Long-anticipated improvements in Fusion energy may or may not be the holy grail, but what’s the significance? and when will we really know? While fusion is interesting to watch in the long term, service agreements are changing now. We have a lot of questions, like, does a 35-year service agreement make sense? Will these agreements be good or bad for preventative maintenance?Â
And what other major changes will we see from OEMs this year?
Vestas is also in the news because its spinoff, BladeRobots A/S, uses AI-informed robots to provide leading edge maintenance (and a few other things). Skagen Blade Technology ApS is a minority partner. And in Iowa, production lines are back up and running at the Siemens Gamesa blade factory that closed earlier this year. And there’s more! Don’t miss this episode!
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Uptime 144
Allen Hall: Well, hey guys I’m am about to head into one of the worst snow storms of the season so far. They’re talking about two feet of snow and, and rosemary, that’s like two thirds of a meter of snow, so I can put it in metric terms for you. . Well, you too. Are sitting in warm, comfortable places. And Rosemary, you’re probably even near the ocean.
Rosemary Barnes: Yeah, that’s right. It is unseasonably cold though. .
Joel Saxum: Oh man. I’m in shorts and I’m in shorts and flip flops. Houston, Texas is 74
Allen Hall: degrees today, I guess. Some people can live in the lap of luxury and us Hardy nor New Englanders, so will just suffer through the winter like we always do. , well, I mean, Well, yeah, not a big skier.
Unfortunately. I’ve seen too many people blow at their knees, hips, elbows, break their thumbs. , it’s so, it’s getting old roast man. I, I, I try to avoid that. Well, this is, this is true. Old or smart, one or the other.
Joel Saxum: It comes one in the same. Stick with one in same, yeah.
Allen Hall: So there’s a lot going on this week in renewable energy news, particularly in wind. But we want to start by talking about the Lawrence Livermore Fusion effort. And Rosemary and I go back and forth about how great America is or how long this is gonna take. Rosemary’s probably right? I’ll, I’ll grant her that.
But it, it’s a good discussion. And then we talk about the Siemens Ka Mesa opening a. Over in Iowa. One, they had mothball for a while, so it’s good to see that one kick back open again. Okay.
Rosemary Barnes: We’re going to talk about a Vestas order that’s been announced for Southern Sweden and the interesting part of that is that it comes with a 35 year service agreement.
Joel Saxum: And then as we all love innovation and we’re sticking with Vestas again, we’re gonna talk about Blade robots, the company that they started out of their, their venture capital fund and are now releasing to the market. So you’ll be seeing some more, more robots climbing blade. Replacing
Allen Hall: technicians possibly.
I’m Alan Hall, president of Weather Guard Lightning Tech, and I’m here with Australian Renewables guru Rosemary Barnes. And my good friend Finn Wind Power Lab, Joel Saxon. And this is the Uptime Wind Energy Podcast.
The big news of the week is Lawrence Livermore, national Laboratories Niche, national Ignition Facility, created fusion where they had more energy out than energy in. And I think that’s a kind of a unique measure, but Okay. And I did a little research on it because it’s all the news in the US is talking about.
this is not that. It, it, in 2013, they did a fusion experiment where the energy released, exceeded the amount of energy being absorbed by the fuel. So that was nine years ago. So now it’s kind of flipped where the energy in is less than the energy out. So they have made some improvements on whatever they’re doing, but it’s been nine years to, to do that.
So the, the latest ex , they used 192 layers, lasers, which is the general setup. So they have 192 lasers pointed to a 10 millimeter long, which 10 millimeters is about half an inch long. Rahm, h o h l r a u m for 30. Checking at home. You can Google that. It’s a little tiny cylinder. All right? It’s a little tiny cylinder.
And inside of there they put a pellet full of the good, the good stuff, a fuel. and then they take that whole rom and they put it in a cooling sleeve and drive it down to 18 degrees, Kelvin and Rosemary, 18 degrees. Kelvin is about the temperature in Wisconsin right now.
Joel Saxum: 340 degrees minus Celsius or so?
Yeah. Three
Rosemary Barnes: seven. So what they do is
Allen Hall: they take those 192 lasers and this. Spherical arrangement or mostly it’s spherical arrangement and they shoot those lasers into the horror and when it, the lasers hit the walls of that hru, it creates x-rays. And those x-rays are so massive, they actually compress the fuel pellet and that creates fusion.
So they, they put two megajoules into the laser energy and out came three megajoules of energy. But the energy was really, really short in duration. I, I think I heard microseconds maybe shorter than that, what this whole event was. So it’s a great thing, right? It’s a, it’s a start that more energy out, the energy in is, we’re practically there to the fusion future, right?
Rosemary Barnes: Right. I actually, I read a tweet from one of my YouTube friends climate, Adam, I don’t know if you guys watched their, their channel. I did a, a collaboration one time, but they say that yeah. So this experiment for fusion energy being energy positive, it’s kind of, yes it is. In the same way that a restaurant making slightly more money than the cost of its raw ingredients is making a.
It’s like the amount of energy absorbed was less than the amount of energy release, but it’s not the amount of energy that you had to put into the process to you know, to get that energy out. Overall, we’re still definitely ne energy negative and I think, I don’t know, my summation of, of this advance is that it’s super, super, super cool science and it’s got absolutely nothing to do with the current energy transit.
