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BaxEnergy’s Software Solutions: Unifying Renewable Assets

We talk to CEO Simone Massaro about how BaxEnergy is revolutionizing renewable energy management. Their groundbreaking software solutions that are making clean energy more efficient and accessible. And the company’s recent acquisition by Yokogawa Electric Corporation will open doors for making their solutions better and more widespread.

Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard’s StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes’ YouTube channel here. Have a question we can answer on the show? Email us!

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Allen Hall: Welcome to the Uptime Wind Energy Podcast. I’m your host, Allen Hall, joined by my co host, Joel Saxum. Today, we’re honored to have with us Dr. Simone Massaro CEO of BaxEnergy. And BaxEnergy has established itself as a leading provider of software solutions for the renewable energy sector. Industry.

Since its founding in 2010, the company has been at the forefront of developing cutting edge asset performance and renewable energy management systems under Dr. Massaro’s leadership, BaxEnergy has gained recognition for its innovative approach to optimizing renewable energy assets, including wind farms and their solution helps energy companies monitor, analyze and enhance The performance of the renewable installations, ultimately making clean energy more efficient and accessible.

And in a significant development this year, BaxEnergy was acquired by Yokogawa Electric Corporation, a global leader in the industrial automation and control industry. This strategic move is set to bolster BaxEnergy’s position in the renewable energy market and open doors to new technologies and markets.

And that’s what I want to talk about today. Dr. Massaro is here today to share his insights on BaxEnergy’s journey. They’re groundbreaking work in renewable energy management and the exciting future ahead following the Yokogawa acquisition. Simone, welcome to the show. It’s great to be here. Thank you. Was that an adequate introduction?

Because you guys are doing so much at BaxEnergy. It is amazing the capabilities you’re providing to the renewable industry.

Simone Massaro: Yeah, I mean, BaxEnergy is essentially a software solution provider. And is focused on doing one thing and one thing only, which is making renewable energy more affordable for everyone.

And the way that we do that is by making the power plants more efficient. BaxEnergy is creating and delivering the software solution that is taking control of the renewable energy power plants, and is actually making them more efficient. In other words it’s taking all the aspects of the power plants that are difficult to handle the dark side of the renewable energy and is transforming it into something more efficient.

Our history as commenced about 10 years ago with the development of a solution, which was optimizing wind farms. And was focused on wind energy. And then from that, we evolved into solar energy, hydroelectrical energy, geothermal energy. And nowadays we’re working a lot with hydrogen, which is a little bit of the forefront of energy storage.

Not many people realize how difficult it is to work with renewable energy because renewable energy are by nature uncontrollable. The reason is that the source of the energy itself, the sun or the wind. They are at their source. They are uncontrollable. They are not depending on the will of the man.

So we we wanted to have energy on demand, but in reality, the sun is shining and the wind is blowing on a completely different schedule. So our focus is to make sure that it is possible to create a balance on the network by controlling this uncontrollable part of of nature. And we do that by mixing all the energy together.

Allen Hall: It’s been an amazing progression, because if you think about the complexity of the energy system we have today, and where we are going, and where we have been 10 years ago, right? The, the, the issue, the early issues, and still exist today. You have a lot of energy companies that have different assets that are manufactured at different times by different manufacturers, wind and solar in particular, the big two, integrating that into a useful system.

has been very difficult for, for operators to achieve. I think you’ve really bridged that gap now in, in terms of software. And that had to be a big hill to climb to do that. You want to explain how you accomplished that and how you kind of working that in software?

Simone Massaro: Yeah. So that’s that you, you make a very good point over there.

So, when the new energy we’re representing. A very small percentage of the global energy production. They were not creating a problem, but as the amount of renewable energy has grown to reach 10%, 20%, 30% in some countries, even 50% or more of the energy being produced, this is also increasing the fluctuation on the grid.

So the grid that we had before. Which was designed for big monolithic power plants was not sufficient to handle the fluctuation and the distribution of this renewable energy power plant. So, new technologies had to be invented to put this under control, not just the monitoring, but also the capability to shut down the power plants when when a wind farm was producing too much or when a solar power plant was producing too much to avoid fluctuation.

On on the grid. So the software somewhat evolved with these challenges. At the very beginning, we were focusing on gathering the data from the power plants. And the key focus really from the utilities was just to visualize this data. Later on the challenge came because Each of these power plant is, is typically produced by a different manufacturer.

Now, you have not only different technology clearly a wind turbine works in a very different way than the solar inverter and the hydroelectric power plant or geothermal power plant. But each of these power plant may actually be manufactured by a different OEM, by a different vendor, by a different original equipment manufacturer.

And each of this vendor is actually creating its own way to exchange data and its own way to control the power plant. It’s like having a different fleet of vehicles. So you can think of wind, solar and hydro making a relationship with the transportation. You can think of them as airplanes, cars.

