TPI Composites Inc. will close a wind turbine blade manufacturing facility in Newton, Iowa.
The Scottsdale, Arizona-based turbine manufacturer did not receive a contract extension from General Electric Co. for the plant's output. TPI had extended its supply agreement with GE through 2021, William Siwek, president, CEO and director of TPI, said in an earnings call for the second quarter of 2020.
TPI will lay off 710 employees, effective Dec. 31, according to an Oct. 18 notice on the website of the government agency Iowa Workforce Development, as reported by local media outlets. The plant was TPI's only wind blade manufacturing facility in the U.S., according to a September TPI investor presentation.
The news comes amid rising costs for raw materials, supply chain bottlenecks and uncertainty about the production tax credit for wind projects. A congressional extension of the tax credit could push back project timelines, as developers would not have to rush toward construction.
TPI did not return a request to comment on the reason for the closure.
Siwek, in an August second-quarter earnings call, said the company was "evaluating our options for the site." He also spoke of increased logistics and rising costs of resin and carbon fiber. In its second-quarter 2021 report, TPI said "an increase in direct material costs at our Newton, Iowa blade facility," had posed a drag on earnings.
"We are also exploring new geographies with our customers for onshore, offshore and combined," Siwek said.
TPI opened the plant in 2008 under supply agreements with GE. A GE spokesperson declined to comment.
GE in 2017 acquired wind turbine manufacturer LM Wind Power Holding A/S, a competitor of TPI. GE executives said in a July earnings call that President Joe Biden's proposal for a 10-year extension of renewable energy tax credits will cause the onshore wind energy market to contract in the near term, as project developers would not have to accelerate construction to capture incentives.
Congressional negotiations over the fate of renewable energy tax credits are ongoing.