Wind Online

2nd Anniversary

2011-07-05T00:58:00.000-07:00

2 years passed since the registration of WindOnline.org . Due to stranglehold of restrictions in Turkey, I am not able to log into my account and update my site weekly.

Despite all set-backs, monthly page views reached up to 1,500 per month by the help of more than 900 unique visitors.

I hope I won't face any restrictions and will be able to write more entries within following year.

I would like to take this chance to present my best regards for your support.

Wind Turbine Transportation: Road Transportation

2011-06-29T05:37:00.000-07:00

Wind energy is becoming popular and growing as a viable sustainable energy among the other alternatives. However, this developing industry is facing several challenges. Transportation of wind turbine components is complex and expensive because of the unusual dimensions and weights of turbines.

To reduce risks and cost, pre-planning is crucial.

In this blog entry, I would like to share basics of pre-planning of wind turbine components’ transportation on road ( you can find conventional transportation methods in http://lifttrans.blogspot.com/2010/07/transportation-methods-on-abnormal.html ) in checklist form.

According to my experiences in logistics sector, scope of duties that must be carried during transportation can be considered as:

1) Getting Weight & Dimension of Wind Turbine Components from the Manufacturer

2) Choosing Transport Equipments by taking:
a. Maximum Axle Load
b. Local Regulations
c. Weight & Dimensions of Components
into consideration.

3) Road Survey

4) Reviewing Transport Equipments after Road Survey to Choose Equipments Best Fit in Project

5) Preparing Access Roads/Entrances on Site According to Road Survey
a. Excavation Works to Provide Adequate Curves (inner & outer radius)
b. Back-filling & Compacting Cable Trenches on Site
c. Providing Adequate Ground Bearing Capacity
d. Gradient (shall not exceed 10%-12%)
e. Road Camber (shall not exceed 2%)
f. Clearance (any overhanging branches, overhead lines shall be removed)

6) Getting Required Permissions from Local Authorities to Execute Civil Works on Route
a. Excavation Works to Provide Adequate Curves (inner & outer radius)
b. Back-filling & Compacting
c. Checking Gradient and Road Camber on Critical Locations
d. Checking Height of Overpasses
e. Checking Bearing Capacity of Bridge

7) Getting Required Permissions for Transportation

8) Insurance
a. Transporters Liability Insurance
b. Transportation Insurance of the Components

9) Providing Crane(s) for Loading & Unloading

10) Lashing/Securing Components onto Trailers According to Instructions Indicated in Manufacturer’s Transportation Manuel

11) Providing Escort for Critical Components in Terms of Height,Width and Length.

There are many variables lies within topics listed above. For example, there can be several alternative routes for the transportation of components. In this case valuation, time and risk shall be taken into consideration while evaluating different alternatives. Cost-benefit analysis and stage-gate model can be beneficial approaches to come to a decision in terms of choosing the best route.

Content of the checklist can be detailed and approaches which help transportation companies to choose best route can be increased in variety.

Making transportation companies prepare preliminary plan can help investors, not only to reduce risk, but also to save considerable amount of inessential expenditures for transportation.

A.Yigit NEPHAN
29.06.2011

Project Completion Reports

2011-02-07T04:25:00.000-08:00

In these days, I have been working on project completion reports of two wind power plant projects.

In my opinion, Project Completion Reports are not only records about the past works but they are also a guide for companies for their further projects.

By taking this information into account, I came up with an index as follows:

General Information

- Project Information: In this section, I had given a brief information about project including the owner of project, main EPC contractor and location.

- Project Overview: In this section information about total capacity, turbine layout, annual production and remarkable dates were given. Some of the remarkable dates are as follows:

o License Date of the Project

o Commission Ruling for Extension (if avaliable)

o Starting Date of Excavation Works

o Starting Date of Foundation Construction Works

o Acceptance of High Tension Power Lines

o Starting Date of Mechanical Installation

o Starting Date of Electrical Installation Works

o Temporary Acceptance of Substation and First Energisation

o Completion Date of Commissioning

o Govermantal Acceptance

- Wind Turbine: In this section, I had given detailed information about the turbine used in projects and it’s components.

- Main Crane: In this section, I had given detailed information about dimension, weight, configuration and load chart of main crane which was used in wind power plant project. Gorund pressure values of main cranes can also be given in this section.

Scope of Contract & Planned Budget

- Work Definition: In this section, I had given information about main works executed during the project which can be stated as transportation, civil works, mechanical works, electrical works and commissioning works.

- Substation: In this section, subcontractors were listed under main budget items such as wind turbines, cosultancy, customs clerance, transportation, insurance, wind turbine erection, mechanical and electrical installation, main and access roads/excavation works, substation, foundation and fiberoptic connections.

- Subcontractor Budget: In this section, planned budget of subcontractors were listed.

- Loan Summary: In this section, loan summary of project was given.

Project Execution Statics & Actual Schedule

- Actual Budget: In this section, actual budget of project was listed. Main budget items were designated as:

o Wind Turbine

o Substation & Business Premises

o Power Transmission Lines

o Main & Access Roads

o Expropriation & Permits

o Operational Expenditures.

After giving information of actual budget, planned & actual budgets were compared and deviatons between them were indicated. After comparing these budgets, main expenditure items were expressed under budget items.

- Civil Works: In this section, costs of foundation works, crane pad preparation, main roads and access roads were indicated and volume of excavation and backfilling works were listed in terms of m³.

- Wind Turbine Installation: In this section, total man-hour spent for the installation of turbines was indicated. Cost of installation works were analysed by taking alternative scenarios into account. Man-hour spent per turbine was designated. On the other hand, effect of windy hours preventing the execution of jobs was calculated in terms of man-hour and cost.

- Wind Turbine Erection: In this section, cost of wind turbine erection works were analysed by taking alternative scenarios into account. Cost of crane rental was designated. On the other hand, effect of windy hours preventing the execution of jobs was calculated in terms of man-hour and cost.

- Actual Project Schedule: In this section, tables were prepared for each main work items including civil works, mechanical installation & erection and electrical installation to list starting date and completion date of each project execution items. At the end of each section, cumulative duration including and excluding windy days were indicated and they were compared with ideal durations.

- Commissioning: In this section, commissioning schedule was shown and exceedance of contractual obligations was indicated.

- Overview: Total cumulative project duration including and excluding windy days was listed in this section. By taking this information into account, total cumulative duration per turbine was calculated both including and excluding windy days.

Project Execution Photographs

In this section, photographs showing each project execution step can be found.

Content of Project Completion Report can be increased in variety according to needs and organizational structure of a company. For, we had our own crane to execute mechanical erection and our own team to execute wind turbine mechanical & electrical installation works, I had included sections analysing alternative scenarios (what if another company was awarded as mechanical erection, installation & electrical installation contractor?) in terms of cost and project duration.

A.Yigit NEPHAN
07.02.2011

Must Have WTG Installation Tools

2010-10-02T00:53:00.000-07:00

As I indicated in my previous blog entry, there are some mechanical, electrical or hydraulic devices that modifies energy to assist in the performance of WTG installation team tasks.

In this entry, I will try to give you information about must have WTG installation tools:

- Foundation Bolt Tensioners: These tools are hydraulic tools used for tensioning wind turbine tower base bolts.

- Hydraulic Torque Wrenches: These tools are used for tensioning bolts between wind turbine towers. There is very important point that it is better not to excess %70 of capacity of these torque wrenches while they are continuously, heavily used such as in installation operations to prevent any breakdown. You can push limits of these tools in maintenance operations.

- Electrical Torque Wrenches: These tools are also used for tensioning works in wind turbines. The difference between hydraulic and electrical torque wrenches is that by the help of electrical torque wrenches, you can work faster and the results can not be as accurate as hydraulic torque wrenches. They can also be used to lock rotor in wind turbines such as GE 2.5xL. Capacity rule which I indicated above is also valid for these wrenches.

- Manuel Torque Wrenches: These tools are used for tensioning small bolts in wind turbines.

- Impact Wrenches: These wrenches are used for pre-tensioning works in wind turbines. Distinctive feature of these wrenches is that you can pre-tension bolts very quickly by the help of them.

There are several brands that stand out with their quality in bolting solutions such as Hydratight, Hytorc, Plarad and Titan.

The other required tools are:

- Laser Alignment Tools: These tools are used for generator and gearbox alignment.

- Crimping Fliers: These tools are specialized pliers for squishing crimp beads.

- Automatic Wire Strippers

- Angle Grinder

- First Aid Kits

- Access Ropes

- Radios

- Toolkit

If you are going to invest in wind turbine installation business, you have to invest on these must have tools, but keep in mind Elbert Hubbart's saying which indicates that "one machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man" :).

A.Yigit NEPHAN
02.10.2010

Performance Indicators of WTG Installation Team

2010-09-06T10:45:00.000-07:00

Machine is defined as "any mechanical or electrical device that transmits or modifies energy to perform or assist in the performance of human tasks". Wind energy industry hasn't been totally mechanized yet in terms of installation of WTGs. So, machines or equipments only assist humans in the performance of their tasks.

All organizations are established to achieve certain goals which can vary during the lifetime of organization. To be able to achieve these goals, activities or results that are important to successfully achieving your organization's goals have to be measured. An old management adage explains the other reason to measure activities or results: "You can not manage what you can not measure".

