Airborne wind energy players are still hustling to get generators up in the air despite the major setback suffered by sector front-runner Makani Power this February, when it lost Google's parent Alphabet as an investor.

At least three European startups say they're nearing commercialization in a sector with a high bar to clear as traditional wind and solar continue to see price declines. Behind them are another 10 or so companies attempting to bring to market a diverse range of concepts involving tethered structures that capture high-altitude wind energy and deliver it to the ground.

Leading the charge toward commercial viability is SkySails Power of Germany, which is “ready to receive orders” and expects to deliver units to reference customers this year, said Nina Grossman, marketing and PR team leader. “SkySails is the first airborne wind energy company with a product available for order and delivery."

Right behind SkySails is Kitepower of the Netherlands, which is taking preorder inquiries. Kitepower is building a distribution network covering Australia, the Caribbean and the Middle East, with a view to kicking off commercial operations in early 2021, said spokesperson Marcello Ghilardi.

Also racing to market is another Dutch company, Ampyx Power, which hopes to start testing a precommercial demonstrator at the end of this year before embarking on further tests at RWE’s onshore high-wind test site in Ireland in 2021.

Makani's fall from grace

For a long time, the leading contender in the airborne wind energy market was Makani, which attracted mass-market attention after it was acquired by Alphabet in 2013.

Alphabet’s ownership gave airborne wind significant credibility: If any company could make the idea work, it seemed like it would be Makani. So, when Alphabet dropped Makani from its X moonshot unit earlier this year it sent shock waves through the fledgling industry.

Worse still, the parting came with hints that airborne wind might be too challenging even for a financial goliath like Alphabet to work with.

“After considering many factors, I believe that the road to commercial viability is a much longer and riskier road than we'd hoped and that it no longer makes sense for Makani to be an Alphabet company,” said Astro Teller, captain of Moonshots at X, in a written statement.

Airborne wind insiders suspect a number of reasons why Makani’s seven-year tenure at X had to come to an end, some more worrying for the sector than others.

The first is that airborne wind was never even remotely linked to Alphabet’s core business (although Alphabet has had some success with other energy ventures, such as the Nest smart thermostat and the Malta long-duration storage concept). Rather than a strategic initiative, Makani is believed to have been a pet project of Google founders Sergey Brin and Larry Page, who stepped down as Alphabet’s president and CEO, respectively, last December.

“Now [that] they are both out of the leadership, I guess somebody said, ‘When will this bring a return, and what does it have to do with online search?’” said Udo Zillmann, secretary general of the industry body Airborne Wind Europe.

Makani’s exit from Alphabet may have been hastened by the mixed results in test flights off the coast of Norway in September last year. In the second flight, the 600-kilowatt Makani generator was unable to make it back onto its offshore launch platform and crashed into the sea.

The accident underscored a feature of Makani’s technology that has led experts to question why Brin and Page had so much faith in the concept. Out of all the possible ways to make an airborne wind engine, Makani’s was perhaps among the most complicated.

Unnecessarily complicated

There are two main ways to categorize most airborne wind energy designs. There's the soft-wind versus rigid-wing distinction. And there are those that generate energy in the air versus those that use a yo-yo motion to power a generator on the ground.

Rigid wing and airborne generation options are generally viewed as being more complex, and Makani combined both features in one. On top of that, in its later stages of development, Makani added two additional complicating factors into the mix.

SkySails Power is the first airborne wind firm to have a product ready for the market. (Credit: SkySails Power)

The first was to try to launch and land its machines on offshore platforms. And the second was to experiment with a full-scale machine without first putting smaller and cheaper prototypes fully through their paces.

Given the immense technical challenges the company took on, it is perhaps unsurprising that Makani wasn’t able to get to market — even with Alphabet’s help.

And the business isn’t out of the running yet.

Does Makani have a future?

Makani’s management team appears to be mostly still in place, although the notoriously secretive company did not respond to a request for information from GTM. But oil major Shell, which joined Alphabet as a Makani investor in February 2019, confirmed it is still backing the company.

When Alphabet dropped Makani, Shell issued a statement saying it is “exploring options to continue developing the technology within our New Energies strategy.”

Shell senior spokesperson Sally Donaldson said: “Our position hasn't changed since then.”

Nevertheless, it is telling that the companies now fighting for pole position in airborne wind are all pushing simpler concepts than Makani’s. SkySails and Kitepower, for instance, are both promoting soft-wing/yo-yo designs.

And while Ampyx is taking things up a notch with a rigid-wing generator, its concept still uses a land-based generator. The big issue facing these companies now is whether they will make it to commercialization before investors lose interest in what’s long been seen as a high-risk bet.

The situation is complicated by COVID-19 and the fall of oil prices. For the time being, airborne wind leaders are putting a brave face on things. Grossman said SkySails is “in the lucky position to have secured long-term financing” and is not expecting delays as a result of COVID-19.

On the contrary, she said, “We are hiring and actively growing our team to meet the rising demand of the market.”

Kitepower, meanwhile, has launched a Series A funding round for growth and institutional investors after a European Union grant for ‘Resource Efficient Automatic Conversion of High-Altitude Wind’ ran out last August. Kitepower’s Ghilardi said the company is hoping to benefit from growing pro-renewables sentiment across Europe. “We hope to witness a much more committed position of the Dutch government in favor of the energy transition to renewables,” he said.

Last but not least, Ampyx and a German startup called Kiteswarms are part of a consortium called MegaAWE that bagged more than €12 million ($13 million) in European funding last month, confirming Europe’s interest in airborne wind remains strong despite Makani and COVID-19.

But can airborne wind compete with regular wind energy?

Despite the optimism, the airborne wind energy sector is conscious that it won’t be enough just to prove its concepts will work. They have to work at a price that is lower than competing technologies, including onshore wind.

“Definitely, it’s a challenge for us,” said Zillmann at Airborne Wind Europe. “The question is how much funding we [will] need to be as competitive as wind turbines.”

A key premise for airborne wind is that it should be able to significantly reduce costs by cutting the amount of materials required for each generation unit, compared to traditional turbines. But to get to that point will also require economies of scale in manufacturing, which might not be easy to achieve when each airborne wind company is working on a different design.

Initially, airborne wind firms are counting on being able to penetrate niche markets where traditional renewables cannot operate. One example is military applications. Kitepower, for example, last year renewed a collaboration agreement with the Dutch Ministry of Defence to investigate airborne wind as a way of replacing diesel generators in field operations.

Another potential market is tropical regions where traditional wind turbines might be at risk from hurricane damage. Kitepower’s interest in the Caribbean highlights how airborne wind machines could provide hurricane-proof energy by landing and sheltering in weatherproof hangers to ride out excessively strong winds.

Zillmann said airborne engines could also be used to repower old offshore wind farms where existing foundations were too small for newer turbines. Finally, one other area where airborne wind could be “really, really interesting” is in shipping, he said.

SkySails is already touting a wind-powered auxiliary generator for shipping. The company says its kites can supplement diesel generators and cut auxiliary fuel consumption by 50 percent, reducing the cost of energy to around $0.07 per kilowatt-hour.

It is promises such as these that have attracted backers to airborne wind in the past, with even at least one traditional turbine manufacturer, Siemens Gamesa, said to be investigating the sector last year.

But that was at a time when a still-growing economy could allow investors to make big bets. As COVID-19 gives way to the prospect of a global economic slump, companies pursuing the airborne wind dream know they have to start showing results — fast.