Although wind dwarfssolarin alternative energy production, wind hasn't exactly soared with VCs.
More than 200 solar companies have received VC funds. Only a handful of wind companies have.
This reluctance arises in part from the manufacturing footprint and capital required. Vestas and General Electric are the top two players in wind and Siemens recently vowed to become a strong number three by 2012 through internal investments and acquisitions. GE itself got into wind by buying Enron's wind business after that game of Texas Hold 'Em ended.
Meanwhile, alternatives to megawatt-sized turbines -- small, household turbines, vertical turbines, atmospheric dirigibles, Archimedean wind screws -- have been beset by long development cycles, technical snags, regulatory skittishness and lack of interest among consumers.
But VCs have begun to warm to wind, particularly those companies that can provide components or services to the larger wind market. In a way, you could call it an Intel Inside strategy. (Coincidentally, Intel now actively markets its chips to turbine makers.)
Case in point: Danotek Motion Services. The company, which produces permanent magnet generators and other electrical components for turbines, has received funds from CMEA, General Electric and Khosla Ventures.
Today, the company gets a new CEO to help it scale up. Donald Naab, who has worked for both wind companies and power electronics outfits, will take over the top spot. Founder and former CEO Daniel Gizaw becomes CTO. (There's a second trend embedded in this story. Danotek comes out of Michigan and in recent weeks, several Silicon Valley VCs have told me the Oven Mitt of the Great Lakes has become a hotbed of startups because of the mechanical engineering talent, plentiful supply chain experts, available factory space and the policies pursued by Governor Jennifer Granholm.)
It won't be easy, and some startups bear scars already. Makani Power, which received an investment from Google, recently went through a near-death experience, according to sources. (Calls to Makani got the answering machine.) Meanwhile, Marquiss Wind Power scrapped its box-shaped turbine and is undergoing a revamp under Farid Dibachi from Velocity Venture. (Dibachi sold Diba to Sun in one of those high-priced, inexplicable acquisitions that characterized the 90s.) Wind turbines make noise and have mechanical moving parts: two headaches largely absent from solar.
Still, a component strategy could work. Here are some other wind startups to watch. You might hear about some of these during WindPower, the hullaballoo taking place in Texas this week:
--Boulder Wind Power. The company, which has received money from NEA and others, makes a direct drive turbine that replaces the internal gearboxes. "We've been breaking gearboxes for 30 years and never really understood why it is so challenging," founder Sandy Butterfield told us.
--Nordic WindPower. It makes a 1-megawatt turbine -- not supposed to be popular. But Nordic has a two-bladed turbine that can wobble a bit on its axis. This "teeter hub" results in a simpler, more lightweight design that requires fewer bulky, rigid nacelle components. This design has the potential to decrease capital costs and, importantly, maintenance costs. Repairing multi-ton nacelles 200 feet in the air is often an expensive proposition. Khosla Ventures and NEA have invested.
--Upwind Solutions. Kudos on the name. Founded in 2007, the company provides engineering, management, logistics and other services to developers and turbine manufacturers. Think Halliburton for wind. Kleiner, Perkins has invested.
--Southwest Windpower. Here's a startup older than some of you reading this article. The 23-year-plus company builds small turbines. Although small turbines have yet to gain widespread acceptance, Southwest has survived the 80s and 90s and continues to grow incrementally. General Electric invested in it in 2009. It also has linked a joint venture with China's Yun Sheng.
--Subocean. A Scottish company, Subocean wants to install offshore turbines. A few companies in Scotland -- SeaEnergy Renewables, for instance -- have formed in recent years to tackle offshore wind. The North Sea remains one of the prime locations globally for offshore wind. A number of execs in these new companies also hail from the oil industry: the skills required to build offshore oil platforms aren't that different. While U.S. VCs have yet to make the pilgrimage to Aberdeen, local investors like Lloyds (which put in $27 million into Subocean) have put money into some. SkyKon in the U.K., which makes turbine components, got an undisclosed injection from EQT Partners in the fourth quarter.
--Wind Harvest International. The Davis, California-based startup has figured out a way to plant vertical turbines between multi-megawatt turbines to generate more power out of the same plot of land. A developer, in other words, can harvest more power with the same grid connection and infrastructure. The vertical turbines can even improve the performance of the larger ones, says COO Kevin Wolf, because they can create a vortex that accelerates the wind. Wind Harvest is looking for funding.
--Windspire. Formerly Mariah Wind Power, the company makes vertical turbines, but doesn't have the vortex effect like Wind Harvest. It opened a facility in Michigan last year. The company has raised funds but not from big-name firms.
--NovaTorque. This is a bit of a stretch, but NovaTorque produces a highly efficient DC permanent magnet motor. NEA, see above, also invested. Thus, the potential for cross-breeding with a Boulder or Danotek exists.
--FloDesign. The company, which won an MIT clean energy prize, has created a turbine that looks like a jet engine and allegedly is far more efficient than conventional turbines. Kleiner and VantagePoint Venture Partners have invested in it. While it has a sterling pedigree, doubts circulate about how big these turbines would have to be to generate power in sufficient quantities.
Personally, the MIT connection and futuristic design seem ominously to hint that this could take a while to get to market. Think of it: Greenfuel Technologies, E-Ink, Cambrios Technologies, Luminus Devices. Those MIT outfits really don't rush to get to work. (CORRECTION: Earlier we said FloDesign came out of MIT. It won a prize there but is actually associated with Western New England College. The rest of the comments about MIT spin-outs, however, stand.)