Performance measurement is defined as "the process of developing measurable indicators that can be systematically tracked to assess progress made in achieving predetermined goals and using such indicators to assess progress in achieving these goals" by The U.S. Government Accountability Office (GAO). As it is stated in this definition, we have to designate measurable indicators to evaluate performance of a wind turbine installation team.

In very recent wind turbine erection project that I attended, I focused on designating these performance indicators and came up with these ones:

Main Installation

Foundation Installation
Pre-Assembled Power Module Installation (if avaliable)
Tower Base Section Installation
Temporary Wiring for Lighting
Mid-Tower Section(s) Installation
Top Tower Section Installation
Nacelle Installation
Rotor Installation on Ground / Hub Installation
Lifting Rotor / Single Blade Installation
Safety Labelling

Cable Installation

Pre-Assembled ower Module Cable Installation
Tower Base Section Cable Installation
Mid-Tower Section(s) Cable Installation
Top Tower Section Cable Installation
Top Deck/Yaw Deck Cable Installation
Nacelle Cable Installation
Hub Cable Installation

Tests

Measurement of Lightning Arrester Resistance
Insulation Test
Voltage Test

Alignment

Gearbox Alignment
Generator Alignment

Commissioning

Downtower Commissioning
Uptower Commissioning

These indicators may not be valid for all WTG types, but it encloses installation of many of them. By the help of these indicators, you can directly measure performance of your installation team.

As Sydney Smith indicated, “the thing about performance, even if it's only an illusion, is that it is a celebration of the fact that we do contain within ourselves infinite possibilities”.

A.Yigit NEPHAN

06.09.2010

GE Ecomagination Challenge: Powering the Grid

2010-08-21T01:46:00.000-07:00

GE is providing a great opportunity to acqiure funding for the future of smarter, cleaner and more efficient electric grids. GE Ecomagination Challenge is designed to be a catalyst for the development of cleaner, smarter and more efficient economy.

Ecomagination is searching for researchers, entrepreneurs and start-ups to improve the way we create, connect and use power and offering a total of $200 Million to the best ideas in partnership with Emerals Technology Ventures, Foundation Capital, KPCB and Rockport Capital.

1253 ideas and 27202 ballots were submitted by 14640 users until now. You can submit, read ideas and vote directly from http://challenge.ecomagination.com/ct/ct_list.bix?c=ideas .

GE Ecomagination Challenge is not only a great oppurtunity to spread environmental consciousness, but it is also a great oppurtunity for participants to realize their ideas for smarter, cleaner and more efficients electric grids.

As Robert Alan indicated “we can create a more sustainable, cleaner and safer world by making wiser energy choices”.

A.Yigit NEPHAN
21.08.2010

Production of WTG Blades

2010-08-21T00:21:00.000-07:00

Three months ago, I had visited LM Wind Power Blades Factory located in Kolding, Denmark and had a chance to get detailed information about LM blade technologies and manufacturing process of blades. After then, we contacted with EAWind (http://eawind.com/) for the repair of damaged blades in our ongoing projects. I had a chance to witness blade repairing process and got some useful information from Mr. Adem Eldemir about the design and manufacturing process of WTG blades. Here below, you can read a brief information about blade manufacturing process.

Everthing starts with design. Designing of wind turbine blades is a very complex process including variables such as shape, structure, materials and processes. Design is basicly an optimisation problem of two variables which are performance and cost. Performance of blades are designated by the help of aerodynamic structure, fluid mechanics calculations and stress analysis.
Materials which are used while manufacturing blades can be stated as birch plywood sticks, core material and fultruded fiber rods.

LM Wind Power

After making two shells in a mould, manufacturing process starts with glass fibre layer. Birch plywood sticks and carbon rods are applied on sections where high strength is required on. If stiffness is required on the areas where high strength is not, balsa wood applied on these sections. The last layer which is applied is glass fibre layer. After appliying glass fibre, all the air is vacuumed and liquid epoxy is infused. This process is named as Vacuum Assisted Resin Transfer Moulding (VARTM). Blade sections are then cured and glued together.

Closing the Blade Sections

After gluing blade sections together, their edges and surfaces are polished and finally painted.

A.Yigit NEPHAN
21.08.2010

1st Anniversary

2010-08-10T02:33:00.000-07:00

I posted my first entry in this blog on July 5, 2009. When I posted this first entry (http://www.windonline.org/2009/07/hello-world.html), I was working in a heavy lift & transport company as an assistant project manager.

After the publishing of my first entry, I had posted another 30 articles and started working in a company which is one of the biggest wind energy investor in Turkey.

Meanwhile, monthly page views reached up to 1,000 per month by the help of more than 600 unique visitors.

I would like to thank you all who give me the inspiration for writing new articles about wind energy.

I hope you will have a chance to see more entries within following year.

A.Yiğit NEPHAN
10.08.2010

The Secret Files of Wind Energy

2010-08-07T00:31:00.000-07:00

After Pentagon Spokesman Geoff Morrell's request to return of the classified war documents in their possession and delete them from www.wikileaks.org website, WikiLeaks became item of the agenda again.

For those who do not know, Wikileaks is described as an international organization that publishes anonymous submissions and leaks of otherwise unavailable documents while preserving the anonymity of sources (http://en.wikipedia.org/wiki/Wikileaks).

WikiLeaks also published some confidential documents about wind energy. These files can be stated as:

CRS: Wind Energy: Offshore Permitting, October 22, 2008 (http://bit.ly/ann8lK)
CRS: Wind Power in the United States: Technology, Economic, and Policy Issues, June 20, 2008 (http://bit.ly/aBefMv)
Te Apiti Wind Farm 2008 Annual Emission Reduction Report, 2009 (http://bit.ly/dBYJVy)
Confidential Report on UK and Irish Wind Energy v. Nuclear Power: Impact of Intermittency, Poyry, 1 May 2009 (http://bit.ly/2jqQGR)

The most remarkable one among these documents is Confidential Report on UK and Irish Wind Energy v. Nuclear Power: Impact of Intermittency in my opinion. This document is summarized as:

This confidential May 1, 2009 report, titled "Impact of Intermittency", is a substantial study of possible future scenarios of high levels of wind generation in the UK and the Republic of Ireland and their effect on energy markets in these countries. It was funded by several companies in the UK energy industry. A public summary of this report is available at ilexenergy.com and has been used to justify favouring nuclear over wind in choosing low-carbon ways to generate electricity, for example, in this article published in the Register.

Given the political debate taking place now in the UK over this issue, it is important that environmentalists, NGOs and other concerned parties are able to see the full report as well as the companies that commissioned it. Furthermore, there are several serious question marks over some of the modelling done in this report. Making the full report with appendices detailing the methodology available means that these can be examined, whereas the public summary does not give any information on these—for example, in the last section of the appendices, compare the recommendations of the Met Office as to how their data should actually be used to model wind production with what was actually done, as described by Poyry.

Our source believes the debate over low-carbon energy is being dominated and distorted by large corporations and their special interests, and that this report in particular was used to do so.

If you are interested in, you can directly download a copy of this document from http://file.wikileaks.org/file/poyry-wind-farm-research-2009.pdf .

A.Yigit NEPHAN

07.08.2010

Comparison of Two Wind Power Plants in Terms of Capacity Factor

2010-08-01T04:29:00.000-07:00

In my previous blog entry, I described capacity factor and listed the top 10 wind farms in Turkey in 2009 in terms of capacity factor. You can find this blog entry in http://www.windonline.org/2010/07/top-10-wind-farms-in-turkey-in-2009-in.html .

While I was comparing capacity factor of two sites which have the same installed capacity and are located in Turkey, I had come by very interesting results in terms of showing the similarity between these two different regions.

One of the wind power plants is located in Bandirma district of Balikesir, and the other one is located in Bergama district of Izmir.

The distance between these districts are around 280 km. One of them is close to the Sea of Marmara, where the other one is close to the Aegean Sea.

Here below, you will be able to take a closer look at their production rates and capacity factors in 2010.

As it can be clearly seen from the table below, both wind power plants have similar characteristics. Graphical comparisons also verify this argument.

Comparison of characteristics of both regions can be a subject of a detailed research. I am also going to compare more wind power farms in both regions, if I will be able to find electricity productions of farms located in these districts.

A.Yigit NEPHAN

01.08.2010

The Top 10 Wind Farms in Turkey in 2009 in Terms of Capacity Factor

2010-07-22T10:06:00.000-07:00

For there is not any other source in the internet listing the top 10 wind farms in Turkey in 2009 in terms of capacity factor, I think this blog entry is going to engage your attention.

Before listing top 10 wind farms, I would like to give a brief information about capacity factor.

Capacity factor of a wind farm can be defined as the ratio of electricity generated in a certain time to electricity generated at continuous full-power operation during the same time.

For example, Catalca RES Wind Farm (http://www.sankoenerji.com/eng/index.html#/fields of operation/wind farm) consists of twenty units of Vestas V90 3 MW wind turbines with total capacity of 60 MW. This wind farm generated 150834 Megawatt-hours of electricity in 2009. So, the capacity factor of Catalca RES Wind Farm can be calculated as:

150834 MWh / (60 MW * 8760 h)= %28,7

After this brief information, lets take a look at the top 10 wind farms in Turkey in 2009 in terms of capacity factor:

As it can be seen from the list, Bilgin Enerji Yatirim Holding A.S's Bandirma Wind Energy Power Plant (BARES) leads the way with a capacity factor of 41,96%. BARES consists of 20 units of GE 1,5MW wind turbines. You can find detailed information about this WPP in http://www.bilgin.com.tr/eng-bandirma.htm .

