WIND ENERGY STOCK
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As one of the only independent wind energy developers in the US and having completed in excess of 18 wind farm projects with more than 23 new wind projects in development, Juhl Wind, Inc. is well-positioned for future growth
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About: Juhl Wind, Inc.
is an established leader in Community Based Wind Power development and
management, focused on wind farm projects throughout
the United States and
Canada. Juhl Wind pioneered community-based
wind farms, developing the currently accepted financial, operational and
legal structure providing local ownership of medium-to-large scale wind
farms. To date, the Company has completed 18 wind farm projects and provides
operations management and oversight across most of the portfolio.
Juhl Wind services every aspect of wind farm
development from full development and ownership, general consultation,
construction management and system operations and maintenance. With its
April 2011 acquisition of the Woodstock Hills
wind farm, the Company now owns and operates a 10.2 MW wind farm. Through
its Next Generation Power Systems subsidiary ("NextGen'),
Juhl Wind also provides full sales and
service to smaller, on-site wind and solar projects in addition to our
larger Community Wind Farms.
Interview conducted by Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published Ė July 15, 2011
Mr. Juhl: I have been in the wind business for about 35 years, and I always thought renewable energy was the thing to do. I have always had a concern regarding energy and its relationship to the environment. I had no predetermination of being a publicly traded company when I started the company many years ago, but it has all been an evolution of technology and philosophy in the renewable energy space ever since I started.
CEOCFO: Why did you decide to take Juhl Wind public?
Mr. Juhl: It was privately held up until 2008 when I was approached by some folks to take the company into the public space. Both of my sons, Tyler and Corey are in the business with me and, being a capital-intensive business, I thought this might be the move to be able to make it possible for them to carry on in the ever-changing world of renewable energy. Therefore, we decided to take the company public in 2008.
CEOCFO: What is going on at Juhl Wind today?
Mr. Juhl: We are busy. In the last 18 months, we finished five wind farm projects. We have two others this year where we are in development phases. One is going to be starting construction here over the next month or so and the other one towards the end of the year. The second one is a much bigger project. We have probably 600 megawatts in, different stages of development phases, that are planned for the next five or six years, and are lining up more projects all of the time. People come to us and ask us if we can help them get projects to the end game or we originate projects on our own, so we have a very full plate now and in the future.
CEOCFO: Where are your projects and why did you locate in this specific area?
Mr. Juhl: I started my business in Minnesota and have been working on policy here ever since. Therefore, we know the Midwest, the regulatory climate, the utilities, the wind resource and how the transmission system works, everything we need to know. Our company focuses mainly on doing community based development, in other words we get the farmers and small business people in the rural communities, actually involved in the ownership structure for wind farms. It varies at different levels, but all of our wind farm projects have local community elements to it. We also focus on distributed generation where the projects we build are anywhere from 2 megawatts to 40 megawatts in size. Usually they are in the 10 to 20 megawatt range and that is because we believe in distributed generation, and the transmission system is in trouble. This is because the industry has been putting large wind farms in the areas of the grid where it is not designed to take it, and that is causing many of the problems for the transmission system that I am sure you all hear about all the time. Our company philosophy is more strategic. We look at the system; we find places where we can blend into the system with out having to do large upgrades. We do not build huge projects, 10 to 20 megawatts is still a lot of power to our company.
CEOCFO: Does Juhl Wind do soup to nuts on your projects?
Mr. Juhl: We do everything. Most of our projects we have originated them, we have done all the development, we do the power purchase contracts, the interconnection agreements, the land permitting, the turbine selection, the turbine buy, oversee the construction, and we operate and maintain the projects after they are built. Therefore, yes, I would say it is pretty much soup to nuts.
CEOCFO: What goes into turbine selection?
Mr. Juhl: There is a lot that goes into turbine selection. It is more than just location, which has importance because different rotor diameter machines are applicable to different wind resource sites. Then there is the turbulence at the site, how much turbulence is there, which also plays how big of a rotor or what size machine you can put in there. There is also availability and access to land, how much land do you have access to and how much do the farmers you are working with control. The other thing is, wherever you are plugging into the system, how much power you can inject at that given point will also help determine what turbine, size and rotor diameter you use at that site. There is no quick answer to that other than that it is a fluid dynamic and that you have to look at alot of moving parts before you settle in on it. Then you also have to look at the availability of specific turbines, and then their pricing, their warrantee, and all of the things that go into the actual turbine supply agreement. We put a lot of thought into it. Growing up with the business, we know and understand all the moving parts that need to be examined when you are doing a turbine supply. We pretty much exercise every one of those.
CEOCFO: What is involved in the maintenance once the project is up and running?
Mr. Juhl: The maintenance is the key to success with wind power. These are machines that operate more in one year than most other machines, like a car or truck do in their lifetime. Therefore, we have scheduled maintenance. We also have what we call a proactive maintenance program, where we know and understand these machines and the idiosyncrasies of the turbine we use. We try to be proactive and catch things before they break. On a big wind turbine, if you just wait until it breaks you have more trouble than you want to deal with, and so our philosophy is proactive maintenance. Then we have regular scheduled maintenance that we do on a regular basis. Each turbine has its own different timing and scheduling, depending on if they are geared machines, or not geared machines, or what kind of generators to have. So each one has its own program that we closely monitor and watch, and we are proactive on all of those.
