NZ Windfarms IPO

[JAMP]

I see the prospectus for the pending NZ Windfarms Limited IPO is now available for downloading.

I deem this to be at the more speculative end of the investment spectrum, but I am seriously contemplating picking up a small holding.

If I do commit, I'll be able to tag them at the "socially responsible" end of my investment portfolio spectrum. <grin>

Regards JAMP
NZX: AIA LPL MCH MVN NOG NOGOD PPG RBD SAN SKX SPN
NZAX: CVT SAT
Unlisted: BRK

[CJ]

I dont see enough upside for it to be a speculative play.

if it does well, it is just another energy develper like CEN and TPW but without the economies of scale.

Where is the big potential upside like in tech, bio tech, oil stocks??

[kura]

Good call CJ !!!

[BRICKS]

quote:Originally posted by CJ

I dont see enough upside for it to be a speculative play.

if it does well, it is just another energy developer like CEN and TPW but without the economies of scale.

Where is the big potential upside like in tech, bio tech, oil stocks??

But without looking at the Details if they make it an earner ,pay div`s and keep adding to the field could be a Goer,, But up until now they don't have the know how and always on the small side to be effective you really have to look Beyond.. [8D]

[Snow Leopard]

I have read the prospectus and can summarise it thus:
Ignore until the early 2008 when the half year report comes out to see if it is starting to generate positive operating income. Then monitor at 6 monthly intervals.

Seems to me this IPO is really an attempt to fund a "working trial" of the WTL wind turbine, which if successful will be:
One) good for WTL and hopefully let them sell this windmills to other customers.
Two) result in a windfarm company that will eventually starting paying a reasonable dividend (late 2009 but lacking imputation credits for a few years).

But you are not going to make any money on this for a few years IMO*.

regards
Paper Tiger

*IMO = in my opinion, tigers and other felines don't do humble

[ananda77]

The problem:

Innovative design and technology enable these windmills to operate more competitive in higher windspeeds. This is advantageous especially in a country like New Zealand, but average windspeeds in Europe are much lower.

However, the biggest market for alternative energy generation including windpower remains in Europe, where favourable legislation demands a certain % of total electricity output from alternative sources by 2010...

-Forget about Australia as a major windpower generator for the next few years as they have a relative abundance of natural gas to satisfy demand and are looking at building a pipeline from PNG to import even more natural gas (actually, some of that might land in NZ via the contact energy/genesis LNG-projects)-

Will the local alternative electricity market 'big-grow' enough to create sufficient demand for these products to sustain this company in the forseeable future??...

Kind Regards

[duncan macgregor]

Lot of proving to be done before i invest in this one. Meridian and trustpower both questioned the two blade British design before it blew its self to bits. I dont care if it was a one off shows a lack of understanding. macdunk

[rmbbrave]

NZ has some of the cheapest electricity prices in the world

See...

http://www.eia.doe.gov/emeu/international/elecprii.html

How will wind electricity compete with hydro or thermal at these prices?

[Halebop]

The real question is why are prices cheap? New Zealand has enjoyed cheap Hydro electricity generation, cheap'ish gas and thermal electric inputs/prices. Cost have also been kept down by making few infrastructural investments at the risk of stability. There aren't many options for us should an earthquake hit the national grid at strategic locations.

Now however we are at the point where Infrastructure needs building. Where risk management needs considering (Auckland's problems in the late 90's proved this). Our environmental and planning processes and laws have impacted our ability to generate power from water. Historical costs may well prove to be just that ...historical. The only financially cheap option left is coal and this seems more ulikely than dams.

Hello alternative energy. Quite an irony when Nuclear free NZ starts arguing the merits and pitfalls of reactors for "clean" power.

[ananda77]

Halebop:

Yes, why not build a few nuclear power plants along known fault lines, therefore making New Zealand even more attractive for overseas tourists when the big fireworks start...

<center>(WOWHHH Nuclear Zealand - the green, clean loaded fault line country in the Pacific)</center>

Nuclear power simply will prove too expensive for a country like New Zealand -Forget It-

Kind Regards

[pimpit]

The cheapest wind generator you can get in nz is $585.
It generates 200w at 40m/s wind speeds.
To get 1kw you need to have it running for 5 hours at top speed.

To buy 1kw hour off the power grid is only 17c.
I believe wind generator's have very poor rate of return for the investment.

