Mortenson Construction has developed a major national footprint in wind and solar energy, and is getting more than one-fourth of its revenue from renewable energy projects.
Mortenson Construction, best known as a builder of hospitals, offices and sports stadiums, also has become one of North America's leading renewable energy contractors.
Most of the wind power generated in Minnesota comes from turbines installed by the Golden Valley-based company. It has built other wind farms and utility-scale solar power projects across the United States and in Canada.
It's now constructing the nation's largest concentrated solar power station in Colorado, and one of the largest U.S. wind farms in Messena, Iowa. The company says renewable energy work accounted for 28 percent of its $2.4 billion in revenue last year.
Tom Wacker, senior vice president, helped move Mortenson into renewable energy and now leads the five groups focused on wind, solar and transmission. He recently sat down to talk about the business.
QHow did Mortenson get into the wind and solar energy construction business?
AMortenson has always had an industrial side -- wastewater, water-treatment projects, energy projects, pulp and paper mills. In 1995, as the pulp and paper business was slowing down, our guys were out looking for another market and built their first wind turbine down in Iowa. That market continued to grow and expand. Then in 2008 we started building our first solar projects.
QHow many wind farms has Mortenson built and what is the largest one?
AAt the end of this year we'll have finished about 107. The largest one is the Mid-America Energy project in Iowa.
QTell me a little bit about that.
AThat's 443 megawatts, and it is the single largest, single-build wind project in the United States, maybe even in the world. There are larger wind projects in total megawatts but they were built in multiple phases.
QTell us the steps in building a wind farm.
ATypically when we are the engineering, procurement and construction contractor, we will get involved when the wind farm developer has a bunch of dots on a map. We'll work on micro-siting of the turbines with the owner and the wind consultant, and on designing the roads, the electrical collection systems, the substation and transmission lines. We do all the work, with the dozers and graders to build the roads, then pour the foundations, erect the turbines and do all the electrical work.
QDo your workers move around for these projects?
AIt's a combination. We'll move most of our management staff to a project site, then we'll bring in some key travelers from the trades who have been with us for many years. And then we hire local in the local community. We have a lot of people out of northern Minnesota who travel with us around the country; that is where a lot of our millwrights and ironworkers came from. We peaked this year at just under 800 crafts people. If you add in some of the sub-trades, you double or triple that.
QWhat is concentrated solar and where is Mortenson building that?
AIt basically concentrates the sun on much smaller but more efficient solar cells. We're building a large project in Colorado that uses Amonix technology, and that will be 30 megawatts. That currently is the largest concentrating solar facility in North America.
QThe cost of new wind farms has dropped significantly this year. Why is that?
AThe price is down for a variety of reasons. One of course is the turbine suppliers are selling their product at less cost. Part of that is because raw materials are down. Then everybody's prices are just tighter as the cost of electricity has gone down. Everybody through the whole supply chain just tightened up their pricing.
QMortenson recently established a power transmission group. Where are those opportunities and are they related to the concerns about reliability of the power grid?
AEventually if we don't build more transmission, we don't build much more wind power because there is no grid to get it onto. The projects we're looking at today are in the West. We are bidding on a project in Utah. We are looking at work in Texas and at some projects up in Canada. Most of those projects are either moving renewables, or strengthening the grid.
QMuch of the construction industry was badly hurt by the financial crisis and recession. What happened in renewable energy during this period?
AI happened to be out in Washington, D.C., meeting with a bunch of the wind people and senators and representatives just days after Lehman Brothers went under in 2008. Customers were talking about projects going away. 2009 was a down year for us. 2010 started coming back, and 2011 is looking pretty good. But there was an immediate effect, a dampening in the market. 2012 looks pretty good. I don't know if it will be as big as 2008 but it will approach it.
QWhat is the outlook for your wind business if the federal wind production tax credit (PTC) isn't renewed at the end of 2012?
AAbout 35 percent of our renewables business is in Canada, so there will be a continued market for us there. Every time there has been no PTC, there have been one or two projects built in the United States. There are a couple places where the wind regime is good enough they don't need a PTC to make it competitive. There may be a couple of projects where the turbine vendors, in order to continue manufacturing turbines, will build a project. But I think that will be limited. Most people are going to wait.
David Shaffer • 612-673-7090