The NPS wind turbines at Over Yonder Cay survived Hurricane Matthew in the Caribbean in mid-October and operated normally following the storm. NPS photo.
Vermont Business Magazine Northern Power Systems Corp (TSX: NPS), a next generation renewable energy technology company based in Barre, announced that WEG SA (Bovespa: WEGE3 / OTC: WEGZY) and NPS have executed a definitive agreement for WEG to acquire Northern Power System's Utility Wind assets. Northern Power is best known for its smaller (100 KW), distributed wind power facilities located in remote areas. The larger, core business (under 1.5 megawatt wind turbines) will remain in Barre with its approximate 75 employees. The core business did $40 million of the company's $54 million in sales in 2015, according to Vice President and Corporate Controller Eric Larson.
Northern Power was required to restate its 2015 annual report and financials for the first two quarters of 2016 because of how foreign sales were accounted for. Despite a well-received product, its business has struggled for many years. Its nascent company started in Warren, was bought out by a Connecticut firm and moved, only to be spun off again after a bankruptcy in 2008 and returned to Vermont to operate out of the former Bombardier plant in Barre. It also has a small office in Waltham, MA. He said Northern Power will retain the licensing business, which was worth $4.7 million last year.
The Barre plant makes components for the wind turbines and outsources other parts, including the blades, Larson said.
Larson told VBM that the restatement process is completed. He said that while WEG has bought the patents as part of the deal, Northern Power will continue to have access to the patents.
Under the agreement, whose financial terms will be released with a future SEC filing, the utility scale direct drive technology developed and successfully deployed to date by both NPS and WEG will be solely owned by WEG and its affiliates. All assets, including the related patent portfolio for utility wind greater than 1.5MW and the engineering team largely responsible for developing this technology, become part of WEG. The engineering team will remain based in Vermont and will work alongside the Brazilian based wind engineering team to continue successful product development work. The direct drive process eliminates the need for a gear box, which reduces maintenance. The total employment and manufacturing impact in Vermont was not fully known at press time.
The companies plan an on-going collaboration providing wind solutions around the world, WEG focusing on utility scale wind and NPS on distributed energy solutions, including distributed wind. WEG will continue to compensate NPS under the existing arrangement paying royalties for sales in South America resulting in future payments of up to an approximately $10 million. Additionally, WEG will pay NPS up to a further $17.5 million in royalty payments over the next decade for turbines shipped anywhere outside of South America.
WEG and NPS started collaborating in 2013 and since then have successfully introduced a permanent magnet direct drive wind turbines solution in the Brazilian market. "We have decided to move forward and take this fundamental step in our wind energy internationalization and growth strategy," said Eduardo de Nóbrega, WEG Energy Managing Director.
Ciel Caldwell, Northern Power Systems President and Chief Operating Officer added, "With a rapidly evolving global focus on affordable clean energy, I am very excited in the future for Northern focusing on delivering distributed energy solutions, and for WEG to expand its regionally successful utility wind activities by offering this utility-scale platform globally. This agreement is a structured way for NPS and WEG to continue such successes in the global market."
According to Nóbrega, "We look forward to a continued collaboration with NPS as we look globally at wind solutions. We have proven in the Brazilian market that we can successfully bring the NPS developed technology to market and we intend to do so globally. With the compliment of an engineering team from NPS and our existing team we believe that we can be successful in bringing appropriate technological advancements to our wind platforms for global expansion. Looking at the opportunities that would arise in distributed wind, we look forward to, in near future, also working with NPS on delivering distributed wind in relevant markets."
Caldwell said, "The economics of this transaction for NPS provide both near-term cash acceleration as well as an on-going robust income stream, giving us further confidence in our balance sheet."
Larson said along with the distributed wind systems, Northern Power is looking to furthe develop power converter systems and the growing business of large battery storage. Separately, Green Mountain Power is now using battery storage at its solar facility in Proctor. In GMP's case, the batteries tend to be used to offset price spikes when grid power peaks during times of excessive use, as during a summer heat wave.
About Northern Power Systems
Northern Power Systems designs, manufactures, and sells wind turbines and power technology products, and provides engineering development services and technology licenses for energy applications, into the global marketplace from its US headquarters and European offices.
