NWF - NZ Windfarms

[Raven]

The problem is, can they sell the electricity produced? And at what price. Will it be more than the cost of manufacture? What will be the maintenance costs, let alone the capital costs. Unless of course the shareholders consider their capital to be at no cost. The majority owners of course are useful as they can buy the electricity produced. So there is a sale, the problem is, how much profit?

The turbines have a few interesting design features that are supposed to make the installation and the turbine more economical. The teetering blades and torque limiting gear box are supposed to cut down on fatigue meaning the nacelle doesn't have to be built stonger and heavier which means less steel, which means the tower doesn't have to be built as heavy to support it, which means the concrete pad doesn't have to be built as big. All should save costs in production which flows into price paid for turbines. Earth works are less as well due to smaller concrete pad and being smaller turbines the roads needed to move the turbines to the site don't have to be as big and a single smaller crane can be used to install them. If you believe the brochure this should all combine to make a very cost competitive wind farm dspite not have the output of the bigger turbine farm.

http://www.windflow.co.nz/products

[mouse]

The turbines have a few interesting design features that are supposed to make the installation and the turbine more economical. The teetering blades and torque limiting gear box are supposed to cut down on fatigue meaning the nacelle doesn't have to be built stonger and heavier which means less steel, which means the tower doesn't have to be built as heavy to support it, which means the concrete pad doesn't have to be built as big. All should save costs in production which flows into price paid for turbines. Earth works are less as well due to smaller concrete pad and being smaller turbines the roads needed to move the turbines to the site don't have to be as big and a single smaller crane can be used to install them. If you believe the brochure this should all combine to make a very cost competitive wind farm dspite not have the output of the bigger turbine farm.

http://www.windflow.co.nz/products

Many thanks for explanations. But they raise several questions. The windmills are small types. What happens if they fail after say seven years. Outside the guarantee period. Plus the manufacturer is only a small NZ company and may not be able to repair. If that happens, then are the towers and concrete foundations capable of having another type of windmill fitted. Or does NZWF have to bulldoze the lot and start again? Is there another windmill of similar size available? How much will it cost?
Next is the question of maintenance. Who is maintaining the system, NZWF staff, or the lowest tenderer? Not trying to be too negative, but these are major problems. Can someone answer them?

[Voltaire]

Many thanks for explanations. But they raise several questions. The windmills are small types. What happens if they fail after say seven years. Outside the guarantee period. Plus the manufacturer is only a small NZ company and may not be able to repair. If that happens, then are the towers and concrete foundations capable of having another type of windmill fitted. Or does NZWF have to bulldoze the lot and start again? Is there another windmill of similar size available? How much will it cost?
Next is the question of maintenance. Who is maintaining the system, NZWF staff, or the lowest tenderer? Not trying to be too negative, but these are major problems. Can someone answer them?

Good questions, but to jump to "major problems" is a bit of a leap.

As I understand it, Windflow Technology has been arranging for maintenance and repairs under warranty to date - not sure why you think they may be unable to continue doing this in the future?

Why don't you email NZ Windfarms with your queries? I'm sure they're currently fielding many questions from shareholders and potential shareholders trying to assess the benefits of investing in the company. You could then post the reply here.

Disc. Hold both NWF and WTL

[mouse]

Good questions, but to jump to "major problems" is a bit of a leap.

As I understand it, Windflow Technology has been arranging for maintenance and repairs under warranty to date - not sure why you think they may be unable to continue doing this in the future?

Why don't you email NZ Windfarms with your queries? I'm sure they're currently fielding many questions from shareholders and potential shareholders trying to assess the benefits of investing in the company. You could then post the reply here.

Disc. Hold both NWF and WTL

The job is not finished until it is maintained. Local knowledge of the system is vital. I am very concerned, if your post is correct, that Windflow are doing the maintenance. NWF has to know the full details of maintenance. Using their own staff. Further, the question of if the present generators fail is fundemental. Can they be easily replaced, or does NZW have to bulldoze the entire installation? Surely investors know the answer to this simple question?

[Financially dependant]

IMHO I think WTL are still learning the wind farm business and they will continue to learn, NWF are office jockeys bean counting there way through the teething problems. The turbines are guaranteed for a minimum performance of availability which it seems are not there yet. The turbines are in some of the best wind resource in the world and so are being pushed hard, if they get it right here they can sell world wide. WTL will keep replacing the turbines until they go bust, with Tindel and the like as share holders I don't think that will happen.
So no I don't think NWF will bulldoze down the turbines but if the power spot rate keeps rising then the bean counters may be a little happier as they get through the problems.

[mouse]

IMHO I think WTL are still learning the wind farm business and they will continue to learn, NWF are office jockeys bean counting there way through the teething problems. The turbines are guaranteed for a minimum performance of availability which it seems are not there yet. The turbines are in some of the best wind resource in the world and so are being pushed hard, if they get it right here they can sell world wide. WTL will keep replacing the turbines until they go bust, with Tindel and the like as share holders I don't think that will happen.
So no I don't think NWF will bulldoze down the turbines but if the power spot rate keeps rising then the bean counters may be a little happier as they get through the problems.

The quote sums up the problem with NWF. A little over twelve months ago there was an IPO? at $1.10? The shares have now traded down as low as 30 cents. Plus a cash call to just remain solvent of 8 new shares at 15cents for every 3 shares held. They cannot even get the financing right. And I am bothered about the engineering!!!!!!!

[Steve]

Has the rights issue been underwritten?

[Silverlight]

Not sure, If Vector maintain their 19.9% holding, this will be probably worthwhile as an low priced asset.

What did Vector originally pay?

[Grimy]

Down in Palmy again. Turbines seem to be spinning nicely (well except for 1 that's stopped). It's hard to see how (barring turbine issues) this can't be successful.
I realise that the project is now fully funded by NWF which has led to the cashflow problems,but if projections are anywhere near close to accurate, and the things are spinning, then surely there must be some reasonable expectation that this will come right?
I don't care if Vector end up with a bigger hunk of the shareholding. The bigger their involvement, surely the bigger the chance of the company being supported to a successful outcome?

[mouse]

Down in Palmy again. Turbines seem to be spinning nicely (well except for 1 that's stopped). It's hard to see how (barring turbine issues) this can't be successful.
I realise that the project is now fully funded by NWF which has led to the cashflow problems,but if projections are anywhere near close to accurate, and the things are spinning, then surely there must be some reasonable expectation that this will come right?
I don't care if Vector end up with a bigger hunk of the shareholding. The bigger their involvement, surely the bigger the chance of the company being supported to a successful outcome?

Were they generating electricity is the more important question.