The Quebec Government supports Wind-Do Energy

Saint-Léonard, November 29^th, 2019 

The Quebec Government is providing financial assistance to Wind-Do Energy Inc. for the development of its midscale wind turbines network. This 500-thousand dollars project leads to the completion of the head of series within Wind-Do’s new facilities in Saint-Léonard, Montréal.

Midscale wind turbines can address large markets if they provide competitive edges and efficiency comparable to those of giant wind turbines. Wind-Do Energy is about to meet this challenge; this is why the Quebec Ministry of Economy and Innovation, through its Innovation program, provides a 150 thousand dollars financial assistance to supporting the development of wind turbines with modern engineering tools and equipment.

Wind-Do's midscale wind turbines operate in small networks, which offers significant competitive advantages over giant wind turbines because they can be configured precisely to the needs of its customers.

Wind-Do’s 20 meters high wind turbines do not generate visual and noise pollution problems, so they can be installed closer to users. Wind-Do’s wind farms can operate where giant wind turbines can’t, such as several off-grid locations in the far North. Wind-Do’s wind turbines are designed to be affordable. Wind-Do's commercial success is based on the profitability that its customers and users can achieve in their respective sectors.

"Ultimately, our systems could cut the cost of generating electricity on off-grid sites. We estimate that Canada's 250 off-grid communities would represent a multi-billion-dollar market for Wind-Do," said François Gagnon, president of Wind-Do Energy.

The head of series will be completed during summer of 2020. In the meantime, Wind-Do Energy aims to set up a technology showcase and sign several agreements with potential customers and distributors in Canada as well as in export markets.

Source:

Pierre Dumas, M.Sc.

Business Development Director

Wind-Do Energy Inc.

514-656 8016

WIND ENERGY, THE NEXT TASK

Despite rapidly changing prices for solar photovoltaic energy, new wind power installations remain the most cost-effective source of clean electricity. With production costs (excluding subsidies) varying between $ 33 and $ 77 / MWh, wind is often the most economical of all sources of electricity.

Two problems remain:

1- The intermittency of wind electricity production.

2- Many other sources of greenhouse gas emissions are inadequately accessible to clean energy. (Air or sea transport, cement production, etc.) The heating of houses and buildings, which is mostly produced by combustion, is an easy target for wind energy.

With very economical wind energy, these two problems can be work out together.

Historically, all the energy produced by wind turbines must be sold at high prices to ensure the profitability of a farm. This business model is represented by the first graphic of the attached image where we have a wind farm that delivers electricity to the grid with a yield of 30 to 40% of its nominal capacity. If the cost of producing electricity is $ 40 / MWh, a sale price of $ 50 is likely.

In the second graph, we reduce the power of the grid connection to deliver only 75% of the electricity produced. For example, a wind farm with a nominal power of 100 MW would only have a connection of 40 to 50 MW with the network, in this way the yield offered could reach 50 to 70% of the nominal capacity. 

There are three important advantages to the network:

1- A connection of 50 MW is less expensive to install, and its utilization rate is doubled, which give a significant reduction costs of the interconnection.

2- The power density offered is higher; the need for ancillary services and its          associated costs is greatly reduced. 

3- A larger clean power density will allow network operators to achieve more easily their greenhouse gas reduction targets.

Various business models can be associated with this electricity generation structure.

a)    If the upper part of the electricity production (in green) is not used, the cost of producing electricity sold to the grid increases from $ 40 to $ 53 / MWh, and the selling price must be around $63  / MWh. It is therefore necessary that the electric operator grants a value of more than $ 13 / MWh to the three advantages mentioned above.

b)    Some of the electricity surplus could be stored in batteries and sold to the grid at peak times. For example, electricity could be available to the system at $ 75 / MWh at peak hours and at $ 57 for the rest of the day. An interesting alternative for the electric operator that would have an availability of 70 to 90% at peak hours. The value of the electricity stored would present a cost-effective business model for the use of batteries.

c)    Another solution would be to use locally the electricity that is not delivered to the grid. The easiest way to store these peaks of energy would be to turn them into heat.

We can decide that the value of electricity transformed into heat is $ 15 / MWh, which would allow, with an efficient heat storage system, to offer heating at $ 25 / MWh, a very competitive price. If this heating system replaces a gas one, a carbon credit of $ 10 / T of CO2 would result in a cost reduction of $ 6 / MWh, and a $ 50 / T of CO2 credit would result in zero heating costs.

By giving a value of $ 15 / MWh to electricity surplus, we reduce the increasing of the cost of electricity delivered to the grid. The cost reach now $ 48 / MWh and the selling price may be $ 58. A win / win solution.

To achieve and eventually exceed our greenhouse gas reduction targets, overcapacity of wind power generation must be achieved, which should lead to the diversification of the use of clean energy.

For the wind, the cost reduction is not finish. Our goals in the fight against climate change are still achievable and wind power will count for a lot of.

Énergie éolienne, la prochaine étape

Malgré une évolution rapide des prix de l’énergie solaire photovoltaïque, les nouvelles installations d’énergie éolienne demeurent la source d’électricité propre la plus économique disponible. Avec des coûts de production (hors subventions) variant entre 33 et 77 $/MWh, l’éolien est même très souvent la plus économique de toutes les sources d’électricité.

