What if renewable energy technology existed that negated the need for the Production Tax Credit (PTC)? And what if this technology wasn’t being introduced to the market?

 Undoubtedly, the most talked about story in renewable energy in the U.S. thus-far in 2012 has been the fight to extend the PTC. It provides a 2.2¢/kWh tax incentive to producers of renewable energy, such as wind. Proponents argue that the PTC is a necessary incentive to help the wind industry produce a greater percentage of U.S. electricity.

The U.S. Department of Energy has stated in its published goals as well as throughout its funding announcements that it would like to see technology improve to the point where tax incentives are unnecessary. Current natural-gas prices make it difficult to hit that goal. However, if many of the technologies already prototyped were introduced to wind-turbine market, the production cost of energy could drop to a point where it would be cost competitive with gas at almost any price.

Over the past 18 months, our extensive research of the wind industry’s patent landscape has led us to identify more than 5,000 U.S. patents and applications for horizontal axis, utility-scale wind turbines covering today’s technology and dating all the way back to 1919.  Sifting through more than 8.1 million US patents and millions more pending applications to find the relevant results, which were then analyzed and classified, has been at the heart of identifying the technology trends in the industry.  From these we have identified many technologies which are languishing, yet would be useful on a commercially available wind turbine.

The analysis of the patent landscape revealed the rate for new technology introduction. The analysis included understanding the historical pace of innovation and comparing patent-protected innovations to the known deployment of various technologies on wind turbines. The accompanying chart shows that the issued patents in an industrial equipment industry sector like wind turbines describe a historical trend of innovation.

Even though pending patent applications typically do not publish until 18 months after filing, they still provide an indication of newer technologies which have not yet been commercialized. Therefore, we see a tremendous pendency of new technologies looking for a commercial home. These technologies have found their way into the innovation and patent-prosecution process, but are not yet making their way into commercial industry.

One reason for the discrepancy is that turbine OEMs are often not incentivized to introduce new technologies unless they face particular technical challenges, such as noise mitigation, O&M cost reduction, enhanced low voltage ride-through capability, or a production or availability improvement. If they can sell their turbines to a developer or owner-operator who has a power-purchase agreement (PPA) for a project which is high enough for the turbine OEM to achieve its margin, then they will bid their existing fleet – machines already in production.

It’s when PPA prices trend downwards – as we have seen in the U.S. market – that the margins of turbine OEMs get squeezed. Then they look to develop new turbine technologies and product offerings to make a step change in the production cost of energy (COE) and restore the manufacturer’s profits.

Of course, the risk premium associated with the introduction of a new turbine product or platform, and the R&D associated with development, testing, as well as risk reduction is often prohibitive to introducing the new technology. This is particularly true in a cost competitive and margin-sensitive market where financing of new turbines has been expensive.

Furthermore, the industry has matured over the past 15 years to an extent that it currently faces a point of diminishing returns on R&D investment. There is incrementally less cost-of-energy benefit for every R&D dollar spent on new technology.

But while it takes more investment to get continued benefits, the pace of innovation in wind is actually increasing. Patent issuances and application filings are up, with approximately 30 new applications publishing each week.  This trend continues, even as the industry continues to consolidate and more industrial conglomerates such as GE, Siemens, Samsung and Alstom, compete to gain Tier 1 status in the wind sector and build their patent portfolios to match.

In the immediate term, the extension of the PTC is a fundamental necessity for the stability of the industry. Policy uncertainty does not provide the industry confidence to invest in workers, factories, or new technology. However, if the currently proposed PTC phase-out becomes part of the final language of the tax-credit-extension legislation, we would hope the industry hears the call to arms for the development and commercialization of new technologies which can further reduce the cost of energy and eliminate the need for a PTC.

About the author

Philip Totaro is the Principal at Totaro & Associates, a consulting firm focused on innovation strategy, risk mitigation, market research and product development for the wind industry.

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When Marc Sielemann, Nordex’ Chief Operations Officer, examined the company’s manufacturing processes he saw an opportunity for improvement. Having spent many years in the commercial vehicle industry in Europe, he saw the benefits of streamlined production, new materials, and inventory-management procedures. He was determined to bring these benefits – cost savings, higher quality, faster throughput, minimized downtimes, increased capacity – to Nordex’ production of wind turbines.

Sielemann recognized that for the company to maximize the value of these types of improvements, there had to be a corresponding leap forward in the product line. The multi-disciplinary team that created the newest addition to the Nordex multi-megawatt turbine family, the N117/2400, worked under Marc’s maxim: Be bold and push the boundaries.

They did. To achieve ambitious targets the team turned to new materials and new ways of working. They fast-tracked development based on new design methods. Their focus changed from a “heavy and robust” model to “stable and efficient,” while maintaining the strength and reliability for which Nordex machines are known. For example, the 58.5-m blade is an important design innovation that creates significant competitive advantage. Using carbon-fiber-reinforced plastic, the team added 8.5m to the blade length while reducing its weight.

