It's A Bird, It's A Plane

No! It’s an airborne wind turbine.  Makani Power has developed airborne wind turbines that are tethered like a kite to a ground station. In fact, Makani’s turbine looks very much like a kite with four rotors across its span.   

Makani is attempting to resolve the wind power conundrum.  To gain efficiency wind towers must be built taller and rotors be wider.  It means wind developers must amass a lot of steel and deploy heavier installation equipment to capture more energy from the wind.  Makani’s alternative kite design is made from light weight aluminum alloys.  The company’s engineers believe its 11,000-kilogram kite (12.1 short tons) can deliver as much as 600 kilowatts of power.  This compares to a conventional wind tower that requires 135,000 kilograms (148.8 short tons) of steel to deliver about 750 kilowatts of power. 

The secret is apparently in the altitude to which the Makani kite can go as well as suitable location.  The tethers can be extended to fly the kite as high as 300 meters where winds can be twice the speed of winds than even the largest conventional wind towers can reach.  The ground stations to which the kites must be tether can be located in terrain where winds are particularly strong but might not be suitable to anchor large wind towers.  

The company’s economic proposition does not end with altitude and location.  The light weight kite, its tether and ground station equipment are much less costly to deploy than large towers and wind blades.  Commissioning time is also shorter even in the most remote and forbidding locations.  

Alphabet, Inc. (GOOG:  NYSE) acquired Makani Power in 2013, giving this small, private company access to a large bank account.  Makani’s superiors at Google have a history of taking big risks on technology, almost guaranteeing receptive ears to Makani’s growth plans.  Yet despite a well feathered nest and a doting parent, the Makani fledgling has so far failed to fly.

There has been speculation by industry analysts that Makani may have miscalculated.  For example, the tether design may be inadequate in gusty wind conditions, risking the loss of the kite.  Even regular wind conditions over a long period of time could lead to fatigue in the fasteners.  The tether has connection points at both the ground station and the kite frame  -  two potential points of failure.  Another problem is that wind speeds at those high altitudes may exceed the maximum revolutions per minute of Makani’s wind turbines.  This would require that the kite be brought to ground or at least that its blades are rotated out of the wind. 

We are left to speculate as Makani management is too busy solving its problems to answer calls from prying analysts.  That cannot be held against them.  We are curious about Makani’s progress.  So curious the next post will be about another developer with an alternative wind power kite design

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.