Posts Tagged ‘Clipper Windpower’

photo: Aurora Biofuels

As I write in The New York Times on Friday, it’s spring cleaning at three renewable energy firms as top executives depart SolarReserve, Clipper Windpower and Aurora Biofuels:

The past week has brought a spate of executive departures at renewable energy startups, with the president of SolarReserve, a power plant builder, and the chief executives of Clipper Windpower and Aurora Biofuels stepping down.

Terry Murphy, a rocket scientist who co-founded SolarReserve after a career at United Technologies’ Rocketdyne division, has started a new venture called Advanced Rocket Technologies in Commercial Applications, or ARTiCA. The firm will evaluate green technologies for entrepreneurs and investors, according to Mr. Murphy.

Mr. Murphy and SolarReserve both said the departure was voluntary. “With the company solidly executing on its business strategies, Mr. Murphy has transitioned to an external role in providing developmental expertise to other early stage clean energy companies,” wrote Debra Hotaling, a spokeswoman for SolarReserve, in an e-mail message.

When Mr. Murphy left Rocketdyne to start SolarReserve, the startup licensed Rocketdyne’s molten salt technology so that its solar power plants could store solar energy for use after the sun sets or on cloudy days.

“SolarReserve, in my opinion, is up and running on all four cylinders,” said Mr. Murphy.

“What I did at Rocketdyne and what I did at SolarReserve and what I’m looking at doing in the future is to sift through technologies to find those that can be commercialized.”

Mr. Murphy’s new firm will focus on technologies involving renewable energy, desalinization and sustainability, he said.

You can read the rest of the story here.

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photo: Clipper Windpower

Tech and defense industry conglomerate United Technologies has shown growing interest in alternative energy and this week it bought nearly half of California wind turbine maker Clipper Windpower. As I write Friday in The New York Times:

United Technologies, a global industrial heavyweight, will invest $270 million for a 49.5 percent stake in Clipper Windpower, a struggling California-based turbine maker.

The deal, announced this week, marks a change in the ownership structure for one of the few major American-owned turbine makers. (Another is General Electric.)

United Technologies, a Hartford-based parent company to businesses such as jet engine maker Pratt & Whitney and elevator maker Otis, has recently shown interest in alternative energy. For example, it has licensed its molten salt storage technology to solar power plant builder SolarReserve.

In a statement on Wednesday, United Technologies said that it “expects to work closely with Clipper Windpower to improve the company’s core technology, manufacturing, product quality, and supply management capabilities.”

The agreement, the company added, “allows U.T.C. to expand its power generation portfolio and enter the high-growth wind power segment.”

Clipper, which is listed on London’s A.I.M. stock exchange, began to look for investors earlier this year as the global recession took its toll and customers delayed turbine orders. Millions of dollars spent fixing defects in some older turbines further sapped Clipper’s cash flow. Its share price rose by close to 20 percent on Thursday, after the deal was announced.

Douglas Pertz, Clipper’s chief executive, said in an interview on Friday that he expects to see the market revive in the latter half of 2010. (On Thursday, G.E. announced a $1.4 billion deal to supply turbines to what would be the nation’s largest wind farm, in Oregon.)

United Technologies has agreed not to acquire additional shares of Clipper for two years following the close of the deal.

Mr. Pertz argued that there are similarities between General Electric and United Technologies — as well as a bit of history.

You can read the rest of the story here.

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The wind industry has been getting a lot of love of late from the Obama administration.

The president spent Earth Day at an Iowa factory that makes wind turbine towers and announced new regulations for offshore wind farms. Meanwhile, Interior Secretary Ken Salazar has been talking up the potential of offshore wind to generate as much as 20% of the eastern seaboard’s electricity that is now provided by coal-fired power plants.

But such scenarios won’t come to pass unless the administration seriously tackles the transmission grid problems that are keeping wind from becoming a nationwide source of green energy, according to panel of wind industry executives who spoke at Fortune Magazine’s Brainstorm Green panel this week.

“The real challenge is to connect wind farms in the Great Plains with the population centers of the Midwest,” said Bob Gates, senior vice president of commercial operations for Clipper Windpower. California-based Clipper is one of two U.S.-owned wind turbine makers (the other being General Electric (GE) ).

