Windflow turbine wins OK
Windflow Technology's turbine has finally received international certification but with repeated losses the company needs to convert paperwork into sales.
Four years after applying, the Christchurch firm received turbine approval from the International Electrotechnical Commission on Tuesday, in what is believed to a world-first for its class of small two-blade turbine.
Yesterday, Windflow chief executive Geoff Henderson said certification did not mean instant sales but would make a difference over the next few months.
"It says to investors and potential customers that this is a serious technology with a great future in the international wind power market," he said.
Gaining certification required Lloyd's Register to scrutinise more than 2800 pages of engineering calculations, 200 drawings and 37 specifications. "It is a huge engineering achievement."
Delays in obtaining certification have been a thorn in Windflow's side, costing $2.56 million to process and souring relations with its only customer, NZ Windfarms.
Not having certification also kept at bay potential customers who might have otherwise jumped on the technology, he said. "We have definitely suffered on a number of fronts because of the delays in getting to this point."
On Tuesday, Windflow reported preliminary results for the year to June 30 showing an unexpected net loss of $7.95 million, exceeding a previous estimate of between $5m and $6m and outstripping last year's $1.23m deficit.
This year's increased loss arose from delays in finishing NZ Windfarms' Te Rere Hau wind farm in the Manawatu and extra turbine maintenance provisions associated with settling the companies' disagreement in April.
Windflow has yet to report a profitable year or yield a dividend and Mr Henderson said he did not expect this to change until at least the 2011-12 year.
He would not comment on the company's cash position but said another tranche of capital raising would be needed in the next year.
With the Te Rere Hau project scheduled for completion by mid next year, Windflow will have to find another project soon to get revenue flowing.
The Long Gully 25-turbine wind farm near Wellington is the obvious candidate but with its partner and cornerstone shareholder state-owned Mighty River Power having pulled out of that project in July, the already cash-trapped Windflow will have to find the money itself.
Mr Henderson has previously estimated the cost of building Long Gully at between $20m and $30m, which would need to be raised either through additional equity or debt.
Yesterday, he said no further progress had been made on Long Gully but he was confident shareholders would support another capital rasing, particularly given the recent success in obtaining certification.
Windflow has struggled to generate sales demand, with wind power giant Meridian Energy publicly dismissing its two-blade turbine.
One industry commentator said the company faced an uphill battle against much bigger competitors in Germany and Denmark.