The partners, which announced the agreement July 1, will focus on utility grid-connected wind farms and hydro-electric facilities, off-grid renewable systems to provide power to small, remote diesel-powered utilities, and wireless power systems using photovoltaics. The power plants will be developed worldwide.
The move is a highly significant sign of the times for the wind industry. Big business has recently been eyeing wind more seriously than at any time since the days when major corporations were drawn in by large government contracts during President Carter's era. Huge Kaiser Space Products now manufactures the Lynette-FloWind AWT-26 and Westinghouse, a conservative company, had already bought 4% of New World (Windpower Monthly, December 1993).
But its decision to team up with the renewable energy developer takes the trend a major step further. The industrial giant, based in Pittsburgh, Pennsylvania, has clearly decided to become an active rather than a passive participant in wind. Westinghouse, the 35th largest company in the United States, developed the early giant MOD wind turbines for the government and manufactured the 15, two-bladed 600 kW wind turbines which stand on the island of Oahu in Hawaii, a project also now owned by New World and recognised as one of the forerunners of big wind turbine technology.
Commenting on Westinghouse's decision to renew its participation in the wind business, Paul Forsyth, analyst with Denver investment bankers Stifel Nicolaus, says: "It's adding more credibility to the industry. It also adds a lot of credibility to a small company from Lime Rock, Connecticut." He adds: "It's good news when a company has been in the industry, stepped away and is now coming back." Summing up his analysis, he says: "In the longer-term, I think it's quite significant. Although Westinghouse has had well-documented problems in the past, it's still in many countries. Westinghouse is an established household name." Stifel Nicolaus helped New World go public.
The alliance hopes to build wind farms internationally. "We are a global enterprise. We operate in 140 different countries and the globe is our interest," says Westinghouse's Paul Tobin. "It is our intent to take wind power and photovoltaics wherever we can in the world." Commenting on where wind plants might be built first, he says: "It's hard to predict which project will go ahead first," adding, "We see power generation overall as a strong growth segment, and although renewables are a small part of that, they are part of the growth." The alliance may well manufacture wind turbines. "We have the capability to provide virtually every level of supply. We can build an entire power plant from the ground up," says Tobin. "The alliance has that potential," he adds.
President of Westinghouse Power Generation Business Unit, Frank Bakos, states: "We believe there are renewable energy technologies which are developing into truly competitive, reliable alternatives to traditional technologies." He continues: "This alliance teams Westinghouse's experience in this industry with the renewable expertise of New World to better serve customers of both companies." John Kuhns of New World comments: "The signing of this agreement marks the beginning of a new era for renewables in the industry. We believe this alliance gives both New World and Westinghouse a solid position in this segment of the power generation industry."
As part of the agreement, New World will purchase Westinghouse's shares in Photocomm Inc, which supplies photovoltaic systems, increasing New World's share in Photocomm to 45%. Westinghouse will in turn acquire additional shares of stock in New World, although it will remain a minority shareholder. Reportedly, its share will increase to 10%, up from about 4%.