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Windflow dream fades as shares plunge

Windflow Technology (NZX: WTL) has abandoned its local manufacturing plans, its share price has plunged to 50c, and it wants more money from shareholders.

From a high of $3.75 in late 2007, a series of increasingly disappointing reports about installation problems and cost overruns has seen a collapse in the fortunes of the company.

After building more than 100 turbines at the Mandeville Street, Christchurch facility the engineering assembly team has been made redundant.

The company’s latest newsletter said that Windflow will now focus on international licencing for its intellectual property as the best way to realise shareholder value. If the company can attract an overseas partner, manufacturing will move offshore.

This marks a departure from the Windlfow modus operandi that attracted many of its green-leaning shareholders and made it the darling of politicians like Jeanette Fitzsimons and Helen Clark.

Inventor and managing director Geoff Henderson was determined to establish a Kiwi-owned and operated employer.

But the latest message to shareholders points out that the market for wind turbines in New Zealand is nearly exhausted in terms of availability and suitability of sites.

“Wind farm activity overall is stagnant and decreasing with several very large farms still in the consenting process. Those that are consented, are not being built as overall electricity demand is down.”

Windflow is now promoting itself in the UK while still working towards securing orders in New Zealand in discussions with cornerstone shareholder Mighty River Power regarding the consented Long Gully site with potential for 25 turbines.

The proposed Mt Cass wind farm in north Canterbury could take around 70 Windflow turbines but depends on an Environment Court hearing at the end of June.

More by Chris Hutching

Comments and questions
21

The visual pollution caused by wind turbines was always going to be a problem in New Zealand. More serious examination of offshore sites should be undertaken as it has been in Europe

Bunch of NIMBY idiots.

Excellent - hope you are putting your hand up for one in your back yard then. Add some cell phone towers as well for good measure.

Is Helen Clark and/or the Greens going to say anything....?

The real problem with wind is that somebody else has to cover their lost output when the wind fails. Ideally, wind should pay a penalty to others have to cover their arses. But in the glorious vision of the Greens and their int'l political party, Green"piece", on / off power is something we are supposed to embrace.

Is this the productive sector we are meant to invest in instead of housing?

Goes to show that being too Green minded and tree hugging (at the expense of good business sense in a real world) can kill you.

"green jobs", working well for Spain eh?

The Australian Senate has recently released a report on noise levels from wind farms after a comprehensive hearing and review of available evidence.The report highlights the serious risks to human health via the noise of spinning turbines and is very negative in its findings.Of course the good old NZ media do not print a word of this,probably not even aware of it.After all the NZ wind industry aren't going to release a press statement on the Senate findings.And that,s all our useless media print these days.No investigative journalism here.On Windflow,this was always doomed to failure.It just took too long and wasted a lot of naive punters hard earned cash.

Power generation for grid distribution has to be able to fulfill two essential criteria, which are reliable 'baseload' generating capacity, and reliable 'peakload' generating capacity.

Neither wind nor solar are capable of fulfilling either requirement, by definition.

While brilliant for small scale off grid generating capacity, off the beaten track (I am a big fan of wind and solar applications in those circumstances, where a small scale battery storage and inverter setup can cope with undependable output to feed very low power requirements), neither have any place even being considered for large scale installations, as the shortcomings are blatantly obvious.

They are nothing but a waste of vast amounts of Public Money for no sensible return.

Just to add,if people in the business don't understand these fundamentals, they have no business 'being in the business'.

If people in charge of Public Money don't understand these fundamentals, then they have no business being paid to be in positions anywhere near where allocation of Public Money is decided.

Are they even qualified to make the tea?

Real issue is the board and management. Should have been obvious that the market wasnt in NZ, and particularly when the NZ generators largely opted for offshore turbines from companies with credible histories and credible management, the company should have changed its modus operandi. Why is it that we have so many failed "green investments" in NZ ?

Poorly conceived, illogical product in a world of well tried and proven designs.
Barry Leagh and past directors of this company are also involved in a list of other companies that have wasted millions of dollars of precious research funds in pursuit of naive get rich quick schemes. e.g Aquaflow Bionomic, Celsias and Carbonscape Etc.
Why is that the so called green industry in NZ seems attract a raft of so called company directors whose egos let them think that they have all the answers when in reality, they do not know how ignorant they really are.

