very high-risk from the contractor’s perspective,” Tim Maag tells Recharge.
“We see new entrants, new companies coming into this business, but we usually see them exit at some point as well.”
The vice-president and general manager of Mortenson Construction’s wind divisionknows more than most about the complexities of building wind farms. The Minneapolis-based company has been doing it for 20 years, erecting nearly a quarter of existing US capacity along the way — far more than any other contractor.
When Mortenson erected its first turbine, in Iowa in 1995, the energy world was a very different place: Kenetech was the world’s largest wind turbine maker (it was bankrupt a year later); solar modules cost more than $6 per watt to build (compared to about $0.50 in China today); and a barrel of oil cost less than $20.
mortenson_panel.jpgOver the past two decades, the US wind industry has installed a staggering amount of capacity — more than 65GW by the end of last year. And throughout this time, through the cycles of boom and bust of production tax credit renewals and economic crises, Mortenson has consistently maintained a market share above 20% in the US wind EPC sector.
So how has it managed to do this?
Building a wind farm is a fiendishly complex task, requiring the assembly of small armies of workers and construction material, often in very remote areas. And North American contractors must cover a huge geographical area — Mortenson has built wind farms in 29 US states and Canadian provinces, from California to Maine and northern Ontario to the southern tip of Texas.
To cover such a vast territory Mortenson keeps about 120 supervisors on staff, dispatching them to various projects under construction. Behind them, it maintains a core group of “key travellers”.
“These are craft workers that we’ve hired over the years,” Maag explains. “We’ve brought them in, trained them, and they travel with us from state to state, project to project.”
These key travellers typically account for 25-30% of the headcount at a typical wind construction site — the largest of which peak at up to 800 workers. Beyond them, “we’ll hire as many locals as possible to fill in the balance”, with the supervisors and key travellers training the locals, Maag says.
One significant factor in Mortenson’s enduring success has been its close relationships with many of the world’s leading wind operators. France’s EDF, Spain’s Iberdrola, MidAmerican Energy and Pattern Energyare all major clients. “We generally do 75-80% of our work with existing customers, and we try to do 20-25% with new ones.”
Aside from wind, Mortenson was also a pioneer in the solar sector, entering over a decade ago. Today it ranks third among US solar EPC companies in terms of capacity built, behind SunPower and First Solar.
“When we do get into a [wind-sector] down cycle... we have a high-voltage group, we have a civil group, we have a solar group,” Maag says. “The first thing we do is transfer our talented resources to other operating groups that might be in a boom cycle.
“We don’t really ever find ourselves in a situation where we have huge layoffs because of a bust cycle.”
As it plans for another 20 years in the wind business, Mortenson expects to continue building new projects, but also to do more work at existing ones — helping to maintain the nearly 50,000 turbines already spinning across the US.
“We’ve erected every major turbine supplier’s equipment over the years,” says Maag. “We’re usually the ones hired to put up the prototype and help the OEMs come up with installation manuals.”
With turbine suppliers increasingly focusing on operations and maintenance work, Mortenson will be careful to not compete with them directly.
“But since we have the tools, the equipment and the skilled craft workers that put these turbines up, it’s a natural fit for us to come in and supplement their work forces,” notes Maag.
“We see the price of wind continuing to come down. We’re in the wind industry for the long haul.”


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