And maybe trains and ships, essentially they’re all moving people from one place to the other, but they’re doing that in very different ways. And when you think of even just one of these categories, like cars, you don’t have a car, you have maybe 20, 30 different type of, of, of cars. You have utility vehicles, you have trucks, you have, very different size, very different objective, but also made up from different vendors.

So that, that’s the same thing that you have a renewable energy. And imagine now that you want a system to control all of these all of these equipments, all of these machines from one single place, that’s what the utility need. Because effectively, utilities are not buying just wind or just solar or just hydro.

They’re buying all of these technologies. They’re building all of them. And they’re not doing it with one vendor only. They’re doing it whichever offers the best price on the market. And as we started to work with utilities, we realized that That sometime utilities were having not, not one system, not two, not three, sometime 15, 20 different systems in order to monitor their power plants.

Because each of these power plant was coming with a different system. Each wind farm was equipped with his own monitoring and control system. Each solar power plant had his own power plant control system. So surely enough, if you have so many systems, you also need a lot of operators that they have to be trained to operate these different, these very different power plants coming from very different manufacturers.

So that challenges no one had solved before us. So early 2010, we came out with the first system. Which was unifying the monitoring and the control of different renewable energy sources all under one roof, regardless of the energy type, the technology type, the manufacturer, the vendor of that power plant, regardless of the communication protocol.

Regardless, even of things like unit of measurements, imagine a wind turbine produced in the U. S. will measure the wind speed in feet per second and one produced in Europe will measure it in meters per second. So you know, these, these, these utilities, these owners of the power plants, as the number of power plants was growing, they really needed to have that unified platform.

So that was the first challenge. That we addressed.

Allen Hall: You’ve grown as the industry has grown in terms of capability. Your first hurdle was trying to communicate everything to communicate with one another. So many different vendors, so many different technologies. It must’ve taken you an immense amount of time to even get that to work.

Just to get the data. Just to get the data, right. And to make sure that it works. Properly, but then to take that knowledge and then explode it into making sure the grid is more stable. That’s amazing.

Simone Massaro: Yeah. And surely enough it’s taken a lot of of people actually have the calculation of that.

So to do the, the data collection, the, the capability that we have today is to interconnect every single vendor that exists in the market. Every single winter turbine buying and inverter manufacturer. That produces inverted today in the world. Do we have a protocol for that? So it took us exactly 165 men years to produce this, which we call the universal data engine, and we did that over time in the course of three and a half years.

But you know, it was a very intense challenge. Once this challenge was resolved, anything else after that, it’s, it’s simple.

Allen Hall: Yeah. After 165 man years, I suppose so, but that’s a huge amount of knowledge that’s into your software platform today, which I think then makes you really powerful and make, this is the big issue.

The United States and Europe and even Australia has this issue more recently of grid reliability combined with when, when to use energy storage, how to apply that to a complex grid. Texas has this problem right now, Joel.

Joel Saxum: It’s what we talk about all the time in like the next evolution of grids in general to this smart grid version.

There’s an integration of hardware and software there, but you guys, software wise, you’re out in front of the game. You’re probably at some level waiting for the hardware that’s out in the field to catch up to what you can offer.

Simone Massaro: Yeah, to a certain extent, yes. So, in reality, what we have developed is an intelligent brain that is composed of two parts.

It is a central part that runs inside the core system of the utility, the owner of the power plants. And that’s the central brain that is orchestrating everything. And then there are smaller brains, smaller pieces of software that are running inside the power plants. So the two of them are communicating in a very secure way, in a very trusted way, has to be super secure because you’re not just reading the data, you’re actually exposing the capability of controlling the power plant.

And the, of course you have to synchronize from a central location, all these plants, you have to have communication is not avoidable, but it has to be super secure. Because if it is not. And any curve can actually enter into the power plant that could accidentally or on purpose shut down the power plant could create a damage, could create a ripple effect, which will lead to a larger scale blackout, such as some that have occurred in the United States years ago.

That’s also the reason why today this is a market in which a lot of very stringent regulation exists. Now, each country is creating its own regulation. In the U. S., you have the NERC Cybersecurity Standards for Power Plant. And in Europe, you have some others. And, as you go in Asia, you have some more.

So, because we started very early on and we wanted to work worldwide, we adapted our software to all of the cybersecurity standards that exist worldwide. So, companies and nations worldwide started to utilize our technology. And, today, we You know, we brought ourself to have, more than a single digit of the entire world energy generation.

In fact, we are approximating 3. 5 percent of the total renewable energy in the world currently being monitored by our software. Now it appears like a small amount where I can assure you being an independent vendor, it’s One of the largest in the market.

Joel Saxum: Yeah, that’s great. So that leads us to the Yokogawa merger the acquisition there So you guys now you’ve you’ve selected of basically a partner to join up with to grow the solution How is that going to work for you guys?

Simone Massaro: Yeah, so that’s if you if you look at the world the control of renewable energy is Is a an objective for for everyone. So the world is polarizing You And in three, maybe maximum five conglomerates of technological providers that are able to solve this challenge, and we’re one of them.