[CJ]

Pimpit - is that to buy outright? How long does it last?. My calcuations show it needs to survive for 2 years running at full speed non stop to break even. However, you would only get that if you weren't connected to the grid. To connect to the grid (because you are to far away) may cost $1000's. Plus, i assume they get more efficent as they grow bigger.

Wind (large scale)is currently bordering on being economic (otherwise they wouldn't build them). IF carbon taxes were introduced this should improve.

I though one of the problems with Nuclear is that it is just to big for NZ. ie One normal size station will supply the majority of our power needs, making transmission a major problem, and the major issues when you close it down (ie for maintenance or meltdown) if the majority of the country is relying on it.

[Snow Leopard]

quote:Originally posted by pimpit

The cheapest wind generator you can get in nz is $585.
It generates 200w at 40m/s wind speeds.
To get 1kw you need to have it running for 5 hours at top speed.

To buy 1kw hour off the power grid is only 17c.
I believe wind generator's have very poor rate of return for the investment.

40m/s = 144km/h

BTW Are we talking about the windmill or the cow?

[Snoopy]

quote:Originally posted by duncan macgregor

Lot of proving to be done before i invest in this one. Meridian and trustpower both questioned the two blade British design before it blew its self to bits. I dont care if it was a one off shows a lack of understanding.

NZ Windfarms are running open days the last three Sundays in November. So yesterday I went along to check the Gebbies Pass site out myself. It was quite refreshing in that instead of facing off to some media drone, you get to speak to the people who are actually driving the project, Chris Freear and/or Geoff Henderson face to face. In other words you get to ask the tough questions to the people who should know the answers, and are not fobbed off with some platitude! There is one open day left, Sunday afternoon next weekend (27th November), for those who haven't been up there to see it. The Windflow Turbine Site is normally closed to the public, (it's on private land) so I would encourage those who have some interest in power generation in general, as well as Windfarms in particular, to go out and have a look for yourselves.

Anyway, here is the theory behind the two bladed design. Over the wing span of the Windflow blade (which is reasonably large, comparable with a Boeing 737) the wind is not pefectly steady. Generally one side of the blade will have a slightly different wind force on it compared to the opposite side. There are two obvious ways to overcome this.

1/ Build the whole windmill structure to be enormously strong so that it can resist any wind nonuniformity - this is the path followed by the three bladed windmill designs.

2/ Adjust the pitch of the blade on either side of the (two bladed) windmill so that wind of different strength on each side of the blade produces a 'balanced' force on each side of the blade. This is the so called 'teetering' design. Doing it this way means that the whole tower structure can be lighter (less wind forces to resist) and therefore cheaper to make.

Now why can't a three bladed windmill 'teeter'?

Imagine you are on a 'see-saw' with 'big lump you' on one end and a light weight kid on the other. Even though there is a severe weight imbalance you can use your legs to 'regulate' the movement of the see-saw to give the kid a good ride. This is analagous to the two bladed windmill design with an unbalanced load on each blade.

Now imagine a different kind of 'see-saw' analagous to a three bladed propellor. In this design of see-saw there are three sitting positions spread evenly about the circumference of an imaginary circle - all at 120 degrees from one another. There is a single central pivot point, with 'Mom' 'Dad' and 'Kid' equally spaced around the circumference. Now you can see that 'Mom' and 'Dad' have to co-ordinate their efforts together to give the Kid a good ride. Now imagine that Mom and Dad and the Kid are suddenly swapped around from blade to blade. Even worse, their weights are randomly swapped around so that sometimes all three weigh as much as Dad, sometimes there is effectively 'one adult and two kids' and all the other weight combinations are cycled through on a random basis. Can you imagine trying to give a kid a good see-saw ride in that situation?
It would be almost impossible!

Of course balancing the wind forces on a two rotor wind blade isn't trivial either, but it is much easier than trying to do the same on a three bladed design.

Two other things make this project more viable than your average kiwi creation that comes out of the garden shed.

1/ You don't have to 'sell' the end line product. That's because there is already an established market for power so the risk of 'market failure' is as close to nil as you can get.
2/ The break even point of the technology, from a production basis, is as low as 60 units. IOW for the thi

[BRICKS]

RIGHT Snoop now you are Balanced is it a BUY or NOT .. [8D]