It. It might next, whoa. It might be the next energy transition in 2100 or something. But people who are saying that, you are saying that this is up,
Allen Hall: come on.
Rosemary Barnes: I wouldn’t be surprised. 20, say between 2060 and 2100. I reckon that’s when, when it will be commercialized. Wow. Okay. So as our
Joel Saxum: LinkedIn post it, Yeah.
So the LinkedIn post I said was a poll, and I said, is this gonna change in, you know, the way we produce energy in 10 years, 20 years, or not in my lifetime. So you’re siding on the, not not in my lifetime. Yeah. Rather than 10 or 20 years. Yeah, I think
Rosemary Barnes: so. I mean, I’ve seen people saying this is 10 years away from commercialization now.
And I don’t think that any of the people really involved as saying that, but it is what I see a lot of people quoted by journalists saying, and I mean, the technologies that I look. 10 years away from commercialization means all the cool sciences, well and truly settled and all the cool engineering is well, and Tru truly settle.
It’s the boring engineering that takes 10 years at the end. And we are, we are not up to the boring engineering part of fusion yet. There’s still science and there is a whole bunch of engineering, like cutting edge engineering things that don’t exist yet. Lasers need to become so much more efficient, just, you know, by lots and lots and lots of times.
And we’ve been, you know, we’ve been trying to make lasers efficient for a long time. So it’s not like a breakthrough is gonna happen in a couple of years with with that. And then there’s a lot of materials, science, materials engineering. , it will be really cool to, to watch and follow, but I don’t know if you are banking on this for your, you know, energy transition plans to save save us from climate change, then I think it’s kind of like somebody whose career plan, retirement plan was to stop going to work and just buy a lot of, a lot of locker lottery tickets or, you know, I don’t know, get, spend a lot of time in casinos.
It’s, it might have a really good payoff, but it’s almost certainly not going to.
Joel Saxum: So our jobs are safe. You’re
Rosemary Barnes: safe. Yeah. For the amount of time that you probably wanna be working I would, I would say that that you’re safe. And if not, until in
Allen Hall: the new fusion industry, the first powered flight was 1903.
The f the first breaking of the soundbar is 1947. So it’s 44 odd years. Right. And for the first five or six years of flight it. Two guys in, in Ohio. So let’s say it was 35 years from real flight to sound barrier, and it was another 20 ish years from the breaking the sound barrier to we landed on the moon.
So you’re telling me this is gonna take longer than I believe
Rosemary Barnes: it already has. I mean, when, when was the first fusion announcement? When was Fusion first 10 years away from commercialization. It had to be in the seventies or something, right? I mean, it’s it.
Allen Hall: No. Well,
Rosemary Barnes: people have been saying, listen, this is America.
I’ve been making a joke. The fusion is, is 10 years away. That’s since I was in university, so it’s been at least 20 years. That fusion’s been 10 years away,
Allen Hall: and it wasn’t new then. Okay. Wait, wait, wait. So Amer America has had created fusion energy in the past, right? When we’ve did it back in the late sixties?
No, maybe in the late fifties. Right. So the hydrogen bomb is a fusion energy release. That’s what it is, right? It’s a fish and bomb that that hits a, makes a fusion bomb. That’s a H, that’s a hydrogen bomb, right? Joel? Am I right about that? But
Joel Saxum: it, I think you’re wrong. I think it’s actually that, that we’ve never actually created a fusion bomb, only a fish and bomb.
Allen Hall: No, no, no, no. Rosemary as your, as our independent judge in this. A fusion bomb is an H bomb. It’s a hydrogen bomb. Wait to hear you.
Joel Saxum: I just one, not gonna be this, this is a, this is a quote from Wikipedia. This is a quote from Wikipedia. This, and this may not be right or wrong, but it says, despite the many millions of dollars spent by the US between 1952 and 1992 to produce a pure fusion weapon, no measurable success was ever achieved.
Allen Hall: True. That’s perfusion. Pure, pure fusion, right? Yeah. Yeah. Right. So we, we use fision to get diff fusion. Ah, I am. Okay. So Alan, Alan, you’re
Joel Saxum: correct, you’re correct. All current thermo nuclear weapons use a fission bomb as his first stage to create the high temperatures and pressures necessary to start a fusion reaction between d deuterium and tr tridium and a second stage
Rosemary Barnes: tridium.
Okay. And I’ve also brought up with, I take it cuz that was the, the level. Research, we’re at podcast and I see that research and diffusion power has been going on since the 1940s, so we’re over 80 years so far of probably people saying that we’re 10 years away from, from this thing reality. And so I don’t think it’s, so we’ve made a lot of progress and like I said, I think it’s so, so cool what they, what they’ve done, what they continue to do.
It does feel sort of arbitrary. This announcement, you know, it’s been getting gradually, gradually more efficient and now they’ve passed some threshold that allows their PR department to to be able to claim it’s energy positive. You know, if you , hey,
Joel Saxum: they need that funding. Wait, wait, wait.
Rosemary Barnes: That funding to keep going, grants running out.
I mean, come on. I get that there’s some sort of funding renewal coming up. It’s not to say that it’s not awesome, but it’s, yeah, it’s not, it’s not 10 years away.
Allen Hall: Sit. Say it’s awesome. Why can’t we say it’s awesome? It’s awesome. Rosemary just say
Rosemary Barnes: it’s awesome. You know, if you wanna, it’s your money on fusion, then I would do it with the giant free fusion reactor in the sky, in the form of solar power.