So what we thought was the best way for us was to create an industrial partnership. So we started to look around the four industries that were interested in this technology and sure enough, we found out the most in the industry that is interested the most in. In renewable energy are these heavy heavy industries that are consuming large amount of of energy.

Think about the aluminum foil foiling industries or think about all of the industries in which you are producing a large amount of metals or, or you have to cool down, refrigerate. You have to. Create larger scale productions that consume large amount of energies and all of these industries, they’re all looking for.

How do we decarbonize our operations? How do we reduce our cost? How do we get away from utilizing oil and gas and burning them in order to generate our energy to to do this? And Yokogawa is actually a technology provider that is offering DCS solutions and distributed control systems to this industry.

So it’s already present in all of the heavy industries, in all of the oil and gas industries, in all of the heavy machinery, heavy equipment, heavy metal. Water clarification plant, anything that really consumes an enormous amount of energy. And they were looking for a solution to help their customer decarbonize.

So we basically found the perfect match and we created a bond through an acquisition. So Yokogawa acquired 100 percent stakes of BaxEnergy, a little more than two months ago. And the goal of this acquisition is to create a new scale operations. From one side, Yokogawa will distribute our technology to renewable energy providers, independent power plant suppliers.

worldwide. From the other side, we will supply them the technology that they need to decarbonize the heavy

Allen Hall: industries. Well, that’s truly amazing because I think that is a perfect match of capabilities and industry and connecting the two together to broaden out this technology and get it to all corners of the world.

Because it is going to be, as you have pointed out, a renewable future. And in order to have a reliable grid, you need to control these assets properly. And this is the beauty of BaxEnergy, I think, is how well you orchestrate all these different technologies together. for efficient use and BaxEnergy is going to be leading that way.

How do future customers of yours find you? Where do they find you on the web?

Simone Massaro: Yeah, so they, they can find us in two ways on the BaxEnergy website, which is BaxEnergy. com very easy. Or they can actually look us over to the Yokogawa website. There is www. BaxEnergy. com. Right now one way to reach us we are entering several markets participating into all the most important trade shows and conferences on renewable energy.

And we find out that there is a great way to meet people, to speak with with the owners of the power plants and the, the, the operation and maintenance teams that have to run the power plants. And from these conversations. We’re driving our our growth to, to be even more precise on this point.

I’m going to be for a minute. What I tell every, every day to my engineers, to my software developers, to everyone else, don’t worry about the revenues. There are people that are taking care of it. Don’t worry about that. Just worry about making the best product possible for our customers. And then all the rest.

will flow by itself. And that’s really what has happened. We’re focused only on making the best possible product. And that’s why, the sales have been growing and, we got to the interest of all of these utilities and now all of these industrial partners. When you do something good, when your interest is aligned with the interest of your customer, then everything else is easy.

And I will go one step ahead, because in this case, our interest is aligned with the interest of the world. Because our, our motto is really making renewable energy more affordable to make a greener world for everyone. That’s really our goal. It’s solutions for a greener world. And even you guys that are listening to webcast right now, even if you’re not utilizing this solution, you will benefit from our technology indirectly.

Allen Hall: That is so true. And congratulations to BaxEnergy and Yokogawa. This is a great matchup. And Simone, I really appreciate you coming on to the podcast. It’s been really informative. I’ve learned a ton. And let’s stay in touch because. Backsynergy is growing and it’s going to be growing in leaps and bounds, and it’s been a pleasure.

Simone Massaro: Thank you so much. It’s been my pleasure. Thank you to everyone that is listening, and have a good day, everyone.

https://weatherguardwind.com/baxenergys-software-solutions-unifying-renewable-assets/

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U.S. Sanctions on Iran

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Is what we see at left actually true?

Possibly, but no one with the IQ of a turnip believes a word that comes out of these people’s mouths.

U.S. Sanctions on Iran

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WindQuest Advisors on Repowering and Rising O&M Costs

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WindQuest Advisors on Repowering and Rising O&M Costs

Dan Fesenmeyer, Managing Partner at WindQuest Advisors, joins to discuss the repowering rush and the FAA permitting stall, rising O&M costs on larger turbines, tariff pass-throughs, and AI data center demand.

Sign up now for Uptime Tech News, our weekly newsletter on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard’s StrikeTape Wind Turbine LPS retrofit. Follow the show on YouTubeLinkedin and visit Weather Guard on the web. And subscribe to Rosemary’s “Engineering with Rosie” YouTube channel here. Have a question we can answer on the show? Email us!

Welcome to Uptime Spotlight, shining light on wind energy’s brightest innovators. This is the progress powering tomorrow

Allen Hall: Dan, welcome back to the podcast.

Dan Fesenmeyer: It’s great to be here. Great to see you again.

Allen Hall: There is so much happening in your particular area. Your name pops up quite a bit within Weather Guard because, uh, we’re dealing with a lot of operators and- A number of times we’ll ask them, “Have you read your turbine supply agreement?”