BARES is followed by Keltepe RES with a capacity factor of 38% and Bores with a capacity factor of 35,6%.

The other wind farms that are achieved to hold a place in this list are Yuntdag RES, Mare RES, Camseki RES, Alize Enerji RES, Karakurt RES, Akbuk RES and Catalca RES.

Note 1) Downtime is neglected while calculating capacity factors. Capacity factors are calculated by taking yearly production on basis of 365 days.

2) Barres, Keltepe, Bores, Yuntdag, Mare-Res, Camseki, Alize, Karakurt, Akbuk, Catalca, Tepe, Datca, Burgaz, Duzova, Ayyildiz, Sayalar, Sebenoba, Samli, Mazi, Bandirma, Lodos, Ares, Belen, Sarikaya, Bahce and Soma wind power plants' production rates are taken into consideration while preparing this ranking.

A.Yigit NEPHAN

22.07.2010

Notes from WWEA's World Wind Energy Report 2009

2010-07-13T04:41:00.000-07:00

I had taken some notes while reading World Wind Energy Report 2009 which was published by World Wind Energy Assiciation. Now, I would like to share these notes with you:

- Growth rate of wind energy industry in terms of installed capacity was 31,7 % which can be stated as the highest rate since 2001.

- China was the pioneer country in terms of adding 13800 MW capacity within one year.

- The USA was the number one in terms of total installed capacity followed by China and Germany.

- Asia had 40,4%, North America had 28,4% and Europe had 27,3% shares of new installations.

- Investments in wind energy gained momentum in spite of the global economic crisis. So, the crises had no negative impact in the development of wind energy industry.

- The finance sector had learned that the investment in wind energy is a low-risk investment.

- The highest growth rate was seen in Mexico (~400%), followed by Turkey (132%) which had the highest rate in previous year, China (113%) and Morocco (104%).

- 340 Terawatthours was produced with all wind turbines installed by the end of 2009. This amount can supply 2% of the global electricity demand or the electricity demand of Italy which had the seventh largest economy of the world.

- Continental shares in new installed capacity was as follows in 2009: Asia 40,4%, North America 28,4%, Europe 27,3%, Latin America 1,9%, Australia Pacific 1,4%, Africa 0,4%.

- Continental shares in total installed capacity was as follows: Europe 47,9%, Asia 25,1%, North America 24,2%, Australia Pacific 1,5%, Latin America 0,9%, Africa 0,5%.

Reference:
- World Wind Energy Report 2009 ( http://www.wwindea.org/home/images/stories/worldwindenergyreport2009_s.pdf ). Report. World Wind Energy Association. February 2010. Retrieved 22 March 2010.

A.Yigit NEPHAN
13.07.2010

Path Dependency and Wind Energy Industry Part III: Siemens Wind Power A/S

2010-07-07T05:00:00.000-07:00

In second section of my article, I had given brief information about Enercon GmbH ( http://www.windonline.org/2010/07/path-dependency-and-wind-energy.html ) in terms of path dependency and factors directly effecting it.

Here in third part, you will be able to find evaluation of Siemens Wind Power A/S in terms of path dependency and factors directly effecting it.

Siemens Wind Power A/S

Siemens was established on 12 October 1847 in Germany. Inventor of telegraph, Werner von Siemens named his company as Telegraphen-Bauanstalt von Siemens & Halske.
As it can be seen in Table 1.1, Siemens' managerial intentionality to expand in global arena resulted in acquisiton of many companies or mergers, especially beginning from 2000.

Until 1970, although there was not any merger or acquisition, Siemens expanded its business in many different areas by using its financial power as an extension of resource advantage theory. During World War II, Siemens had good relationship with the regime in Germany and benefited from this situation economically (Url-1).

Just after the war, Siemens diversified its business by feeding from its economic power which was relatively constructed by the help of the regime in Germany. So, actor-network theory shaped Siemens’ decision in a path creating way. Not only its economic power, but also demand from the market shaped its decision.

Table 1.1: Siemens’ Acquisition and Merger

The main subject that is going to be discussed is Siemens Wind Power A/S. Siemens acquired Bonus Energy in 2004 to enter wind energy business. For it is totally new business area for Siemens, this decision can be considered as a path creating one. Siemens entered market by acquiring Bonus Energy to derive benefit from its resource, knowledge and experience advantage. Bonus Energy was the first manufacturer who built offshore wind turbines in 1990s. So, Siemens focused their developments on offshore wind turbines and became market leader in terms of installed capacity. It seems that Siemens is going to continue to focus on offshore wind turbine development and try to keep its leadership as a result of actor-network theory and managerial intentionality. Siemens Wind Power A/S’s vision is to be best at wind industry. Here below, you can find Energy Farming International’s World Market Forecast of Wind Industry in terms of MW installed per annum. According to this estimation Siemens is going to increase its position in offshore wind market which can be achieved by path dependent decisions sourcing from know-how and experience gained in industry and which are free-from behavioural and technological lock-in. On the other hand, another information that can be clearly seen from this table is that wind energy industry will continue to grow.

Table 1.2: Energy Farming International’s World Market Forecast of the Offshore Wind Industry December 2008

Summary of historical development of Siemens Wind Power A/S can be found below in Table 1.3.

Table 1.3: Siemens and Factors Effecting Path Dependency

To sum up, there are a lot of path creating decisions realized within Siemens Wind Power A/S in micro scale. In macro scale, it can be considered that Siemens Wind Power A/S contiuned that the tradition inherited from Bonus Energy on a path dependent way. If we look at the picture from Siemens Group’s perspective, it can be surely stated that a path creating actions are adopted for company branched into many different business areas in macro scale.

Abbreviations

ANT : Actor Network Theory

BL : Bootlegging

LI : Lock-in

MI : Managerial Intentionality

MIS : Micro Scale

MAS : Macro Scale

OL : Organizational Learning

PD : Path Dependent

PC : Path Creating

RAT : Resource Advantage Theory

References

Prager, L. D., 2007: Poop Culture: How America Is Shaped by Its Grossest National Product. Feral House, Los Angelas, CA.

Raghu, G., and Karnoa P., 2001: Path Dependence and Creation. In Path Dependence and Creation. Lawrance Erlbaum Associates, London, UK.

Wilsford, D., 1994: Path Dependency. Journal of Public Policy. Vol.14, No.3, pp.251-83

Callon, M., 1998: Introduction. The Laws of the Market, London, Blackwells.

Barnes, W., Gartland, M.,, Stack M., 2004: Old Habits Die Hard: Path Dependency and Bevioral Lock-in. Journal of Economic Issues. Vol.14, No.2, pp.371

Knight, K. E., 1967: A Deep Descriptive Model of the Intra-Firm Innovation Process. The Journal of Business. , Vol.40, pp.478-496

Rycroft, R., Kash, D., 2002: Path Dependence in the Innovation of Complex Technologies, Technology Analysis and Strategic Management, Vol.14, no.1

Url-1 , http://www.energy.siemens.com/hq/en/power-generation/renewables/wind-power/wind-turbines/ accessed at 17.01.2010.

Stack, M., and Gartland, M. P., 2003: Path Creation Path Dependency and Alternative Theories of the Firm. Journal of Economic Issues. Vol. XXXVII, no.2, pp.487.

Dickson, P. D., 2003: Toward a General Theory of Competetive Rationality. Journal of Marketing. Vol.56, pp.75

Hunt, S. D., and Morgan, R. M., 1996: The Resource-Advantage Theory of Competition: Dynamics, path dependencies, and Evolutionary Dimensions. Journal of Marketing. Vol. 60, pp.107

Greener, I., 2002: Theorising Path-Dependency: How Does History Come To Matter in Organizations. Management Decision. Vol.40, pp.616

Hutzschenreuter, T., Pedersen, T., Volberda, H. W., 2007: The Role of Path Dependency and Managerial Intentionality: A Perspective on International Business Research. Journal of International Business Studies. Vol.38, pp.1058

Augsdorfer, P., 2005: Bootlegging and Path Dependency. Science Direct Research Policy, pp.1-9. Retrieved February 2010 from http://www.sciencedirect.com

A.Yigit NEPHAN

07.07.2010

Path Dependency and Wind Energy Industry Part II: Enercon GmbH

2010-07-03T03:28:00.000-07:00

In first section of my article, I had given a brief information about path dependency ( http://www.windonline.org/2010/06/path-dependency-and-wind-energy.html ) and Vestas Wind Systems A/S in terms of path dependency and factors directly effecting it.

Here in second part, you will be able to find evaluation of Enercon GmbH in terms of path dependency and factors directly effecting it.

Enercon GmbH
Enercon was founded by Aloys Wobben in 1984. Its established as a wind turbine manufacturer company. Their first product was Enercon E-15/16, 55 kW wind turbine. Enercon sold its first ten wind turbines in 1986. When Enercon was established, it did not have its own production facility. They only had a design of wind turbine and outsourced production in those days. If there was not any subcontractors to manufacture these turbines then Enercon wouldn’t have a chance to manufacture its own product. So it existence has a close relationship with actor-network theory. After having required financial background, managerial intentionality was going to shape future of the company. The important point about Enercon is that everything started with wind energy business for company. There was not any business area that company have operations in.

