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SEPTEMBER 2006

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PENNSYLVANIA SPOTLIGHT

Full Circle
Sweeping tax reform is but one of the fresh breezes invigorating Pennsylvania's business climate.

E

veryone's familiar with the triangular recycling symbol. In many territories, the challenge is to square the exigencies of business cycles with those of the environment. But in Pennsylvania, the business and environmental communities are finding novel ways to solve the economic geometry of industrial development and natural resources.
   On June 21, Spain's Gamesa Group opened its US$50- million, 183,000- sq.- ft. (17,000- sq.- m.) Fiberblade LLC wind turbine blade operation in Ebensburg, Pa., on a site that encompasses 861,000 sq. ft. (79,987 sq. m.) in the Cambria County Industrial Development Corp. industrial park. Among the project's highlights are storage and maintenance areas for the 141- ft. (43- m.) blades. The plant, which employs 205 but could employ 235 in a few years, will have the capacity to turn out enough blades to produce 300 megawatts every year.
   But that was just one tranche of Gamesa's game plan in the U.S., which includes headquarters in Philadelphia.
   Later this year, the company will launch three more facilities on the former U.S. Steel property in Bucks County, Pa., once known as Fairless Hills and now known as Keystone Industrial Port Complex. Those three plants – whose deals were inked in mid- 2005 – will make blades, towers or nacelles. The Pennsylvania commitments will bring Gamesa's global production portfolio to 26 facilities employing more than 2,600 people. While the company's Ebensburg plant is its first outside Spain, it's by no means the last: The 27th is coming online in Tianjin, China, this year, and No. 28 will be in Portugal. That's the long and short of the new world order, in a niche that may bring Gamesa a projected annual growth rate of more than 16 percent between 2006 and 2010.
   "It will reinforce the company's long- term commitment to the U.S. wind power market," said Gamesa group President Alfonso Basagoiti of his firm's Pennsylvania portfolio, "something which is underpinned by the existence of a considerable portfolio of orders for wind turbine sales."
   The company has signed contracts over the past two years to provide a total of 674 megawatts of wind power in the U.S. Twelve of those Pennsylvania- made turbine assemblies are headed to Bear Creek Wind Farm (pictured above) in Bear Creek Township, just south of Wilkes- Barre in Luzerne County. Other Pennsylvania wind farms are located in Somerset and in Mill Run, home of Frank Lloyd Wright's masterpiece Fallingwater. Those two towns are in a patch of southwestern Pennsylvania formerly known for its coke production.
   "Working with private industry and making strategic investments, Pennsylvania continues to build its own energy from wind power to waste- coal- to- diesel to biofuels," said Gov. Edward G. Rendell during a tour of Bear Creek Wind Farm earlier this year. "We cannot afford to wait for the federal government to establish a policy that supports our businesses and reduces our dependence on foreign oil. We are acting now." Indeed, Pennsylvania has more megawatts of wind energy deployed than any state east of the Mississippi, with 135 megawatts being produced and 65 scheduled to come online soon.
   Bear Creek is the seventh utility scale wind project in the Mid- Atlantic electricity grid. Helping to make it reality were commitments by PPL Corp. for a 20- year power purchase agreement and leading wind energy customers such as the University of Pennsylvania, which announced a 10- year, 10- megawatt wind energy purchase.
   While many states are in the midst of establishing renewable portfolio standards for energy production and consumption within their borders, Pennsylvania is among the most progressive, aiming to reach an 18- percent alternative energy goal by 2020, including solar.
   Pennsylvania's multi- faceted approach to renewable energy coincides strikingly with Gamesa's own approach, as well as that of fellow Spanish firm Iberdrola.
   In its June 2006 strategic plan announcement, Gamesa emphasized its research on synergies among such renewable- energy sectors as wind, solar, biofuel and hydrogen. Pittsburgh is well known for its hydrogen fuel cell research base. Last year, a biofuels storage and blending operation opened in Middletown, Dauphin County. The state also soon will be home to the nation's first waste- coal- to- diesel plant in Schuylkill County, which is now under construction and expected to produce 600 permanent jobs. Rendell led the effort to form a buyers consortium to purchase nearly all of that forthcoming plant's output, a move that was essential to helping the plant get financed.

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