“No.” “Have you read your full service agreement?” “No.” “Well, maybe you should do that.” And then we say, “Have you talked to Dan? You should call Dan, ’cause he can help you understand what you have signed.” Mm-hmm. “Oh, that’s probably a good idea.” So now that you’re here, WindQuest Advisors, of course, obviously is your company.

Mm-hmm. And you’re talking to a number of operators. The, the big hurdle at the minute, the nearest short-term hurdle, is repowering. There’s just a lot of [00:01:00] repowering efforts going on- Mm-hmm … trying to get turbines in, start a project. There’s a July 4th deadline and an end of the year deadline. There’s a couple deadlines after that.

What are you seeing right now from operators i- in terms of repowering? What’s the effort happening?

Dan Fesenmeyer: Well, there was a ton of effort to start physical work. That window’s obviously closing-

Allen Hall: Yes …

Dan Fesenmeyer: very quickly, but it’s still open. Uh, and then once you’re past that window, my understanding is if you get your repower completed by the end of ’27, you didn’t really need to have started physical work.

But I think most folks, start physical work is kind of the insurance piece of it-

Allen Hall: Sure …

Dan Fesenmeyer: if things take longer. Uh, another thing that’s popped up is obviously FAA and other permitting.

Allen Hall: On the permitting side, from the federal’s, uh, standpoint, is that stopped? Or, or are projects able to continue putting turbines in the ground, or what’s the status?

Dan Fesenmeyer: My- From what I’ve seen, I think on the opening session here at [00:02:00] ACP, it was said, they said that there’s, like, 130 projects that are-

Allen Hall: At least …

Dan Fesenmeyer: caught. Yes. And I’m, I’m involved with some of them, and I have a fairly small shop, and there’s just no FAA variances or permits or- They’re not issuing- … mitigation studies.

Everything seems to have stopped.

Allen Hall: So they’re not even reviewing the documentation that’s been submitted by the operators at all?

Dan Fesenmeyer: That’s what it seems, yes. Yeah.

Allen Hall: Is that legal? Uh, uh, usually those federal requirements have a timeline which they’re able to review those permits and get them approved or disapproved them.

You’re s- Right … I think what I’m hearing is, what you’re saying is they’re not even looking at them.

Dan Fesenmeyer: That’s correct. That’s what I’ve heard and seen.

Allen Hall: Okay.

Dan Fesenmeyer: Yeah. Yeah.

Allen Hall: So what is an operator to do then? How does this, how do they meet some of these deadlines if they can’t get the permit?

Dan Fesenmeyer: Well, I mean, it stalled a lot of projects ’cause of the associated risk with it.

Although I’ve seen some, uh, you know, some repower folks think, “Well, you know, I’m just repair- repowering like for like, or I’m not changing much.” [00:03:00] But if your, if your rotor’s changing or pad location’s changing, you need to update those permits.

Allen Hall: So the, the groups and the operators that are repowering the existing turbines are putting basically the same turbine in the same hole.

Dan Fesenmeyer: Well,

Allen Hall: I- Would that be okay?

Dan Fesenmeyer: I would say originally- The initial push on repower was kind of your larger rotors- Sure … new drivetrain, et cetera. Yes. The market seemed to shift more towards, “Hey, let’s do smaller upgrades, component exchanges.”

Allen Hall: Okay.

Dan Fesenmeyer: Getting more towards the minimal investment, so to speak.

Allen Hall: The 80% investment portion.

Dan Fesenmeyer: Yes.

Allen Hall: Right.

Dan Fesenmeyer: Yeah. And less about, you know, a big new machine head, for example.

Allen Hall: Well, if that gets you through and gets you the, the, uh, tax credit started back up again, which is the whole point- Right … there would be a reason to do that.

Dan Fesenmeyer: That’s right.

Allen Hall: Is there a marketplace then for those components if you’re gonna repower a GE 1.5 machine, which there’s a lot of them- Mm-hmm

in the United States? Are you seeing a big emphasis to go get a new gearbox, [00:04:00] to upgrade the blades- Yeah, and, and- … kind of

Dan Fesenmeyer: thing? Or just do maybe a drivetrain and s- Okay … and leave the rotor or, or-

Allen Hall: So do a gearbox and-

Dan Fesenmeyer: Yeah. Gear or just full drivetrain- Or generator … or yeah, s- things like that. And, um- Wow

people are comfortable doing it, and then it’s e- it’s easier, obviously.

Allen Hall: Sure. It’s faster.

Dan Fesenmeyer: And faster, and you don’t necessarily have to touch permits or, yeah.

Allen Hall: And is part of that repowering, I know one of the questions- Mm-hmm … that’s been bandied about quite a bit is, do I have to buy a, a new generator or a new gearbox, or is a refurbished gearbox enough to check the box in terms of upgrading or putting 80% of the value back into the turbine to qualify for those tax credits?

Dan Fesenmeyer: I’m not a tax expert, but I’ve seen people do both.

Allen Hall: Okay. Well, that’ll tell you.

Dan Fesenmeyer: Yeah. Yeah.