- Northern Power Systems has almost 40 years' experience in technologies and products generating renewable energy.
- Northern Power Systems currently manufactures the NPS™ 60 and NPS™ 100 turbines. With over 12 million run time hours across its global fleet, Northern Power wind turbines provide customers with clean, cost effective, reliable renewable energy.
- Patented next generation permanent magnet direct drive (PMDD) technology uses fewer moving parts, delivers higher energy capture, and provides increased reliability due to reduced maintenance and downtime.
- Northern Power Systems' FlexPhase™ power converter platform uses patented converter architecture and advanced controls technology for advanced grid support and generation applications.
- Northern Power Systems offers comprehensive in‐house development services, including systems level engineering, advanced drivetrains, power electronics, PM machine design, and remote monitoring systems to the energy industry.
History
According to its Website and Vermont Business Magazine: The original Northern Power Systems started in 1974 as North Wind Power Company in Warren.
In 1978, North Wind was awarded a US Department of Energy contract to develop a high-reliability 2 kW wind turbine for the growing telecommunications market. As a result of that work, North Wind developed its HR2 wind turbine, a three-bladed, horizontal axis up wind rotor configuration utilizing a slow-speed, direct-drive 2.2 kW alternator. This small wind turbine soon gained international market acceptance as one of the most rugged, high-reliability wind turbines available. Over 600 HR2 and its successor HR3 wind turbines were sold over approximately 20 years of production. These wind turbines have been installed in over 40 countries on all seven continents, with many still operational today.
In 1986, North Wind, renamed Northern Power Systems, continued its DOE-sponsored research and development work, but also began to design, fabricate, and install high-reliability hybrid power systems for remote applications using gas- and diesel-fired reciprocating engine generators, photovoltaic panels, wind turbines, and battery banks for energy storage.
In 1999, this team began development of a 100 kW wind turbine under a series of cost-share contracts with the US Department of Energy and the National Aeronautics and Space Administration. This turbine was specifically designed to function in the harsh winters of Alaska and was installed in remote villages with unreliable or expensive access to electricity. As part of another US Department of Energy contract, this group designed an advanced platform utilizing a permanent magnet direct drive generator. A 1.5 MW generator was constructed and tested at the National Renewable Energy Laboratory, facility in Boulder, Colorado and proved the feasibility of such design. Combining this generator technology with the then-existing 100 kW wind turbine design, the original Northern Power Systems introduced a new 100 kW permanent magnet direct-drive wind turbine.
Clint "Jito" Coleman, President of Northern Power Systems, was named Vermont SBA Small Business Person of the Year in 2002. In the summer of 2008, Distributed Energy Systems, of Wallingford, CT, which had acquired and moved the company in 2003, went bankrupt and Northern Power was spun off and acquired by a group of investors who provided over $100 million in financing to Northern Power Systems between 2008 and 2013. It moved back into Vermont and into the 110,000-square-foot plant in Barre that formerly was home to the Bombardier passenger rail company. From that point Northern Power Systems introduced an advanced technology permanent magnet direct-drive distributed wind turbine, and has since sold over 400 of these 60 kW and 100 kW units. Starting in 2009, the company also invested in the development of a utility scale wind turbine, and completed a certified design for a 2.3 MW turbine with a 93-meter rotor. Two prototypes of this turbine are installed and operating at a Michigan wind farm, and this utility scale platform has been licensed to partners in Brazil and China.
Even as the firm has developed its unique wind turbine products and its sales just in the last five years have grown from $21.1 million in 2011 to $54 million in 2015, the company has typically reported a net loss. At the beginning of 2016 it had to restate revenues because of how foreign sales were accounted, largely because they were accounted for when products were shipped rather than when actually sold. The first two quarters of 2016 also had to be restated.
Ciel Caldwell, who had recently joined the company, stepped up to lead Northern Power in August 2016, following the removal of Troy Patton as CEO. Patton had been hired in 2009 largely to lead the effort to produce the much larger, utility-scale, 2.2 megawatt turbines.
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Source: BARRE, Vt., Oct. 26, 2016 /CNW/ -- Northern Power Systems, please visit www.northernpower.com