NWF - NZ Windfarms

[Arthur]

Solar has come down in price and may even be viable to tie into the existing infrastructure. The RMA and other bureaucracy would be a barrier, but it would be nice to be generating on those sunny, low wind days. This location would not be a first choice for stand alone solar, but with all of the infrastructure on place for collecting and distributing electricity it could be worth looking into.

[Aarrgghh]

Sorry I have to make this quick as I need to get to work.

Yes I agree, it's fantastic to have Dassets input here, and Snoopy as well of course, we appreciate both of your input. Little tidbits such as "the RMA consents relate to the actual turbine" can have quite an impact on how the company can move forward.

That said - a dismissive attitude of the turbines are making cash so stop asking questions is incredibly counterproductive. This forum is full of prospective and current share holders who want to know what the next stage of the business is. There is one passing statement in the annual report "Long-term planning will consider a range of factors including: The life expectancy of the current turbine against newer technologies when measured by financial benefit to shareholders"

Disc; as of a few days ago I hold shares in NWF

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.

Yeah I know. I did start this but with two little ones demanding attention I'm a bit short on time. I also looked for early prospectisussus but could only find one, Is there an archive of these somewhere? I will be putting in some serious time when I get a chance

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.

What I don't know is how the turbines compare to new technology. They obviously don't compare to what was being sold.
From a recent article, " When the company first started operations, it assumed that it could achieve 160 gigawatts of production per year."This was later changed to 140 GWH and then to 130 GWH. Whilst we have occasionally operated at an annual rate close to this, it has never been achieved over a full year, so this year we again reduced it to 120 GWH, production we did not achieve this in 2018."
https://www.stuff.co.nz/business/107...a-major-review

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.

I found this in one of the annual reports. I think it was part of a warranty claim, NTL gave NWF about a million bucks and rights to the IP, as well as rights to buy some NTL.

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.

I believe NWF was originally set up as a subsidary of WTL, not sure of the exact arrangement but I guess it doesn't really matter any more.

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

SNOOPY

[Independent Observer AUNZ]

Sorry I have to make this quick as I need to get to work.

Yes I agree, it's fantastic to have Dassets input here, and Snoopy as well of course, we appreciate both of your input. Little tidbits such as "the RMA consents relate to the actual turbine" can have quite an impact on how the company can move forward.

That said - a dismissive attitude of the turbines are making cash so stop asking questions is incredibly counterproductive. This forum is full of prospective and current share holders who want to know what the next stage of the business is. There is one passing statement in the annual report "Long-term planning will consider a range of factors including: The life expectancy of the current turbine against newer technologies when measured by financial benefit to shareholders"

*** some good questions followed***

Good questions, Argh. Interested in further discussion - I only have a tiny holding (in $s... it feels like a huge amount in share numbers) but with greater confidence I would buy much more given this is a sector for which I'd like to have a very strong ratio in my portfolio.

[kiora]

Windflow 500kw?
https://www.windflow.co.nz/licensing
31 Siemens turbines, each with a capacity of 4.3 megawatts,
https://www.siemensgamesa.com/en-int...sg-10-0-193-dd

Wouldn't be replacing 1 for 1.A lot of factors to consider.As time progresses the value of turbines decreases & their other assets increase?

[Snoopy]

Yes I agree, it's fantastic to have Dassets input here, and Snoopy as well of course, we appreciate both of your input. Little tidbits such as "the RMA consents relate to the actual turbine" can have quite an impact on how the company can move forward.

That said - a dismissive attitude of the turbines are making cash so stop asking questions is incredibly counterproductive. This forum is full of prospective and current share holders who want to know what the next stage of the business is. There is one passing statement in the annual report "Long-term planning will consider a range of factors including: The life expectancy of the current turbine against newer technologies when measured by financial benefit to shareholders"

What I don't know is how the turbines compare to new technology. They obviously don't compare to what was being sold.

I don't know Dassets and I am sure he is quite capable of defending himself, but I think you are going too far here Aarrgghh. Dassets is a board member. Dassets has given us the flavour of his vision he brings to the board table. But boards are concerned with governance. Your questions on turbines are more operational matters. You need to direct them to management.

I believe NWF was originally set up as a subsidary of WTL, not sure of the exact arrangement but I guess it doesn't really matter any more.

Way back before listing you may be right. But after NWF was listed, Windflow didn't hold any shares. That is all l am saying.

