Who Will Be the Steve Jobs of Microwind?

I am no stranger to wind. Growing up in the Chicago area, strong wind was a fact of life: flanked by the Great Plains on three sides and a Great Lake on the fourth, Chicago is called the “Windy City” for a reason. I will never forget one autumn day, walking around a street corner at the base of the Sears Tower (the Burj Khalifa of its day) and being stopped in my tracks by the wind – so strong and steady that I could lean my entire body weight into it and not fall down.

Now imagine how strong that wind must have been at the top of the Tower, or any tall building for that matter. Even on a less windy day, buildings can be de facto wind turbine towers and are often as tall (or taller) than the standard 80 meter towers used in utility-scale onshore wind installations.

Those utility-scale installations, though, are almost always sited far from demand centers. This makes sense: the towers and turbines are enormous (and getting bigger) and so require a significant amount of land area to be sited in large numbers and at an appropriate distance from one another. In addition, the plains and mountains that feature the best wind resources are usually far from coastal population centers.

Enter microwind (also known as “distributed wind”). Kilowatt (rather than megawatt) sized wind turbines installed on rooftops rather than towers, operating in much the same manner as rooftop photovoltaic systems and sharing many of their advantages: proximity to load, ability to net-meter, and mitigation of grid stability issues associated with large-scale renewable energy. Microwind can also serve as a distributed renewable energy resource where PV cannot (or should not): Southern California, Southern Spain? PV. The northern US, northern Europe? Wind energy.

And microwind is well-suited to urban environments, as buildings are actually very effective wind towers in and of themselves. This is due to the “roof effect,” whereby wind hitting a building first compresses and slows down, but then decompresses and accelerates as it clears the roof, right into the path of the roof-mounted wind turbine.

All these advantages have made microwind a hot topic in the innovation community. Think of FloDesign and Optiwind, to name just a few.

Amidst all the excitement, however, it is important to think through the issues that microwind might face as it begins to compete in earnest with other forms of distributed generation, especially PV.

Cost, both capital cost and output cost, is a primary consideration, as it is with all forms of electricity generation. System integration is too: these machines (with inherently intermittent electrical output) must be integrated into both the host building’s electrical system and, through the host building, into the grid, such that the host building is assured of reliable electricity supply regardless of wind conditions.

But microwind is not just another distributed energy technology, another PV.

From a financing standpoint, there will be a “valley of death” of sorts: unlike PV, microwind is relatively new technology. Therefore, equipment manufacturers will have to be very creative in providing both comfort on financing assumptions (e.g. operating life, operating costs), building credibility around proven components of an unproven system and proactively educating the market as technology develops. Equipment warranties of adequate scope, duration, and creditworthiness will also be crucial, likely drawing on a combination of insurance products, government subsidies, and parent or partner company balance sheets.

From an engineering standpoint, vibration will be a significant concern, much more so than in a conventional (i.e. ground-mounted) wind farm, both in terms of the building’s occupants and its structural integrity. Noise, too, will be an important factor, whether caused by vibration, the passage of air through the turbine blades, or both. Safety will also be a major concern: human life is rarely endangered when a blade flies off a utility-scale wind turbine in a remote farm field; now imagine a similar scenario (even though it involves much smaller parts) high above a crowded city.

That said, I believe that success in the microwind market will be driven by two factors which are new to the energy industry.

First, unlike utility-scale wind and most PV, microwind will suffer from an unusual resource risk. In an urban environment, one building’s wind resource can be profoundly affected by unanticipated changes in its neighborhood over the multi-year (or perhaps multi-decade) operating life of a microwind system: if a new office tower next door cuts off the fat part of the wind rose, what happens? In other words, today’s capacity factor projections may be quite different from tomorrow’s reality, not because of inaccurate pre-installation wind measurements but by unpredictable third-party actions outside of the system owner’s control.

The microwind manufacturers need to proactively engage the financing community on this risk: how to distribute it, how to mitigate it, and how manage to it. Will “wind rights,” “wind easements,” and the like be created, defended, and bought and sold?

Second, and I believe much more importantly, success in the microwind market will be driven in large part by equipment aesthetics. Aesthetics? Power generation? Prime movers compete on cost and efficiency, not beauty, right?

But this is a different market: building owners understandably link a major portion of a building’s value to its appearance – an appearance which will be permanently altered, for better or worse, by the microwind installation. And unlike PV, microwind turbines will extend beyond the host building’s original roofline and will likely be visible not just from neighboring buildings but also from street level.

In fact, equipment aesthetics, not equipment efficiency, may create a very real threshold for market penetration: unattractive equipment may not even be considered, no matter how efficient it might be. That’s a radical thought for the power industry.

So microwind equipment developers will need to spend as much effort designing their equipment as they do engineering it. In other words, taking a page out of Apple’s playbook, for example, not Dell’s; thinking more like Steve Jobs to bring products to the market that are as attractive as they are durable and functional. Whichever credible microwind player adopts this approach will, I believe, take the market by storm.

So, who will be the Steve Jobs of microwind?

Let’s get innovating.

Lincoln E. Bleveans is the Chief Executive Officer of Hullspeed Energy Development & Finance, a global developer of energy projects.