The motto of Dan Dachelet’s Wind Storage Solutions is, “Because sometimes things don’t go as planned.” There could be no better description of the U.S. wind industry right now.
According to the American Wind Industry Association (AWEA), Q3 2010 was the slowest quarter for U.S. wind project developers since 2007. Year-to-date installations were down 72 percent from Q3 2009. Europe is building wind capacity twice as fast and China is building it three times as fast as the United States. Wind equaled three times the new installed capacity of coal in 2009 but has been only one-third the new installed capacity of coal in the first three quarters of 2010.
Yet there are always those who find a way to seek out and seize the opportunity in the midst of a crisis. That is what U.S. Marine Reserves Lieutenant Colonel Dan Dachelet, Wind Power Solutions founder and principal, intends to do. He credits three tours of active duty since September 11, 2001 with teaching him how to do it.
Dachelet got into the wind business in 2006 with Noble Environmental Power. He had been a procurement specialist in the Marines and knew nothing about renewable energy. Noble was planning projects in upstate New York, and four of them, successively, got put on hold. Nobody knew what to do with the 150 GE 1.5-megawatt turbines that contracts forced Noble to take ownership of.
Noble, Dachelet said, wanted somebody “who could figure it out on the fly, and my Marine Corps background prepared me to do that.” He quickly found subcontractors, he said, “and we were each other’s guinea pigs. We figured it out together.” He got a lot of help from GE project manager Gary Pelletier. “I wore that number out on my speed dial,” Dachelet said.
He found land, got it cleared and leveled, found a shrink wrapper to protect the turbines, blades and nacelles from the harsh upstate New York weather, and found riggers to handle and crane the turbine parts. At one point, Dachelet said, Noble had “hundreds of acres” covered with stored turbines at an expense of over $100,000. He learned how to store the million-dollar machines in a way that protected their warranties.
“I would still gladly be working for Noble,” Dachelet said. But “when the economy went south in 2008,” he recalled, “Noble laid me off, along with a sizeable portion of their workforce.”
In the wind industry, developers have to “lean far enough forward to procure towers,” Dachelet said, “or they’re not going to have them.” Commitments are made far in advance. “The very nature of this business is that you’re putting yourself out there.” Companies without the financing to complete projects find themselves in the position of being obligated to take possession of turbines or lose even more money for not doing so.
That’s why Dachelet decided, when Noble laid him off, to seize the opportunity in the crisis and start his own turbine storage company. It was a decision the marine could not have made based on a carefully delineated business plan.
“I don’t think a lot of companies will come out and tell you they’ve put a project on hold,” Dachelet said. They are not “going to be announcing to anybody yet that Project X is now on hold.” Instead, a developer will persist, thinking, “I will put them up if I can.”
But in the current economic environment, he likely won’t be able to, Dachelet believes. Turbines are stacked high at the Port of Albany, New York, where turbines for the Northeast are delivered, he said. “There is an overproduction of wind towers.”
People throughout the industry have told him that setting up this business is, right now, a good idea. He has signed no deals since he officially announced, but “I wouldn’t have started this business if there wasn’t a market,” he said. In this economic environment, “they just can’t build.”
Though Dachelet had no statistics to verify a rising need for storage, his experience and gut feeling are that AWEA’s Q3 report means there is already an equipment oversupply. That gut feeling is validated by recent news of layoffs by world-leading manufacturers like Suzlon and Vestas.
Dachelet’s plan is heartily endorsed by his former supervisor at Noble, Dan Haas, now the Director of Strategic Development for Berkhalter Rigging and a seventeen-year wind industry veteran. “There are literally hundreds of turbines that don’t have a home right now,” Haas said, based on informal reports from his network of industry associates. “A lot of those are being stored by the original manufacturers -- at a fee. They know how to turn a buck. There is a price for storage.”
Haas echoed Dachelet’s point that the extent of the oversupply is not yet widely known because developers are still scrambling. “People are still running hell-bent-for-leather, trying to meet certain end dates,” he said.
“I think Dan’s on to something,” Haas said of the Wind Storage Solutions business plan. Dachalet, he said, knows how to store the turbines at a more reasonable fee than the OEMs demand and has the experience to do it in a way that protects the turbines’ warranties. “An unwarranted machine is a financing nightmare,” Haas said. “He’s done it with 500 turbines,” he added. “There’s not many people that can tell you they’ve stored them, and in his case, he’s stored them for two seasons.”