Rationale for Investment

The return on investment will be demonstrated in several ways.  By investing in the WTC, the investors will be helping to promote an environmentally friendly energy technology that will allow the global economy to reduce its dependency on fossil fuel energy for new power generation.  In addition, the WTC’s design is resource efficient thereby lowering the capital cost of the turbine. 

The inherent technology problem for wind turbines is controlling the out of plane bending moments caused by the wind interacting with the turbine’s blades.  The WTC’s two blade, hinged turbine design reduces the mass and components needed in the turbine to counter these moments, and therefore the cost of the turbine is also reduced.  In addition, the WTC’s turbine achieves a large swept area compared to a relatively smaller amount of turbine and tower mass.  Large swept areas are particularly important for low wind speed sites because they help to capture more energy.  The WTC’s turbine is best suited for a moderate wind resource site referred to by those in the wind industry as a Class 4 wind site.  There are seven classes of wind speed with Class 1 being the lowest and Class 7, the highest.

Because 75% of the cost of developing a wind farm is the purchase price and the installation of the turbines, reducing the cost of the turbine itself goes a long way to making wind a more cost competitive energy resource.  Besides these universal benefits gained from the investment in wind energy, the investors will enjoy a financial return by investing in the WTC.
                       

The WTC was established in 1989 with the purpose of developing a two-blade wind turbine.  The intellectual capital of the company includes over 15 years of experience in the wind industry.  The company has patented protection for its innovative technology and anticipates receiving more patents in the future.  The WTC has received contracts from the DOE’s NREL and the California Energy Commission.  In addition, it has received private funding from Dow Chemical.

The WTC is looking for outside equity ownership investment so it can commercially deploy its downwind, two-blade, hinged rotor wind turbine.  In order to reach this ultimate goal, the turbine must prove itself to be technically reliable and commercially viable.  This will be achieved in a series of steps.  First, the company would like to increase the energy output of its turbine by increasing the rotor size.  Next, the company would like to implement a pilot project to demonstrate the turbine’s capability on a large scale.  The last step would be to secure a first adopter for the WTC’s turbine. 

As with any new technology, there is risk involved, especially for an early adopter.  Yet, acquiring a lead customer will allow WTC to commericially deploy its turbine on a larger scale and strongly improve the wind industry’s acceptance of the WTC’s turbine.  This acceptance by the industry would then enable the WTC to be acquired by a major wind company, such as GE Wind Energy, or enable it to establish a program to license the technology to interested companies.  This is where the financial return on equity investment will be realized.

DENMARK AS A BENCHMARK

To establish a benchmark for successful wind development, one can look at Denmark as a prime example of the conditions that must interact for industry success.  The Danish model amply demonstrates one element crucial to the success of wind energy development: strong governmental support and, at least initially, intervention.  According to an article by the Danish Wind Industry Association, Denmark has the good fortune of having a “very broad consensus” regarding energy policy, a situation that has existed for over 25 years.

This consensus first manifested itself in the late 1980s when wind energy in its present form enjoyed its first substantial boom.  Rapid growth of wind power in the United States and Europe was accompanied by a growth of manufacturers, many of whom produced exceedingly poor equipment.  Most of these companies soon folded, with the exception of many in the Danish industry.  According to Ken Deering of the Wind Turbine Company, the sole reason for the continued presence of the Danish companies, many of which now dominate world turbine manufacturing, was Danish governmental support in the form of warranty insurance.  The Danish government guaranteed the quality of the products produced by Danish companies, giving them credibility among potential buyers that simply could not be matched by producers in countries not offering such an assurance.