Well almost !

Clipper Windpower, the US-based wind technology developer and manufacturer, listed on London's AIM, has just closed a deal with Crown Estates to buy their 7.5 MW prototype offshore wind turbine. Crown Estates by the way, is a kind of British government body (supposedly, but not realistically the Queen's own property company - she has fairly tenuous ownership rights on property as she is not free to sell, let alone bank the profit). The reason for Crown Estates to venture into this market is because they own most of the seabed surrounding the United Kingdom - prime real estate in other words for the explosion in offshore wind that the government is trying to encourage. Although I don't believe it will happen at anything like the scale they want it to - see my earlier post, Don't hold your breath for offshore wind.

What is exciting though is the size of this turbine, at 7.5 MW, it is massive, three times larger than their Liberty machine. Offshore turbines, as I have argued before, are just not big enough to profitably pay for themselves, that is to say the additional costs of installation at sea with highly specialist equipment, grid connection through underwater sea cables, extra casing to prevent corrosion of internal machinery, etc. etc. usually mean that offshore costs up to twice as much as onshore.

So the only way to overcome this is with much, much bigger turbines because that reduces your maintenance per megawatt cost over a machine's lifetime. And at 7.5 MW, a turbine working at a 30% load factor, just might though go some way to closing that financial performance gap with onshore wind . . .

Not all the news has been so positive of late about Clipper. Making a loss before tax of $191.8m in 2007 from $19.9m in 2006 in the best ever year for the Wind Industry is not a great sign. About half of that loss stemmed from  turbine remediation costs, loss making contracts, warranties, inventory obsolescence and liquidated damages on late turbine deliveries.

And yet I do admire Clipper for being something of a maverick, can-do firm, which is quite different in its outlook to some of the relatively staid European players. Here's why;

i) First of all, How many other wind turbine manufacturers would have thought of approaching Crown Estates to sell them a prototype turbine?
ii) The Chairman, Jim Dehlsen, has been an entrepreneur in the business since 1980, i.e. the very beginning when he founded Zond.
iii) Clipper thinks it can cover both ends of the wind market - as a windfarm developer and a turbine manufacturer - which is courageous - they may yet be right
iv) The company eschewed the North American Stock Exchanges and went straight to London's AIM for cheaper capital, deeper analyst coverage and less onerous regulatory requirements - an early mover in that trend
v) They have managed to raise a lot of funds outside of the market - from BP and most recently, JP Morgan.

So, let's see how it pans out for Clipper over the next couple of years . . .