Deux problèmes demeurent :

1- L’intermittence du vent et de la production d’électricité.

2- Beaucoup d’autres sources d’émissions de gaz à effet de serre sont peu accessibles aux énergies propres. ( Le transport aérien ou maritime, la production de ciment…) Par mis celles-ci, il y a le chauffage des maisons et immeubles qui est très majoritairement produit par combustion (gaz, mazout, bois…)

Avec une énergie éolienne très économique, ces deux problèmes peuvent être traités ensembles.

Historiquement, toute l’énergie produite par les éoliennes doit être vendue à prix élevé pour assurer la rentabilité d’une ferme. Ce modèle d’affaire est représenté par le premier graphique de l’image jointe où nous avons un parc éolien qui livre de l’électricité au réseau avec un rendement de 30 à 40% de sa pleine capacité. Si le coût de production de l’électricité est de 40 $/MWh, un prix de vente de 50$ est probable.

Dans le deuxième graphique, nous réduisons la puissance de la connexion au réseau de façon à ne livrer que 75% de l’électricité produite. Par exemple, un parc éolien qui a une puissance de 100 MW aurait une connexion de 40 à 50 MW avec le réseau, de cette façon le rendement offert serait de 50 à 70%. Il y a trois avantages importants pour le réseau :

     1- Une connexion de 50 MW est moins chère à installer, et le taux d’utilisation de celle-ci est doublé, donc une réduction importante du coût d’interconnexion par MWh.

     2- La densité de l’électricité offerte est plus élevée, le besoin de services auxiliaire est grandement réduit, ainsi que les coûts associés.

     3- Une densité d’électricité propre plus importante permettra aux opérateurs de réseau d’atteindre plus facilement leurs objectifs de réduction de GES.

Divers modèles d’affaire peuvent être associés à ce profil de production d’électricité.

a)    Si la partie supérieure de la production d’électricité (en vert) n’est pas utilisée, le coût de production de l’électricité vendu au réseau passe de 40 à 53 $/MWh, et le prix de vente doit être de 66.67 $/MWh. Il faut donc que l’opérateur électrique accorde une valeur de plus de 16.67 $/MWh aux trois avantages cités plus hauts. 

b)   Une partie de l’électricité produite en surplus pourrait être entreposé dans des batteries et revendu au réseau aux heures de pointes. L’électricité pourrait par exemple être offerte au réseau à 75 $/MWh aux heures de pointes et à 60$ le reste de la journée. Une alternative intéressante pour l’opérateur électrique qui aurait une disponibilité de 70 à 90% aux heures de pointes.  La valeur de l’électricité entreposée présenterait un modèle d’affaire rentable pour l’utilisation de batteries.

c)    Une autre solution serait de valoriser localement l’électricité qui n’est pas livré au réseau. La façon la plus simple d’utiliser localement ces pointes d’énergie, ce serait de les transformer en chaleur. 

Nous pouvons décider que la valeur de l’électricité transformée en chaleur est de 20 $/MWh, ce qui permettrait, avec un système d’entreposage de la chaleur efficace, d’offrir du chauffage à 30 $/MWh, un prix compétitif. Si ce chauffage remplace un système au gaz, un crédit carbone de 10 $/TCO2 produirait une réduction de coût de 6 $/MWh, et un crédit de 50 $/ TCO2 conduirait à un coût de chauffage nul.

En donnant une valeur de 20 $/MWh au surplus d’électricité, nous réduisons de moitié l’augmentation de coût de l’électricité livré au réseau. Le coût passe à 47 $/MWh et le prix de vente à 58$. Une solution gagnant/gagnant.

Pour atteindre, et éventuellement dépasser nos objectifs de réduction de GES, une surcapacité de production d’électricité éolienne doit être réalisée, ce qui devrait conduire à une diversification de l’utilisation de l’énergie propre.

Dans l’éolien, la réduction des coûts n’est pas terminée. Nos objectifs dans la lutte contre les changements climatiques demeurent réalisables et l’éolien y sera pour beaucoup.

A Business Model to Stimulate the Economic Development of Rural or Devitalized Communities

A Win-Win Approach

An understanding of the connections between a variety of problems can sometimes lead to a common solution.

        Summary

Wind-Do has a decentralized approach to energy generation from wind turbines.  A variety of local actors working together can generate electricity and benefits, which will stimulate local economic activity.

The Wind-Do modular wind farm can be optimized in many ways. In addition to producing a target amount of electricity that is sold to the network, a significative amount of excess electricity will be generated. This extra energy is free, but must be used locally, for example providing heat for a greenhouse or for other industrial uses.  

By saving on energy costs, greenhouses can become more profitable in Northern countries. This could be one factor that leads to their construction.  In turn, local employment is created, and as the greenhouses are located where produce is needed, fruits and vegetables will be fresher and cheaper. In addition to enhancing the local economy and creating jobs,  this will reduce greenhouse gas emissions in many ways: less food transportation, clean electricity, and even carbon capture with winter culture.