And, you know, slightly less directly the, there it is, you know, the heating and off the planet than wind and, you know, wind energy. They’re both, they’re both fusion. If you trace it back far enough, nearly everything is actually. .
Allen Hall: There you go. The, the, the root cause is true. The root cause is fusion. Yeah.
It’s all fusion. Well, here’s, I’ll throw another set of dates at you. The, the first uh, controlled vision experiment was in Chicago, at least in the US and Chicago at the University of Chicago underneath the football stadium. That was like 19 36, 7, 8, somewhere in there. And the first fission generator.
Well, we, we built a nuclear sub in like 1955, somewhere like that. So it, it wasn’t really 20 years from carbon blocks and some fial material underneath the football stadium to we’re under the water with a submarine.
Rosemary Barnes: Some problems are harder than others, remember, would be my response to that. Fu Fusions a hard problem.
Remember that
Allen Hall: No. I, I, okay. All right. No, I’m gonna, I’m gonna give this round to Rosemary, but round two, remember we’re the comeback Kids America maybe able to pull this one off. We’ll see. Wasn’t fi
Joel Saxum: wasn’t the original fission designed by the.
Allen Hall: I don’t know.
Rosemary Barnes: It’s probably not in the American version of Wikipedia, probably native VPN to access that.
That’s true information to admit that the French ,
Joel Saxum: something like that. We, we also won the Vietnam War, just so we’re clear.
Allen Hall: We also created Wikipedia in the internet and Google and Facebook. There you go. This Rosemary’s not part. Yeah, I wouldn’t be
Rosemary Barnes: true. We did all that stuff. I’m proud of the Facebook part of it, but
Allen Hall: Zuckerberg’s listening. Shh. Be quiet. All right. So I, I, I think we’ll just set this one aside for now and we’ll come back in six months to a year when they’ve created fusion and replay it. I think that’s what we’ll do. Siemens esa Renewable Energy in Fort Madison, Iowa is bringing the workers back and the company had laid off about 170 workers.
May and then I think another 120 or so will let go in February. So they’ve had layoffs basically to close that factory cause they didn’t have any work, but they got a new lease on life. The company has ordered order book has has increased and they’re saying the IRA bill in America is helping the wind turbine industry get back on its feet.
So they’re bringing people back to the factory and they’re gonna open two production lines that will be operational. Joel, this. No, come on. Two.
Joel Saxum: Come on. I know, right? That’s two weeks away and it’s Christmas.
Allen Hall: I know. well, maybe, maybe you can earn a couple weeks salary before the end of the year. That wouldn’t be something.
Yeah, maybe yeah, take it. The, the two production lines are gonna produce new and larger winter and Blaze and what? bin making, which I think everybody’s doing at this point. So that’s a good sign. Right, because Siemens ESA had throttled down this plant in Iowa and they had an sister plant in Kansas and both of them were, had really dropped off dramatically in terms of the amount of work, and so they were laying off people.
So it looks like they’re bringing them back. So they
Joel Saxum: must I I Do you think they started this plan to bring the factory back right after that IRA bill was signed? Do you think that them next morning they were like, Hey guys. Should we get this Fort Madison thing going again?
Allen Hall: Siemens CESA is really good with handling money or seems to be and I would have be hard pressed to think they didn’t have a significant order book in place before they flipped the swish backs on at, at the factory.
Okay. Because they could have offloaded like GE did to t p. . Yeah, I would,
Joel Saxum: I’ve, I’ve gotta say that there’s gotta, that has to be some, that thing has to play in it somehow. The other side, I guess the, the question I have is if they’re gonna get this thing going this fast, when we talked about this last summer and last winter, it was like, complete mothball, shut the factory down.
They must, must not have mothballed it that hard. They must have kind of just said, Hey, let’s put this thing up for a year or something. Because I would think that it would take, if a, if something set idle for a year, a factory, I think it’d take longer than a week or two to get it back going.
Allen Hall: Well, the article,
Rosemary Barnes: I would agree with you that I read called it Hibernation Not Mothballing.
So I guess hibernation kind of implies that, you know, you’re gonna be waking up in a few months. That’s my take on it, . But I, I think that it’s, yeah, well that’s definitely the IRA bill is definitely, I think, going to, gonna make a resurgence in American manufacturing because you can see people panicking in, in Europe, the eu are quite worried that they’re going to lose a lot of their manufacturers.
are going to relocate to the US and I know that they’re scrambling to see how they could even counter it because I, I think it’s quite challenging for the EU to make any kind of coordinated tax measures since that’s, that’s left up to each member state and . They, you know, they’ve got transport they want, but then they’re also trained within the EU by not being able to have a policy that gives their country an advantage compared in trade compared to the other member countries.
So it’s. The tax measures are up to each state, but then they can’t, and one state can’t choose to. Can’t choose to actually make anything sig significant, a significant incentive for manufacturing in their in their country because it would disadvantage to the other countries. So it’s challenging for ’em, but I mean,
Joel Saxum: In a tax benefit or some kind of policy benefit to a manufacturing facility in Europe or elsewhere in the world would have to be extreme to be able to.