After two years, Enercon established own production facility in 1988 after gaining required background. It is considered to be path creating decision for company sourcing from managerial intentionality. It was also about to make company have resource advantage not only in knowledge and experience terms but also in means of manufacturing their own designs. Just after this period, Enercon developed E-17 / 80 kW and E-32 / 300 kW wind turbines. By the help of organizational learning which is shaped by knowledge and experience gained from E-15/16 wind turbines, helped the development of this product (Url-1).

In 1991, Enercon developed the prototype of gearless wind turbines. This development could be considered as a path creating development for Enercon was the first company having considerable amount of market share that manufactured gearless wind turbines, although in terms of wind turbines manufacturing, it can be considered as a path dependent decision.

In 1993, Enercon started serial production of E-40 / 500 kW wind turbines. They also started construction of a plant to produce their own rotor blade. Investments on wind energy business gained momentum for Enercon because actors in the market is inclined to maintain their interest to company products.

In 1995, Enercon started serial production of gearless E-30 / 230 kW in India. It is first time that they started to produce wind turbine components on a continent other than Europe. Managerial intention to internalization was to key to this decision which can be considered as a path creating one. They also tested a prototype wind turbine which is E-66 / 1500 kW on company site in Aurich. So meanwhile, knowledge and experience through organizational learning continued to shape company’s future.

In 1996, Enercon purchased a production facility in Brazil. As the demand from market grew, managerial intention was to expand which resulted in path creating decisions in terms of entering new markets.

In 1997, Enercon installed a wind powered desalination plant in Tenerife in Germany. This development can be considered as a path creating decision for the wind turbine manufacturer for it is the first time it focused on another business area. On the other hand, for it is a wind powered desalination, it could also be considered that the company was still walking on the path that it started its journey on.

Enercon invested on another manufacturer company to produce E-66 / 1500 kW wind turbines in Magdeburg in Germany in 1998. By using its resource advantage, Enercon continued its investments in wind energy business.

In 2001, Enercon built foundations and towers for E-112 / 4,500 kW wind turbine prototypes and established a production facility in Magdeburg-Rothensee. Its total production area reached up to 285,000 m2.

Enercon established rotor blades manufacturing facility in Turkey in 2002 and erected the first E-112 / 4,500 kW prototype in Magdeburg-Rothense. Enercon came on to an agreement with Demirer Holding in those days. The main idea of the frame agreement between both companies was to work together on Demirer Holding’s wind farm projects in Turkey. So, Turkish actor played an important role in terms of making Enercon open a facility in Turkey to reduce its production cost. So, actor in the network was considered to shape Enercon’s decision which was a path creating one. By the advantage of know-how gained in establishing facilities and Turkish investor’s market awareness, Enercon realized this path creating decision.

A rotor blade manufacturing facility for it also built in Magdeburg-Rothense in 2003.

In 2004, Enercon sold its first E 70 / 2 MW wind turbine with new rotor design. Also two wind farm of E-112 were constructed near Emden in Germany. Enercon also installed first near shore E-112 wind turbine in this year. This development can be considered as a path creating development because onshore and near shore wind turbine technologies have some certain differences.

In 2005, a concrete tower facility opened in Emden. It can considered as distinct path creating decision for the tower production prices was considerably decreased and complexity level of production phase of towers decreased. After this progress, worldwide production area was expanded to 370,000 m2. 6 MW Enercon E-112 wind turbine was developed. A prototype of E-82 was erected near Aurich in Germany. So, Enercon continued to realize path dependent decisions sourcing from knowledge, experience gained from wind energy business.

Enercon built a new headquarter in Aurich in 2006. Not only they further developed E-112 and E-126 wind turbines but they also built prototypes of E-44 and E-53 within this year.

New production facility was opened in Portugal in 2007. One year after development, first prototype of E-112 6 MW prototype was installed.

In 2009, they started production at new factory in Gusszentrum Ostfriesland. They had completed and commissioned a hydro power plant in Raguhn in Germany and expanded facilities in Magdeburg. Construction of hydro power plant can be considered as a path creating decision for another business area was chosen for investment.

Summary of historical development of Enercon GmbH can be found below in Table 1.1.

Table 1.1: Enercon and Factors Effecting Path Dependency

To sum up, Enercon continued on the path, that it started in wind energy business. Although it invested on hydro power and desalination plant, its main focus was always wind energy business. Although these investments can be considered as a path creating decisions, path dependent decisions shaped the future of Enercon beginning from its establishment up to now in general means in macro scale. It can be also indicated that technological lock-in was not a matter of subject in any phase of company’s existence.

Abbreviations

ANT : Actor Network Theory

BL : Bootlegging

LI : Lock-in

MI : Managerial Intentionality

MIS : Micro Scale

MAS : Macro Scale

OL : Organizational Learning

PD : Path Dependent

PC : Path Creating

RAT : Resource Advantage Theory

References

Prager, L. D., 2007: Poop Culture: How America Is Shaped by Its Grossest National Product. Feral House, Los Angelas, CA.

Raghu, G., and Karnoa P., 2001: Path Dependence and Creation. In Path Dependence and Creation. Lawrance Erlbaum Associates, London, UK.

Wilsford, D., 1994: Path Dependency. Journal of Public Policy. Vol.14, No.3, pp.251-83

Callon, M., 1998: Introduction. The Laws of the Market, London, Blackwells.

Barnes, W., Gartland, M.,, Stack M., 2004: Old Habits Die Hard: Path Dependency and Bevioral Lock-in. Journal of Economic Issues. Vol.14, No.2, pp.371

Knight, K. E., 1967: A Deep Descriptive Model of the Intra-Firm Innovation Process. The Journal of Business. , Vol.40, pp.478-496

Rycroft, R., Kash, D., 2002: Path Dependence in the Innovation of Complex Technologies, Technology Analysis and Strategic Management, Vol.14, no.1

Url-1 , accessed at 12.01.2010.

Stack, M., and Gartland, M. P., 2003: Path Creation Path Dependency and Alternative Theories of the Firm. Journal of Economic Issues. Vol. XXXVII, no.2, pp.487.

Dickson, P. D., 2003: Toward a General Theory of Competetive Rationality. Journal of Marketing. Vol.56, pp.75

Hunt, S. D., and Morgan, R. M., 1996: The Resource-Advantage Theory of Competition: Dynamics, path dependencies, and Evolutionary Dimensions. Journal of Marketing. Vol. 60, pp.107

Greener, I., 2002: Theorising Path-Dependency: How Does History Come To Matter in Organizations. Management Decision. Vol.40, pp.616

Augsdorfer, P., 2005: Bootlegging and Path Dependency. Science Direct Research Policy, pp.1-9. Retrieved February 2010 from http://www.sciencedirect.com

A.Yigit NEPHAN
03.07.2010

Path Dependency and Wind Energy Industry Part I: Vestas Wind Systems A/S

2010-06-27T13:14:00.000-07:00

My graduation project's subject was "Path Dependency in Wind Energy Industry". In first section of my graduation project I explained path dependency and factors directly effecting it. For it is a very detailed section, I am just going to give you a brief information about this section and focus on evaluation of companies in wind energy industry in terms of path dependency.

Preager (2007) defined path dependency as the decisions made by an individual or a group of people is directly effected by the decisions made in the past whether the past circumstances are still relevant or not.

Path dependency can result results in path dependent or path creating decisions/actions. There are some certain factors that directly effect whether a decision/action is going to be a path dependent or a path creating one. These factors can be stated as:

• Resource Advantage (The Resource Advantage Theory)
• Organizational Learning (Knowledge and Experience)
• Actors–Network (Actor–Network Theory)
• Lock-in (Behavioral Lock-in, Technological Lock-in)
• Managerial Intentionality
• Bootlegging

If you are interested in these subject, you can find detailed information about these topics in internet. Here below, you can find evaluation of Vestas Wind Systems A/S in terms of path dependency and factors directly effecting it.

Vestas Wind Systems A/S

H.S. Hansen bought the local blacksmith workshop in 1898 on the west coast of Denmark which is considered to be the first step on the path of establishing Vestas.

In 1928 Smith Hansen and his son made test window frames. After the approval of buyer, they started to produce steel frames. After considerable amount of orders from the market, they were able to establish Dansk Staalvindue Industri which was making steel window frames for industrial buildings. They had expanded this business until World War II, when occupation and rationing restricted metal supplies. It can be indicated that role of buyers in this case can be considered as an effect of network which was indicated in Actor-Network Theory. Due to high demand from network, Hansen was able to develop his business. World War II can be also considered as a network effect which later than blocked company’s expansion.

After the end of World War II in 1945, Smith Hansen, his son Peder and his colleagues established VEstjysk STaalteknik A/S which later then shortened to Vestas. This compony’s main focus was to make household appliances such as mixers and kitchen scales (Url-1). Wold War II’s network effect resulted in path creating decision for Hansen family and colleagues. On the other hand, managerial intentionality plays an important role on such business switching decisions.

In 1950, Peder got a worldwide patent for Vestas’ milk urn cooler. This can be considered as the first of Vestas on the path of internalization. It was indicated on www.vestas.com that “Vestas’ employees… know that agricultural equipment must be robust and practical. They apply their know-how and experience to produce equipment they know customers will want”. So it is indicated they know-how and experience collected beginning from 1945 had shaped their success in the market. Organizational learning and knowledge and experience gained through it beginning from 1928, resulted in Peder’s patent in same industry which can be considered as a path dependent decision. For they also know buyers, suppliers and logistic channels for this industry, Actor-Network is considered to shape Peder’s decision on patenting milk urn cooler. Vestas exported their first products mainly to Finland, Germany and Belgium.