Allen Hall: They’ve obviously talked to- Right … tax advisors about that.

Dan Fesenmeyer: It’s, it’s their level of risk and whether they have outside tax money or whether- … they’re kind of balance sheet or taking it themselves. It’s, it’s- Yeah … more of a risk profile that [00:05:00] everybody’s different on.

Allen Hall: Okay. So that has changed the landscape quite a bit. So now it’s, once this window of opportunity passes by, we’re into brave new world. Mm-hmm. And operating turbines now not really 10 years, operating till end of life, which could be 20, 25 years. Have operators started thinking about that and starting to address some of the, the, especially the contracts around that?

Are they starting to rethink contracts? Are they starting to approach full service agreements differently? Is, is the marketplace changing in the US?

Dan Fesenmeyer: Yeah, I think so. I mean, it, it, depending what you have and what you’re doing, whether you have an existing agreement or you need a new one, and whether it’s a renewal or if you’re doing, let’s say, a drivetrain or new machine head, then there’s usually a service contract that’s going to come with it- Sure

’cause it’s essentially a new machine. Largely a new machine. Largely,

Allen Hall: yeah.

Dan Fesenmeyer: But in the case of a gearbox, right, you’re probably out of your longterm O&M agreement anyway, and, uh, whether you’re… And you probably [00:06:00] have, you don’t have the unplanned coverage anymore. Right. So it’s really, you’re on, you’re kind of on your own risk.

Allen Hall: Okay, so that’s the repower scenario. Mm-hmm. What’s happening new turbine-wise? It seems like the, a lot of the operators are choosing six megawatt, seven megawatt, eight megawatt machines tends to be the, the, the band of opportunity for a lot of operators. What are they working on right now in terms of, uh, TSAs, full service agreements?

What are you seeing out on the landscape US-wise?

Dan Fesenmeyer: Well, I think, um, the TSAs haven’t changed much.

Allen Hall: Okay.

Dan Fesenmeyer: But the- The, the scope and the risk has changed a bit, and the, the OEMs are, you know, holding their cards closer, and it’s hard to get to certain terms that– harder than it used to be.

Allen Hall: So let’s, let’s talk about that for a minute because, uh, there’s been some recent reports speaking to the O&M costs for larger machines.

And so the, the goal was if I went from a [00:07:00] two-megawatt machine to a six-megawatt machine, my O&M cost may be 3x because of the size of the turbine, but ideally they drop. That, uh, the same amount of effort into a larger, m- newer machine, uh, so, uh, my spend wouldn’t go up that much. In, in some places on the planet that I’ve seen feedback about that is that the O&M costs are not 3x, they’re 5x.

So the, the cost to operate the turbine, the six and eight megawatt machines, is higher than it would be proportionally to a two-megawatt machine. I think operators are just trying to start to figure that out. Are the OEMs already knowledgeable of that fact and are s- trying- I, in, in- … to phrase the conversation

I

Dan Fesenmeyer: mean, in the pricing that you get from the OEMs for the full scope agreements, that’s largely in there already.

Allen Hall: Yes.

Dan Fesenmeyer: And I always tell people look at it on a dollar per kWh or dollar per megawatt hour- Ah … basis versus a dollar per turbine, and you- Sure … you’ll see a different number.

Allen Hall: Different calculation done.

Dan Fesenmeyer: Right. But [00:08:00] these, these larger machines, they need larger cranes. They need tall– Yeah, they have taller towers, so a different crane setup, and these components become very, very large. So- Everything gets harder … everything gets d- more difficult. In a basic sense, it’s still oil and gearbox and, you know, tho- tho- Right

that kind of basic service. But when you get into major components and more major maintenance items, then it’s bigger, it can be harder.

Allen Hall: So what does a operator think about that now that they have a little bit of experience? Obviously SunZia, which is a huge project, three and a half gigawatts, uh, a l- several hun- like around 900 turbines, all of them bigger turbines.

It’s a r- for, uh, really the first real taste in America of larger turbines. What are the operators thinking about that, and how are they thinking about what sizes to go with in the future? Or, or, or do they not really have a choice? Like, GE offers six, Vestas offers six, Siemens will offer a six or a seven, [00:09:00] so those are your choices.

They’re– You’re not able to get a two megawatt machine anymore.

Dan Fesenmeyer: I mean, I think, uh, it really comes down to your, your site. Okay. And the larger machines are generally better when you have land constraints or, uh, y- your, your wind resource varies very differently. Think of a ridgeline, and you only have a certain number of pads.

But generally, it’s kind of a pad constraint to push you to the larger, and then your smaller, “smaller,” four and four to four and a half- … megawatt machines, those are still kind of the workhorses of, of the US, in my opinion. Their NCS better, they’re e- they’re lower cost, but you need more pads. So it’s always that trade-off of pads versus space, spacing, uh, and in the end, you just want to get the most AEP out of that site.