It is unfortunate that this negative view is all that the NBR is interested in publishing. The company has developed a technically proven wind turbine, fully internationally certified and which is operating extremely well (in some cases better than imported turbines) in NZ's strong winds. Although it would have been ideal to keep manufacturing turbines in NZ, the future appears to be licensing the design and proven innovations to companies in other countries who have a market which encourages renewable energy generation. Most of the dream has been realised with the successful development of the technology (which the NBR don't tend to report on), but the dream of having a local manufacturing industry in NZ is less likely. Windflow isn't the only company to be sending jobs offshore and realising value from licensing its innovations outside of NZ. It is just a shame that NZ doesn't embrace its own. Even the business leaders (Pure Advantage) are trying to turn the ship around in terms of NZ being a leader and realising the value of its 'green economy' knowledge and skills.

Hopefully companies and entrepreneurs keep trying despite the knocks they get when they do.

The design of Windflows Turbines ignores the basic laws of aerodynamics and has a number of short comings.
If it is so good why was it not chosen for the current raft of installations in the windier parts of the world e.g. Antarctica {NZ and Australian stations} - Chatham Islands etc.
Just because a design is different and can be patented doesn’t mean it will sell.

What the company requires or required was peer review of their so called innovative design. The directors / business leaders appear to know very little about engineering or physics - what was needed were some directors with good engineering background who could question the company engineer on what was being proposed.

Thanks for your comments. I can assure you that lack of engineering design isn't the issue here.

The company has a very strong engineering focus and capability, and its CEO/Director is an engineer and fellow of IPENZ. In September 2010, the Windflow turbine was independently certified to the highest wind turbine standard, IEC Class 1A Edition 3. It has undergone other independent technical reviews by the likes of international wind consultants Garrad Hassan and deemed 'commercially proven'. With this certification and 8 year operational track record, it is now in a position to be considered for a number of wind projects around the world or licensed for other companies to utilise the design.

Like many smaller NZ companies, one of the main challenges is competing on a commercial basis against large international manufacturers who ae generally considered lower risk because they have strong balance sheets and a lot of money behind them. Governments in other countries such as China, US and Brazil also require/incentivise a percentage of buying local products and provide finance for their turbine manufacturers customers which has helped during the GFC, something the NZ government is not in a position to do.

This is one the reasons why the company is moving towards a strategy of licensing the technology and selling its engineering knowledge overseas, rather than trying to manufacture and sell product from NZ.

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....Oh yeah...it's all in this UN document that has just been released:

http://www.un.org/en/development/desa/policy/wess/wess_current/2011wess.pdf

So given page 19 and 20 is clearly communist redistribution (like the old Habitat 1 doctrine)....and that Helen Clark is number 3 at the UN....does this mean that co-Fabian Goff also supports this document (as does Cunliffe)?

It also beggars the question of why 'National' wants to collaborate with 'Post-Nationalists'?

Mmmm.... have a read free thinkers....troubled times ahead.

Right now, indeed, it’s likely that the United Nations poses a far greater threat to Western Civilisation and the world’s economic future than Al Qaeda does. Have a glance at its latest report World Economic And Social Survey 2011 – and you’ll see what I mean.

The report argues that over the next 40 years our governments must spend an annual minimum of $1.9 trillion – that’s an eyewatering $76 trillion – steering the global economy onto the path of “green growth.”

But “Green growth” – as the report more or less acknowledges – is an oxymoron. That’s why, even though it was supervised by an alleged economist, Dutchman Rob Vos, the report is not at all ashamed to advocate limiting economic growth through rationing, punitive taxation and other forms of government intervention. Why? To combat “Climate Change”, of course.

Here’s the kicker:

“Hence, if, for instance, emission reduction targets cannot be met through accelerated technological progress in energy efficiency and renewable energy generation, it may be necessary to impose caps on energy consumption itself in order to meet climate change mitigation in a timely manner. Proposals to put limits on economic growth can be viewed in this context.” (P.19)

And if shaving off $1.9 trillion from the world economy each year (that’s 3 per cent of the world gross product in 2010) results in further economic stagnation and a lower standard of living for our children and grandchildren, well what the hell. As the report primly tells us, none of us actually needs to earn more than $10,000 a year. Anything more is greedy:

“For example, taking life expectancy as an objective measure of the quality of life, it can be seen that life expectancy does not increase much beyond a per capita income of about $10,000. Similarly…cross-country evidence suggests that there are no significant additional gains in human development (as measured by the human development index) beyond the energy-use level of about 110 gigajoules (GJ) (or two tons of oil equivalent (toe) per capita.”