In 1956, Peder’s brother Soren Hansen became a partner to Burmeister &Wain Shipyard in terms of developing new type of cooler for turbo charges. So, Vestas had opened a new track for their product range. These turbo charger coolers became the star of Vestas product range in terms of quantity of sales. By using their experience on coolers, they adapted their know-how and experience to turbo charges. Managerial intention to expand business to a new track resulted in this investment. They had achieved success in such a short time by the help of their resource advantage in cooler manufacturing process.

In 1959, Peder Hansen bought all shares of Vestas. This step increased the power of managerial intentionality and focused company’s decision only to Hansen family. Although their offices and warehouse burnt in 1960, they achieved to increase their turnover than previous years and they established a new company.

Due to market demand in 1968, they started to manufacture hydraulic cranes for trucks. They had exported this product to 65 countries. In these years, Vestas’ 96 percent of production was these hydraulic cranes. Buyers that created the demand in market (actors) and market forces (network) broke the relatively technological lock-in in production line and relatively behavioural lock-in of employees by the help of this managerial decision. It can be also considered that managerial intention was resulted in a path creating decision.

1971 can be considered as a new era for Vestas. Their first engineer which they employed for their hydraulic crane factory, Birger Madsen developed a technology turning wind energy into electricity. Vestas was used their cranes to erect different types of wind turbines before Birger Madsen’s development. By the help of their network in hydraulic crane business, they were able to meet wind energy industry. It is not indicated in any source, but it can be considered that Birger did not share his idea with management until it came to some maturity level. So, period before sharing his thoughts with top management can be given as an example to bootlegging. Managerial intention on this subject had direct effect to shape future of Vestas.

Vestas carried out their experiments about wind turbines in secret. They had built their first a giant egg whisk like prototype in 1978 which was failed to produce sustainable, economical electricity. Birger used his know-how and experience which was gained in crane business while erecting wind turbines and considered to be deficient to develop this technology.

On these days, two blacksmiths Karl Erik Jorgensen and Henrik Stiesdal developed a new wind turbine model. Because of the lack of financial power, they requested Vestas to test their design. Vestas accepted this offer and invited these two blacksmiths to work with them. In 1979, Vestas sold and installed its first wind turbine with specifications of 10m rotor, and 30 kW capacity. The resource advantage theory showed itself on this subject for Vestas had required financial power and means to realize Karl’s and Henrik’s development while they did not.

In 1980, Vestas sold two wind turbines to American company Zond. After the autumnal storms in certain restrict of Denmark, Vestas realized that there was a design flaw in their products and decided pay compensation to their customers.

Vestas found the design flow in 1981 after one year investigation. To solve this problem, Vestas decided to produce its own fibreglass components with high quality. A certain problem in their current network caused Vestas to choose a path-creating alternative which was later fed by their know-how and experience in wind turbine components. After the tax breaks in the USA, Zond ordered 155 wind turbines. After a short period they had ordered another 550 wind turbines. A positive development in the network helped Vestas to sell considerable amount of wind turbines. Vestas increased number o of employees from 200 to 870 after this progress. Vestas’ agricultural background played an important role for Zond to choose Vestas in terms of having ability to manufacture strength and robust products. It can also be considered that their know-how and experience in agricultural industry played an important role for Zond to choose Vestas wind turbines.

In 1985, Vestas manufactured first pitch-regulated wind turbines which increases the efficiency of wind turbines. The other innovation was fine-tuning system of angle of the blades which was named as optitip. Technology lock-in was never a matter of subject for Vestas for they had developed many Technologies for wind turbines. After starting to manufacture product with these innovation, Zond company ordered another 200 wind turbines which was subject to be delivered on 1st of December. On the second shipment of order, shipping company went bankrupt. Vestas missed the deadline fr this reason and Zond refused to accept wind turbines. Shipping company as an actor in Vestas’s network caused deep injuries for the company.

In 1986, Vestas faced problems for they a huge stock of wind turbines in Denmark. Danish government lowered the tax on wind turbines to make Vestas overcome this situation.

Vestas decided to sell group companies, other then the company focused on wind energy in 1986. After this decision, many group companies had been sold and Vestas Wind Systems A/S was born. After a few months, this new company received orders for six different projects in India by the help of Danish State-Financed Aid Agency. For wind energy business had the biggest share among other businesses, managerial intention directed companies future into a path dependency in terms of focusing on wind energy industry.

Vestas lowered its blades’ weight from 3800 kg to 1100kg in 1990. Another American company ordered 342 wind turbines for their wind farm in California. As result of many years of organizational learning which resulted in considerable amount of knowledge and experience, Vestas added another technological innovation to its wind turbines.

Vestas sold its 1000th wind turbine in 1991. It had exported wind turbines all around the world, from India to Great Britain to New Zealand. As its network expanded, there would be more incentives that effect company directly according to Actor-Network Theory.

Vestas came up with 600 kW wind turbines and other innovations in 1994. In 1995, Vestas constructed one of the first offshore wind power park in Denmark which can be considered as a path dependent decision for both onshore and offshore wind turbines had many similarities.

In 1997, Vestas manufactured the world’s largest commercial wind turbine which produces 1,65 MW per hour.

In 1998, Vestas went public on Copenhagen Stock Exchange. It also became te world’s biggest company in terms of installed capacity. Only one year after, Vestas had introduced V80-2 MW wind turbines. Top management’s decision on this subject can be considered as a path creating decision for shareholders decisions would also be effective while managing Vestas.

In 2000, Vestas got the largest order to date with 1800 turbines for Gamesa Eolica S.A. Vestas also offered shares to its employees which is later accepted by 80 percent of employees. Vestas had supplied around 26 percent of the installed capacity in this financial year (Url-2). Actors in Vestas started to have a voice in the management by the help of this progress.

Vestas constructed world’s largest offshore wind farm with installed 80 wind turbines in 2001. These turbines did not work properly and most of them was replaced. The problem that Vestas faced, was an expensive lesson for the company. For Vestas’s mastery was in onshore wind turbines and there were slight difference in manufacturing process of onshore and offshore wind turbines, technological lock-in in onshore wind turbines could be considered the main reason of this problem.

In 2003, Vestas introduced 1,8 MW, 2 MW and 3 MW Vestas V90 wind turbines which brought down the cost per kWh of electricity. In 2004 Vestas merged with NEG Micon which another big wind energy company from Denmark. Market share was increased up to 32 percent with this merge, but Vestas announced loss for this financial year. After this merge, knowledge and experience pool was expanded and possible behavioral lock-in for employees was removed indirectly. On the other hand, increasing resources provided many advantages for the success in the market.

2005 was a though year for Vestas due to high steel prices and delays on delivery time of suppliers, but Vestas achieved to awarded its biggest order to date from Horizon Wind Energy in USA. While one of the actors in the market (steel) caused a very big problem for Vestas, another actor (customer) helped Vestas overcome those though days.

In 2006, Vestas opened a blade factory in China to meet increasing demands. Vestas also lost considerable amount of money because of the repair costs in guarantee period of wind turbines. After training 80 engineers only to repairing wind turbines, it achieved to increase its share price by 10 percent. Managers intention to solve problem by the help of path creating decisions helped Vestas overcome another though period.

2008 was a golden year for Vestas. It achieved record financial results by having an operatiing profit of EUR 668,000,000.

Summary of historical development of Vestas Wind System A/S can be found below in Table 1.1.

Table 1.1: Vestas and Factors Effecting Path Dependency.

In general means, Vestas continue to protect its leader position by the help of path creating decisions feeding from company’s organizational learning skills and ability to adapt itself to actors’ and network’s demands both in micro and macro scales.

Abbreviations

ANT : Actor Network Theory

BL : Bootlegging

LI : Lock-in

MI : Managerial Intentionality

MIS : Micro Scale

MAS : Macro Scale

OL : Organizational Learning

PD : Path Dependent

PC : Path Creating

RAT : Resource Advantage Theory

References

Prager, L. D., 2007: Poop Culture: How America Is Shaped by Its Grossest National Product. Feral House, Los Angelas, CA.

Raghu, G., and Karnoa P., 2001: Path Dependence and Creation. In Path Dependence and Creation. Lawrance Erlbaum Associates, London, UK.

Wilsford, D., 1994: Path Dependency. Journal of Public Policy. Vol.14, No.3, pp.251-83

Callon, M., 1998: Introduction. The Laws of the Market, London, Blackwells.

Barnes, W., Gartland, M.,, Stack M., 2004: Old Habits Die Hard: Path Dependency and Bevioral Lock-in. Journal of Economic Issues. Vol.14, No.2, pp.371

Knight, K. E., 1967: A Deep Descriptive Model of the Intra-Firm Innovation Process. The Journal of Business. , Vol.40, pp.478-496

Rycroft, R., Kash, D., 2002: Path Dependence in the Innovation of Complex Technologies, Technology Analysis and Strategic Management, Vol.14, no.1

Url-1 <http://www.vestas.com/ >, accessed at 10.01.2010.

Stack, M., and Gartland, M. P., 2003: Path Creation Path Dependency and Alternative Theories of the Firm. Journal of Economic Issues. Vol. XXXVII, no.2, pp.487.

