Projects and Sales

Overview

Wind Harvest International’s new Vertical Axis Wind Turbines (VAWTs) will undergo national and international certification[1] with the installation of its G168 VAWT System at the Advanced Wind Turbine Testing Facility in West Texas, anticipated to occur in the fourth quarter of 2017. Certification will provide a third-party verified power performance curve, validated Annual Energy Production, and a permit-worthy acoustical signature. These accomplishments are critical to bringing a turbine into commercial sales and the beginning step towards megawatt-sized projects.

The rest of this section presents WHI’s plans for installing dozens of turbines around the world in 2018. As is noted in the different sections, the key to a successful project in 2018 will be verifying the site's wind speed, power purchase agreement and resulting expected project financial return. WHI welcomes and values help in finding projects that meet these criteria.

Project Pricing

Each project, like each piece of land, is unique.

WHI's turbines are priced competitively with similarly sized on-shore conventional Horizontal Axis Wind Turbines (HAWTs). Over time, the wind industry has established standardized costs and financing for HAWTs, yet they must still be calculated for each individual project.

Significantly, WHI is not selling just turbines. We are selling turbine systems that capitalize on the coupled vortex effect, which increases the energy output of closely placed neighboring VAWTs. A single WHI turbine may be cost effective for some, but we expect that projects will be 140kW (two turbines) or larger. Project development costs per turbine are mostly halved with each doubling of the number of VAWTs installed.

Project Operating and Maintenance (O&M) costs drop with economies of scale. VAWTs, at similarly installed capacities, are less expensive to maintain than HAWTs because the parts that require maintenance are lower to the ground, making them easier to access and less labor intensive to work on. HAWTs require technicians to access parts located 100-200 feet or more above ground level. The projects WHI wants to install in 2018 will be small and mid-size developments that range in price from $2500 to $5000 per kW installed, depending on the variables described below.

Turbine Unit Cost
WHI's VAWT Systems are competitive with similarly sized, on-shore conventional HAWTs. The unit price for a given turbine depends on a number of variables, including the number of units ordered and where they are manufactured. Presently, WHI is manufacturing in Denmark and the U.S.; we are receptive to working with qualified manufacturers in-country if the local market demand is sufficient.

Size of the Project
As with many developments, one installed turbine will cost more per unit than two, two will be more per unit than four, etc. For example, each project needs one conduit or set of poles to connect to the nearest 3-phase transmission line no matter the size of the project. Only one land-use or grid-connection permit is needed per project. Maintenance is less expensive per turbine because the cost per trip to the site is amortized over more turbines. Larger orders and local manufacturing reduce turbine costs,which will further reduce project cost on a per-unit basis.

On-site Conditions
Each project’s site conditions will affect the capital needed to build it. Some key issues include:

  • How far away is the site from the nearest substation?
  • Are easements required?
  • Will the site use an existing road, or will a new road or bridge be needed?
  • How much grading needs to be done?
  • Will a bird and bat detection system be required?

Transportation of the Turbines
The farther away the manufacturing is done from the installation location, the higher the transportation costs. Importation into each country adds its own set of costs, including port fees, customs duties, etc. WHI VAWT Systems fit securely into standard land-sea containers and are easy to transport and handle, providing a significant cost saving compared to standard HAWTs. Larger orders and local manufacturing reduce per unit transportation costs.

Capital Costs
Often, wind projects are financed. Changes in the cost of money or financing terms can radically change the profitability of a project. Until a dozen or more G168 VAWT Systems have operated for at least a year, traditional loans will be more difficult to acquire or will come with higher-than-normal interest rates. Some governments are supporting renewable projects with direct subsidies, tax credits, accelerated depreciation and other incentives, lowering the overall cost to the purchaser. By the end of 2019, WHI projects should have financing terms on par with industry standards.

Development Costs
Before a project can begin, investment must be made in securing land use and grid connection permits. Costs to connect to the grid can vary greatly, with some utilities requiring hefty payments. Some jurisdictions will require a wildlife study for larger projects, often requiring a year or more of field observations and studies. (Note that the use of bird detection and dissuasion technology may eliminate the need for these often-expensive pre-permitting studies.) Developments that don’t own the land will need to lease it.

Local Workforce Costs
WHI VAWT Systems can be pre-assembled off-site and then installed and maintained by semi-skilled, local workers with appropriate training and supervision. Building and installing these turbines is not labor intensive; therefore, fluctuations in labor costs should not have  a significant effect on overall project costs.

