The 390-foot-tall turbine owned by Scituate Wind LLC – a partnership between Palmer Capital Corp. and Solaya Energy – has been offline for 34 consecutive days due to a software problem.
Gordon Deane, president of Palmer Capital Corp., said the down time comes at the tune of about $1,380 per day, or $46,920 total as of today.
“What the operator has been doing is working overnight because they’re talking to people in Beijing to get things fixed,” Deane said Tuesday. “They’ve been trouble shooting, but haven’t been able to figure out what the problem is.”
The Chinese company Sinovel Wind Group Co. Ltd. is the manufacturer of the turbine.
The turbine has failed to produce any electricity since June 26, according to Power Dash, a website that records the turbine’s energy production. It was also offline for more than two weeks in May due to an electrical issue …
… Palmer Capital Corp. and Solaya Energy are also the principals for a turbine in Fairhaven, which is also manufactured by Sinovel Wind Group Co. Ltd.
Deane said the operator visited the Fairhaven turbine to see if the software card from the Scituate turbine’s converter would work there. The Scituate turbine worked with the Fairhaven card, but the Fairhaven turbine wouldn’t run with the card from Scituate, Deane said, suggesting it’s a software issue.
Last June, the U.S. Department of Justice announced that three employees from Sinovel Wind Group Co. Ltd. were being charged with stealing trade secrets from AMSC, a United States-based company formerly known as American Superconductor Inc.
Deane said the ongoing litigation with the manufacturer hasn’t to his knowledge impacted the operator’s ability to fix the turbine. “We specifically asked the question and we were told that’s not an issue,” he said. “But when there’s litigation involved, you don’t get the whole scoop.”
Sold at 1.69 for a significant 11% loss on a fairly good-sized investment. Hate to do it, but I see the stock going lower in the near term, and I'm not willing to see my portfolio take the hit. I might get back in if it goes below $1.50.
The reason to stay in is in anticipation of more REG announcements. The eventual revenue from these projects is impressive, but they are cost share and, in my opinion, will have limited positive affect on cash flow. Growth from Inox is also encouraging.
The negative is that it looks like Inox growth will not offset lower DVAR sales and wind sales into China. Specifically, the company has stated that it will take two wind customers with meaningful sales in order to get them to cash flow positive. Inox is there, but the second customer is not. McGahn had stated that the most likely candidate for the second would be JCNE. But sales to JCNE were negligible this quarter.
good luck to all
An editorial appeared in Recharge yesterday (google: Opinion Chinese Wind Reboots) predicting the recent uptick in the Chinese wind market will also result in higher quality Chinese turbines that could break in to Western wind markets. It mentions the “precipitous decline” of Sinovel, and the rise of Goldwind, United Power, Ming Yang and Envision … “firms that have been open to international design standards and practices and emphasized quality over quantity”
Sinovel has had a terrible quality record. One of the first negative reports came in 2010 (google Sinovel denies quality control behind turbine collapse)
Then in 2011 a came a very public and embarrassing scolding from China’s biggest wind farm developer (google Longyuan taps Siemens after slamming Sinovel) Cut and pasted:
"China's biggest wind-power developer, Longyuan, has slammed domestic turbine manufacturer Sinovel over quality issues, and awarded Siemens its first Chinese offshore turbine contract.
Speaking at the Offshore Wind China conference in Shanghai last week, Longyuan president Xie Changjun urged the country's rapidly expanding turbine makers to "first resolve the problems onshore" before thinking about entering Chinese waters.
And in a swipe at the country's largest equipment maker, Sinovel, he said: "I have to buy yours because others don't have offshore equipment. But if others have it, I won't buy yours." "
Most recently, another customer has taken Sinovel to court in China for failing to fix quality problems in turbines it installed (google Huaneng Renewables takes Sinovel to court over turbine quality)
In my opinion, Sinovel has become an untouchable in China. I predict the company will be liquidated next year, and amsc will never see a penny of its claims.
But worse than this, it brings up the question: Since Sinovel and amsc were basically joined at the hip during Sinovel's rise, has amsc's image been permanently tarnished in China because of Sinovel's record?