Are they seriously suggesting that developed economies should ration their people’s energy use? They surely are:

“The Survey estimates that the emissions cap would be equivalent to primary energy consumer consumption of 70 gigajoules per capita per year, which means that the average Kiwi would have to cut his or her energy consumption by about 2/3rds and the average resident of the US by about three quarters.”

So, instead of being able to enjoy a hot shower every day all you Americans, you’ll now confine your warm ablutions to weekends only. Same goes for air-con in summer. And heating in winter. Welcome to the New Green World Order.

What’s amazing about this stuff – and believe me, there’s plenty more where this came from – is the unblushing shamelessness with which it advocates this economic insanity. Here is the world’s most powerful intergovernmental institution essentially arguing for the destruction of the global economy, enforced rationing, Marxist wealth redistribution, greater regulation, the erosion of property rights and global governance by a new world order of technocrats and bureacrats. And being so upfront about it they actually issue press releases, telling us what they’re planning to do and encouraging us to write about it.

This is the thing that amazes me - if the global green movement is any kind of conspiracy, then it’s a conspiracy in plain sight. The people in power who are advancing its agenda – be it President Obama’s house eco-activists John Holdren and Carol Browner, Green MP's/Communists like Russel Norman, and all those faceless apparatchiks at the UN and the EU – make absolutely no bones about what it is that they want to do to save the world from the peril of “Climate Change”: the end of Industrial Civilisation.

Which might be just about understandable if the crisis we were facing were so great that only the most extreme measures would suffice. But the crisis they describe is non-existent. Economic growth and true environmentalism – as opposed to the sick, bastardised, warped, hair-shirt perversion of it currently being dumped on us by the Greenies – go hand in hand.

As economies grow richer, so they have more money to set aside for cleaner rivers, fresher air, as well as to invest in R & D projects for ever more eco-friendly forms of energy. It’s no coincidence that quite the worst environmental damage in the last century was done in those countries behind the Iron Curtain. Free market economies tend naturally to be cleaner and healthier because clean and healthy is what people choose anyway if they can afford it. They don’t need government to step in and take their money in order to spend it inefficiently trying to achieve something which would have happened quite naturally anyway.

What this ludicrous UN report is advocating is the exact opposite of what the world needs if it is to become genuinely greener. All those people in the developing world, if they’re to live healthier, less environmentally damaging lives the very last thing they need is hand-outs from richer economies. What they need is property rights and free trade and the chance to grow their economy to the point where – cf the Kuznets Curve – they can afford the luxury of having to breed fewer children and to heat and light their homes without having to chop down the nearest trees. What they also need for us in the rich West to have thriving economies in order that we can import more of their produce.

Rationing and limits to growth are not the answer. The UN is a menace and we listen to its eco-fascist ravings at our peril. Australia is riven with these liars too...

Let face the facts here, who would buy Windflow’s product when the company is on its knees and has no real track record of sales to companies outside its own sphere of influence i.e. NZ Windfarms. Their turbine can have all the so called certification in the world but it has no real advantages over other designs and if potential customers spend a little time researching the company they will find too many gremlins in the closet to give them any confidence in the companies long term survival, hence no “real sales”. There are plenty of designs out there from companies with a proven track record in this field. Yes they may be overseas companies but they have the skills and resources to survive the vicissitudes of this industry and give potential purchases confidence that they have a proven design and can give long term support for their product. In a free market a NZ car industry can not compete with the Toyotas and Nissans of this world - wind turbines are no different. The directors of Windflow seem to be oblivious of this fact.

To :Sheralee MacDonald - Windflow

Have you ever bought any large wind turbines?
If you have, did you do some investigation before hand?
Have you ever generated any electricity from resources owned by yourself? (Real electricity that is)
I can answer yes to the above can you?

What’s your position at Windflow - PR ?

What are your “real practical” qualifications to be commentating on this forum?

Isn’t the internet wonderful, do a search on torque limiting gearboxes, put in a date from 1900 to present and see how many hits you get? Patent and a meaningless words like memorandum of understanding and letters of intent that are part of Mr. B Leays rhetoric,

There is an old saying "if it looks right it is right".
This product does not meet this criteria – hence no real sales.