Northern Power growing as interest in wind power increases

Wind power from turbines is an emerging green industry and Northern Power in Barre Town is cashing in. The company is a high growth green tech company, says marketing vice president Jim Stover. This is good news for the industry and Vermont.

Northern Power, located in the former Bombardier rail plant at the Wilson Industrial Park is growing rapidly. By year’s end it will employ 155 including high paid engineers and managers as well as production workers. Some of the production staff formerly worked for Bombardier and were retrained since the Northern Power move here from Fayston in 2005.

The company primarily builds 100 KW wind turbines using what Stover calls a permanent magnet drive or PMDD, which he said is more efficient and reliable than gearbox systems. You won’t find these machines powering a home or adding to the utility grid. They are for community wind applications such as found typically at schools, wastewater treatment plants, a farm, or a grocery store. Vermont’s first Northwind 100 turbine will power an eighth of the electric needs at the Bolton Valley Ski Area this winter.

In the industry these are considered mid-sized machines. They are erected on a 120-foot tower. The machines list for $300,000 with the tower and blades. Stover said a typical project cost for full construction is $500,000 to $550,000.

The company is on track to produce one unit per day in its plant by the end of the year. International sales are growing and 20 percent of sales already go to Italy and the UK. These countries lead in sales because, explained Stover, they have feed-in-tariffs where utilities pay a fixed rate for power that comes from renewable energy generations. That promotes adoption of wind turbines of the size Northern Power makes. Other units have sold in Canada and other US states beside Vermont.

This is a very good time to be a wind turbine manufacturer said Stover.

“The market is absolutely accelerating,” he explained. There is now a federal 30 percent investment tax credit, and ARRA funds are being disbursed to states that support a variety of renewable projects. Forty-two states now have programs to promote renewable energy.

One market the company will not pursue is the residential scale wind turbine. However, it is developing a 2.2-megawatt turbine for utility scale wind farm applications. Prototypes will be installed in an as yet unnamed location next year. These machines will sell for $2.5 million.

According to Stover, Northern Power will continue to expand as the leader in the community wind market and into the utility market with its larger machine. The company sees significant growth opportunities for its products and expects to double its community wind business next year. This is separate from the utility scale wind farm turbine business it is now developing.

Competition for Northern Power exists in the community wind business with older gearbox based turbine designs.

“Most others don’t have new designs in this size range,” said Stover. Community scale turbines are the emerging market, one that did not previously exist as turbines were geared for either the residential or utility scale market.

The company, originally owned by Distributed Energy Systems, was sold in August 2008 to CB Wind, a newly formed private company focused solely on wind energy. In September, 2008 the company, now known as Northern Power Systems, Inc, announced that its parent company, Wind Power Holdings, Inc, had completed an additional round of financing with net proceeds of approximately $37 million to support the growth and development of Northern Power’s wind turbine business. The capital was raised in a placement of Series A Preferred Stock with institutional and other accredited investors, and led by RockPort Capital Partners and Allen & Company LLC, which also served as the placement agent.

Northern Power is pleased with its Wilson Park location. The company occupies a building, which is a 100-foot-high bay manufacturing facility that is “very suited to our 100KW machine.” The workforce it inherited from Bombardier was retrained.

The Vermont Economic Progress Council gave approval for “Green VEGI” incentives totaling up to $826,014 in August. Because the project would create jobs in the environmental technology sector, the company is eligible for an enhanced level of incentives, said Stover.

The future looks strong, said Stover. “Based on the core technology we’ve developed we will be a world class leader of turbines for community and utility scale and have the ability to significantly grow this company and be a leading turbine manufacturer in the US.”