  

             This is a win-win approach.

   

 Here are some examples of problems 

 that have common links:

Over time, many cities and villages have lost their economic vitality.

In Quebec, there are about 150 cities and villages with higher than average unemployment rates.  About half of these communities have a population of less than 500.  Young people tend to leave these villages, and the average age is often higher than for communities of similar size. 

To stimulate the economy and create jobs, the benefits of local activities must remain in the communities. To keep the youth in their community, either jobs or business opportunities must be created.

Climate change is likely to lead to problems of food security. 

Certain agronomists argue that 75% of the world's agriculture should be carried out in enclosed spaces by 2050, in good part due to climate changes.

The only way of significantly reducing the production of greenhouse gas is to reduce the production of energy from sources that produce those gases.

This implies a significant reduction in the burning of all carbon-based fuels, not only for electricity production, but also for heating and industrial processes. 

Not in my backyard.

Most people want green energy.  One current source is the use of giant wind turbines.  However, many people do not want them in their backyard. Energy production from the wind needs to minimize visual and noise pollution, and be widely distributed to more evenly balance its contribution to the grid.

The costs of clean energy have to be reduced. 

In many regions and countries, green energy currently costs more than that produced by burning carbon fuels. 

To favour rapid uptake, clean energy must be profitable even without subsidies, and it should be relatively simple to finance projects. The production of green energy should provide an interesting profit margin for those who invest and maintain the facilities. There are advantages with facilities that are at human scale, require relatively little training, need minimal capital and are easy to finance at a low interest rate.

         The Wind-Do Proposal 

Energy is at the centre of all human activities:

-    Energy production generates significative benefits and income.
-    Energy availability at low cost generates opportunities that are sources of economic growth.

Wind-Do proposes the installation of several mid-scale wind turbines grouped in a wind farm that can produce from one to a few megawatts.  These wind-farms can be the starting point of a development plan for remote or devitalized communities. 

Our wind turbines are the size of a tree, and so have little visual or noise impact.  The cost of each KWh produced is quite competitive, and does not require ongoing government subsidies.   To meet their production targets, very often the wind farms will need to be oversized.  There will be a surplus of electricity that is free, but this surplus must be used locally. 

Our wind farms may have a variety of business models:

-        A cooperative can be created to manage the wind farm and other related projects that are part of a revitalization initiative.  Profits are then reinvested in the local community.

-        A local business or entrepreneur could decide to be part of a wind farm close to his facility. The main production of electricity is used by the business to reduce its energy cost and/or to sell to the grid. The surplus production is given to a cooperative to empower a greenhouse.

-        An electricity producer such as Hydro-Québec could also be the owner of a wind farm. The surplus electricity can be used to stimulate the local economy.

The Economic Advantage for the Electricity Distributor:

-        The cost of electricity production, using the Wind-do approach, will be between 2 and 4.5 ¢/KWh.  Depending on the project and its particular situation, electricity could be purchased by the grid administrator at 4.5 to 7 ¢/KWh, a win win situation. The electricity distributor could decide to create and manage its own wind-farms, although it is unlikely to want to do this for small wind farms of a few megawatts.  This leaves the field open to small producers.

-        Our wind farms are small and spread over the grid, so the electricity produced can be linked into the network at a minimal cost.  Over time, and as experience is gained, the local electricity production could be increased, based on the community needs and the capacity of the grid interconnection.

-        A wide distribution of wind energy production in the network will facilitate the integration of this intermittent source for the grid manager. Distance between each farm make sure that wind variations will never create sudden changes in grid loads.

-        In Northern countries, the wind in the winter has 50-100% more energy, so the production will be highest during weather-related peak loads.

       Greenhouses and Wind Energy

One of the characteristics of the Wind-Do wind farms is that a good deal of surplus electricity will be produced (beyond the target that is set), but this energy must be used on site.  The availability of almost free electricity can spur a number of local economic activities that would be advantaged by very low cost energy.  Here are a few examples:  heating of commercial buildings, drying wood, commercial food preparation, the production of hydrogen, electricity storage to make it available at spot prices, or any industrial processes that need electricity or heat. 

The use of free electricity by greenhouses has a number of advantages:

-        Greenhouses in northern latitudes are hardly profitable due to heating costs. Our low cost energy will enable them to compete with food produced in the south.

-        Local vegetables will be fresher, often cheaper and be healthier than imported ones.

-        Local production will favour food autonomy and security, stabilize prices and increase the diversification of the production with local species.

-        Most of the local jobs that would be created require little education.

-        Part of the greenhouse could be used as a community garden or coffee shop.  

A basic Wind-Do wind farm is designed to supply one MW of nominal power.  Based on wind availability and configuration, it will provide 3-4.5 GWh of electricity to the grid each year.  In most cases, the wind farm will produce 1 to 2.5 GWh of free electricity, which can only be used on site. It is possible to heat and light a 1,250 square metre greenhouse with an annual surplus of one GWh.

The Wind-Do GSG heat storage system allows on demand use of surplus heat, at a cost below 1¢/KWh.

