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Build Your Own Turbine – The AMSC Business Model


Kari Williamson

A company living off licensing its wind turbine design to manufacturers – is that a viable business plan? Timothy D. Poor explains AMSC’s business model to Renewable Energy Focus U.S.’s Kari Williamson.

American Superconductor (AMSC) has been largely successful with its Windtec subsidiary, through which it licenses out wind turbine design – from foundations to blades – but how can that be a profitable business model? Senior Vice President, Global Sales and Business Development, Timothy D. Poor, explains: “You can think of our Windtec business just like a ‘Vestas’ or a ‘GE’, except we don’t have a wind turbine manufacturing plant.”

“We sell wind turbine designs including designs for the manufacturing plant to our licensees. We help with the supply chain, which is very important. We do everything that a wind turbine manufacturer would do, except we don’t actually make the turbines – it lets us focus on where we add the most value, and we add value on the engineering side, and on the design and the system level optimization of the wind turbine.” AMSC also helps its customers with sales and marketing of their systems.

AMSC Windtec in Short

AMSC Windtec provides licenses and customized designs for onshore and offshore turbines ranging in power from 600 kW to 10 MW. Licensees receive unlimited service and support from the prototype development stage to full-scale scale production. AMSC Windtec additionally helps its customers to establish a local supply chain.

AMSC Windtec also develops complete electrical systems for wind turbine applications. Based on the company’s PowerModule™ power converter, these electrical systems manage power flows, control the operation of the entire wind turbine and monitor the turbine’s performance with a S CADA and Condition Monitoring S ystem.

AMSC’s wind business has grown from approximately US$13 million to over US$250m in sales over the last three years.

But is licensing revenue enough to make a profit? “How we make our money is actually selling the electrical components that go into the wind turbine. We sell you the license and transfer he technology and become part of the supply chain for you,” Poor explains.

“So all the electrical controls that go into the wind turbine, the power converter – the brains of the wind turbine if you will – are coming from us, and we sell those to our licensees on an ongoing basis.”

Another part of the AMSC Windtec business model that, according to Poor, gives AMSC an advantage, is that they are not committed to a particular drive train type or wind turbine design. “We can switch,” he says. “In every AMSC case, our only mission is to build the best-performing wind turbine. It doesn’t matter which drivetrain or technology we use, or where they’re coming from. We think that’s a unique starting point for a company.”

Rated vs. Actual Output

Up in the nacelle, Poor says there is a trend to use permanent magnet type generators using a full-scale converter. AMSC licensees Hyundai and Doosan both use full conversion in their multi-MW wind turbines.

“At partial loading, a permanent magnet generator is more efficient– and has less losses. … Wind turbines typically only run at a fraction of their top power rating, so the efficiency gains on a permanent magnet machine – especially for your larger megawatt sizes – are not insignificant. Those factors coupled with the support to the grid enabled by the full scale converter make them very attractive designs for wind turbines.

“There’s also a trend to larger rotor diameters, so bigger blades. The whole game with wind is ‘how close can you run to that rated power setting?’,” Poor says.

“There is a focus by all of the global players now towards making bigger and stronger and lighter blades.”

Although the race towards higher power ratings is still on, it is no longer the ‘only goal’ of the wind turbine industry.

Increasingly, the trend is to get as close to the capacity rating as possible – optimizing the output of existing platforms.

“We’re working on a 100 m rotor for a 2 MW machine. These are focused at sites that have slower wind speeds.”

Poor explains: “Every little bit you can increase [actual output] is money in the pocket of the developer. Putting bigger rotors on turbines opens up the markets for certain sites that could not be economically justified to be developed before – suddenly now they become economic. It will increase the size of the market, quite frankly, if manufacturers were able to do that.”

Blade Dynamics

Blade Dynamic’s technologies can enable blades longer than 90 m for the next generation of turbines, such as the seaTitan.

The rotor is lighter, more powerful and more cost effective than most existing technology. Blade Dynamics says the rotor increases annual energy production (AEP) by as much as 10%.

The rotor manufacturer has also developed a surface coating, Bladeskyn, said to last longer than traditional paint and gelcoat. It features UV stability, minimal dirt pickup, abrasion resistance and very low reflectivity.

AMSC additionally recently invested in a UK company called Blade Dynamics on the Isle of Wight, which designs and manufactures wind turbine blade technologies engineered to increase the efficiency and performance of very high power (multi-megawatt) wind turbines while also reducing costs.