Fight with the, we don’t have to put these things on boats. We don’t have to go through two harbors. We just put ’em on trucks from the factory and drive ’em a hundred miles down the road and put ’em up up in Iowa, because in Iowa, I mean, everybody knows how prolific the wind energy situation is in Iowa.
They’re developing and developing and developing, right? That whole, that whole corridor, Iowa, Minnesota, South Dakota, there’s within 500 miles of that factory. A day’s, a day’s heavy truck drive. From that factory, there’s probably 40,000 turbines. and they’re, and they’re just, I don’t know. I mean, so it’d have to be extreme
Rosemary Barnes: to be, we’re building a lot of winds farms in Australia and have been for a while and don’t make any major components here.
We get them from India or, or China primarily. That, yeah.
Joel Saxum: If, if, if they were, if your blades were built in outside of Camberra versus in India, that even with the labor differences, I would imagine that they would be a lot cheaper. So
Rosemary Barnes: why don’t, why aren’t we building them in Australia then? I mean, I, I just think that the
Yeah. It, it has occurred to people that nobody wants to take the risk that they could build a, a factor in Australia. And investors did have, have one at some point, and I can’t remember exactly what they were making, but, but some stuff and they closed it, mm-hmm. so. Yeah, I think that it’s I mean that was quite a while ago and we wouldn’t have been building as many wind farms back then.
So it might be partly part have been, partly have been a pipeline problem, but for sure now everyone wants to build as many wind farms as they can get turbines for. As you know, the, we, we would be building more faster if the supply chain was you know, available to do that. So, I think there’s heaps of pool for manufacturing in Australia, and it hasn’t happened yet, although we did talk about last time how at least Queensland, one of the states in Australia has plans to bring manufacturing here.
Yeah, I think I, I think the, you know, proof of the puddings in the eating and I think that it’s shown that incentives do do matter and. I, I think it’s gonna make a difference for, I mean, it was, the whole point of the bill was to get manufacturing happening in, in America. Right. To get stuff moving.
Joel Saxum: Yeah. Get it on point of the bill. Mm-hmm. One of, one of the, one of the piece of quantitative data that I don’t, I don’t think we’ll ever get, but I would, I would be very interested to see how many people of the a hundred and or 3, 292 that were laid off over the last year, how many of them are gonna be back, how many of them found other jobs or, or whatnot, or how much of that knowledge has been retained in that?
Cuz if you had to go right back to being at 300 people again and retraining every single one of ’em from scratch, I might not wanna be the first wind turbine taking a delivery of Siemens Ga Mesa Blades, next summer. . I might wanna wait to get mine until the fall.
Allen Hall: Yeah, well we, everybody’s having a hard time bringing people back to, to factories and jobs.
That’s a nationwide problem at the United States. So why would Siemens Ka Mesa be different than anybody else? Probably not. It’s probably gonna be a little difficult. Two thirds will come back. The other third maybe won’t that, that will be trouble. I think it’s a, and Joel, I think you raised a good point
Rosemary Barnes: about, go ahead.
I think it’s a problem with the, that the industry is quite used to actually employee churn. And, you know, opening, opening factories in places that have never had a, you know, wind turbine manufacturing before. So, you know, in that case, they, they bring some people from other factories to get it started and train up the local work.
But it is also a problem in some parts of the US and in some parts of Europe, at least I know probably other places where they get people in, train them and only keep them, you know, on average for you know, less than a year. And so then they’re, they are having a problem with having to train up new people constantly.
And in, if you’re not very carefully managing your shifts, and you end up with a, you know, a whole team that’s ba brand new, then you do end up with quality problems. And it is something that you do see from time to time popping up. I think for all the manufacturers, that’s, that’s an issue. So I guess that this will be, you know, another example of that and no doubt they’ve faced it before and we’ll implement some of the same solutions.
It’s definitely would be easier if you could just keep your staff on and , you know have them know what to do. Yeah. Keep this rolling blades around the clock, around the year.
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Allen Hall: Vestas has received a 59 megawatt order to power an undisclosed project in southern Sweden. Sweden is not that big, so it can’t be undisclosed that long. Come on guys. It includes an order for 13 V 1 54 0.5 megawatt turbines at a hub height at 105 meters, so pretty tall. One of the key features of this deal is it includes a 35 year active output management 5,000 service agreement, which is there to optimize the performance of the farm.
The whole thing’s supposed to kick off second quarter 2024 and finish in the third quarter 2024. It’s only 13 turbines won’t take that. So the, if, if you’re not familiar with Vestas, Vestas offers a variety of active output management agreements from a o m 1000 to 5,000, and each one has a slightly different package of goodies inside of it.
So the a o M 5,000 is a full scope contract, which means there’ll be no unseen or unbudgeted maintenance costs for items covered by the a. . That’s interesting. And I’ve seen this a couple of times. I think, Rosemary, you pointed out too that you had seen this a o m 5,000 pop up in sales. You wanna describe what that means
Rosemary Barnes: exactly?
Yeah, well, I I looked up the, the pdf, I guess it’s their sales brochure, to see what was contained in the agreement. It’s because a topic we’ve talked about on the, the podcast, I think a little bit, and it’s something that I’m thinking about a lot in my day-to-day work is. Really long-term service agreements, and in this case, 35 years.
I mean, I haven’t seen one longer than that. It, you know, it’s, it’s still, if you read the, the literature, people are still saying wind farms last for 20 years. And I think that that’s increasingly become I don’t know if that’s ever the case anymore. It’s crazy to think, you know, what’s the world gonna be like in, in 2035?