         Community participation

A general scenario is proposed below.  Various combinations or options could be customized for a given community.

The creation of a local cooperative would allow the participation of the local population in their economic development.

This cooperative would not be a financial institution, but rather an investment club.  The group could include entrepreneurs, small or large businesses, angel investors and even VC funds; anyone interested in local development. 

The business plan needs to insure the profitability of the cooperative.

Ideally, the cooperative would be the owner of the wind farm.  To support the development potential of the COOP, the wind farm annual benefit should be $100K or more. With a sale price of 2 ¢/KWh higher than the production cost, a sale of 5 GWh per year would be required.  This can be accomplished with an initial connection to the grid of 1.5 MW.

A local greenhouse could create 2 to 4 fulltime jobs and several part time ones.  A typical wind farm with a connection of 1.5 MW would generally produce 2.5 GWh of electricity surplus.  This could meet the needs of a greenhouse up to 3,000 square meters, which could be profitable even with local sales.

The greenhouse should include activities that enhance  the community, but do not compete with existing activities.  For example, the greenhouse could house a garden coffee shop, a restaurant, a vegetable market, or any other useful activity for the community. 

The cooperative should start with local funds of $100K, which could be reached by having 100 investors contribute $1,000 each for a share in the cooperative. Adaptations could allow unemployed people and those on welfare or retired people to contribute and participate in other ways.  Members of the cooperative should have the right to:

1-     Work 2 hours a week in the greenhouse in exchange for a basket of vegetables (which would reduce their weekly expenses).

2-    Work an additional 2-5 hours per week and be paid minimum wage (which will not reduce their government support). This income could also be used to pay for a share in the cooperative.

3-    Receive dividends.  A minimum of 10% of the annual benefits should be distributed to its members.

Individuals and companies could buy additional shares, with the understanding that the cooperative's initiatives would be with local business, including micro-loans and the funding of new projects.

The local availability of low cost energy, as well as the economic potential associated with the COOP, would contribute to the local economy.  Over time, this activity could attract new residents. 

     A prerequisite 

In order to obtain a surplus, a basic amount of electricity has to be sold.  Every state and province has its own rules. In Quebec for example, only Hydro-Quebec can sell electricity, so a basic requirement is that they purchase the primary electricity production from the wind-farm cooperative.

   Useful contributors

Several organizations and corporations could contribute to this approach to community revitalization, for example:

-        The Ministry of Municipal Affairs could provide some financial aid to devitalized communities that wish to carry out feasibility studies.

-        The Ministry of Finance could lend the money required to build greenhouses and wind farms.

-        Credit unions could hold the mortgage, guide the creation of the cooperatives, and participate in their management.

-        A distribution agreement could be drawn up for the greenhouse's production (IGA, Metro…).

-        Other sponsors could contribute to this revitalization activity, while pursuing their own commercial development. (Subway, Couche-Tard…)

     Project Partners

The main project promoter is Wind-Do Inc.  The development of greenhouses would be assumed by Serres Harnois.

Other project partners are needed.  In Québec, these could be:  1)  an investor or lender, such as the Ministry of Finance, Investment Québec, or a bank...  2) a Cooperative like Desjardins or an agricultural COOP,  3) a contractor to build the foundations, and if needed, additional buildings.  Etc…

  

A range of project partners will help to accelerate the creation of cooperatives and enhance the local economy and jobs.

  

    Conclusion

The scenario proposed here does not resolve all the problems identified at the beginning, but its implementation can help to reduce several of them.

-        Economic stimulus of remote communities will enhance living standards, help keep the youth in the community and favour the integration of newcomers.

-        The wind farm and greenhouse activity will create 2 to 4 permanent new jobs, and dozens of part time ones that will energize the community.

-        For off grid communities, wind power can replace diesel generators, reduce the associated greenhouse gas emission, and lower the cost of electricity generation.  Instead of money flowing to the oil producing countries, it stays in the community.

-        The addition of a local greenhouse can increase the availability of fresh produce and for a number of remote communities, lower its cost.  The greenhouse could also become a local meeting place.

-        The local cooperative is likely to be a source of learning about entrepreneurial activity.  Youth could use this knowledge, and the financial potential of the local investment club, to create their own projects.

Please feel free to contact us for additional information.

François Gagnon  ing.ind.                                            

     C.E.O. of Wind-Do Inc. 

     fg@wind-do.com            

Duncan Sanderson Ph.D. 

    V.P. Community Relations of Wind-Do Inc.   

    ds@wind-do.com

Why most small and midscale wind turbines has low efficiency

Most small and midscale wind turbines show low electricity production efficiency, here is one of the reasons:

Giant wind turbines are efficient because of the very large size of the blade near the centre, and the high speed of the blade (200 Km/h or more) at the end of the turbine.

Obviously, a 2 or 3 meters wind turbine cannot have 2 m blades, so the system must be set to turn fast enough to generate the require lift effect on the blade. This is the only way to withdraw an efficient part of the wind energy.

