host posted on December 13, 2009 13:57
By Ryan Beene
Crain's Detroit Business
Astraeus Wind Energy Inc. is close to finalizing two major steps needed to bring its pilot program for carbon fiber wind turbine blades to market.
The joint venture between Sterling Heights-based MAG Industrial Automation Systems Inc. and Eaton Rapids-based Dowding Machining Inc. is close to finalizing a deal to license a new turbine blade design from a major wind turbine component manufacturer.
Astraeus also is negotiating with Dow Chemical Co. to land the Midland-based chemical giant as its supplier for a new resin that will have the same lightweight strength characteristics of carbon fiber but be far less expensive.
These deals, Astraeus' founders say, will help the company execute its main goals: to replace the current handmade turbine blades that dominate the market and become the leading manufacturer of wind turbine blades in the world, and be based in Michigan.
“This will, overnight, just take the market — there will be no competition,” said Jeff Metts, president of Astraeus. “There's no reason to go back to doing it any other way.”
Astraeus hopes to open turbine blade manufacturing plants on each coast of the state. The plants would contain fully automated operations.
The upcoming deals follow last week's announcement that Astraeus won $7 million out of $15 million in federal TARP funds allocated to Michigan companies for clean energy manufacturing projects.
Astraeus plans to use the $7 million to build its first machining center for wind turbine hubs, or the central component that connects a wind turbine's three blades to the turbine's powertrain.
The machining center, Astraeus' founders say, would cut down the time needed to machine the hubs to about 4.5 hours from the 20 to 60 hours currently required.
“The goal (of the hub machining center) is part of the overall strategy to reduce the cost of making these windmills to make electricity,” Metts said. “This would be just one step in a highly competitive windmill generator. The next thing we tackle is going to be blades.”
To do that, though, additional funding is needed.
Metts and Astraeus co-founder Roger Cope, president of strategic business development at MAG, have said the company's first plant is expected to be at least 625,000 square feet and cost an estimated $135 million.
To date, Metts and Cope said, venture-capital funding for the work has not been available. But they are pursuing other financing options.
Frank Alex, CFO of Canton Township-based Danotek Motion Technogies Inc., concurred that investment is harder to come by, but can be found. (See story, this page.)
“Obviously with what has happened over the last 18 months, people are a lot more risk averse,” Alex said. “The banks have even become more risk averse, which hurts things, because in the past you would have venture capitalists teaming up with banks to fund things, and the banks have pretty much taken themselves out of the game.”
Still, funding is available for projects, Alex said, but the venture must have the right value proposition, which may include startups with a more-developed product.
“Venture capitalists are tending to invest a little bit later in the maturation stage than they used to,” he said.