In May this year I tried to warn ya’ll that amsc had no liability insurance in the Ghodawat case, but I was criticized for merely providing a link to the insurance court case decision.
Basically what it amounts to is that amsc did not notify the insurer when they took their policy out that Ghodowat had filed a claim against amsc. Amsc’s then-general counsel John Powell instructed then-assistant treasurer Joseph Tocci to flat-out lie and answer “No” to that question on the insurance application.
You can read the decision by googling “Catlin amsc” and opening the first link from the search. Aside from the info about amsc not disclosing the Ghodawat claim to the insurance company, it also provides information about why Ghodawat filed the claim against amsc. Ghodawat claims there were technical problems with amsc’s turbines. I will cut and paste a portion of the court decision in a response to this message topic
lafeet, I suspect that Sinovel has been using power converters supplied from a foreign source rather than the reverse-engineered Guotong converters. For instance, they publicly announced an agreement with Mita-Teknic, and we know that they used Emerson for the converters in their Brazil turbines.
My point being this: a restraining order against Guotong/Sinovel would be meaningless if Sinovel is not using the Guotong converters for their present and future turbines.
A few months ago I provided a link that claimed that at the end of 2013 China was still importing 95% of their wt power converters ... this despite China putting a big emphasis on going to local production. Leads me to believe they have encountered a lot of technical problems with developing the technology.
google the following:
Wind Power Converter Industry in China 2016 Forecasts
cut and pasted:
"China’s domestic wind power converter manufacturers started late on the business.
By the end of 2013, foreign players dominated about 95% of China wind power converter market,
with ABB, Converteam, AMSC and Emerson being the leaders. Domestic Chinese companies chiefly
involve Beijing Corona, Sungrow Power, Hopewind, Zhuzhou CSR Times Electric and Qharvest.
At the end of 2013, Sungrow Power, Hopewind and Zhuzhou CSR Times Electric had wind
power converter capacity of 1,000 sets/a each."
end quote. Notice that among the mere 5% of Chinese production of power converters, Guotong is not even mentioned here. Perhaps that effort was a total flop.
Sorry, forget to supply a reference that Gridon's FCL has no superconducting material.
Google “Gridon platform of FCL solutions” Cut and pasted:
“Two main FCL paradigms have been developed in recent years; saturated-core and high temperature superconductor (HTS) based technologies. HTS-based concepts are challenging technically and commercially. Not only does it require expensive, high-maintenance cryogenic system, the HTS system takes long time to cool-down and recovers following a fault. HTS-based FCLs are limited in their scalability and their ability to handle consecutive faults.
GridON has been focusing on superconducting-free solutions that use standard transformer technology and manufacturing expertise”
For the info that Superpower is supplying the wire for the other project, google “Applied Materials FCL” and read the following statement near the beginning of the p.r.:
“Applied is teaming with the New York State Energy Research and Development Authority (NYSERDA); Central Hudson, a New York State regulated electric and gas utility; SuperPower Inc., a manufacturer of high-temperature superconducting wire ...”
It has nothing to do with Sinovel. It’s just confidentiality of the price of the parts and the delivery schedule in relation to their most recent order from Inox. If you read the CT order, you can figure it out for yourself. Cut and pasted
“American Superconductor Corporation submitted an application under Rule 24b-2
requesting confidential treatment for information it excluded from the Exhibits to a Form 8-K
filed on June 5, 2014.”
The Form 8-K filed on June 5 was the Inox order. If you read the exhibit to the 8k, you’ll see that the individual prices and the delivery schedule has been replaced by asterisks ***. Cut and pasted:
1.3 The price for each of the [**] ([**]) ECS, FCA Shanghai, China and/or any place in Europe, excluding VAT shall be: EUR [**] (EURO [**] ONLY).
2. Delivery Period:
2.1 The Sets of ECS shall be delivered according to the time and quantity below. The delivery plan can be changed by written agreement of the Parties with a six month advance notice.
Despatch Schedule for an order of [**] Sets.