As most small and midscale wind turbines are direct drive engine, this increases the problem. For the Wind-Do 2.5 m diameter turbine for example, the best rotation speed to harness energy of a 3 m/s wind is between 8 and 16 rad./s (similar to 80 – 160 RPM). Bellow and above that, the efficiency drops rapidly. For the same turbine, the good rotation speed for a 7.5 m/s wind will be between 20 and 30 rad/sec.

The problem is that a 7.5 m/s wind will produce about 160 watts of kinetic energy per square meter with appropriate rotation speed, beside 8 watts for a 3 m/s wind. This is a 20 to 1 ratio for the energy production beside a 2 to 1 one for the rotation speed. A direct drive engine cannot support efficiently those two common wind speeds without special features, and this is only a part of the wind spectrum,

Lets consider now the following graphic:

This is the reality of wind speed in nature; measurements come from one of our field session.If your midscale Darrieus wind turbine is set by a processor that compute wind speed, your motor / generator system will probably switch with a 4.5 m/s wind. This mean you turbine rotation speed will have to be multiply by 4 in few seconds to reach the power generated by a wind gust of 7 m/s, or by six to reach the 8 m/s gust. Not much probable for a structure that harness 25 or 100 sq.m. of wind.

If your turbine rotation speed at 4.5 m/s is compatible with the one require for the 7 or 8 m/s wind gust, you may not loose too much energy in the transition, as your turbine will also act as a flywheel and store some kinetic energy. Still you produce energy only 50% of the time (when wind is above 4.5 m/s), and you loose useful energy below your wind speed set point.

If your wind turbine has a fix setting, it will most probably be set for wind of 3 or 3.5 m/s, the idea being to produce energy the most often possible. With the above wind profile, the set rotation speed will not be compatible with 7 or 8 m/s wind gust. This not means only that turbine rotation must be multiply by 10 in few seconds, but that the efficiency of the turbine will most probably be at 10 or 20% of its potential at the beginning of the gust. As an example, a direct drive Wind-Do turbine with appropriate rotation speed for a 3.5 m/s wind will have a negative energy production with a gust of 8 m/s. Overall efficiency of this kind of system will be very poor, and much bellow of what you will expect from measures in a wind tunnel.

One solution is to have a complex gearbox drive by a computer, which is not anymore a direct drive wind turbine.

The Wind-Do solution for this specific problem is call permanent modulated stimulation of wind turbine. The demonstration needs few pages of text and drawing that you can download here:

/Presentation_pemanent_stimulation.pdf

This provisional patent application is one of the numerous innovations proposed by Wind-Do with his wind turbine. If you are in the wind industry and you think this concept can be useful for your products, please send a written request of utilisation and we will deliver it free of charges or royalties.

WIND CAN DO IT !

Wind-Do team at work.

Last week, the Wind-Do team  proceeded with a  trial of our new improved test turbine. A sunny day with less wind than expected, but enough to generate useful results.

One of the characteristics of our design is the use of small parts that can be produced by hundreds of suppliers. Here you have a close-up view of our prototype blade.

The real blade will be about 50 cm (24 inches) long, compared with this prototype which is 25 cm. This size allows the mass production of plastic blades, thus our blade cost will be much less per kilowatt produced compared to the kilowatt cost of blades for giant wind turbines. As demonstrated, installation and maintenance will require no specialized tools or skills, which will allow the participation and ownership by local groups and individuals.

More data on these tests will follow.

Co-generation heat and electricity with wind energy

With the continuous reduction of the cost of wind electricity, new business models can be developed.

To increase the used of clean energies, and reduce greenhouse gas emissions, we need to enhance the availability of wind and sun, and diversify their applications.

The business model proposed by Wind-Do has not get interest until now because of the historic high cost of wind and solar electricity. Recent low sales prices of wind electricity make this innovative model viable even for large wind farms, but its still favour Wind-Do midscale community wind energy network.

The model is easier to understand with Wind-Do wind farms. On a regular basis, our customers will sell wind electricity at 5 to ¢6 per KWh to the grid. This basic set-up will provide 45 to 50% efficiency to the grid connection. We will be able to negotiate a sale price increase with the grid manager if we propose a more reliable 60 to 70% efficiency to the grid. It is a realistic objective to ask a ¢2/KWh increment for a more consistent clean energy.

To achieved that electricity delivery, we may have to increase the number of wind turbines by 50%, or even double it in some occasion. The increase value of electricity, added to the increase amount of electricity deliver every month, will enhance the profitability to the wind farm; with a large amount of free electricity that could be used on site!

The append figure show how an oversize wind farm can propose a 50 to 70%
efficiency supply to the grid. It is also showing that the excess production of this oversize facility is a random energy source with 15 to 35% availability. This means that the heat storage system must be able to accumulate in a short period up to two weeks of the required heat.

The GSG heat storage system develop by Wind-Do to support this function is a low cost system that will store and return heat at less than ¢1 per KWh. The heat can be used directly for temperature control (including lower cost cooling with heat), for sanitary water, but also to support industrial process like cooking, drying, melting… up to 4000C.

Entre gadget et modèle d’affaire

Si vous pensez que cet article s’applique à RER Hydro, vous n’avez pas tout à fait tord, mais c’est aussi le cas de centaines d’autre start-ups, très souvent dans l’énergie propre.