Allen Hall: In terms of marketplace, are you seeing prices generally rise dollars per megawatt on [00:10:00] new turbines? ‘Cause the, at least the market indication is that, uh, some of the OEMs have- Real strength in the marketplace today. This is an, an OEM-strong market. They can set- Mm-hmm … prices now. There’s fewer players. China has been eliminated from a lot of lo- locales.

Mm. So they don’t have the competition. That allows them to raise prices. Are you starting to see that flow down in some of the contracts, that, hey, the prices are going up? But, but i- inflation has been a big part of that, too. Well,

Dan Fesenmeyer: yeah, yeah. I mean, there’s… And tariffs, right? The, uh, that, that’s the most interesting one right now, and you have to kind of peel apart what’s my pre-tariff price versus my post, and then what’s the exposure if these tariffs change?

And-

Allen Hall: Is that in the contracts now? Are they able to write contracts that tie them to what the tariffs could be, so your final price really depends on what the tariffs are today or tomorrow?

Dan Fesenmeyer: It’s generally… Well, things have changed and, and things are always fluid, but, [00:11:00] but most recently it’s, “Well, here’s what the tariffs are today,” and when we either bring in the component or when the OEM’s actually paying that tariff, it’s kind of a pass-through

Allen Hall: in essence.

So they’re just handing you the, the bill for the tariff- Yeah … in a sense.

Dan Fesenmeyer: I mean, that- that’s it. And then you can maybe negotiate and do some things around that to share risk a little bit. Mm-hmm. But the basic premise is, you know, there’s transparency on here’s the countries and the tariff rates. If these change, that’s on the buyer.

Allen Hall: So the OEMs are trying to address that in, in some form w- by moving production into the United States. Vestas has a large blade facility in Colorado. They’ve been expanding that over the last several months. They’ve been hiring quite a bit. Uh, GE with LM up in North Dakota and TPI, and all the discussions around TPI at the minute is to really bolster their supply chain.

Uh, they’re trying to get away from the tariffs as much as they can. Are, [00:12:00] are you… You think you’re still gonna see more of that where a Siemens, a GE, a Vestas are gonna be investing more in the United States to avoid that tariff, or is it just impossible?

Dan Fesenmeyer: I, I mean, I think you… What they’ve done, I… It seems to me, I’m not obviously an expert on that, but it- they’ve moved things where they can And to capture- Mm

you know, where you already have capacity. But starting, yeah, building a new plant somewhere, I’m not sure how wise that is in the environment that we’re in.

Allen Hall: Yeah, you saw a lot of plants that were proposed two, three years ago that have, were never built. It does seem like existing plants that were on site that were closed got reopened.

Kansas, Iowa- Mm-hmm … some of those plants got- Mm-hmm … started over again, which is easier to do, which makes a lot of sense. So they’re going after the, the easiest things first still. We’re in that phase of we’re not gonna put a lot of money into the United States however. We’re gonna utilize what we have and maybe grow what we have.

Dan Fesenmeyer: Right. Or, or similarly, you can move from, if you have more of a… All these supply [00:13:00] chains are global at this point.

Allen Hall: Sure.

Dan Fesenmeyer: But if you happen to have a factory in a country with a lower tariff and versus one that’s higher, maybe you move that. You’re not bringing it over to the US, but you’re moving from, let’s say, India to the UK.

Allen Hall: Sure. So, so- Okay, so there, there’s a lot of sh- card shuffling going on- Yeah … to avoid tariffs.

Dan Fesenmeyer: Yeah, and unfortunately then the tariffs change and- … perhaps you have to change back. And, and the other one, uh, that’s out there, obviously the Supreme Court had their ruling on tariffs, so folks are waiting for a Section 232, which is

Allen Hall: still- Untouchable, in a sense?

Uh-

Dan Fesenmeyer: Well, it- people are just waiting for what, what will Section 232 be. And it’s been looming for months now.

Allen Hall: Over a year.

Dan Fesenmeyer: Yes. So, and, you know, we’re waiting, I guess.

Allen Hall: Is the feeling about that in the industry, uh… I’ll, well, I’ll use a couple of good examples, I think, which, uh, offshore wind being a real stress point United States, and a lot of [00:14:00] the administration’s work to limit offshore development got stopped in the courts.

So anything that was sort of building turbines, putting, had ships out, putting- Mm … uh, monopiles in, they never got stopped. They were delayed a couple of weeks, but they were never really stopped, and it feels like from the outside looking in, is that the courts are not gonna allow some of these, uh, movements by the administration to take effect.

Is the industry in the United States seeing the tariffs and some of the more extreme things that are happening as temporary or, or are they being a little more cautious, saying, “Yes, offshore wind has won a, a number of lawsuits”? But we may not. And th- with the Department of War and 232 and all those events that are happening, what is the outcome there, and w- how are operators thinking about that?

Dan Fesenmeyer: Well, I think we’re in a, in a market where if you have a project that can get built within this window-

Allen Hall: Yeah …

Dan Fesenmeyer: and [00:15:00] you’ve safe har- Like, those projects- And you’re, you’re just in … are desperately moving forward.