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To enjoy engineering, it also helps to come from a like-minded family of tinkerers. “My first experience with renewable energy came from my brothers who built a parabolic solar collector for fun,” he says. It was a breakthrough experience for him because it exposed him to the idea of harnessing the power of natural forces.

In addition to his brothers, Catalán says engineering inspiration comes from his father. “He could fix anything and he proposed innovative solutions to most problems,” says Catalán. For example, he says, when the clock in the village church tower stopped working, the town could not find repairman. Catalán’s father volunteered to give the repair a try and succeeded in getting the mechanism working.

“Most of my career at Gamesa has been devoted to leading our 2-MW platform projects designing, developing, validating, and certifying most of the variants,” he says. “We are always looking at ways to advance the platform that will better serve the needs of customers. For example, we’ve added new rotor sizes, airfoils, and wind classes for specific grid codes. Driving platform evolution is important for Gamesa because this family of turbines is fundamental to our product portfolio.”

The G11X 5.0MW is a new platform for the company and the first offshore wind turbine to be designed in the U.S, so Catalán says it’s an exciting challenge. He explains that extensive testing is a key driver for design enhancement. The major components and subsystems of the G11X-5.0 MW have gone through more than 240,000 hours of testing and validation including applying a counter-yaw system to evaluate how effectively it behaves under extreme conditions.

Most members of Catalan’s North American offshore engineering team are housed in Gamesa’s North American Offshore Wind Technology Center in Chesapeake, Va, which opened in early 2011. “Plans for the offshore industry in the U.S. are moving ahead, so we want to be ready to supply the first wind farms to be installed here,” he adds.

talled here,” he adds.

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Britt’s passion for his work and for building a strong domestic wind power industry, were an inspiration to all who worked with him and knew him. He was personally committed to building a future powered by clean, renewable energy, and put that commitment into practice in his own life, powering his home and auto with solar and wind energy.

Theismann was diagnosed with cancer about two years ago and after a worthy struggle, he died late last year. He was our colleague and our dear friend, and will be sorely missed.

Theismann was born in Odessa, Texas, on March 30, 1963. He graduated from Katy High School in Houston in 1981, and received his undergraduate and Master’s of Business Administration degree from Oral Roberts University. Before joining AWEA, he served as Director of Statistical Information for the International Institute of Synthetic Rubber Producers. He became Senior Vice President and Chief Operating Officer of AWEA in 2009.

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The agreement is set for three years with an option to extend for two additional years and provides the foundation for a long-term relationship among Iberdrola, GE and Tamoin. GE will act as the technology partner in the consortium to provide high availability and reliability for the installed GE wind turbine fleet by supplying parts, specialized labor and technological support, while Tamoin will supply skilled labor.

The scope of the agreement includes planned and unplanned maintenance for the GE wind turbines at the following Iberdrola wind farms: Cuesta Colorada, Cerro Calderón, Cerro Palo, Muela 1, Maza, Calleja, Isabela and Sierra Quemada y Gavilanes.

“Our goal, in collaboration with our partner Tamoin, is to provide Iberdrola with the highest level of service to help optimize operations while maximizing production,” said Ramon Paramio, Europe wind services leader at GE’s renewable energy business.

The GE-Tamoin consortium has been working with Iberdrola for the past two years under an existing services agreement at Iberdrola wind farms in Germany and Poland. In addition, GE has provided equipment and services to Iberdrola for a wide range of energy projects over recent years, including the thermal, aeroderivative and renewable energy sectors.

GE
www.ge.com 

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Congressman Dave Reichert has over 37 years of public service, coming a long way from Detroit Lakes, Minnesota as the oldest of seven children and grandson of the town marshal. Reichert was a member of the U.S. Air Force Reserve and eventually King County sheriff, the first elected sheriff to take the position in 30 years. While he held the position, voilent crime in the country significantly dropped. He also attracted national recognition as head of the Green River Task Force, solving the largest serial murder case in U.S. history. As sheriff, he spoke out strongly against domestic voilence and advocated family values.

These efforts earned Reichert the National Sheriffs’ Association’s “Sheriff of the Year” award in 2004. He is a two-time Medal of Valor Award recipient from the King County Sheriff’s Office and was honored with several other awards as well.

Reichert served as president of the Washington State Sheriffs’ Association and an executive board member of the Washington Association of Sheriffs and Police Chiefs. He has also served on advisory boards including the King County Criminal Justice Council and the King County Domestic Violence Council. He co-chaired the Washington State Partners in Crisis, a coalition targeting mental health issues. Reichert also was a leader in the fight against Meth. He currently serves as a member of the Special Olympics of Washington State Board of Directors.