We’ll all have, you know, our, our portable fusion reactors by then. No doubt and . 20, 20 57 . It’s yeah, , who knows what the world will look like. Investors is, you know, backing up their claim that their wind turbines are gonna last that long with, you know, by providing the service guarantee. I mean, I guess that is as good as, you know, how long the company itself lasts pass for four.
I mean, even that. . Right. And that says something. But one thing that I thought was interesting in yeah. So this, their brochure for this service agreement was that they also have an, like an uptime no, an upside sharing arrangement. So there is an incentive for not just ensuring that a minimum.
a minimum threshold is met. That’s, you know, normal energy based or you know, some other basis of making an availability, performance guarantee. But and yeah, and if it’s not met, then liquidated damages are paid to cover the loss production, but there’s also upside sharing so that there is an incentive for investors to perform beyond the t.
And I noted that that is initially a shorter term, I think 10 years and it can be renewed. I, I guess depending on how things go, but I think that, that I, I don’t know how common these are. Certainly most of the , the wind the wind farm owners that I’m working with don’t have those kinds of clauses because Yeah, we’re, we’re seeing a lot of these service agreements where, you know, the, the service provider, the OEM has incentive.
meet the availability guarantee, you know it’s 98% or whatever. But if they already, you know, they’re getting close to the end of the year and they’re know that they’re gonna exceed it, there’s actually no reason for them to even bother continuing to run the, the turbines for that last week or two of the, the year.
I mean, I’m sure they will, but you can imagine that there isn’t the incentive for them to be like super proactive with their, their maintenance and really make sure that they are you know, doing maintenance at a time. That’s the. financially beneficial for the, the project overall avoiding, you know, high, high generation days and high price days and, and that sort of thing.
So I wonder if we’re gonna see,
Allen Hall: is that what that means? I mean, it’s, it, well it is, it sounds like a profit sharing thing. Like if we make this, the turbines produce super good amounts of power. I don’t know how you would describe it. It’s more than some threshold. Right? If you like to have more power than what we guarantee as a minimum, we’ll do.
but we have to split the proceeds
Rosemary Barnes: when we do it. I think it’s necessary. Does that make sense for it to be like that? It sounds greedy, but I think it’s necessary for them to have like a decent incentive to actually want to do it. Because when you just have the like baseline minimum, you go beyond below this and you have to pay as compensation.
It only gives you the incentive to, to do the, the absolute minimum. Whereas this way they’ll make more money if everyone will make more money if it, if it performs better.
Allen Hall: Yeah. But what about pride in your job and pride in your product? , why wouldn’t you wanna maximize that all the time? I’m, I’m missing that.
If, if I had control over that, why wouldn’t make it work as well as
Rosemary Barnes: might busy? It could. You might, you might
Allen Hall: have. I think that’s
Rosemary Barnes: what it applies on a negative side. And so you’re not putting any energy into this wind farm that’s never going to, you know, fall below. It’s guarantee you, you are worried about the wind farm.
There’s a, it’s
Joel Saxum: not gonna be, there’s, there’s. , there’s a risk versus rewarding there too, right? So like Rosemary was saying before, if you had to meet X level and you met it by December 1st, well, as Vesta is going into the next year, it might be smart to shut that wind farm down for a year because now you’re saving on oil changes, all these different things, all these different maintenance issues that could rear their head over the year or that month that you don’t, you don’t benefit from, but you.
Rosemary Barnes: Hmm. Or you might choose to get ahead on Right. Like unscheduled maintenance, even if it’s, you know, really high power prices that, that month. So, you know, they should be generating as much as possible to make as much money as possible, but their incentive is structured in a way that, that doesn’t matter.
They might Yeah. Bring foreign maintenance so that they’re doubly sure that they’re going to, you know, meet it next year.
Joel Saxum: So I’ll give you, I’ll give you a
Allen Hall: I’ll call her. Well, I, I’m just asking, would Vestas shut down your turbines when it’s producing power and just say, Hey, look, this is part of the deal.
We get to do the maintenance when we feel like it. I don’t. And you, the power producer don’t have any say in it.
Rosemary Barnes: It’s, I don’t think so, but I’ll give you an example. Without , without trying to get into too many specifics that I can’t share. But say you’ve got a cereal defect in all of the blades in, in your wind farm or, you know, it’s in some of them not in others.
So you might choose to be more proactive if you were on the hook for, you know, say there’s, there might, there’s a one in 10 chance that another blade in the wind farm might might catastrophically break and need to be. But you don’t have a spare blade, it’s probably gonna take months, maybe up to a year to replace that blade.
If you are, if you’re not really worried about the overall performance of the wind farm, you might say that’s, that’s fine. Whatever, you know, we’ll just, we’ll just wait for that blade to show up. Whereas if you are more, a bit more proactive, you might be able to say, okay, we’re going to do some some preventative maintenance.
We’re gonna be doing a lot more checks, a lot more drone inspections. We’re gonna be, I don’t know, monitoring the inside of the blades. You know, you can be more proactive to be more sure that you’re not gonna end up in a situation with a catastrophic blade failure and having to wait a year for a replacement.