Dickson, P. D., 2003: Toward a General Theory of Competetive Rationality. Journal of Marketing. Vol.56, pp.75

Hunt, S. D., and Morgan, R. M., 1996: The Resource-Advantage Theory of Competition: Dynamics, path dependencies, and Evolutionary Dimensions. Journal of Marketing. Vol. 60, pp.107

Greener, I., 2002: Theorising Path-Dependency: How Does History Come To Matter in Organizations. Management Decision. Vol.40, pp.616

Hutzschenreuter, T., Pedersen, T., Volberda, H. W., 2007: The Role of Path Dependency and Managerial Intentionality: A Perspective on International Business Research. Journal of International Business Studies. Vol.38, pp.1058

Augsdorfer, P., 2005: Bootlegging and Path Dependency. Science Direct Research Policy, pp.1-9. Retrieved February 2010 from http://www.sciencedirect.com

A.Yigit NEPHAN

27.06.2010

Nokia Ovi Store: Wind Online Widget

2010-05-30T11:13:00.001-07:00

From now on, you will be able to follow Wind Online from Wind Online Widget which can be directly sent to your Nokia mobile phone from http://store.ovi.com/publisher/NEPHAN+Insaat/

You can find a screenshot of Nokia Wind Online Widget below:

Investment Cost of Wind Turbines

2010-05-23T09:33:00.000-07:00

The popularity of wind energy is increasing day by day. If we look at the past 18 years, we can easily see that there is an average annual growth rate of more than 25 percent in terms of number of wind power plant projects realised within a year.

After the increase in fuel prices within past two years and improvoments in turbine technology, wind energy became more populer and competitive among other energy sources such as coal and natural gas. It is a fact that competitiveness of wind energy against other sources varies according to wind regime of a certain location.

Apart from that, for the turbine technology and assembly methods are too different for offshore projects, we have to analyse the economics of onshore wind projects and offshore wind projects seperately.

According to EWEA’s Wind Energy – The Facts document published on 13.02.2009, average investment cost of an installed onshore turbine differs significantly between countries in Europe, from around €1 million/MW to €1,35 million/MW. These costs include not only mechanical installation costs, but also all additional costs for foundations, electrical installation and consultancy.

According to EWEA’s study, the cost structue of a typical 2 MW onshore wind turbine installed in Europe, is as follows:

Turbine (ex Works) : 75,6 %
Foundations : 6,5 %
Electric Installation :1,5 %
Grid Connection : 8,9 %
Control Systems : 0,3 %
Consultancy : 1,2 %
Land : 3,9 %
Financial Costs : 1,2 %
Road : 0,9 %

One of the important things that have to be pointed out is that, this cost structure is sensitive to global demand for wind turbines. As the global demand increases, price of turbines and their share in cost structure increase with rising supply constraints.

On the other hand, average investment cost of an installed offshore turbine differs significantly between countries in Europe, from around €2 million/MW to €2,2 million/MW today. The reason why investment cost of offshore turbines are higher is that foundations, transformer stations and transmission cables of offshore turbines are more expensive.

Although turbines are becoming taller and technology of turbines advance, investment costs of turbines are expected to decrease by 10% by 2015 and it is obivous that these developments are going to increase demand wind energy solutions in near future.

A.Yigit NEPHAN

23.05.2010

References:

1. EWEA, (2009). European Wind Energy Association, Wind Energy - The Facts, http://www.ewea.org

2. Gokcinar, R.E., (2008). Ruzgar Enerjisi Maliyetleri ve Tesvikleri, December 17-19, Istanbul

Preliminary Acceptance of Wind Power Plant Projects in Turkey

2010-05-21T07:29:00.000-07:00

I had visited Energy Market Regulatory Authority in Ankara/Turkey yesterday with a colleague of mine to hand over electricity, machine and construction works files required for preliminary acceptance of our wind power plant project in Hatay.

We had handed over three copies of each file which had a total weight of 42,5 kgs. After evaluation by authorized engineer who is going to be appointed by chairman, we are going to be informed about section(s) which is/are required to be revised. I hope we won’t face such a situation and get preliminary acceptance as soon as possible. As Thomas Jefferson indicated “I’m a great believer in luck and I find the harder I work, the more I have of it”. So in the end, we are going to get a result which is going to be measure of our efforts.

For we had a limited time, I was also not able to check every file whether there was any missing document or not. So, I am not sure about the result that we are going to get, but I can inform you about files which have to be prepared and handed over to get preliminary acceptance of a wind turbine power plant project in Turkey directly.

According to Regulation of Power Plant Projects which is published by Ministry of Energy and Natural Resources, electricity file has to include:

1) Confirmity document from General Directorate of Electrical Power Resources Survey and Development Administration,

2) Power calculations for (inner requirement) transformer,

3) Compensation calculations according to the transformer rated power,

4) Short circuit calculations,

5) High-voltage, low-voltage cable calculations showing voltage drop, current bearing and short circuit control,

6) Lighting and emergency lighting calculations,

7) Grounding and lightning rod plant calculations,

8) Overall site plan layout,

9) High-voltage and low-voltage one-line diagrams,

10) High-voltage and low-voltage power distribution layout,

11) Lighting and emergency lighting layout,

12) Grounding and lightning rod plant layout,

13) General, top, front and side views and cross section details of amplifier and transformers for inner requirements with cable connections, measurements,

14) General and cross sectional view of High-voltage metal-glad cells,

15) Approved projects by revelant agencies according to coordination agreements prepared by taking voltage level of substations and distribution center’s feeder cells into account,

16) Fire detection and extinguishing system plans.

Machine file has to include:

1) Confirmity document from General Directorate of Electrical Power Resources Survey and Development Administration,

2) Scaled overall site plan,

3) Scaled full assembly and three-view pictures,

4) Scaled tower assembly and three-view pictures,

5) Emergency and/or black-start diesel generator mounting pictures (three view),

6) Strength calculations and noise prevention system,

7) Workers health and safety system of wind turbines,

8) Cross-sectional view of filters,

9) Fire-extinguishing system for fire tube hydrant and / or foam instalment,

10) Unit bearing lubrication, compressed air and / or instrument air, cooling-ventilation system, the generator cooling system, hydraulic system process and instrumentation diagram,

11) Symbols and encodings in process and instrumentation diagram.

Construction file has to include:

1) Confirmity document from General Directorate of Electrical Power Resources Survey and Development Administration,

2) Static calculations concerning structures, foundation and towers,

3) Concrete and steel calculations,

4) Geotechnical, geological, seismic, seismicity, geophysical and similar reports and soil survey reports, calculation of soil improvement works,

5) Map sheet showing the location of plant in Turkey,

6) Plant sheet (1/25.000),

7) Overall situation and turbine plans with coordinates,

8) Projects concerning main structure and other structures,

9) Infrastructure projects,

10) Architectural, cross-sectional view projects, plans, details of structures,

11) Excavation plans, foundation and anchor projects,

12) Switchyard’s and transformer building’s architectural projects,

13) Technical specifications,

14) Access roads projects.

After providing all of these documents indicated above, you can get preliminary acceptance document from governing department in Turkey, if it is prepared comformable to other general clauses indicated in Regulation of Power Plant Projects.

P.S. Regulation of Power Plant Projects which is prepared by The Republic of Turkey Ministry of Energy and Natural Resources can be downloaded from

http://www.enerji.gov.tr/mevzuat/3154/Elektrik_Tesisleri_Proje_Yonetmeligi.pdf

A.Yigit NEPHAN

21.05.2010

Turkish Wind Energy Market (Q1 2010)

2010-05-18T02:05:00.000-07:00

Mr.Murat Durak who is Chairman of Turkish Wind Energy Association, had prepared a document for wind power projects under operation in Turkey. You can download this document by clicking here .

By analyzing data indicated in this document, I was able to see current situation in Turkish Wind Energy Market. I want to share this interesting information with you:

Beginning from 2006, number of wind power projects had increased at least 50% each year. In 2009, 11 wind farm projects were realised.

Although the difference between number of turbines erected in 2008 and 2009 is only three, considrable amount of capacity change between these two years which means that capacity per erected turbine is increased.

In 2008 average capacity per turbines was 1,65 MW where it was 2,31 MW in 2009. 0,5 MW - 0,6 MW turbines was dominating the so-called market between 1998 – 2003.

If we take number of projects into account, Izmir gets the lion’s share with 29% share among other cities in Turkey, followed by Istanbul and Canakkale. Nearly the sum of projects in Istanbul and Canakkale is equal to the number of projects in Izmir.

By taking number of MWs installed into account, we can easily see that Izmir gets the lion’s share with 25%, followed by Istanbul (17%) and Manisa (12%).

By May 2010, total number of projects under operation in Turkey is 33. There are other 11 projects which are subject to be commissioned in 2010.

By taking the number of projects under operation, It can easily be seen that market leader in Turkey is Enercon by being WTG manufacturer of 40% of projects realised , followed by Vestas with 30% market share.

Number of turbines installed is another data which can be taken into account while analyzing Turkish Wind Energy Market.

With more than 310 turbines installed until May 2010, Enercon is the number one in Turkish market in terms of number of turbines installed.

If we take a closer look to market by taking installed capacity into account, we can easily say that Vestas is the market leader with around 321 MWs installed, followed by Enercon and Nordex.