For instance, Clipper and BP (BP) have signed an agreement to build a 5,000-megawatt wind farm – the nation’s largest – in South Dakota. But the deal is more a dream at this stage because there are no power lines to transmit such massive amounts of electricity to Chicago and other Midwestern cities. (Gates said there is enough transmission available to begin construction this summer of a small 25-megawatt portion of the wind farm.)

The Obama administration has devoted billions of dollars in stimulus package funding to transmission projects and the Federal Energy Regulatory Commission last week approved incentives for a company planning to build a $12 billion “Green Power Express” transmission project to bring wind to Midwest metropolises.

Gates and the other panelists — Andris Cukurs, CEO of Indian turbine maker Suzlon’s North American operations; Don Furman, a transmission executive with Spanish wind developer Iberdrola Renewables, and James Walker, vice chairman of French-owned wind developer enXco – said the development of wind offshore from East Coast cities would ease transmission bottlenecks.

“Connecting offshore wind to cities is relatively cheap and easy compared to bringing wind power from the Dakotas to New York City,” Gates said. Another way to work around transmission gridlock would be to develop highly efficient small turbines that could be placed near cities and existing power lines, said Gates.

Despite Obama’s embrace of wind, the executives said they don’t see the industry resuming its record growth in 2008 – when U.S. wind capacity more than doubled – until 2010 or later. The credit crunch delayed or scuttled numerous wind farms and turbine orders have fallen dramatically.

One bright spot: Growing interest from well-capitalized utilities in directly investing in wind farms.

“Utility ownership is about 15% of the U.S. turbine fleet,” said Furman of Iberdrola Renewables. “I see more utility ownership in the coming years,, perhaps up to a third of the fleet.”

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photo: Todd Woody

As President Barack Obama embraced renewable energy in his inaugural speech Tuesday, Clipper Windpower laid off 90 employees – about 11% of its workforce – as the global financial crisis throws a spanner in the once-booming wind industry.

The Carpinteria, Calif.-based turbine maker has seen business slow as customers delay existing orders and put off new ones because they cannot obtain financing for wind farms, Clipper CEO Doug Pertz told Green Wombat.

“In the short-term, the impact to Clipper is a reduction in 2009 turbine production,” he said. “We know that 2009 will be a challenging year, however, remain optimistic that this economic situation is temporary.  We trust that the new Obama administration will, in the not-too-distant future, enact policy to enable better financing options for wind energy projects and aggressively promote the growth of renewable energy development.”

Clipper is one of only two U.S.-owned turbine makers – the other being General Electric (GE) – in an industry dominated by European manufacturers and wind farm developers.

Like their counterparts in the solar industry – which also has been shedding workers in recent weeks – wind companies depend on tax incentives to lure investors. But with traditional investment banks all but extinct on Wall Street and other investors hoarding their cash, there’s been little appetite of late for investing in so-called tax equity partnerships to provide funding for massive wind farms or solar power plants.

Pertz said Clipper’s production is down 20% from the 750 megawatts worth of turbines it manufactured in 2008 and that he expects double-digit declines for 2009. “Customers with large balance sheets are being much more conservative and smaller independent wind developers are seeing that it is much more difficult to obtain tax-equity financing,” he noted.

Wind and solar industry lobbyists are pushing Congress to make the investment tax credit and the production tax credit refundable so those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance renewable energy projects.

Founded in 2001 by wind industry veteran James Dehlsen – his first wind company is now owned by GE –  Clipper makes a 2.5-megawatt turbine called the Liberty at its Cedar Rapids, Iowa, factory that powers wind farms built by FPL (FPL) and BP (BP). Other customers include Queen Elizabeth II, who bought the prototype of a 10-megawatt offshore turbine being developed by Clipper in the U.K.

One bright spot for the wind industry, said Pertz, is an expected move by well-capitalized utilities to take ownership stakes in wind farms if a national standard is enacted requiring them to obtain a certain percentage of their electricity from renewable sources.

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photo: Todd Woody

CEDAR RAPIDS, Iowa – For the past four years, the global wind industry has grown at a Google-like 30% clip as wind farm developers and turbine makers met demand for the one renewable energy source that has become competitive with fossil fuels. In the United States alone, new wind capacity will have jumped 50% in 2008.

Now the credit crunch is taking its toll – at least when it comes to forecasts for the industry’s prospects in 2009. Over the past week, analysts and industry insiders have ratcheted back growth predictions due to uncertainty over whether developers will be able to secure financing for the ever-bigger wind farms on the drawing boards.