That’s the kind of situation that I see. I mean, not that I’ve ever seen it come to that where someone’s left waiting for a year because the service provider just didn’t feel like doing the, the yeah. Preventative maintenance or inspection, you know aggressive inspection campaign. But I do very often, I’m, I’m looking at a, at a serial defect.
if the recommendation was up to me for how much they should be inspecting it’s never, you know, the inspection protocol that they’re following is always far more relaxed than what I would wanna do if it was my wind farm. And I was worried about how much money it was gonna make. Hmm. So I think I difference,
Allen Hall: Joel, the 30, the, yeah.
Joel, the, the 35 year piece that’s longer than most marriages in. That’s, that’s longer than most mortgages in America. Yes. True. It just seems like an eternity. You think there’s opt-out clauses in this, like after a couple of years you can back out. You may have to pay a fee to get out of it, but it, it would seem to me that signing any agreement that’s that long would be full of risks and I, they have to have attorneys sitting at the table when they sign these things.
What, what’s, what are the, what are the outs? There.
Joel Saxum: There has to be, and I would say you’re exactly right that there’s a cost to getting out, but, so I guess, let’s try to think. It says, it says it is a, what was the word they used? Undisclosed wind project. I’m curious who this owner is because in my mind I’m thinking this is an asset owner that doesn’t have any experience in o and m.
This is a financial. , this is some kind of group that’s like, Hey, let’s get into wind. Let’s, let’s do this. So they’re just saying like, man, this is, this is a way to do this without having to increase our opex costs within our organization by hiring engineers and all these site people and all this kind of stuff.
So they’re, they’re gonna say, let’s let them do it. And to be honest with you, I’m sure Rosemary, you’ve run into this in your, in your, with your consulting company as well, sometimes. . The financial people aren’t as well-rounded in the wind industry. They might, Vestas might have put this in front of ’em.
35 years. Yeah. This is what we do and. It’s just not, to me, it’s not a normal thing. I would be afraid of it just simply by the, the length of it. And if you don’t like it or if you don’t have any experience with an fsa and cuz a lot of times what we deal with day in and day out is asset owners fighting their FSA holders on something, one thing or the other.
whether it’s an inspection or who’s at fault for this, or did you go and check this one after the lightning storm last week? Oh, we don’t have to. Yeah. It says so in a contract, oh yeah, we will. These kind of things, right? So there’s always fights going on. So I, I’m thinking that this is someone that’s fresh into wind that doesn’t have a whole lot of experience
Rosemary Barnes: or to, and that’s who the kinds of developers that you see making these agreements in Australia, which is most of them, they know that they don’t have the, the expertise in, you know, the technical.
And so it, this kind of agreement feels very safe to them. And it is on the, the downside, you know, they are really being, being cautious and there’s less chance that they’re gonna end up in 10 years time with an asset that is just broken down doing nothing, and they don’t have you know, the right people to come and fix it, or, you know, even just the certainty that it is fixable because, I mean, a.
wind turbine things only have a couple of years warranty. And although if there’s a serial defect, then you do still have recourse after that. It feels like. I, I know when you talk to people in part of the sales process you talk to per perspective buyers they’re like, how do I know that it’s even gonna work for more than two years?
How can I put more than a two year lifetime into my, you know, my financial analysis? And and be sure that I’m still gonna have an asset making money in 10, 20, 30 years. Just cuz you say it does, you know, there’s, there’s, you say it’s gonna last 35 years, but you’ve got no skin in the game. And then this kind of service agreement means that they do have, have skin in the game and suck heel.
A lot better about it at the start of the project and when they’re, you know, focusing on developing as many projects as possible. And it’s not until they get to, you know, a bit further down the line and they see a lot of downtime or they just feel like you know, okay, technically it’s available, but it’s not making as much energy as as you said it would.
That’s when they start to wonder whether that was the smart agreement and maybe they should have you. got some expertise into to help out with the operation rather than just leaving everything up to the, to the oem.
Allen Hall: Well, back to Joel’s point of if you’re new to the industry, you wanna protect your downside. Does this also, thinking about if you wanted to sell this wind farm in the future, does that provide added value? Does that to the new. It’s like if you bought a Ford and you had. Ford local Ford dealership.
Fix your car all the time. That does add a little bit of value to it. Cause there’s records and everything’s in order and it’s all nice and neat. Same thing for airplanes. Airplanes have the same thing, right? So if you, you, you buy an airplane from Gulfstream and Gulfstream does all the repairs, or a Gulfstream authorized dealer does all the repairs, it adds value to.
Gulfstream when you want to sell it. Is that same logic applied to wind farms?
Rosemary Barnes: Phil, was it Phil when we had him on recently, didn’t he say that there is a perception that these OEM service agreements are the best way to go, but when you actually look at the data, that’s not who’s getting the best value out of their assets?
Actually, and yeah, so the maintenance strategies of some of the, some, some of the other providers. Are actually better when you look at the data. Am I recalling that right? Do you, do you remember? No, you,
Allen Hall: you are recording. Yeah. You, yeah. You’re recalling that correctly. But the thing that Phil was adding to the equation was he was saying that the insurance companies were pushing operators to buy into these agreements because it would makes the insurance a little easier, obviously, because you have somebody knowledgeable repairing the turbine.
So this in the insurance industry case. Mm-hmm. , you probably have. Payouts on the insurance side, so maybe it’s also an insurance play. So maybe it has two, two benefits that maybe lowers your insurance premiums smart and maybe keeps the value your asset higher, longer to where you will flip this to another energy producing company at some point.
