NWF - NZ Windfarms

[mfd]

Just read the report.
How can they be forecasting EBITDA of 7.5m when the previous highest was only 4.0m ??
I am not seeing what has changed to cause such a dramatic increase

Generation was around 10% lower than expected this year with average wind speed lower than the last few years, and they now have a fixed price agreement. Perhaps the fixed price works better as they no longer face the problem that when the wind blows for them, it probably blows for everyone which correlates their production with lower spot prices. I'm speculating a little, if anyone knows more please correct me.

[fish]

Generation was around 10% lower than expected this year with average wind speed lower than the last few years, and they now have a fixed price agreement. Perhaps the fixed price works better as they no longer face the problem that when the wind blows for them, it probably blows for everyone which correlates their production with lower spot prices. I'm speculating a little, if anyone knows more please correct me.

The fixed price enables more accurate estimations of earnings.
They have learned how to best use their turbines and keep them operating.
For the last few days I have learned how to check energy production from the farm and calculate the income if they were selling on the spot market prices.
Most turbines have been operating and generating energy around $2000 per hour or 50000 per day.
Operating at this level equals 18 million per year.
Of course this will not continue but it gives an approximation of potential earning with power prices averaging $100 mwh.

[ratkin]

The fixed price enables more accurate estimations of earnings.
They have learned how to best use their turbines and keep them operating.
For the last few days I have learned how to check energy production from the farm and calculate the income if they were selling on the spot market prices.
Most turbines have been operating and generating energy around $2000 per hour or 50000 per day.
Operating at this level equals 18 million per year.
Of course this will not continue but it gives an approximation of potential earning with power prices averaging $100 mwh.

one thing I found interesting was that they de commissioned some of the more inefficient (poorly placed) turbines. Why did they not just move them to a better spot?

[kiora]

one thing I found interesting was that they de commissioned some of the more inefficient (poorly placed) turbines. Why did they not just move them to a better spot?

A whole different kettle of fish.Not so simple RMA?

[Arthur]

I think that the maintenance costs of poorly located turbines probably outweighed their revenue. Wind does all sorts of strange things with direction, gusts and shear. Ground topography will have aggravated the situation. I suspect one of the advantages of the taller turbines is more consistent wind over the whole of turbine blade profile.

[Dassets]

The maintenance costs were more than revenue. Some of the turbines were sited where they were prone to turbulent winds and excessive wear. So the sensible thing to do is stop. In terms of moving turbines it would have to make financial sense. Given the cost of the base, more distribution cabling etc you couldn't justify the spend. RMA consents relate to the actual turbine. So the old unbuilt consents throughout the industry are based on old turbine technology. Draw your own conclusion about whether they will be built.

[Aarrgghh]

OK so is this the time line for the turbines?

1. Windflow sell a bunch of turbines promising high efficiency and reliability

2. Turbines don't live up to expectations

3. Rights to all IP within turbines given to Windfarm NZ

4. All links with Windflow are cut - When did Windflow sell Windfarm?

5. Windfarm NZ develop their own modifications alongside an un-named supplier to turbines to make them more reliable (and efficient?) But all IP relating to modifications is owned by Windfarm NZ

6. Windfarm NZ now running at better reliability than originally promised.

How do the modified turbines compare to what is currently available in a similar size? Although from your comments Dassets it's obvious that it would be un economic to use the original turbines in the remaining consented locations, how about modified turbines? Could the new supplier produce these if you have rights to the IP? Do you supply any IP or parts to the UK operations?

From reading further into the issue, it appears the relationship between windflow and windfarms is bad. Here's a couple of reasons I thought they were linked.

*Windfarmnz still advertises Windflow turbines on their website - https://www.nzwindfarms.co.nz/about-...ne-manufacture
*The logos of the two companies use the same colours and fonts
*The names are reasonably similar
*Windflow once owned windfarm

[Snoopy]

OK so is this the time line for the turbines?

Aarrgghh. You may wish to go back to the very start of this thread and check out the timeline as it unfolded. This thread goes right back to the IPO time.

1. Windflow sell a bunch of turbines promising high efficiency and reliability

2. Turbines don't live up to expectations

I don't think you can lay the problems that NWF have had on the hardware. AFAIK the only catastrophic turbine failure was the test turbine built in Gebbies Pass just out of Christchurch by Windflow. Nothing as remotely catastrophic as that has occurred at the NWF site in the Manawatu.

Even the world's best turbine will disappoint if installed in a sub optimal position. I haven't followed up whether the prospectus claims on the amount of energy projected to be produced were actually matched.

My admittedly quite distant impression now is that NWFs biggest problem has been not receiving the amount of money they expected for a given amount of energy generated. The points to NWFs lack of understanding of how the power market works in NZ (by previous management I should add).

In summary, the main problems that NWF have faced are problems in implementing the business plan. There is nothing much wrong with the underlying hardware. Except that times have moved on since 2005 and the trend seems to be before bigger turbines with greater attention paid to the aerodynamics.. And that is a different design paradigm path to the one that Windflow was following fifteen years ago.

3. Rights to all IP within turbines given to Windfarm NZ

As the financial position of Windflow became more precarious, NWF moved to secure technical support for their turbines going into the future. I am surprised if that included the IP, because I recall Windflow trying to sell the IP related to the gearbox mechanism overseas once the plan of selling whole turbines seemed to have become too difficult.

4. All links with Windflow are cut - When did Windflow sell Windfarm?

NZ Windfarms was never owned by Windflow. NZ Windfarms was promoted by Windflow as a 'proof of concept' bulid. There may have been some crossover of staff in the early days. But there has never been a shareholdings link between the two.

5. Windfarm NZ develop their own modifications alongside an un-named supplier to turbines to make them more reliable (and efficient?) But all IP relating to modifications is owned by Windfarm NZ

6. Windfarm NZ now running at better reliability than originally promised.

I don't know anything about the above two points.

SNOOPY

[Dassets]

Aargh is off point. The turbines are doing what they are capable of. The company is able to generate a cash return
That cash is being returned to shareholders. If someone wants to receive that they can buy shares.The company will continue to try to improve cash generation. It isnt complicated.

[Independent Observer AUNZ]

Aargh is off point. The turbines are doing what they are capable of. The company is able to generate a cash return
That cash is being returned to shareholders. If someone wants to receive that they can buy shares.The company will continue to try to improve cash generation. It isnt complicated.

Thanks for the direct communication Dassets. I agree, in this instance (like it is many others like what I've seen at Tower and A2) sometimes the past is not an indicator of the future. Power generation is a game of cashflow and there seems plenty of cash flowing here. Hence, I'm in.

Can I just also say, I'm a new shareholder and pleased to have a director engaging in a shareholder forum like this.