Sl No Despatch FCA Shangahi, China and/or any place in Europe Quantity
1 [**]Note 1 —
2 [**] Note 1 —
3 [**] Note 1 —
4 [**] [**]
5 [**] [**]
6 [**] [**]
7 [**] [**]
8 [**] [**]
9 [**] [**]
10 [**] [**]
Buyer is desirous that Seller dispatches [**] sets of ECS each in the month of [**], [**] and [**] 2014. Seller will make best efforts to try to prepone dispatches of some quantities of ECS to the months of [**], [**] and [**] 2014. In case there are no dispatches in the month of [**], [**] and [**] 2014, the total number of dispatches till [**] shall reduce to [**].
On Dec 6, 2010 a Windtec customer, Ghodawat notified Windtec that it was terminating a 2008 license agreement between the two due to technical problems with the wind turbine which was the subject of the agreement and which Windtec had supplied and installed. ... The letter leveled an accusation of gross negligence, and promised that, "unless some amicable resolution is reached between the parties," Ghodawat would be pursuing a "claim for all the losses we have incurred and will continue to incur" in the wind turbine project.
Windtec immediately notified AMSC's senior management, including its Chief Financial Officer (David
Henry) and its General Counsel (John Powell), of the Ghodawat letter.... Powell analyzed the claim ... concluding that a loss was probable and would likely be in the range of $500,000 to $1.3 million, and suggesting a reserve of $500,000. Catlin was not notified of the letter or the claim.
Powell wrote to Ghodawat on Feb 18, 2011,denying its allegations but confirming the termination of
the license agreement, and suggesting a meeting to explore settlement. The meeting was held on March 23 at
AMSC's Devens headqurters, at which time the Ghodawat representative made a demand for four to five
million euros. AMSC countered with an offer of 50,000. The meeting terminated without a resolution, and without AMSC reporting the situation to Catlin. For purposes of these Motions, AMSC concedes that the December 6, 2010 letter coupled with the March 23, 2011 meeting constituted a "claim"...
... about a week after Powell sent his Feb 18 letter to Ghodawat, Tocci executed an application at AMSC's Devens office for a second year of coverage with Catlin. Questions 8(a) and (b) inquired whether any "claim, suit, notice, or legal action" had been made or brought against AMSC, and whether AMSC was "aware of any other circumstances or incidents which may result in a claim being filed against [it]." Tocci asked Powell to to respond "No" to each, and he did so
google the following for skeptical comments made by researchers:
Has Lockheed Martin really made a breakthrough in nuclear fusion technology?
cut and pasted:
Lockheed’s announcement has generated a lot of publicity, but experts point to the lack of details or results, suggesting fusion power is still a long way off
...Professor Steven Cowley, director of the Culham Centre for Fusion Energy in Oxfordshire, says he is “nonplussed”. According to Cowley, Lockheed had said “all the usual things about how it’s going to save the world and how nice it would be if [the reactor] was small” but failed to produce any details upon which their success can be judged
...Cowley says it is unlikely fusion will become part of the world’s power generation before 2050 and Lockheed’s announcement does little to change his mind. “I can’t see any results. I mean what have they achieved? It’s all promise,” says Cowley. “The proof is in the pudding in science. I’m surprised that a company like this would make this kind of announcement without announcing any results.”
...One of the top scientists at the International Thermonuclear Experimental Reactor (Iter) told the Guardian: “Let’s just say that since they don’t provide any technical details of what their ‘breakthrough’ actually involves, I am very sceptical. It’s amazing how much publicity you can generate with minimal information.”
...Fusion power has long been the sun that never rises. As the Guardian’s Leo Hickman observed in 2011, it is “perpetually 30 years away”.
Paradoxically, breakthroughs are announced with monotonous regularity. The hysteria that accompanies every false dawn is a reflection of the hope invested in fusion. It is seen as the silver bullet for the world’s troubled energy system and climate change – a zero-carbon, non-polluting energy source that uses elements mined from seawater.
Google “sinovel balance sheet” and click on the first link. Annual data shows up. You can click on “Interim Data” to pull up Sinovel’s latest reported balance sheet.