“There is little visibility into the project finance market over the next 18 months,” wrote HSBC analysts Robert Clover, Charanjit Singh and James Magness in a report issued last week. “Thus far, company management in the wind sector continues to say that it is not experiencing a slowdown in growth, although developers say that finance is more expensive than it was. We do not believe that the long-term growth story has been undermined, but expect a period of reduced growth.”

The HSBC analysts predict the industry won’t grow at all next year. Meanwhile, the American Wind Energy Association, a Washington, D.C., trade group, also expects a slowdown in 2009.

“Clearly the market’s perception of growth for the wind industry has declined dramatically, but against a backdrop of virtually no industry data points,” the HSBC analysts acknowledged.

Ah, there’s the rub. Aside from the fear of the future that threatens to paralyze just about every industry, absent a complete collapse of capitalism the wind industry would seem poised to continue its run, albeit at a slower pace. (The nascent Big Solar business, in contrast, finds itself in a more precarious situation.)

In the U.S., state mandates that require utilities to obtain a growing percentage of electricity from renewable sources will drive growth for years into the future. That’s the reason you’re seeing plans for gigawatt-sized wind farms like the 4-gigawatt one T. Boone Pickens is building in Texas. As analysts were souring on the industry’s prospects last week, oil giant BP’s (BP) wind subsidiary finalized a deal with California turbine maker Clipper Windpower to build a five-gigawatt project – the world’s largest, sorry T. Boone – in South Dakota. (Of course, that’s little comfort to investors who have seen wind stocks take big hits in recent weeks. Nor is it good news for two U.S. startups that have filed for IPOs –  First Wind and Noble Environmental.)

The wind developers and turbine makers Green Wombat has talked to in recent weeks for an upcoming Fortune magazine story say the long-term impact of the financial crisis remains unknown at this point. A large pipeline of orders for windmills – Danish turbine king Vestas’ orders spiked 52% from the first quarter to the second, according to HSBC – suggests that growth will continue unless wind farm developers start canceling projects – something that hasn’t happened to date.

The wombat happened to be at Clipper’s Cedar Rapids, Iowa, turbine factory on Tuesday and put the question to Bob Gates, the Carpinteria, Calif.-based company’s vice president of operations. Clipper is only one of two U.S. turbine makers, the other being General Electric (GE). (GE acquired its turbine operations from a bankrupt Enron, which itself had bought the business in 1997 from Clipper’s founder.)

“I think growth will be flat next year and that may continue to 2010 and then go back up,” said Gates as workers assembed gigantic drive trains for Clipper’s 2.5-megawatt Liberty turbine. “You have to put in your order for some components a year in advance, so if demand drops in 2009 you’ll have fewer turbines to bring to market in 2010.”

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Green Wombat’s story on the Royal Turbine is in the latest issue of Fortune and available online here and below.

Her majesty’s big, honkin’ windmill

The Queen of England is buying the world’s largest wind turbine, which towers over Big Ben and will light up thousands of British homes.

By Todd Woody, senior editor

(Fortune Magazine) — It’s been a century or so since Britain ruled the waves, but Queen Elizabeth II will soon reign over the wind. Earlier this year the Crown Estate, which manages royal property worth $14 billion and controls the seas up to 14 miles off the British coast, agreed to purchase – for an undisclosed sum – the world’s largest wind turbine.

It’s a 7.5-megawatt monster to be built by Clipper Windpower of Carpinteria, Calif. Now the Royal Turbine is getting even bigger: Clipper has revealed to Fortune that Her Majesty’s windmill has been supersized to ten megawatts, producing five times the power generated by typical big turbines currently in commercial operation. The giant’s wingspan stretches the length of two soccer fields. At 574 feet, the turbine soars over Big Ben and roughly equals 111 Queen Elizabeths (the actual queen) plus one corgi stacked on top of one another.

The Queen’s turbine will displace two million barrels of oil as well as 724,000 tons of CO2 over its lifetime. This prototype will be the flagship for Clipper’s Britannia Project, an effort to create a new generation of massive-megawatt turbines to be placed on deep-sea floating platforms. When the windmill goes online in 2012 somewhere off the British coast, it could power 3,700 average homes.

Rule, Britannia, indeed.

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