Maybe that, maybe that’s what’s going on. Because 35 years just seems really long to me.
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Allen Hall: interesting development from Vestas and it tells you how much repairs and the, and the fees and the profits that are coming from the repair side. Vestas is taking their Blade Robots project, so if you’re familiar with Vestas, they actually have a. A sort of VC part. Venture capital part of Vest is called Vestas Ventures.
So Blade Robots is part of Vestas Ventures and they’re gonna stand that Blade Robots up as an independent company. And Blade Robots is a, what they describe it as an AI robot. I don’t know if it’s AI or not, but it, it does leading edge repair. So it just kind of grabs on from the pictures I’ve seen it grabs onto the blade.
Grinds off whatever leading edge is on there and must put down some coating as far as I can tell from the pictures. So the blade robots was started sometime in like 2020, as far as I could tell, in 20 in last year, 2021, they were, they’re putting it through commercial testing, so that must have turned out well.
And off. off to the races. So now Vestas is creating standalone companies to com basically compete in the aftermarket repair business. They have a second company as part of Vestas Ventures, which is called Coveo. And, and Joel, you may have seen this, it’s a company that’s like an eBay company for aftermarket parts.
So repair parts. Yeah, like, like, and there’s a couple of companies that are in that space. Yeah.
Joel Saxum: Kinda like spares in motion or Dan Wind does some of that as well.
Allen Hall: Yeah. Okay. . Yep. Very similar. So now Vestas is branching out into probably one of the more profitable sides of the repair business, leading edge repair.
And I, I’m just kind of wondering what the industry’s gonna think of that. Right? I I, if you made the, if you made the blade that has a leading edge being damaged and then you get to do the repairs, it seems. Nice little gig if you could , if you could get it and just not, do you think there’s gonna be some hesitancy to, to choose?
Maybe that’s why they spun it off. Maybe that’s why they spun it off. Cause they felt like people wouldn’t use it. Well,
Joel Saxum: I think it’s the same thing as, as most of these OEMs, so Siemens, cesa, Vestas, they all have service groups now. Their service groups are of course heavily dedicated to their full service agreements, but they also do multi-brand, right?
I’ve been on projects before where Siemens is working on Nordex turbines and this kind of stuff. So I would say that Vestas as a company that has some capital, saw the same writing on the wall as Erroneus and, and , our good friends at Rope Robotics. Rope Robotics and, and, and whoever else is developing these things and said, you know what?
We’ve got some capital and a VC group internally. Why don’t we develop one of these to help ourselves anyways? Because they’re seeing the same thing. We are a skilled worker, worker shortage across the globe. As the global fleet of wind turbines increases and increases and increases, it’s only gonna get harder and harder and harder to find.
People that are this special mix of, a bit crazy to climb these turbines on, on ropes and platforms. Mm-hmm. and, and our skilled craftsmen in the, in the fiberglass and, and whatnot and and want to travel and all this. So those people are hard to find and they’re only gonna get more scarce. So what’s the solution?
True robotics. . So I would say there’s a, there’s a very good reason why they’ve done it. They’ve got some heavy hitters on the board, right? The X M H I, Vesta offshore CEO is gonna be the board chairman of the board. So you’ve got, you’ve got some, some horsepower there. And then I think also SKAs in, in with these guys, Skagen owns actually a portion of one of our.
A friend’s power curve, so gans into some Oh, sure. Some other stuff as well. Yeah. Okay. So sca, so you have, you’ve got some, some, some pretty big Danish hitters on this thing. And as I say, with Rope Robotics or Erroneus or any of these guys are doing Blade Works is that there’s a, the, as I talk about being hard to find technicians, it’s really hard to find people that are, can deal with robotics and then also be a technician.
The, the, the barrier to entry there for everybody in that game is how do you take this fantastic product that you’ve created in a lab with a bunch of engineers and tested, and then actually get it to scale in the field and do quality work. So we’ll see what they come up with. Hmm.
Allen Hall: Yeah, it’s a difficult place and space for Vestas, I think.
Not that they haven’t been in repair business, they have, but leading edge. is difficult one. Mm-hmm. and two, it’s just, and you’re, you’re running into all kinds of different situations with the blades when you get on site. It’s a people business. Really. Yeah. And the, the engineering part and the robots are cool, but what I’m learning, just watching it from the outside, is that the people are super important.
If you have the right people on the ground, you can pretty much do anything but getting those right people in. , it’s hard to do. Mm-hmm. and I think the Erroneus and the real robotics of the world have already gotten that in place. Mm-hmm. . So they’ve been out for a couple of years, working in the field, doing a lot of blade repairs.
Mm-hmm. , they’re gonna have a leg up, wouldn’t you think? At this point? Yeah. I mean, if,
Joel Saxum: if you look at the, and I’m, I don’t, I don’t know this for sure, but I’m looking at m h I vest as Johnny Thompson being. , he comes from the offshore world. Yeah. So a lot of the you know, of course offshore North Sea there’s a lot of leading edge issues, a lot of leading edge erosion out there on those offshore winter lines, right?
I know a lot of, a lot of the big campaigns that go on every year for everybody out there are leading edge protection, leading edge protection. I mean, so Polytech was designed the shells for out there, right? So there’s, they may be chasing a little bit of a different market with him at the helm, being that I know Rope Robotics.