Allen Hall: Okay.

Dan Fesenmeyer: Then- ‘

Allen Hall: Cause the trend has been, if you can get it in the ground, they’re gonna let it be developed.

They haven’t been able- Right … to stop anything halfway through. Well,

Dan Fesenmeyer: other, like, the FA is a good example of it-

Allen Hall: Sure …

Dan Fesenmeyer: being stopped. But- Yeah … if you have a project that’s being built, you’re moving forward, and then projects that are outside the window, it’s more of a greenfield development view of, of life.

And seems like some folks are selling p- assets, some folks are buying- A

Allen Hall: lot of that …

Dan Fesenmeyer: development assets.

Allen Hall: Let’s go down that pathway for a minute because I did think- Yeah … that’s a very interesting piece to what’s happening in the United States at the minute. There’s a lot of transactions, big dollar transactions happening for wind- Mm-hmm

on buying, selling portfolios, not just farms. It used to be farms. Right. We’ll sell a farm. Yeah. It was. We’ll swap farms, that kind of thing. Now it’s like, uh, would you like our whole portfolio, wind, solar, battery?

Dan Fesenmeyer: Mm-hmm.

Allen Hall: Is that playing into a lot of the decisions that are [00:16:00]happening on the ground right now, that a, a developer or an operator that has assets is saying, this is a prime time to sell.

There’s a l- I have my tax credits already locked in. We’re golden here- Mm-hmm … for several years. The value is never gonna get higher. I need to get out. I- is that the marketplace today, is-

Dan Fesenmeyer: I think for some. I mean- Yeah … everybody’s got different, uh, motivations, whether they wanna get into wind, get out of wind, greenfield versus repower.

Uh, it, it’s, it’s really their view of the world and their risk profile moving forward, and whether this is a short-term play, long-term. Do we wanna get out of wind? Some people are essentially doing that. Uh, it’s, it’s across the board.

Allen Hall: How’s AI data centers playing into this? What are you hearing?

Dan Fesenmeyer: Oh, I mean, that’s what everybody talks about, AI and data centers, and the demand for power is there.

And- The [00:17:00] issue that, that a lot of us see is wind and solar and battery can all help with that.

Allen Hall: Sure.

Dan Fesenmeyer: And if you want a gas turbine, that’s great, but my former colleagues at GE are gonna tell you it’s 2030- Yes … or later to get one, so what do you do between now and then? And you’re seeing prices go up, which makes these wind farms look pretty good.

Power profile’s nice. Yes. Uh, but you still have hurdles to get, like the FAA, US Fish and Wildlife, all these other hurdles to, you know, that are slowing down wind and solar for that matter too.

Allen Hall: Solar’s been slowed down for sure.

Dan Fesenmeyer: Yeah. Yeah. Yeah.

Allen Hall: Does that change, though, with the demand for power in AI data centers?

And it does seem to be a priority in the United States to, to win this AI race. Mm-hmm. Does that loosen some of the reins on renewables to let them go, like just look the other way for a while, while they put a new solar field or wind farm in?

Dan Fesenmeyer: It stands to reason that will happen. Haven’t really seen [00:18:00] it, unfortunately.

But I wo- But I think it will, right? I mean, it, it, it, it almost has to at some point.

Allen Hall: There’s a lot of pressure on Washington DC to let data centers start being developed and, and go.

Dan Fesenmeyer: Mm-hmm.

Allen Hall: But a- as you pointed out, gas turbines are hard to get, and they can’t scale up at the rate at which the demand is.

Right. So your alternative is something really simple, quick and efficient, which would be wind and solar and a little bit of battery. Yeah. I- is that change in the thinking of operators and how they’re thinking about their assets, one, and two, what they’re thinking about in the future? Or are they trying to hook up with an- a- I mean-

a Google, a Facebook, a- Yeah, I

Dan Fesenmeyer: mean, the offtake’s- … SpaceX … there, and that’s generally, you know, it used to be utility PPAs. Then it turned- Right. … into hedge things and C&I. Yeah. And now it’s more, you have this, the data center offtake.

Allen Hall: Is the data center offtake, thinking about it from a, a financial standpoint, which they’re probably not being tied to the grid.

At [00:19:00] least a lot of these, or at least the talk is right now, is the not being connected to the grid to be sort of standalone, feeding a data center, and maybe a piece of fiber optic coming out of the data center. But that’s essentially it. Maybe some backup power on the grid just in case things go horribly wrong, but standalone power for data centers does make sense.

It would, it would seem to lessen the requirements on wind and solar in terms of interacting with the federal government or the, the power company in a sense. Does that make wind and solar a little more viable because it’s not connected to the grid?

Dan Fesenmeyer: Well, I mean, it will be connected to the grid because when the wind stops blowing, the utility will usually, you know, or, and the sun stops sh- shining- Sure

uh, the utility will kind of provide that power. That w- Or the gas turbines that they have would- Gas turbine will kick

Allen Hall: in, right.

