AWEA 2009 and the wild west

15 05 2009

The dust has settled after the American Wind Energy Association’s meeting and tradeshow in Chicago, IL last week.  Everyone’s dog’s are barkin’ from standing around in their booths all day, and perhaps their brains are full from the sessions too.

I’ve done a lot of tradeshows.  A whole lot.  Since these shows have been across many different industries, it lends an interesting perspective to “newer” industries like wind power and renewables in general.

I’m unique, just like everyone else!

Every emerging industry grows in a slightly different manner.  For instance, the capital and interest in renewables today is probably more like the 1849 Gold Rush than say, how the pulp and paper industry emerged onto the scene.

This rush for property, positive press, and market dominance makes wind energy in particular seem like it has a different side to it than other industries we think of in the energy sector.  But it really doesn’t.

After attending many many wind energy meetings and talking with all sorts of companies, what I’ve noticed is that, for the most part, their problems are no different than any other industry.  Each industry calls their problems by different names, but they boil down to the same set of issues:

  • Is there demand for my product?
  • Does my fuel source / energy cost make my product profitable?
  • Do I have the promised capacity available to take advantage of the market?
  • Am I operating as efficiently as possible?
  • Can I prevent major, unanticipated downtime events?
  • Etc.

Perhaps the spin on each of these is different than, say, a coal power plant or a refinery.

However, the “shoot first and ask questions later” urgency in the renewables sector has created an odd dichotomy…

Cowboy science, superstition, and hardcore math

The renewables industry today and the early days of the oil fields are probably similar (one industry looks for the fuel under its feet, the other above its head).  One difference is the state of technology.  The oil exploration industry produced a lot of new technology through years of urgent research and application.  The wind industry has a zillion times more technology at its disposal at its inception, but almost no time to apply it.

For instance, design of the wind farms themselves is a hotly contested topic because the industry standard practice uses the topology of Denmark as its model… Denmark’s a little flat compared to the windy frontier out West.  But is there a trustworthy alternative?  Can you secure financing if you use an alternative methodology?  Can you afford to do both (time and cost)?

Heavy mathematical investments are being made into ways to shorten and enrich the process of choosing good wind resources (using math so dense you could stump Stephen Hawking for at least 15 seconds).  Forecasting providers breathlessly try to explain in layman terms how awesome their math models are for all phases of site development to operation, but still recommend that you use multiple providers simultaneously just in case.

The mashup of math and seat-of-the-pants field work leads to strange collisions of cutting edge and mid-80’s technology.  Where supercomputers are crunching averaged data collected from the equivalent of a Speak and Spell.

OK, a very smart Speak and Spell with a modem.  But still, the point is that huge amounts of money are being committed based a thin upfront investment – and no one has time to think about it lest the financing go away.

A name you can trust

It’s understandable at the start because identifying a new wind site is often a collaboration with an industrious farmer and some other party which doesn’t have access to the limitless amounts of investment cash.

Once the site is established, there’s so much money flowing into the renewables space, everyone wants in on the action.  It’s truly caveat emptor on the western frontier.

Big name players are investing huge amounts of money to develop wind resources.  The effect is bipolar: the big name suggests stability, but sometimes when you engage the people behind the name, you find out it’s their first day on the job.  You can quickly tell apart the big names with big brains vs. the alternative.

Good business vs. good intentions

We all know greenwashing is pervasive.  Energy companies touted investments in alternative fuels when the price of oil was high and once the price per barrel dropped, some companies cut back.  Not that everyone’s in it just for the money… but there are some out there that will purposely flip a poorly assessed or designed resource to an unsuspecting buyer.

At this tradeshow, you could even find examples of modern day medicine shows.  Promises of a brave new energy future based on eye-catching, grandiose claims.  There’s no way to know if these claims are valid because there’s no time to check.  If you’re not on the bandwagon already you’ve missed the opportunity.

You could also find companies resting on their laurels.  They are the “standard”, but that “standard” was established pre-1990.  However, investment companies have nothing else to latch onto as a benchmark.  So some companies are in the catbird seat because they dominate the industry with old science and technological superstition.  And maybe that’s good enough for now.  Newer isn’t always better.

The market appears to be reinforcing the old adage: “There’s never enough time to do it right, but there’s always time to do it over.”  It’s just doing it over is a whole heckuva lot of work.  Pardner.

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