Reichert advocates the PTC extension to spur domestic manufacturing and reduce energy costs. “Renewable energy resources play an important and increasing role in America’s total energy supply,” he says. “The certainty this bill will provide can further spur this vital sector, increase economic development, and create jobs.”
Reichert graduated with an A.A. degree from Concordia Lutheran College in Portland where he played football and met his wife. The Reicherts have three grown children and six grandchildren.

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Elected to the US House of Representatives in 1996, Blumenauer has created a role as Congress’ chief spokesperson for Livable Communities: places where people are safe, healthy and economically secure. From 1996 to 2007, he served on the Transportation and Infrastructure Committee, where he was a strong advocate for federal policies that address transportation alternatives, provide housing choices, support sustainable economies and improve the environment. He was a member of the Foreign Affairs Committee from 2001 to 2007 and vice-chair of the the Select Committee on Energy Independence and Global Warming from 2007 to 2010. He is also an avid supporter of biking to “burn calories not fossil fuel,” as he told The New York Times.

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Texas Wind 2012 will feature more than 30 hours of information exchange through keynotes, breakout sessions, and networking events in the heart of downtown San Antonio. Seminars and expo will take place at the historic Sheraton Gunter Hotel in the midst of the Riverwalk, the Alamo, and all that the Nation’s seventh largest city has to offer.

Seminar topics will include wind policy outlook and intensive strategies, initiatives to increase wind project profitability, wind transmission expansion, wind supply chain manufacturing and transportation, homeland security issues and solutions, retail and wholesale market opportunities, regional project case studies, public outreach, workforce development, university and college programs, Wind Law 2012 continuing legal education about wind policy, and Texas wind energy in the media.

Registration, exhibitor, and sponsorship information and online sign-up are available at www.TexasWind.info. Early registration rates are in effect through June.

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Selected executives from across the nation will join the program. Targeted executives are those who have built successful companies in different sectors such as aerospace, biotechnology and enterprise technology. Executives with more than 20 years of experience, an advanced degree and experience leading a venture-backed start-up company are encouraged to apply. Each candidate must have a strong desire to transition into the cleantech industry through accelerated training, networking and technology exposure.

“Colorado is a hub for cleantech. There is an abundance of market-ready research and technology here to drive the success of this program,” said Wayne Greenberg, director of the Cleantech Fellows Institute. “The executives selected will have access to virtually unlimited resources, build an invaluable national network of cleantech stakeholders and have the opportunity to launch venture backed companies in one of the industry’s most innovative and supportive communities.”

“We’re thrilled to be a founder of the CFI and we look forward to working closely with experienced executives who can incorporate fresh ideas into leading successful cleantech start-ups,” said Christine Shapard, executive director of Colorado Cleantech Industry Association. “This will be the first year of the program and I’m confident that it will prove to be one of the nation’s most practical and motivating programs to advance the cleantech industry.”

CFI was created by the Colorado Cleantech Industry Association (CCIA) and is supported by the Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) and Advanced Energy Economy (AEE), a national business organization of which CCIA is a founding chapter. The CFI program builds on a regional program developed by the New England Clean Energy Council, another AEE member, and takes it national in scope.

This new program begins on Sept.17 with executives immersed in a highly interactive curriculum. Eight weeks of the 17-week program will be held on-site at various locations throughout Colorado such as the Colorado School of Mines, University of Colorado, Colorado State University and NREL. Seven weeks will be held “virtually” as webinars taught by nationally recognized experts in advanced energy. The executives will also participate in valuable networking events such as evening debates, speaking sessions, and exclusive dinners.

Approximately 20 percent of the program will be dedicated to intensive study of the energy industry and the regulatory, capital and structural challenges the industry faces. Topics will include overviews of wind, solar, renewable fuels and electricity markets, as well as the state of venture deal terms in cleantech and the outlook for exits. The participants will also study which industry niches are securing the most venture investment to best position their companies. Areas of in-depth study include advanced transportation technologies, energy storage, clean energy technologies and energy efficiency and building technologies.

The key to the program’s success will be the executives’ exposure to commercial-ready technologies from Colorado sources. Working with the universities and NREL as well as various business incubators such as CleanLaunch, the executives will develop a deep understanding of the technologies being researched at each institution. Each executive will select a technology that sparks their interest and plan a capstone project to present in January, in advance of graduation on Jan. 11, 2013. The capstone project includes a market and technology assessment as well as the building of an initial business plan for a potential new cleantech company.

“One of the challenges in the advanced energy sector is finding the right talent to turn cutting-edge technologies into successful companies,” said Graham Richard, CEO of Advanced Energy Economy. “The Cleantech Fellows Institute is a perfect example of identifying special individuals outside of the clean energy industry – whether that be technology or other sectors – and helping them acquire the expertise they need to succeed in the dynamic, competitive advanced energy marketplace. We’re very proud to support this program, which is the result of a true collaboration between two of our founding state partners.”

Cleantech Fellows Institute
cleantechfellows.com 

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Hubbell Power Systems
www.hubbellpowersystems.com

Windpower Engineering & Development