Mitsubishi Heavy to stop wind plant construction due to poor demand

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Mitsubishi Heavy to stop wind plant construction due to poor demand

Greentech Lead America: Mitsubishi Heavy Industries has
decided to suspend construction of its wind turbine manufacturing plant in Fort
Smith, Arkansas because of poor market conditions in the U.S.

The company decided to cancel the construction after the
board of directors approved an inventory writedown and related measures
regarding its onshore wind-turbine business on March 29.

The U.S. market is expected to slow considerably when the
production tax credit (PTC), a key subsidy for the wind-power industry, expires
at the end of this year.

“Since the 2008 banking crisis, demand for wind turbines
in the North American market has stagnated, and the commercialization of cheap
oil- shale gas and other matters have had a further dampening effect,” the
company said in a statement March 29.

The company announced plans for the 600 MW manufacturing
plant in Arkansas in 2009 to support growth in its main market and the factory
was due to originally start operations in the second half of 2011.

Mitsubishi’s four–year legal struggle with competitor GE
over intellectual property issues also has a significant impact on this
decision, according to Bloomberg.

Recently, The federal court jury found that MHI’s
flagship 2.4MW turbine had infringed GE’s ‘705 patent for a form of low-and
zero-voltage ride-through (LVRT) technology.

The GE dispute is believed to have hit MHI’s sales of the
turbine. The only recent deal for the MHI 2.4 is for Duke Energy’s Los Vientos
II project in Texas.

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