Project Development, Wind Power

Wind Turbine Company Blown Away

A wind turbine company is winding up after raising millions of dollars in the last five years.

WELLINGTON, New Zealand, NZ, 2001-08-13 [SolarAccess.com] A wind turbine company is winding up after raising millions of dollars in the last five years. Vortec Energy raised NZ$23 million to develop and commercialize a technology which it claimed would increase the suction effect of its hooded turbine, to yield five times the normal efficiency of a turbine. It had leased the technology from Grumman Technology which, a decade earlier, had also failed to commercialize the product. Vortec officials now say the technology is not economically viable and has received shareholders approval to wind up the company that began in 1994. Vortec had planned to list shares in Europe and on the U.S. Nasdaq exchange, and had entered joint ventures around the world. Four years ago, wind analyst Paul Gipe had warned that the technology had little chance of commercial success. A German energy analyst, Heiner Doerner of Suttgart University, also said the design would not work. Wind energy officials in New Zealand had expressed concern that Vortec may hurt the industry if its plans did not succeed, and said small investors need better protection from speculative investments. At the 1997 New Zealand wind energy conference, Gipe said “nothing the company has said convinces me its idea offers any significant improvement in technology. Wind energy is not about great leaps forward. It’s about steady incremental improvements. They may be dull, boring and unexciting, but they work.” Gipe acknowledged that Vortec’s prospectus was clear on the technology’s speculative and untried nature, but he said the ‘buyer beware’ philosophy was not sufficient for the rights of small investors who might be drawn to Vortec without understanding the risks. “I think professionals in the wind energy field are obligated to speak out,” he said at that time. “We’ve spent 20 years bringing technology to commercial fruition, and we have to much to risk to let the market dictate what happens.” A consultant hired this year by Vortec claimed “the potential to profit from turbines had declined because of a drop in the cost of wind energy worldwide.” The New Zealand government says its securities laws differ from the U.S. and other countries, in that the emphasis in offerings in New Zealand is on getting the information out to the public and allowing people to make their own decisions. The head of the country’s Securities Commission, John Farrell, said U.S. authorities take a more active interest in the structure of the offering and make judgements on the likelihood of the offer delivering financial returns to investors.