As it can be easily seen, Vestas leads the way with 30% market share in Turkish Wind Energy Market in terms of installed capacity.

Fact Sheet of Turkish Wind Energy Market (May 2010):
· Total Installed Capacity: ~1080 MW
· Number of Wind Farms Under Operation: 33
· Number of WTE Installed: 631

Here in this document, I tried to reflect current situation of Turkish Wind Energy Market, if you have any comments please do not hesisate to contact me.

A.Yigit NEPHAN
18.05.2010

ICCI 2010

2010-05-15T05:38:00.000-07:00

ICCI 2010 was held in the WOW Convention Centre, Istanbul on May 12-13-14, 2010. ICCI is Turkey’s biggest energy and environment fair and conference . It aims to present a general outlook on the energy sector worldwide and in Turkey.

I also attended this fair on May 14,2010. Most of the companies attended on this fair was mainly focused on wind energy sector. Acciona WindPower, Enercon, Gamesa, GE Energy, Sinovel, Nordex AG, Soyut Wind, Suzlon and Vestas were the wind turbine manufacturer exhibitors.

The most innovative WTGS was Gamesa's G10X - 4,5 MW in my opinion. The reasons why this wind turbine differs from other turbines are that:

- It has hybrid concrete and steel tower which is named as ConcreTower. The concrete sections of tower are prefabricated to make it easy to transport and assemble it in the field.

- At the back of Gamesa G10X's nacelle, there is a small auxiliary crane named FlexiFit which raises and lowers nacelle's main modules. It also provides great flexibility to assemble nacelle modules and provide service for G10X wind turbnes.

- Two sectional blade technology: Innoblade. Blades of G10X consist oftwo sections assembled by screw joints.

- Blade Hoisting System: Blades of G10X are hoisted seperately with a pulley system which only requires the help of small mobile crane.

I was also glad to see Garrad Hassan's stand in fair. We had procured Garrad Hassan's consulting services many times for assesment of wind turbine locations in certain sites. I had also gotten their WindFarmer Demo program. After giving a try to this program, I am also going to share my thoughts.

It seems that wind energy is going to keep dominating ICCI fairs in near future. It also seems that organizer Sektorel Fuarcilik will have to account for organizing a new fair that only focuses on wind energy in near future.

A.Yigit NEPHAN

15.05.2010

WTG OEM Market Shares 2009

2010-03-22T02:45:00.000-07:00

The Denmark based consulting company MAKE Consulting announced results of it's WTG OEM Market Shares 2009 research.

According to this research, Vestas kept it's position as the world's no.1 supplier of wind turbines with around 14% market share.

Top 15 companies' market shares can be found in graph below.

The Chinese players have two players in the top 5. For China occupies a unique niche in the world's political economy, I am sure that we are going to see more Chinese players in the top 5 list in the following years.

Research note can be found in http://www.make-consulting.com/latest_research0.html .

A.Yigit NEPHAN

22.03.2010

9th World Wind Energy Conference & Renewable Energy Exhibition

2010-03-11T11:50:00.000-08:00

As I indicated before wind energy workshops & conferences are great chance for attenders to follow new trends and news in sector and meet new manufacturers and potantial customers. You can find detailed information about 9th World Wind Energy Conference & Renewable Energy Exhibition below:

“LARGE-SCALE INTEGRATION OF WIND POWER”

World Wind Energy Conference & Exhibition WWEC, the leading event in wind energy, taking place in a different continent each year, will be held in Istanbul, Turkey from 15 to 17th. of June 2010.

WWEC2010, The 9th World Wind Energy Conference and Exhibition, aims to set up a powerful platform where the major players of wind energy technologies, industries and policies are gathered together to share the latest technologies and information effecting strategic decisions.

The special focus will be on how to integrate large capacities of wind power into existing grid infrastructure and how to adjust grid capacities. Turkey with 80 GW wind projects waiting for permission is an excellent example for the corresponding challenges and opportunities

WWEC Conferences and Exhibition brings together all major players in the sector and provides great networking opportunities with industry leaders, investors, developers, public authorities and worldwide media. The exhibition enhances the visibility of products, brand names and projects and gives direct contact and selling chances to a wide range of potential customers.

CONFERENCE TOPICS

Wind turbine technology, systems, and components
Wind power and other renewable energy system integration and storage
Grid connection
Hybrid systems and small wind turbines
Wind farm planning, onshore, offshore and stand alone
Monitoring, operation and maintenance of wind farms
Manufacturing of wind equipment
National policies on wind energy and renewable energy sources, barriers, incentives
Financing models: Equity, loans, carbon finance
Community power: Ownership models
International programmes
Training and education

http://www.wwec2010.com/giris.php

Designating Technology Strategy of Vestas: Part IV

2010-03-10T10:57:00.000-08:00

In last section of my article series, I am going to designate timing of strategy application and select technology acquisition method for Vestas.

Timing of Strategy Application:

Vestas’ strategy can be defined as primarily aggressive and seconderely opportunist strategy. It is an aggressive strategy because Vestas want any innovation on market depend on them as a leader company on innovation. It is an opportunist strategy because while they are innovating technologies, they are also finding the gap, the niche in the market and fill this gap relatively by the technology they innovated.

1) Aggressive Strategy

2) Opportunist Strategy

Vestas Strategic Preference Model

The reason why I did not stated their strategy as defensive because the demand is higher then the supply, so there no need to go for defensive strategy. Apart from that they do not immitate technology like Chinese manufacturers, they develop technologies in their own R&D facilities. On the other hand, they do not follow dependent strategy because they other not dependent to any other company for as they have many supplier ve transporter alternatives.

Selection of Technology Acquisition Method

As it is stated above Vestas is going to work in current and familiar markets where technologies adapted ranges from current to new (current, familiar, new). According to this information Technology acquiring methods that Vestas can use is shown as blue in Technology Acquisition Methods Avaliable for Vestas diagram.

Internal development is a long very hard process. It is also costly, riskly and it also takes considerable amount of time. In Vestas’ current organizational level there is no need for internal development.

As it is stated before, demand is higher than supply, so if there is any company available, Vestas can buy this company for it has enough capital to buy. Integration process takes a long time but worth for capacity increase and technology integration.

As a general structure of sector, manufacturer do not sell licences to be able to be competitive in growing market. But there is an another option for licencing which can be got from aeronautical sector concerning technologies about aerodynamics. Boeing and some other companies sell licences to wind turbine manufacturer about key innovations related with aerodynamics.

As it is stated before, Danish goverment encourages wind turbine manufacturers work with universities by providing some certain advantages. So, Vestas is generally working with universities in Denmark. On the other hand, they are working with some research centers in some certain quality issues. By the help of these researches, they have a chance to obtain theorical knowledge. On the other hand, there two orgazinations that Vestas is a member of, which are European Wind Energy Association and Danish Wind Power. So innovation network and research consortium is another mean for technology acquisition.

As a result of sector structure, it does not seem to be possible to acquire technology through venture capital. Manufacturers directly buys licences for new ideas.

For the center of technology is Vestas’ R&D facilities, it can be said that there is an internal training process in Vestas. New employers are sent to R&D center as a part of orientation program and get required knowledge about technologies advanced in this center.

Technology Acquisition Methods Avaliable for Vestas

Through out this technology strategy designating process concerning position approach; models, terms and processes are pointed out.

A.Yigit NEPHAN

10.03.2010

Designating Technology Strategy of Vestas: Part III

2010-03-05T11:18:00.000-08:00

In first two sections of my article, I had designated best competitive environment for Vestas and focused on internal and external analysis of Vestas.

In third section, I am going to make selection of competitive strategy and technology to innovate for Vestas by taking previous informations into account.

Selection of Competetive Strategy:

For all the reasons indicated in previous articles, competetive strategy of Vestas is selected as differentiation strategy. Differentiation is aimed at the broad market (Europe) that involves the creation of a product or services that is perceived throughout its industry as unique (unique technologies which are going to be implemented on products, are going to be explained in “Selection of Technology to Innovate” section). Vestas may then charge a premium for its product. This specialty can be associated with design, brand image, technology, features, dealers, network and customers service.

Differentiation is a viable strategy for earning above average returns in a specific business because of the resulting brand loyalty lowers customers' sensitivity to price. Increased costs can usually be passed on to the buyers. Buyers' loyalty can also serve as an entry barrier-new firms must develop their own distinctive competence to differentiate their products in some way in order to compete successfully. Differentiation strategy is more likely to generate higher profits than a low cost strategy because differentiation creates a better entry barrier. A low-cost strategy is more likely, however, to generate increases in market share (relatively).

Selection of Technology to Innovate:

Every Vestas wind turbine offers modern, competitive energy solutions based on 25 years of experience that incorporates the continual development of known technologies within aerodynamics, power regulation and generator regulation. This section contains information about some of the areas and patented technologies that Vestas work with:

The lighter the weight, the higher the profits
CFD – mapping wind currents
OptiTip® – optimum blade positioning
OptiSpeed® – increased power in changing wind conditions
Active Stall® - maximum energy, minimum load

These technologies can be briefly stated under product innovation. Anything which is new to the business and its product range is counted as innovation, even if similar products are available elsewhere or if the change is an incremental one. The reason why we name these technologies as product innovation is that:

There is an performance improvement in terms of material change and changing some sort of manufacturing conditions,
Bringing userfriendliness to product,
Adding new fuctionality.

