COPENHAGEN—Vestas Wind Systems A/S said Thursday it will shed more than 2,300 jobs, or 10% of its work force, close one of its 26 factories and reshuffle management in a cost-cutting plan as it grapples with industry overcapacity.
The world's largest wind-turbine manufacturer also warned that if U.S. lawmakers fail to extend a renewable-energy subsidy, known as the production tax credit, which expires by the end of 2012, it could lead to the layoff of an additional 1,600 workers in the U.S. Vestas will start preparing for a possible scale-down of U.S. operations later this year, it said.
Vestas is grappling with a deteriorating market for wind turbines as extra supply and looming competition from Chinese makers have put downward pressure on prices, while pressure on government finances has put wind-energy subsidies at risk in Europe and the U.S.
The production tax credit has been in place, with some gap years, since 1992 and is currently equal to about $22 dollars for every megawatt-hour a wind farm generates.
"It brings in financial backers and makes wind power competitive," said Matt DaPrato, an analyst with IHS Emerging Energy Research, a Boston consulting group.
IHS has projected that the market demand for wind turbines would be a record 10.7 giga watts in 2013 with the tax credit — without the tax credit it would drop to 1.5 gigawatts.
"The loss of the production tax credit would pull the rug out from under the entire wind industry, not just Vestas," DaPrato said.
The battle in Congress over energy incentives is a recurring one, said Ritter, who is now director of the Center for the New Energy Economy at Colorado State University.
During his administration, Congress tried to do away with an oil and gas tax credit, Ritter said. "We worked with our congressional delegation to get that extended," he said.
"We have tax credits for every form of energy production," Ritter said. "The wind-energy industry is bringing down costs and in a few years won't need the tax credit, but for now — and in this economy — it should be extended."
While Vestas failed to meet its sales targets for 2011, its North American division had its second-highest sales year, with 812 turbines sold to 14 U.S. and Canadian customers.
To lure Vestas to Colorado, state and local governments provide an array of incentives.
The Vestas Windsor factory received about a $4 million incentive package from state and local agencies, according to a U.S. Department of Energy report.
The package includes grants, tax rebates and job-training funds.
Weld County provided a $792,000 personal-property- tax rebate over 10 years, according to county-commission meeting minutes.
The world's largest wind-turbine manufacturer also warned that if U.S. lawmakers fail to extend a renewable-energy subsidy, known as the production tax credit, which expires by the end of 2012, it could lead to the layoff of an additional 1,600 workers in the U.S. Vestas will start preparing for a possible scale-down of U.S. operations later this year, it said.
Vestas is grappling with a deteriorating market for wind turbines as extra supply and looming competition from Chinese makers have put downward pressure on prices, while pressure on government finances has put wind-energy subsidies at risk in Europe and the U.S.
The production tax credit has been in place, with some gap years, since 1992 and is currently equal to about $22 dollars for every megawatt-hour a wind farm generates.
"It brings in financial backers and makes wind power competitive," said Matt DaPrato, an analyst with IHS Emerging Energy Research, a Boston consulting group.
IHS has projected that the market demand for wind turbines would be a record 10.7 giga watts in 2013 with the tax credit — without the tax credit it would drop to 1.5 gigawatts.
"The loss of the production tax credit would pull the rug out from under the entire wind industry, not just Vestas," DaPrato said.
The battle in Congress over energy incentives is a recurring one, said Ritter, who is now director of the Center for the New Energy Economy at Colorado State University.
During his administration, Congress tried to do away with an oil and gas tax credit, Ritter said. "We worked with our congressional delegation to get that extended," he said.
"We have tax credits for every form of energy production," Ritter said. "The wind-energy industry is bringing down costs and in a few years won't need the tax credit, but for now — and in this economy — it should be extended."
While Vestas failed to meet its sales targets for 2011, its North American division had its second-highest sales year, with 812 turbines sold to 14 U.S. and Canadian customers.
To lure Vestas to Colorado, state and local governments provide an array of incentives.
The Vestas Windsor factory received about a $4 million incentive package from state and local agencies, according to a U.S. Department of Energy report.
The package includes grants, tax rebates and job-training funds.
Weld County provided a $792,000 personal-property- tax rebate over 10 years, according to county-commission meeting minutes.
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