Commençons par une anecdote : Dans une exposition sur les énergies renouvelables, un groupe d’entrepreneurs propose d’enchâsser des cellules photovoltaïques dans les fenêtres d’édifices commerciaux. Je mentionne que leur concept est peu prometteur car ces cellules ne seront presque jamais dans un angle efficace par rapport au soleil. On me répond que ce n’est pas dramatique car leurs cellules vont aussi fonctionner la nuit, en utilisant l’éclairage intérieur des bâtiments. Je mentionne que l’électricité produite sera négligeable, et l’on me réplique encore que ce n’est pas grave, cela marche car l’aiguille bouge.

Cet exemple un peu extrême veut mettre en relief une chose : Ce n’est pas parce que ça marche qu’il y a un modèle d’affaire.

Voir la note sur cet image

Bien que cette remarque puisse s’appliquer à toutes sortes d’entreprises, les exemples les plus remarquables sont souvent liés à la production d’énergie propre. La raison en est d’ailleurs fort simple, le start-up qui réussira à produire de l’électricité sans émission de GES en étant compétitif sans subvention s’ouvrira des niches de marché colossales.

Le problème c’est que beaucoup d’investisseurs de tous les niveaux se font prendre par l’attrait de beaux gadgets, et se brûle les doigts. Le phénomène peut même prendre des proportions dramatiques s’il y a interventions politiques et subventions.  

Un indice qu’il y a anguille sous roche dans le modèle d’affaire d’un projet, c’est lorsque l’information chiffrée est inexistante ou extrêmement vague. Par exemple : ‘Notre coût de production de l’électricité est comparable à celui d’autres formes d’énergies renouvelables!’ Parle t’ont d’hydroélectricité patrimoniale à 2 cents par KWh, ou d’éolien offshore à 20 cents?

Les calculs de base

Les calculs associés au coût de production de l’électricité propre sont relativement simples, mais ils nécessitent d’inclure tous les détails. Comme le coût de la matière première est nul (eau, vent, soleil…), le coût de production de l’électricité se résume à cette simple formule :

Coût d’opération annuel  / KWh produit annuellement  =  coût par KWh

 Pour illustrer notre démonstration, nous allons voir quels seraient les éléments qui devraient être pris en compte dans le projet d’hydrolienne québécoise RER Hydro. (Sans émettre d’opinion sur un projet qui est possiblement très valable.)

Le coût annuel

 Il faut débuter avec le coût d’installation. Il y a premièrement le coût à la sortie de l’usine, qui peut varier du simple au double si la production est de deux unités par mois, ou de deux cents. (Pour utiliser le second coût, il faut être raisonnablement sûr que le marché permettra d’écouler ces 200 unités à tous les mois pendant 15 ans ou plus.) À ceci l’on ajoute le transport, les frais d’aménagement du site (Fondation, dragage….), les frais de mise en place (Location de navires et de main d’œuvre spécialisés), les coûts de câblage, de l’électronique de puissance, du raccordement au réseau, et les autre frais indirects comme les études, les permis, les audiences publiques, etc…

Le total de ce coût d’installation doit être amorti sur la durée de vie du produit. Cet élément du calcul est crucial. Par exemple, Hydro-Québec amorti ses barrages sur 120 ans, ce qui est réaliste, par contre les éoliennes doivent être amorti sur 20 ans, car leurs durée de vie utile n’est pas beaucoup plus longue. Pour les hydroliennes, une durée de vie moyenne de 50 ans serait idéale.

Les autres éléments du coût d’opération annuel sont : Le coût du capital (principalement les intérêts), les frais d’entretien (préventif et bris), la main d’œuvre d’opération et les frais généraux.

Pour des hydroliennes, il y a peu de frais d’opération, et le calcul des frais reliés au capital est simple. En considérant qu’il faut retirer les appareils de l’eau pour chaque entretien, il faut prévoir le coût d’extraction d’un appareil pour réparer un bris, et le coût des entretient préventifs où toutes les hydroliennes seront émergées pour changer soit les turbines, les génératrices, les joints d’étanchéité…. Une prévision d’entretien réaliste doit être proposée pour la durée de vie des appareils.

La production annuelle d’électricité

C'est là qu'il y a le plus souvent exagération avec les start-ups en énergies renouvelables, dans l’évaluation de la production annuelle d’énergie.

Par exemple, dans une zone jouissant d’un ensoleillement annuel de 2,000 heures, un panneau de 1,000 watts ne produira pas 2,000 KWh par an, mais 1,000 à 1,200 s’il est parfaitement positionné, sans ombrage et bien entretenu. Avec un angle approximatif sur le toit d’une maison urbaine, 8-900 KWh, encore moins s’il n’est pas nettoyé régulièrement.