CEOCFO: What is the financial picture like for Juhl Wind today?
Mr. Juhl: We just had a great quarter. We closed financing on over $100 million with the projects and Juhl Wind is doing quite well. We are a lean machine too. Our whole company, the service company, the development company, the operations and management company; all total we have about twenty-plus employees, so we are very efficient with what we do. That is mainly because we did not just decide yesterday to get into the wind business. We fully understand every aspect of it from A to Z, so that allows us to be a low overhead operating company that does alot of things with a few people, and we do it very well.
CEOCFO: Is there a limited number of projects that Juhl Wind can take on at any time and how would you ramp up if more were to come your way?
Mr. Juhl: Right now, we would put them in a pecking order for sure, as historically, people come to us, but we are looking at the logistics of ramping up. We are entertaining some partnerships that will accelerate some ramping up. Not everybody lives on the windiest hill in Nebraska or Michigan, so we look at the project, the site, the wind resource of the site, the access to the transmission system, the utilities in the area and their appetite for power purchase contracts. We do our own cursory review as we are not interested in spending ourís nor anybodyís time or money on something that is not going to come to the end game. Therefore, we do a good job of screening, and our experience helps us with that.
CEOCFO: From your vantage point, what is your two-minute take on where wind is today and where it is going?
Mr. Juhl: Obviously, if you look at the electric power system as a whole, we have been building everything but power plants and transmission lines for the last thirty years. Our loads are going up all the time, as people are more into computers and everything is becoming electric. Now we are looking at electric cars. Then you look at the other side of the spectrum on where this electricity comes from. Most of the world is concerned about climate change, and we all know that there are problems with what happened at Fukishima in Japan, which pretty much wrote the epitaph for nuclear power; economically anyway. I do not know how anybody plans to economically build nuke plants in future. Therefore, we have the problem of loads going up and people relying on electricity as their lifeblood and not having access to conventional resources that we have historically had. Therefore, I feel that wind and solar are going to be major players, as well as biofuel. Most all renewable energies are tremendous opportunities for rural economic development and job creation plus the fact that it can provide very good long-term sustainable energy. The missing link is storage and our company has been working very hard on that for the last few years. We have found some good partners that we are collaborating with on doing storage, but not only the wind farms, but also for site-specific storage applications. The energy sector has been troubled; the transmission system is overworked and underbuilt. It is very difficult to build new transmission and very expensive, so our companyís philosophy of doing distributed renewable technology, wind solar and storage is the way the country should go. In the process, we can create good jobs and provide long-term revenue streams of income to parts of rural America.
The technology in our 35 kW turbine is basically the same technology that
they use on the large turbine applications. It is just that we use smaller
increments of it. It is still considered commercial scale wind turbine. Juhl
is applying technology in a distributed fashion. We are more cognizant of
where we plug it in as well as how much power we inject into the system at
any given point. It is not just the technology that we utilize; it is our
philosophy that truly differentiates our approach.
CEOCFO: Do you do much investor outreach?
Mr. Juhl: Yes, John Mitola, the president of our company does most of the investor outreach. However, I cannot say that we are real aggressive on it. Part of the problem with being a lean mean little machine is that you have to focus on certain things at certain times and in the last eighteen months, we have been completely focused on completing, constructing and financing the projects that we have to keep our balance sheet healthy. I know John has worked very hard on investor relations and deals with that on a daily basis, but that is obviously a part of being a publicly traded company that I am still learning as a wind guy. John Mitola, our president, is very astute at investor relations and he keeps on top of that.
CEOCFO: In closing, why should potential investor pay attention to Juhl Wind today?
Mr. Juhl: People should pay attention to Juhl Wind today because we are on the cutting-edge of where this country needs to go. The stuff that we are doing with distributed renewable technology is going to be a major factor in the build out of our electric power system. We know that the conventional fuels that we are utilizing today to produce electric power are causing problems both economically and environmentally, and we are realizing that we need to make the shift to clean sustainable energy. If you can build locally derived and owned clean, renewable energy sources, which create jobs and economic development, it is a good thing, and is where we need to go for the future of our country.
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If you look at the electric power system as a whole, we have been building everything but power plants and transmission lines for the last thirty years. Our loads are going up all the time, as people are more into computers and everything is becoming electric. Now we are looking at electric cars, then you look at the other side of the spectrum on where does this stuff come from and the concern about climate change. The energy sector has been troubled; the transmission system is overworked and underbuilt. It is very difficult to build new transmission, very expensive, so our company philosophy of doing distributed renewable technology, wind, solar and storage is the way the country should go. In the process, we can create good jobs and provide long-term revenue streams of income to parts of rural America. - DANIEL J. JUHL
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