Tuesday, December 09, 2014

Capital Raise by Altaeros Energies

Privately-held Altaeros Energies was also added to the Wind Group of our Electric Earth Index.  The company is developing high altitude wind power technology that it calls a Buoyant Airborne Turbine (BAT).  It could be called a floating wind turbine, which is essentially the way BAT works.  It looks like a giant, over-inflated automobile tire with wings even though the company prefers to call it a ‘shell.’  It is made from high performance fabric is filled with helium to give it buoyancy with a conventional three-blade, horizontal wind turbine attached to the inside walls.  The shell and turbine apparatus is tethered to the ground with high strength cables that secure it at about one thousand feet in above the ground.  A control system is installed in a ground station next to the tether point.

Altaeros has a project underway in Alaska near Fairbanks.  The region provides plenty of open land and air space to test the BAT.  At 1,000 feet the Altaeros Buoyant Airborne Turbine will reach 38% higher than the tallest tower mounted wind turbine, a Vestas-made wind turbine with rotor blades that measure 720 feet across.  Installation of tower-mounted wind turbines of such massive size requires large cranes and substantial underground foundations to support the tower.  Altaeros claims its lightweight fabric design will be more easily installed in remote locations where cranes cannot be deployed. 

Ultimately, high-altitude designs are expected to generate more electricity with less environmental impact than conventional rotor turbines that turn as high speeds in the same airspace as migratory birds.  Capital costs are also expected to be lower than the conventional tower-mounted rotors and turbine.  The demonstration project is expected to require about $1.3 million in capital. The Energy Technology Fund of the Alaska Energy Authority has provided $740,000 in grant monies to begin the project. 

What caught our attention was the recent announcement of $7 million in funding from Softbank (SFTBF: OTC), the Japanese telecom company.  While the connection between telecom and wind power might not be apparent at first glance, Softbank is known an active venture capital investor and has accelerated its renewable energy bids since the Fukushima disaster in its home country. We believe this investment by a world-known company is a strong endorsement of Altaeros Energies.  The capital infusion should support final development work indicated by experience with the BAT in Alaska.   Altaeros had already received funding from RNT Associates International, which has common ownership with Tata Group, a leading developer of wind power in India.  Together the two sources of financial support might help propel Altaeros to the forefront in commercializing high altitude wind power technology.

In my view, Altaeros is the second important high altitude wind power developer for investors to watch, along with Sky Sails. 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.


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