Conclusion:

By taking all above information, we can clearly state that Vestas’ technology to innovate is incremental product innovation because a potential marketable improvement to an existing product is quickly placed within a clearly defined, time-tested product designed to prove or disprove its value to the company.

If we state the reasons why we name them as innovation;

There is a new product, process or method,
There is process to obtain this new output,
This output reaches to customers or users,
Timing is right (they weren’t used advanced before),
They change the current way of doing something and they create a significant value from the eye of customer,
They have an impact on industry,
They bring competetive advantage.

If we adapt Social Deterministic School’s evaluation criterias to Vestas current situation:

Department Starts Innovation: R&D, customer, goverment, competitors etc…
Innovation Type: Incremental & Radical Innovation
R&D Investment: High for Radical, relatively low for Incremenal Innovation (high in general terms)
Profitability: High for Radical, relatively low for Incremenal Innovation (high in general terms)
Uncertainty & Risk: Low for company
Innovation Sourcing Department: Innovation source can be goverment, customer, R&D department, competitors etc...

Because of the special condition of market, it can easily be seen that there is a little difference between System Integration Model and Vestas’ current situation.

To be continued...

A.Yigit NEPHAN

05.03.2010

Designating Technology Strategy of Vestas: Part II

2010-02-28T07:31:00.000-08:00

In first section of my article, I had designated best competitive environment for Vestas. In second section, I am going to focus on internal and external analysis of Vestas.

Please be informed that these analysis are not detailed analysis.

Internal and External Analysis:

Technological Threats and Opportunities in Industry

Threats:

Siemens Energy introduced its new 2,3 MW SWT-2.3-101 model at the end of 2007, the company says it is ideally suited for low- to medium-wind speed sites. Siemens expects the low- to medium-wind market segments to grow substantially in the future, representing as much as one fourth of the total global wind power market in the coming years.
Vestas is currently manufacturing tubular steel wind turbine towers. Lately developed concrete wind turbine tower let wind turbines reach higher heights where the wind speed is faster and wind efficiency is higher at.

Opportunities:

Government policies in Denmark aimed at mitigating climate change are expected to further support for wind energy in terms of covering considerable amount of money for the R&D expenditures of wind turbine manufacturers which is supervised by universities.

Development in aeronautical industry can directly effect with the wind turbine manufacturing technologies where both of them are related with fluid mechanics and aerodynamics. So wind turbine manufacturers can also collaborate with or benefit from R&D endeavours of big aeronautical companies such as Boing etc…

Porter’s Five Forces Analysis

The threat of substitute products: The existence of close substitute products increases

the propensity of customers to switch to alternatives in response to price increases (high elasticity of demand).

* Buyer Propensity to Substitute: Investors are inclined to work with head of list companies

with world wide service for the investment amount is considerably high

* Relative Price Performance of Substitutes: Chinese manufacturers such as Goldwind and

Sinovel have very competitive prices.

* Buyer Switching Costs: Buyer switching costs are relatively not high but they are not

inclined to switch because of prices. The only reason for switching is bad service and long supply duration.

* Perceived Level of Product Differentiation: Buyers in the market are nearly aware of every

technological evaluations criterias about wind turbines for wind turbines investment are very expensive.

The threat of the entry of new competitors: Profitable markets that yield high returns

will draw firms. This results in many new entrants, which will effectively decrease profitability. Unless the entry of new firms can be blocked by incumbents, the profit rate will fall towards a competitive level (perfect competition).

* The Existence of Barriers to Entry (patents, rights, etc.): Patents are highly protected by govermental regulations. Getting a wind turbine manufacturer licence in European countries takes considerable amount of time. Non-European manufacturers have get CE certification to be able export their turbines to European countries and there is an extra tax demand for such manufacturers.

* Economies of Product Differences: Some sort of aeronautical technologies creates a distinct cost differences and has a considerable amount of effect on efficiency. For wind turbine technologies are similar with aeronautical space technologies, implementation of these technologies are relative high

* Brand Equity: For Vestas is one of the oldest wind turbine manufacturer and leader in it’s sector, it’s brand equity is relatively higher than other companies except Siemens.

* Switching Costs or Sunk Costs: Switching costs are extremely high for wind turbine erection and operating projects are long term projects and each wind turbines has an average of 50 years life.

* Capital Requirements: Considerable amount of money required for the manufacturing facility investment of wind turbine facilities which makes entry to market impossible for SMEs.

* Access to Distribution: For the turbine parts can be transported by sea or land, it is very easy for a new entrant to access to distribution channels.

* Absolute Cost Advantages: Chinese companies have absolute cost advantages against manufacturers in other companies for work force is considerably cheaper in China.

* Learning Curve Advantages: Learning curve plays an important role in companies technologies for wind turbine manufacturing requires a high end technology and skill.

* Expected Retaliation by Incumbents: Competence between high rollers in industry are high especially in technological and cost level.

* Government Policies: Goverments generally encourages manufacturers for R&D investment in terms of providing low taxes etc… The only country where patent rights are not taken into account, is China.

The intensity of competitive rivalry: For most industries, this is the major determinant

of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc...

* Number of Competitors: There are more than 10 competitors in the market

* Rate of Industry Growth: 35% per year in Europe, 20% per year in the world.

* Exit Barriers: Considerable amount of capital investment for facilities. Signed long term service contract (more than 10 years)

* Diversity of Competitors: There are many competitors from different countries focusing on different competencies.

* Informational Complexity and Asymmetry: Many different and complex information of science branches have to be associated to be able to manufacture wind turbines.

* Level of Advertising Expense: Approximately 2% of annual revenues.

* Economies of Scale: Highly applicable because of acculumated demand for further 2,5 years.

The bargaining power of customers also described as the market of outputs. The

ability of customers to put the firm under pressure and it also affects the customer's sensitivity to price changes.

* Buyer Concentration to Firm Concentration Ratio: Lower than one, Vestas has more

bargaining power (demand & supply)

* Degree of Dependency Upon Existing Channels of Distribution: There many choices for

transportation channels. Vestas is not dependent on some certain company for transportation.

* Buyer Volume: Vestas have difficulties to answer potantial buyer’s demand.

* Buyer Information Availability: For buyers are inclined to get proposal from every manufacturer, Vestas do not need reach legal entity except from goverments.

* Ability to Backward Integrate: In the beginning, we mentioned about some vertical integration. Vestas had carried out backward integration in near past.

* Availability of Existing Substitute Products: There are a lot of wind turbine manufacturers but Vestas have some certain advantages concerning technology.

* Buyer Price Sensitivity: Only a small percent of buyers are very sentitive to price differences.

* Differential Advantage (uniqueness) of Industry Products: Products in the industry have some significant differences.

The bargaining power of suppliers: Also described as market of inputs. Suppliers of

raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm, or e.g. charge excessively high prices for unique resources.

* Supplier Switching Costs Relative to Firm Switching Costs: Suppliers want to work with Vestas because of the high volume jobs. So they are inclined not to switch.

* Degree of Differentiation of Inputs: Within every 1,5-2 years.

* Presence of Substitute Inputs: There can be some substitude items but generally they are rigid.

* Supplier Concentration to Firm Concentration Ratio: Vestas has more bargaining power.

* Employee Solidarity (e.g. labor unions): Employees right highly protected in Denmark. There are also labor unions about wind energy sector.

* Threat of Forward Integration by Suppliers Relative to the Threat of Backward Integration by Firms: Backward integration has more possibility then forward integration in terms of being realized .

* Cost of Inputs Relative to Selling Price of the Product: Profits are high, so costs of inputs are considerably lesser than selling price of the product.

Strenghts and Weaknesses of Technologies in Value Chain

For we are going to evaluate strenghts and weaknesses according to value chain, you can see detailed scheme below:

Value Chain

Strenghts:

As a secondary activity in value chain (technology development), Vestas established an Innovation Network which is designed to create a global platform of interconnected ideas, technologies, methods and research. The goal is to build a dynamic and open environment in which to develop, share and support cutting edge innovation in modern energy. They are inviting partners to join them on a journey into the unknown future of modern energy. People power people, and they believe true innovation comes from great minds working and thinking together. Innovation Network is currently working with the brightest minds in academia and industry across the globe. Together with them, Vestas aims developing research programmes from their sites in Denmark, India, Singapore, the UK and the USA to strive for a revolutionary change in Modern Energy.
At Vestas, service and maintenance which can be stated under primary activities in value chain are just as important to them as choosing the right wind turbine. Thus, Vestas want customers to know that they view the delivery of a modern energy solution as the beginning of a close partnership that will last the next 20-25 years, or more.A power plant represents a long-term investment, and Vestas know that trouble-free production is crucial for achieving a satisfactory return. Thanks to their global service network, they will have access to a range of standard products that ensure optimal operation, tailored to customer risk profile and minimize the amount of time turbines are not producing power.

Service

Weaknesses:

For Vestas is working with suppliers for transportation, there can be sometimes problems concerning delivery times and following rules indicated in Vestas Transport Manual. This weakness can be stated under external logictics in primary activities of value chain.
Another weak point of Vestas is relatively high prices of wind turbines because of the high amount of investment on R&D. This weakness can be stated under marketing & sales in primary activities of value chain.
The third weak point can be stated as supply time which can be stated under secondary activities (supply) in value chain. As I indicated before demand is higher than supply and this causes a waiting time after order which is around 1,5 – 2 years.

To be continued...

A.Yigit NEPHAN

28.02.2010