Northern Power Systems Aims for Large-Scale Wind Turbine Market, Taking on Industry Giants

6/10/09

Northern Power Systems is a busy company these days. The Barre, VT-based firm is expanding its business of designing and making medium-sized wind turbines to include the production of larger, utility-scale systems. Competition in the utility-scale market is fierce, but Northern Power has developed wind-turbine technology that its leadership believes will enable the firm to compete with the majors.

The company has undergone many changes since last June, when it went into Chapter 11 bankruptcy along with previous owner Distributed Energy Systems, of Wallingford, CT. In September, a group led by Boston-based venture firm RockPort Capital Partners and New York investment bank Allen & Company purchased Northern Power. The new ownership group has invested more than $50 million to make the acquisition and recapitalize the company. Northern Power was one of two operating subsidiaries under Distributed Energy Systems. The other, Proton Energy Systems, also of Wallingford, is a provider of hydrogen fuel cell technology. It was sold last year as well.

“We were reborn with a company that was laser focused as a pure play in the wind turbine industry, but far more important laser focused on developing an extraordinarily differentiated technology approach,” says John Danner, president and CEO of Northern Power. Danner took the reins at the company in late October, having previously served as chief executive at Codon Devices, a former Cambridge, MA-based provider of synthetic DNA and other biological materials that was shut down this year. Yet he’s no stranger to energy systems. Earlier in his career, Danner was a naval officer who ran a nuclear reactor aboard an attack submarine called the USS Dallas.

Northern Power says its technology enables its turbines to operate with minimal maintenance and high efficiency. A key to the system is what the firm calls its direct drive technology, which enables turbines to convert energy without troublesome gearboxes. This is a big deal. Gearboxes—which are used in traditional turbines to covert high-torque, low-speed energy from the turning turbine blades into low-torque, high-speed energy for electricity generators—have many moving parts that need to be replaced several times during the typical 20-year lifecycle of a turbine. By removing the gearbox, enabling the motion of the turbine blades to directly drive the generator, you can eliminate or lower some maintenance and repair costs. Another key to the firm’s design is its use of magnetic materials in the turbine generators. The permanent magnet generators are said to be lighter and more efficient than traditional wound-rotor generators, among other benefits.

The company, which was founded in 1974, developed many of the technologies that go into its wind turbines in recent decades with grants from the National Renewable Energy Laboratory, the National Science Foundation, and NASA, according to the firm.Northern Power Systems photo

Northern Power’s technology is used in 100-kilowatt turbines that it has developed and installed in such places as remote communities in Alaska, as well as closer to home in Massachusetts. (For example, one of its 100-kilowatt turbines owned by the city of Medford is visible from Route 93 north of Boston.) There are few competitors for 100-kilowatt turbines, but that market is believed to be many times smaller than the utility-scale turbine business. The larger turbines are used, for instance, on  wind farms that utilize many machines. To capitalize on this multibillion-dollar market segment, Northern Power is developing a 2.2-megawatt wind turbine. The first of these turbines is slated for deployment as a testing model in the first half of 2010.

The foray into the utility-scale market is behind much of what’s making the company so busy. This summer the firm plans to open a Boston-area office focused on research and development for utility-scale wind turbines, Danner says. Northern Power is also in the midst of working out a deal to open a manufacturing facility in an undisclosed location in … Next Page »

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