As of Jun 30, 2014, Sinovel reported a cash balance of 1,486 million CNY, down sharply from 2,924 million CNY as of Mar 31, 2014. When I plug these numbers into a Yuan – Dollar converter, I come up with a cash balance of $242 million on Jun 30 vs. 476 million on Mar 31.
Google “Sinovel to Buy Bonds Issued as First-Half Loss Narrows”
Bloomberg reported on Aug 29 that Sinovel will spend 700 million yuan ($114 million) to purchase bonds issued in 2011. Subtract that from their cash balance of $242M and you have $129M left, not counting any additional cash burn between now and then.
Sinovel is carrying total long term debt of 2.796 million CNY ($455 million). Most of this consists of 2.6 million CNY notes due in 2016. However, noteholders have the option to sell back the bonds on Dec 27 this year, and according to the Bloomberg article, “The company said it will face huge pressure on repayment if the bondholders exercise options to sell their securities in December.”
Consider the arbitration ruling against amsc in favor of India’s Ghodawat. Here is a history of what amsc has revealed to us concerning the breakup with Ghodawat, starting in 2011. (google American Superconductor's CEO discusses Q3 2010 Results) In a Feb, 2011 conf call, in response to question about losing Ghodawat, then CEO Greg Yurek’s response was:
“… I guess you know the cream rises to the top as we used to say in the past, and so we're seeing the strong winners come through here. Ghodawat had some internal family squabbles and those things happen, and so you have to put it aside.”
BTW, lafeet, my compliments to your memory for recalling that Yurek had blamed the fallout on a family squabble within Ghodawat.
In amsc’s subsequent sec filings, we were quietly informed that Ghodawat had filed an arbitration against amsc, explaining vaguely that Ghodawat claimed amsc had breached their license agreement, but not getting into more detail. Cut and pasted from the 10k:
“Ghodawat alleges that AMSC Austria breached an agreement dated March 19, 2008 pursuant to which AMSC Austria granted a license to Ghodawat to manufacture, use, sell, market, erect, commission and maintain certain wind turbines using its technical information and wind turbine design “
Next came the ICC International Court of Arbitrations finding against AMSC, awarding Ghodawat $11 million. In amsc’s 8k, they stated simply that the award was “ relating to Ghodawat’s claim that AMSC Austria breached the license agreement between the parties”, but again, giving us no specifics.
Now, google “Catlin amsc”, and you will find in this insurance case ruling agains amsc that Ghodawat “…was terminating a 2008 license agreement between the two due to technical problems with the wind turbine which was the subject of the agreement and which Windtec had supplied and installed… The letter leveled an accusation of gross negligence …”
FWIW, the arbitrators sided with Ghodawat.
Could be. I’m sure you know more than I do about this since - to be honest - I wasn’t even aware of the project until your post.
I was skeptical at first when I saw Areva has been supplying their 5mw’s in the vicinity, but then found the following: The planned project was owned by Bard until Sept this year it was purchased by Laidlaw. Bard’s website still describes the project as 400mw involving 80 turbines, which would have implied more 5mw turbines (probably Areva again).
However, google “Laidlaw Group acquires Veja Mate” and read the Windpower Monthly article. Cut and pasted:
“A statement from CMS Hasche Sigle, which advised Laidlaw on the acquisition, said the project would use up to 72 turbines. This would indicate a 5.5MW turbine, although the only machine of this size is the AMSC design manufactured by Dongfand (sic) and Hyundai.”
End quote. (If the above info was posted earlier on this msg board I apologize, I didn't see it)
Google “Veja Mate turbine model” and open first link. You will see in the table that the turbine model is “not decided”, and the foundation is “Not Decided. Was previously a Bard 5.0MW on triple foundation”
I think HHI’s 5.5mw is not extensively proven yet. The prototype was installed in Februrary of this year. Google “Hyundai Heavy Industries Installs 5.5 MW Offshore Wind Prototype
Cut and pasted:
“The company says the offshore wind turbine, featuring a 100-meter hub height and 140-meter rotor diameter, is designed to withstand strong winds of 62.5 m/s and to be protected from corrosion caused by sea water.