SNOOPY

[nztx]

I'm also a new NWF shareholder and pleased to have Dassets as a director engaging on the forum

To confirm Aarrgghh's earlier posting -

NWF was originally set up as a 100% subsidiary of WTL (Windflow Technologies) back in 2004 (31.12.04)

WTL continued holding 3.0 m shares in NWF from Interim period 31.12.05 to 03.08.09

(originally 43.0% ; this diluted down to 3.82% interest )

The WTF holding of 5.66 m NWF shares (1.96%) as at 05.08.2010 disappeared from NWF Substantial Shareholder
listing in Reports at the 30 June 2011 Annual Report

Source: Interim & FY NWF Published Reports 31 Dec 2004 - 30 Jun 2011)

[Aarrgghh]

Honestly, my comments were not intending on attacking anyone. But I still stand behind my statement.

The way I read the following line;

"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."

Is basically the antithesis of DYOR, which is what this forum is all about.

One of the big decisions that Dassets will be making, along with the rest of the board in the near future is whether or not to replace the turbines, what with and how much this will cost. I have no concerns if he or his fellow board members are technically capable of doing this task - I would assume that they are capable of this. The outcome of this decision will have a massive effect on the value of our share holdings and we should be able to understand the issues involved so we can value our holdings.

For example, as indicated in the past couple of pages of this thread, the resource consent is specific for the model of turbine. I presume this means if the board want to change the turbines then they will need a new or modified resource consent. Given the historic issues with neighbours (https://www.stuff.co.nz/manawatu-sta...ints-behind-it) This could open the company to a lengthy and expensive environmental court case. Or maybe not, hopefully the lesson has been learned, and turbines won't be placed near residential buildings, even if that means abandoning some sites.

The alternative, not buying replacement turbines, will firstly increase operating costs as long term maintenance is scheduled (I hate to think how much it would cost to paint one of those bad boys) and essentially put an expiry date for operations at the site. As it happens, the turbines are pretty well written down now (~20 mill value for all turbines) so I guess that depreciation won't be increasing, but putting what is essentially an expiry date on the company will certainly have an effect on share price.

Just to make it crystal clear, Dassets, well done, everyone appreciates your work on on the board of NWF and we're all happy you're there. As I search deeper than my original research I see the company appears to be well run and I believe good current value.

Now you just need to work on some PR and distance yourselves from WTL to attract some more investors!

[fish]

Like you I am pleased to see that Dassets is on the board and engaging with us.
He has made it clear where the company is focused at the moment.
Snoopy has explained why we are not easily able to buy replacement turbines.
The turbines are now working much more efficiently and getting better prices so the share price should improve with good dividends.Reverse hedging is a brilliant concept that reduces risk for all parties.
No doubt sometime in the future we will need replacement turbines but we have no need for this at the present time.
Indeed it could adversely affect the share price
DaSSET HS MY FULL SUPPORT

[Dassets]

Argh,
I did not tell people to stop asking questions as you say. There is no relationship with Windflow and hasn't been one for a number of years. Our relationship with neighbours went through change about 3 years ago which saw resolution which has been on place since. I have seen no evidence of issues since that change. The turbines are not at end of life, I don't know how you came to that conclusion. At some unknown point in time is is obvious that it may make sense to repower. When that is will be based on financial outcomes for shareholders. That is it would have to be value accretive. A lot of what you talk about is past history. The company is very different to what it was 5 years ago.

[Independent Observer AUNZ]

Argh,
I did not tell people to stop asking questions as you say. There is no relationship with Windflow and hasn't been one for a number of years. Our relationship with neighbours went through change about 3 years ago which saw resolution which has been on place since. I have seen no evidence of issues since that change. The turbines are not at end of life, I don't know how you came to that conclusion. At some unknown point in time is is obvious that it may make sense to repower. When that is will be based on financial outcomes for shareholders. That is it would have to be value accretive. A lot of what you talk about is past history. The company is very different to what it was 5 years ago.

All makes sense, Dassets.

This may be operational and/or sensitive, and sorry if its been discussed elsewhere but I think a recent take would be enlightening:

Is there any indication of average lifespan for turbines of this type coming out of the long-term planning I understand to be underway? I've heard that modern turbines are meant to average approx 25 years, but I've heard stories of some only lasting 10. Are we realistically actually talking 5 years before end of life decisions and direction need to be made? 10 years? 15 or More? I understand there are some 20 and 25 year horizons on terms of consents, etc for the land. The PPE estimates in the annual report (5 to 40 years) aren't particularly enlightening and then the mid-life refurbishment estimates suggest 40 to 45 years. To put it simply; Why is there such confidence in these turbines for such a long tail?