Mostly focused on shore. I think Erroneus is mostly focused on shore because of course onshore you have to get a blade onto a, or a robot onto a blade. It’s not, it’s not easy taglines and all this stuff, right. So I’m sure there’s ways around it, but Sure. I would by the design here. Now I’m just looking at the, some of the pictures.
I know Rope robotics works on a blade that’s at six o’clock in the bunny ears position as, as we say in the industry, right? Yep. This blade looks like it’s at. You know, 10 degrees off of parallel to the ground. It’s close to parallel, close, right? So that may give them a little bit of a different design advantage for working offshore, cuz you might not need the taglines and that kind of stuff.
I don’t know, I’m just thinking out loud here. I have, so
Allen Hall: somebody’s gotta get that robot on the leading edge and it, it can’t be light. Yeah. That’s gonna be tricky, I think. Yeah. There, there must be some technique to it clearly. And, and maybe you’re right and maybe that, maybe the emphasis. offshore winds, and they realize that that’s gonna be the space where profitability is just gonna be there.
And the complexity is so high, it’s gonna take some like vest just to, to, to do it. Well, you go
Joel Saxum: offshore wind, you go to these, these, these campaigns and they’re, they won’t even have repairs in ’em. It’ll just be leading edge, but the campaigns are millions of dollars because of the s o sov costs and the CTV costs and all the offshore costs and that kind of stuff, and the amount of people you’ve gotta have.
If they can, that’s really the place where you can save yourself some money. So say Vestas has an FSA with someone offshore and they’re on the hook mm-hmm. , and they’ve scheduled, they, maybe they have a 20 year fsa, who knows? And at year they signed it when they knew they were gonna be on blades and it was gonna cost them I a million dollars.
Well, now if they can do that for 300 grand, they’ve just made a. Profit by switching to robots on these things. Yeah, so we’ll see where, where they shoot, where they,
Allen Hall: Chase it. Rosemary, you’re gonna turn all of our maintenance over to robots. Definitely, since we’re
Rosemary Barnes: headed to a robot future, I , I always love, love a technology that includes lasers and or robots.
And we’ve had both in today’s episode. So I’m, I’m pretty happy, . I can only hope.
Allen Hall: I don’t know who I’m talking to anymore. It’s like talking to Elon’s twin over there in Australia. What is going on down there about
Rosemary Barnes: the, the crazy, crazy personality stuff I keep thinking of. Take implants
Deep Voice Guy: into your
Allen Hall: brain.
Joel Saxum: I thinking, Dr.
Exactly. The sharks switch laser pointers on their,
Rosemary Barnes: if it included a laser on it, then yeah, that. That would be the only way that you can improve it, . But I think definitely we need to get these kind of things working offshore, that that’s where they’ve really needed. You know, it’s nice to save money and work faster on shore, but I mean, offshore, I think it’s, it’s only gonna work.
It’s only working now because everything is so, so new. But , you know, in a, it’s expanding so quickly now in a few years, I just feel. Every second person is gonna be, need to be a winner by technician to keep up. Unless we, you know, we get the automated stuff happening. Mm. That, that’s, so, I think that’s where it’s, it’s all, all good.
Go. And I’m sure you know anyone that’s only onshore now, I bet that that’s not all that they’re thinking about. I’m sure that they’re , they’re trying to figure out how can we, how can we adapt this to offshore because that’s surely gonna be where the money is. You know, cuz it costs so much at the moment.
Yeah. Even if it’s an expensive automated solution, it could probably still be cheaper than a man’s solution. So yeah, I’m sure that’s where we’re headed.
Allen Hall: Joel, am I wrong about this? And I, I just needed to, to double check my numbers here, but I saw a number recently, and I, I don’t think we talked about this in the podcast of.
the US is gonna need about 120,000 wind turbines by 2030. I saw that number
Joel Saxum: too. I, I remember, I don’t remember exactly
Allen Hall: what A lot of leading edge .
Joel Saxum: Yeah, yeah. But I mean, they, I’ve also seen the number that says the ir, the IRA bill is going to help us install another a hundred thousand turbines by 2030 on top of the 72 in change that we already have.
I got a hard time, I’ve got a hard time believing that. No, that’s possible. There’s no way. But
Allen Hall: Yeah, it’s the lofty numbers out there. Well, if you’re flipping off a company, right? Well, if you’re flipping off a, a, a flipping off. I mean, if you, if you’re standing up a separate company that does blade repair and then you, and you’re looking for the total addressable market, what we call tam, that TAM is huge.
Yeah. Right. All of a sudden, because of that RA bill and the, if we’re gonna do a hundred thousand, just say a hundred thousand, that’s 300. If I can do the math right, that’s 300,000 blades you’d. Robots. You’d have hundreds of these robots in service all the time. Just keeping your wind turbines going.
Especially if Vestas has signed all these AOM 5000 agreements. You’d have a lot of robots working a lot of hours. Pretty profitable business sounds like. That’s gonna do it for this week’s Uptime Wind Energy podcast. Thanks for listening. Please take a moment and give us a five star rating on your podcast platform and be sure to subscribe in the show notes below to Uptime Tech News or our weekly newsletter, as well as Rosemary’s YouTube channel Engineering with Rosie.
And we’ll see you next week on the Uptime Wind Energy Podcast.