Dan Fesenmeyer: Yes. Yeah. But, but generally speaking, you’re never truly off the grid, but it does speed things up with interconnection and, and, you know, your T&D [00:20:00] line is much shorter.

Allen Hall: Right.

Dan Fesenmeyer: Or not, you know- Much

much, much shorter. Yeah. Depending where the, the resource is and versus the plant or the, the data center.

Allen Hall: So what are the things that we don’t know in the industry that you’re in touch with that we should know? ‘Cause there, there must be a lot happening behind the scenes that we don’t hear out in public or in the common spaces of some of these conferences that are happening behind the scenes.

What is, what is the status right now? What do you think the status is of wind?

Dan Fesenmeyer: I mean, it’s, I, I, I’m a big sailor, and sometimes the wind’s blowing hard- … you’re going fast, and sometimes you sail into what we call a hole- Yeah … and it’s just dead quiet. We’re not quite there yet, but, um, it, it’s kind of we’re going through a bit of a lull right now.

And I think, I think what people don’t realize is the multiple roadblocks that the industry’s facing. In the past, we’ve had PTCs lapse, and the question is when and if it [00:21:00] will be renewed. Yeah. Now you have other roadblocks, you know, whether it’s, again, FAA, Fish and Wildlife, permitting, different localities.

Some… And this goes back to the data center. A lot of local, you know, communities don’t want a data center.

Allen Hall: Right. There’s a lot of-

Dan Fesenmeyer: Right? And they’re like, “Well, wait a minute. My power prices as a citizen are gonna go up- True … because of it.”

Allen Hall: Yeah, it’s true. We’ve already seen it.

Dan Fesenmeyer: Yeah. Yeah. So, so there’s a lot of just new barriers that have come up.

Allen Hall: Okay. That-

Dan Fesenmeyer: But wind developers are an extremely resilient bunch, and-

Allen Hall: This isn’t the first rodeo-

Dan Fesenmeyer: Right …

Allen Hall: where they’ve had these issues pop up- Yeah … and PTCs stop and other world forces affect the industry. What’s the outlook over the next three to five years, do you think? Different administration in a couple years, maybe different outlook, more demand on…

for power, AI data centers. Is- it just gonna [00:22:00] overwhelm any resistance to wind and solar and battery?

Dan Fesenmeyer: I mean, it, it, that’s kind of a crystal ball, but I think if these data centers start getting built out like people think they will, there’ll be demand for power. And, now we’re talking basic economics, Supply, demand. People need power, then power plants will get built and, whether it’s gas, wind, solar-

Allen Hall: All of the above

Dan Fesenmeyer: All of the above, right? And, and I think it will ultimately follow that. I think the, administration will let you know if there’s not enough power or power gets too expensive, something has to break and fill that gap

Allen Hall: because- So let the economics play out a little bit.

Dan Fesenmeyer: Yeah, right? Yeah. ‘Cause we’re, we’re voters, right? And- Sure … and, um, people vote often with their pocketbooks.

Allen Hall: And wind and solar are cheap sources of energy, and they’re gonna come to the top of the list almost every time.

Dan Fesenmeyer: Yeah.

Allen Hall: Yeah. Yeah. Yeah. I, I agree with you. Uh, it’s good to see you again. We saw you a few months [00:23:00] ago at WOMA in Australia, and that was wonderful.

And I tell a lot of the operators we talk to, “You better be talking to Dan and WindQuest Advisors because you really need to understand what your contracts say and the contract you’re signing, and you need to have a better sense of what’s happening, a little more broader speak in the United States and elsewhere- Mm-hmm

and they should be talking to you.” So how do they call or how do they contact WindQuest Advisors to get started?

Dan Fesenmeyer: Well, www.windquestadvisors.com or reach out to Allen and his team. You’re on LinkedIn. I’m on LinkedIn as well- … both personally and my firm. And, um, ask a friend ’cause I have a, we have- … big networks that everybody…

You know, it’s, it’s a small community here. It

Allen Hall: is.

Dan Fesenmeyer: Right?

Allen Hall: It is.

Dan Fesenmeyer: And, and people bounce around different firms and, but people stay connected, so, um, that’s a great way to find each other as well.

Allen Hall: Yeah. Great to see you, Dan. Likewise. Thank you. Thanks for being on the podcast. And yeah, we’ll hopefully see you in Australia in a couple months.

Dan Fesenmeyer: Looking forward to

[00:24:00] it.

WindQuest Advisors on Repowering and Rising O&M Costs

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America’s Brand: Indifference to Human Pain

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There are essentially two forms of government on this planet: those that care about the wellbeing of their citizens and serve their interests and those that don’t.

Until the late 20th Century, one could have plausibly argued either way re: the United States.  Since about 1980, it’s been clear that we really couldn’t care less about the sufferings of the common American.

It’s really become part of our brand.  Billionaires deserve tax cuts.  The middle class is shrinking, and the poor deserve a kick in the ass for not working harder.

America’s Brand: Indifference to Human Pain

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