Le nouvel éolien souffre aussi de toutes sortes d’abus : Puissance nominale basé sur des vitesses de vent non standard, appréciation exagéré des innovations (Il n’est pas possible d’augmenter de plus de 5 ou 10% le rendement des éoliennes géantes, c’est une loi de la mécanique des fluides.), courbe de puissance non réaliste (et surtout non vérifié), etc…

Pour les hydroliennes, elles sont soumises aux même lois physiques que les éoliennes. Si les puissances déclarées dépassent 50% de l’énergie cinétique incluse dans l’eau à ces même vitesses, il y a fabulation. Il faut aussi s’assurer que, comme l’éolien, la puissance nominale déclaré n’est pas en relation avec des courants d’eau inexistants ou très rares. Par exemple, si la puissance nominale est associé à un courant de 4.5 m/s, l’appareil ne produira que le huitième de cette puissance dans un courant (déjà très rapide) de 2.25 m/s. Finalement, il faut aussi être conscient que tous les fleuves et rivières ont des cycles annuels de débit associés aux saisons. Un site peut donc jouir d’un débit d’eau de 4-6 m/s au printemps et passer sous les 2 m/s le reste de l’année.

Les facteurs de réduction de coût

Pour l’instant, aucune nouvelle installation de production d’énergie propre ne peut être rentable sans subventions. Quel que soit le modèle choisi, toutes ces subventions sont sujettes aux aléas politiques, ce qui refroidi l’intérêt des investisseurs qui cherchent des modèles d’affaires viables à long-terme.

Pour l’hydrolienne de rivière, cet aspect est critique car il n’existe pas de programme de support spécifique pour ce produit. Ceci est un obstacle tangible pour obtenir un financement important. Si le modèle d’affaire prouve que l’énergie produite coûtera entre 3 et 6 cents par KWh sans subvention, l’entreprise pourra recevoir divers appuies publics qui favoriseront son financement. Si par contre les coûts de l’électricité produite sont entre 10 et 20 cents par KWh, il est peu probable que de nouveaux programmes de subventions soient développés, les gouvernements ayant déjà assez de problèmes à justifier leurs supports aux énergies éolienne et solaire.

La compétitivité dans un marché colossal

En faisant abstraction des règlements et subventions, les électricités éolienne et solaire sont peu attrayantes dues à leurs intermittences et leurs productions asynchrones avec la demande. Dans un libre marché, leurs valeurs seraient d’à peine plus de 50 ou 60% de l’énergie modulable concurrente la moins chère.

L’énergie des hydroliennes de rivière aurait une meilleure valeur puisqu’elle serait disponible en tout temps et ses variations saisonnières parfaitement prévisibles.

Dans tous ces cas, une taxe carbone significative, de l’ordre de 40 ou 50$ la tonne de CO2, permettrait un développement d’affaire stable pour les divers producteurs d’énergies propres. Une bourse d’échange des émissions de GES qui aura cette force nécessitera un consensus international qui ne verra pas le jour avant une ou deux décennies.

Conclusion

Les anges financiers, VCs et autres investisseurs stratégiques auraient avantage à être beaucoup plus exigent sur les détails du modèle d’affaire des start-ups proposant des nouvelles technologies. Il faut que la présentation de base soit claire sur les objectifs financiers et les avantages compétitifs, et que celle-ci soit supportée par une documentation détaillée disponible dès les débuts d’une négociation d’affaire.

Le travail de démonstration du modèle d’affaire doit donc faire parti très tôt du processus de développement d’une nouvelle entreprise, ne serais-ce que pour ne pas investir temps et argent dans un concept sans avenir.

Voici un exemple de document décrivant bien le modèle d’affaire associé au développement d’un nouveau produit :

 http://wind-do.com/web/PDF/2014/our_cost_of_electricity.pdf

Vous y noterez entre autres que l’évaluation de l’élasticité des variables principales peut aider à fixer les objectifs de développement et d’optimisation d’un  projet.

Note sur l’image : Des millions de dollars ont été investis pour développer ces serpents de mer. Aujourd’hui ceux-ci rouillent tranquillement quelque part en mer du Nord, beau gadget sans modèle d’affaire viable.

Why accredited investors should like crowdfunding.

When you talk to your banker to make an investment, before he give you any advises, he’s gone to ask you a lot of questions in order to evaluate your objectives, and you capacity to manage risk. Base on the answers, he will propose a portfolio with a percentage of: Fix revenues, low risk funds, higher speculative funds, and sometime direct investment is public corporations.

An accredited investor will generally self-manage his investment. Even if he is more open to risk, and have more experience to manage it, he’s still gone to wish to invest a part of his assets in safe options, another part in more active products, and a last portion in risky business with explosive potential.

Up to recently, acting as an angel investor was the risky business. Today, angel groups still give an exciting opportunity to accredited investors, but behaviour is different. As discuss in another post, angel group are not at seed level for start-ups, they are acting between seed and VCs, which is often call funding round 1.

Crowdfunding will act at seed level, and investors that wish to invest 10 or 20% of their asset in potentially explosive products will have to follow that new trend.

At seed level, a start-up will generally look for 25 to $200K investment. Consider this example; In order to give a good number of shares to investors; a start-up at seed level sells new shares at $0.25 each. Those shares may also be granted of some purchasing options for following funding round.