HHI will start a test run on the turbine in March to obtain certification within this year, and a company official adds that HHI plans to speed up its marketing campaign for the turbine overseas in regions such as Europe.”
My guess is that the books are being cleaned up for a future noteholder to provide financing It's just a guess. Going into debt at this point is really playing with fire, but what is the alternative?
In the last 10q, Tres amigas carried a value of 1.643 million, blade dynamics 3.661 million. Total of 5.304 million. Today's 8k warns of an impairment charge of up to 5.3 million.
They are writing-off both investments. In my opinion, blade dynamics is, in fact, totally worthless, as the company has failed to produce a single sale to date. Tres Amigas will produce real revenue eventually. But that venture's source of capital to build the interconnect has been overwhelmingly via revenue bonds rather than cash on the balance sheet . So I wonder how much, and for how long, that company's revenue will go to paying off the bonds.
At this point, being a shareholder in Tres Amigas may mean not realizing any value for a very long time.
I bring this up because I noted previously some posters here believe Sinovel would settle the U.S. Justice Dept case against it so that they could do business in the U.S. I believe the truth is that Sinovel has absolutely no chance of sales in the U.S., because the meager few turbines that have been erected here have had quality issues. Sinovel, struggling to compete even in China, has no illusions about the U.S., in my opinion.
Consider this: The only turbines Sinovel has sold in the U.S. have been in Massachusetts – the home turf of their former, long term partner, amsc. .They have sold turbines in Fairhaven, Scituate, and Charleston, Mass - all within a 100-mile radius of amsc’s HQ in Devens.
Coincidence? I doubt it. The deals were struck when amsc and sinovel were still partners. At the time, it was certainly in amsc’s interest for Sinovel to get a foothold in the U.S. So I think it’s very reasonable to believe that people employed by amsc-Devens made contacts in the area, and helped Sinovel bag these deals.
Here’s the quality record of Sinovel’s turbines in Massachusetts: The turbine installed Scituate in 2012 has already gone down for repairs. (google, Scituate Wind Turbine Under Repair). One of the two turbines in Fairhaven has also been down hard (google Fairhaven Wind awaiting parts to fix north turbine). The Charleston turbine is still O.K. to my knowledge. (there were issues with the foundation settling, but I don’t think you can blame Sinovel for that).
So two of four Sinovel turbines in the U.S. down hard within just a few years. 50% failure rate
Applied Materials FCL uses wire supplied by Furukawa Superpower, as stated in press releases. GridON's FCL uses no superconducting material at all.
I agree. I think you can take a design, cut corners that aren't supposed to be cut, use substandard materials, manufacturing, labor, etc, fail to support in the field. But that said, Sinovel's 1.5mw design, which was their bread and butter, and for which amsc provided electronic controls, was NOT amsc Windtec's design but was Fuhrlander's.
I think it's just the close association (former close association) of amsc and Sinovel that could be stigmatizing amsc now in China. Just a guess.
What is discouraging is this: McGahn has stated that in order to get to cash flow positive, they would need TWO licensees to enter meaningful production. Inox is already there. He said the most likely second candidate was JCNE. Well, while we hear great news from China for Goldwind, Ming Yang, and others, we've heard nothing from JCNE.
I'm not saying it won't happen, but I just wonder if wind developers in China may shy away from amsc due to the Sinovel stigma.
Actually, looking at the article again, it was dated June 28, 2013. A year and a month ago, not just a month ago, as I had stated. Sorry for the mistake.
Interesting. About a month ago there was an article in what I think is Scituate’s paper stating that if there was a problem with the turbine’s software, amsc would supposedly be willing to fix it. Google the following sentence:
Scituate's wind turbine owners see little impact from case against Chinese manufacturer
Cut and pasted from the article:
“… Yet the operation of the local turbines is not at risk, Deane said.
‘Under our contracts, yes. If there is any issue [with our technology or software, Sinovel] has to make it right. We’ve also had discussions with AMSC that they would be willing to step in and make it right as well,’ Deane said in a phone interview.
Alterations could include replacing any software determined to be stolen. According to a release issued by Palmer Capital, an agreement is already in place with AMSC to replace software should it become necessary …”