Operations and Maintenance (O&M) Costs
Maintenance required on a VAWT is basically the same as for HAWTs. One major difference is that the drive train and controls of the VAWTs are at ground or near-ground levels, allowing easy access for maintenance and repairs. This saves on maintenance labor and also provides a much safer work environment when compared to the need to climb 100-200 or more feet to access the drive trains and controls for HAWTs. Bearing lubrication drives the maintenance schedule as it does with HAWTs. Routine maintenance can be done semi-annually, requiring fewer than 16 hours of labor per year per turbine. Operational costs will vary based on the size of the project and whether it stands alone or is part of a HAWT facility. The larger the project, the lower the costs per MW for security, meteorological sensors, management and administrative overhead.

Demonstration Projects

WHI is planning the market entry of its innovative VAWTs and is seeking projects that meet key objectives. These demonstration and pilot projects will highlight the unique strengths of the WHI G168 VAWT Systems across a variety of sites, both geographically diverse (e.g., different countries and terrains) and of varying scale (e.g., community projects, R&D  projects in wind farms).

Partners in these projects will have the ability to permit, install and operate the G168 VAWT Systems within 12-18 months. Some of these projects will help research and demonstrate how VAWTs can be installed to benefit or be neutral to HAWTs above and downwind. Other projects will be chosen based on their locale and specific challenges. WHI is interested in project proposals that demonstrate the G168’s unique way of solving industry challenges and can be replicated at similar sites worldwide.

Demonstration and Pilot Project Cost
While specific project costs will vary depending upon a number of local factors, the average project cost in 2018 for one to four G168 VAWTs will range between $200,000 and $1,000,000. Some of WHI’s partners will finance a project themselves, while others will need WHI's help. We are prepared to work with prospective turbine owners to finance qualifying projects and operate them for a year or more, at which point they would be offered for sale to the customer.

Site Requirements
In advance of WHI committing to participating in a project, two criteria must be met:

  • Prospective sites must have a proven near-ground wind resource that is sufficient for a project to be financially viable.
  • A power purchase agreement (PPA) for the energy produced by the project must be sufficient for a reasonably good return on investment.

To help evaluate a project site near-ground wind resource, WHI provides a set of tools to make a rough evaluation of the wind speed at 10-25m above ground level. Alternatively, WHI can evaluate the project’s proposed location when provided the latitude/longitude coordinates.

The financial viability of a given project will depend largely on each site’s predicted wind resource; sites with lower wind speeds will need to command correspondingly higher energy prices. This potential stumbling block can often be eliminated using economies of scale; the larger the project, the lower the capital costs per turbine and the lower the minimum wind resource required. Each project is unique.

Ensuring that our turbines are installed in well-vetted venues will maximize the opportunities for shared success. Our success depends on that of our customers. Consequently, WHI will only pursue projects that have a verified and profitable wind speed at the hub height of the G168 VAWT System.

Moving Forward
WHI has secured non-exclusive agreements with several leading partners (e.g., Technip), and we are seeking additional qualified companies that wish to bring WHI’s technology to their regions. WHI offers a standard market rate finder’s fee to people who bring us potential projects that get built with our technology. If you are interested. please let us know.

 

Licensing

Wind Harvest International’s (WHI’s) goal is to stimulate the installation of 100,000 MWs of VAWTs by 2030. The short-term strategy is to certify our G168 VAWTs and deploy them into individual projects through sales and partnerships, so as to gather the operational data needed to support large-scale project financing based on the value of our patents and turbines. The long-term strategy is to continue sales growth of our proprietary turbines, and establish licensing partnerships for our technology and patents with the largest industry players. This combination enables widespread adoption of leading VAWT technology around the globe.

The key hurdle that large, wind farm-scale VAWTs need to overcome is proof that they can be internationally certified. Upon certification, which WHI is actively pursuing in 2017-2018, the next step is to have 10-plus projects producing energy in different environments and have 50-plus G168 VAWTs operating in a single wind farm for at least a year. The more G168s and the longer they operate, the easier it will be for projects to secure traditional loan funding. Each new project further validates the G168 VAWTs practical applications, overall design integrity, O&M costs, and annual energy performance. Advancing the large-scale wind farm goal can be assisted with a licensing relationships. Parallel with the pursuit of wind farm development projects, WHI is using licensee opportunities to help encourage smaller-scale, faster-moving demonstration projects around the world.

WHI will consider and negotiate regional licensing requests based on geographic areas that will allow the licensee to profit from the sales of our VAWTs in these regions. Offers need to include the following:

  • A proposed project site with the proven wind speeds needed to produce a minimum kWh per year (see Demonstration Projects);
  • A Power Purchase Agreement (PPA) or other income stream that makes a project financeable;
  • Most or all of the financing needed to develop the project;
  • A plan for projects in 2018 - 2020 and a proposed minimum sales over the next five years.

Non-exclusive sales and Engineering, Procurement and Construction (EPC)-type licenses are available for companies that finance the installation of a project that advances the science and modeling of how VAWTs can be installed among HAWTs to maximize wind energy profitably while protecting habitat and minimizing harm to wildlife.

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