After few months, if the product delivers as expected, we are now at the next funding round for commercialisation. As all facilities of a new corporation must be set, require funding will be few hundreds to one or two millions dollars. Angel groups will be interested here, as the corporation already have presales of a tested product. In this case, shares should be sales between one to three dollars per unit.

As sales growth well, it will be time for a larger factory, or to begin international deployment. Investment require in round 2 is now 5 to $20M; its time for VCs to act. At this point, we have established profitability, detail market potentials and a good management team. In our example, shares should be sales between five to twenty dollars.

Next step is the exit for investors, it is time for strategic investors, or IPO.

In our example, as we have few years of profitable operation, shares may worth 25 to $100.

 

In short:

Seed investment is at time 0 and shares worth $0.25.

Round 1 is at time 6 to 18 months, share worth 1 to $3.

Round 2 is due after 1 to 3 years, share worth 5 to $20.

Round 3 is 3 to 8 years after beginning, share worth 25 to $100.

However the sale scenario, the ROI is always much higher for seed investment.

Future of seed investment is crowdfunding, where accredited investors can bet $5-20K on an idea, or a charismatic entrepreneur. The objective now is to build a structure that scammer will not destroy before it’s become mature. This is the subject of my next post.

Climates changes, some bad news of 2013.

We can be optimistic and believe that soon new tools will enable a stronger fight to climate changes. We also have to be realist and accept that some facts damper clean energy progression. Here is what we count as the three saddest news of 2013.

The USA is expected to be oil self-sufficient within few years.

As unconventional gas had drop down the price of this raw energy, unconventional oil production will increase offer while internal US demand is lightly decreasing. Add to this the new more open rules of Mexico for oil development, and the fact that Canadian had difficulty to hand out their excessive oil sand capacity, this ended with a strong pressure on price reduction for crude oil.

Some stand that crude oil barrel may drop as low as $92 in 2017, beside an average of $112 in 2012. This is good news for US economy, but very bad news for cleantech and climate changes.

Subsidies will not last forever.

Even if we can count on green energy cost to continue to decrease, the price of those options are still far above fossil energies one. If crude oil cost drop too much, it will delay, or simply close the door to many clean alternatives. We need to stop the green house gas concentration that continues to increase on earth.  This request to install 5 to 10 times more clean energy facilities than what we actually do every year. Subsidies cannot achieve that goal. Price gap must disappear, but with fossil energy costs that stay low, we are far of it.

Coal is expected to become the first raw energy source of the world.

It should be clear for everybody that coal is the #1 enemy of fight against climate changes. More than just a greenhouse gas producer, coal also makes huge pollution; we received regular news and pictures of it from China and India.

Emerging countries needs energy, it’s link with economical progress. The problem is when you’re not to rich; you go with the most simple, rapid and cheapest solution. For coal, this mean low efficiency / high pollution facilities. China and India had important coal reserve, and growth fast. The used of clean (or cleaner) energy options just begin to be consider in the decision process of those two countries, but it is not true for all emerging nations.

There is only one-way to stop the coal progression: Clean electricity (wind, sun, water…) at 2-3 cent per KWh, which is feasible, but not achieved yet.

Forthcoming articles on WIND CAN DO IT blog.

Those articles will not necessarily appear in this order, post a request in ‘Comments’ if you what to see one in first.

-        How to favour transition to renewable energies. (5000 reading in French)

-        Peak oil theory, the deception. (4000 reading in French)

-        Why large car builder do not want electric car. (12000 reading in French)

-        How to double the effective output of wind farm. (4000 reading in French)

-        One billion human will suffer of climates changes before the end of the century.

-        Why fight to climates changes is already lost.

-        Some numbers that is not enough show about greenhouse gas emission.

-        Random availability of wind and solar energies is not really a problem.

-        The two kinds of innovations.

-        Renewable energy is not green energy, bio and waste to burning is not carbon free process.

-        Self-production of energy as a part of industrial business model to increase competitivity.

-        Business model for renewable and green energies.

-        Business model for energy storage.

-        The only 100% efficient energy storage system.

-        The energy autonomy market segment for renewable energies.

-        The democratization of energy production, and its effect on global energy market.

-        Crowdfunding for renewable energies, the two models.

-        Home and office energy storage, the passive energy wall.

-        River flow hydrolian, a disruptive concept that is now open.

-        Who is the first public enemy for greenhouse emission?

-        Stop said that you are concern about climate change.

-        Liars an myths about green energies, climates changes, and so… May become a series of articles.

En français pour le Québec:

-        Le modèle d’affaire d’Hydro-Québec pour l’exportation. Le concept proposé par Wind-Do à la commission sur l’avenir énergétique du Québec.

-        Les surplus électriques d’Hydro-Québec, mythe ou réalité.

-        La proposition d’énergie éolienne à 6 c/KWh. La proposition de Wind-Do à Hydro-Québec.

-        Hydro-Québec pourrait construire le nouveau pont Champlain. Le concept éolien-hydrolien-solaire.

-        La carte éolienne du Québec, et de Terre-Neuve.

This starting list will be enhance with actuality and comments on the blog.

As for many blogs, comments are expect to add value to the discussion. When request, we will post replies.