United States

United States

NPS looks to expand through strategic partnerships

UNITED STATES: Northern Power Systems (NPS) hopes to carve out a "large" European market in 2014, especially in the UK and Italy, according to Canadian securities documents.

NPS has designed an 8MW turbine
NPS has designed an 8MW turbine

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The turbine manufacturer is also seeking international strategic partnerships, including in China, India, Mexico, Russia and South Korea, that would involve licensing its technology and design, development and support services.

The information was provided to regulators by Toronto-based Mira III Acquisition Corp, which is merging one of its subsidiaries with Wind Power Holdings, the parent of NPS. Mira, listed on the Toronto Stock Exchange's Venture Exchange, is a capital pool company, a public shell that merges with an operating company and raises money through a private placement.

NPS's intellectual property (IP) portfolio is small but high-quality, especially their converter technology and direct-drive architecture, said Philip Totaro, an wind-technology IP expert.

Elliot Mark, NPS's counsel, declined to comment on the post-merger plans.

NPS, one of the oldest wind turbine manufacturers, has sold more than 400 60kW and 100kW wind turbines since 2008. Its 100kW turbine has an in-house designed permanent-magnet direct-drive generator.

Two of the private company's prototype 2.3MW turbine have operated since 2011 in Michigan, but a $40 million sale of 13 of the units for a pilot project collapsed after the company's application under the US Department of Energy's 1703 loan guarantee programme was iced indefinitely, according to the securities documents.

NPS subsequently recast its strategic direction and for the last 20 months has pursued license and turbine-development contracts. "They were caught short — they released their utility-scale turbine just as the [US] market went into oversupply even for established players," said Matt DaPrato, ananalyst at IHS Emerging Energy Research.

In fact, NPS has now licensed its technology non-exclusively to China First Heavy Industries, which intends to develop larger turbines for onshore and potentially offshore markets in China, according to the public documents. NPS has been developing an 8MW direct-drive offshore turbine with a 175-metre rotor diameter.

NPS also has a strategic partnership with Brazil-based WEG Equipamentos Elétricos, which has exclusive rights to sell wind turbines based on NPS's 2.1 MW design in Brazil and non-exclusive rights elsewhere in South America. Wind Power Holdings has agreed to develop a 3.3 MW utility-class wind turbine for WEG, according to the documents. In early April, WEG announced that it will to supply 46 turbines based on the licensed design to a project in north-eastern Brazil.

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