AMSC now owns 25% of the company and helps promote Blade Dynamics’ technology also to non-AMSC licensees.

“The neat thing about Blade Dynamics’ technology is that it’s 40-50% lighter than conventional blades. That means we can put very large rotors on turbines and open up markets that aren’t economical otherwise.”

This especially applies to low wind sites: “With a very big rotor integrated efficiently into the design of our wind turbines – we have a very good product for that market. We think the US and North America are prime markets for this, as well as Europe, and Asia.”

Blade Dynamics is, amongst other things, working on the blades for AMSC’s 10 MW SeaTitan offshore wind turbine.

The SeaTitan

A few companies, including AMSC, are currently working on 10 MW wind turbine designs. The most prominent being Clipper’s Britannia project; Sway of Norway; and AMSC’s SeaTitan, which utilizes superconductor direct drive generators that are equivalent in size and weight to a 5 MW system utilizing conventional technologies.

“Nobody’s building anything yet, so it’s going to be interesting to see how this works. Our focus is not just to build a 10 MW wind turbine – anyone could do this. But you want to build one that’s commercially viable and that’s going to be economic for the development of large-scale offshore wind farms. You’ve got to take into account all of the costs and logistics associated with building an offshore farm including the subsea infrastructure.

“The SeaTitan is much smaller in size and lighter in weight at the top of the tower, which enables much lower installed costs for an offshore wind farm. About 60-70%, or two-thirds, of the cost of an offshore wind farm is not in the actual wind turbine itself, but in the foundation – the construction of the foundation and the installation of it into the sea.

The SeaTitan

AMSC’s 10 MW SeaTitan offshore wind turbine, which is expected to enter production around 2015, utilizes high temperature superconductor (HTS) rotors rather than copper in the generator. This enables the generator to be much smaller, lighter, more efficient and less expensive than conventional large-scale wind turbine generators, according to AMSC Windtec.

SeaTitan will use a direct drive generator, which could lead to less maintenance requirements than a gearbox.

The wind turbine is expected to have a rotor diameter of 190 m, and a tower height of 125 m.

“If you can keep those costs somewhat fixed and yet raise dramatically the power rating of the wind turbine, you’ve definitely improved the economics of the wind farm. … We’re taking the infrastructure you need for a 5 MW turbine and we’re putting 10 MW at the top of the tower. So you’ve got essentially the same costs as you would in terms of all the infrastructure, but for 5 MW you get 10 MW.”

Asian Power

AMSC says its business model serves it very well in Asia, and particularly in China where it currently has a total of five customers. When China decided it would have a domestic wind industry a few years ago, it faced the problem of not having the technology. AMSC as a technology provider could therefore enter the Chinese market without worrying about the Chinese requirement to set up shop in the country.

Sinovel Wind is one of AMSC Windtec’s China-based customers, and according to Poor, it is the third largest wind turbine manufacturer in the world and the largest in China. “They’re using all our technology, buying all their components from us on an ongoing basis.” Dongfang is another large customer.

Looking West

“Going forward, Asia – and China in particular – will continue to be the most important market for us in terms of where our revenue is coming from, but we’re also focused now more on the West. We eventually expect to have additional licensees in America and Europe – we’re actively now out promoting this business model to Western companies,” Poor says, before adding: “We don’t feel there’s any reason why we can’t be just as successful in the West as we have been so far in Asia.”

AMSC Windtec believes its technology will be part of major offshore wind farm developments such as the ones under the UK Round 3. “We have three licensees making 5 MW turbines, which is ideal for offshore – Dongfang, Sinovel and Hyundai Heavy Industries. Over the next year, they will be erecting and commissioning their first 5 MW turbines. They will be ready to go into commercial production after that, and we expect them to benefit from the Round 3.”

As Europe could be seen as the ‘headquarters’ for wind power, Poor believes it is a very competitive market. AMSC Windtec is therefore concentrating on the less developed offshore wind market. “From the European perspective, that’s a segment that interests us most and where we see a lot of potential.”

US Market Potential

The US and North American market as a whole, represents a vast market for the company based in Devens, MA. “We’re focused on – for markets onshore like North America – really high performance turbines,” Poor says.

It looks like AMSC Windtec is heading back to its origins – North America – with its Windec business model. The question is, who will take up the baton to become the Sinovels and Dongfangs of North America?


Renewable Energy Focus U.S., Issue 3 November/December 2010

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