Green Wave Energy is trying to turn wind power market on its axis

www.latimes.com
November 17, 2009

The company and investors are banking on the unconventional design of its micro turbines that can generate energy by capturing breezes from any direction. The potential for profit is blowing in the wind, and Green Wave Energy Corp, plans to catch it. Among its secret weapons: an 11-foot-tall, blazingly white, nearly indestructible prototype generator that produces as much as 11 kWs of electricity using gusts of wind.

The fiberglass contraption could make homespun, do-it-yourself wind energy a reality, Chief Executive Mark Holmes said. A model version recently stood amid yachts in a Newport Beach shipyard before being disassembled for updates, but Holmes envisions it moving soon into the backyards and rooftops of homes and businesses. "It's gee-whiz stuff," he said. "It gets really Space Age."

Green Wave Energy Corp has big dreams for its generators, known as micro turbines, and for a product that churns out energy using ocean waves. There are also ambitious plans for a park filled with larger turbines. The wind-energy industry is growing, in part with help from federal stimulus money. For the first nine months of the year, more than 5,800 MWs of wind projects were added to the nation's energy supply, up nearly 40% from the same period last year, according to the American Wind Energy Association.

But for fledgling energy companies such as Green Wave Energy Corp, staying aloft can be a major challenge. "It's been hard getting this off the ground," Holmes said. Unlike most windmills' propeller-shaped turbines, the Green Wave Energy Corp products operate on a vertical axis, merry-go-round style. More than 20 U.S, companies build or are developing vertical-axis turbines. Around 200 urban or rooftop units were sold in 2008, double the 2007 number.

Sales of small wind turbines soared last year to $77 million and 10,500 units capable of generating 17.3 MWs of electricity, marking a 78% increase in capacity sold from 2007, according to the American Wind Energy Association. Holmes has invested $100,000 of his own money since Green Wave Energy Corp launched in October 2008 with a vast underestimation of the resources, time and effort needed to operate. Development costs have been about $1.7 million, about four times higher than the team had expected. The crew quickly learned the value of resourcefulness.

Friends, family and other investors, who have pitched in $110,000, have given Green Wave Energy Corp access to $1.5 million in facilities, supplies, vehicles, equipment and services, Holmes said. The company has no official employees. Instead, all partners who provide services, equipment and working space are considered shareholders and officers. Most Green Wave Energy Corp workers have day jobs, such as the man who engineers corneas for eye replacement surgeries when he isn't designing turbine parts.

Using shareholders' properties - - the shipyard, a 10-acre manufacturing facility in Perris, two others in Santa Ana and Costa Mesa, and a garage in Orange - - saves thousands of dollars in rent a year. Instead of using an expensive wind tunnel to test the strength of the turbines, team members hitch a 4-foot prototype to a truck bed and go for a 55-mph spin. But even though Holmes is an ace at being thrifty, he's less adept when it comes to government regulations and holdups, he said.

Before wave-power generators can even get close to public waterways, companies must hack through a pack of regulatory agencies, including the California Coastal Commission and the Federal Energy Regulatory Commission. The process, Holmes said, could take as long as three years and cost thousands of dollars in legal, permitting and other fees.

Fewer than 1% of small wind turbines are built in urban settings because of poor wind quality and zoning restrictions, according to the wind energy association. Convoluted permitting practices and resistant city planning departments thwart a third of all potential installations, the group said.

"The regulatory maze is so thick and complex that I am fairly certain no one can navigate it but well-trained lawyers - - and even for them, it's rather daunting," Holmes said. The federal government and several states offer rebates and tax credits to stir investment in the wind industry. California, according to the association, boasts some of the strongest sales in the market. There's plenty of competition from a crush of other young energy companies, all angling to set themselves apart.

Buying and installing a small turbine costs an average of $3,000 to $5,000 a kW, according to the wind energy group. Recouping the investment could take six to 30 years. Green Wave Energy Corp tries to position itself first as a company with money-saving products, while touting its eco-friendly qualities. "We're here to make money," Holmes said. "We're the new guys on the block. If we didn't show up with a better mousetrap, we wouldn't have a chance."

Although he majored in chemistry in college, Holmes, 49, strayed from science for nearly two decades as he pursued a career as a maritime and corporate lawyer. In the 1990s, however, he worked on bankruptcy cases involving solar energy companies. Intrigued by alternative energy, he began combing through patents, trawling the Internet and meeting with inventors. Along the way, Holmes had to learn physics and engineering. Now he can translate "scientific gibberish" for investors.

Unlike most turbines, Green Wave Energy Corp's vertical-axis products can generate power using wind from any direction, Holmes said. The smallest operates alongside a solar generator to power batteries built into a light pole, designed to generate light from dawn until dusk for as long as 20 years in remote or harsh locations such as deserts or jungles. There's also an "urban turbine," which is smaller than many rooftop air-conditioning units.

The first prototype turbine was finished in February to the tune of $30,000, but others have been progressively cheaper to build. Eventually, Holmes hopes to manufacture turbines like "tinker-toy sets" for easy manufacturing and installing. Meanwhile, in the desert near Victorville, Green Wave Energy Corp is participating in a joint venture to construct and operate a 5-acre park filled with 70 wind turbines. The first 40-foot-tall, $350,000 colossus could be turning its 50-pound blades by February, Holmes said.

A venture capital firm has initially promised 90% of the $26.5 million to develop the park, which could be finished in two years. Green Wave Energy Corp and other partners will raise the rest. The turbines could each bring in $160,000 a year if the park works out a power-purchase deal with a California utility, Holmes estimated. "It's kind of a risky deal, but even if it works half as well as it's supposed to, it's still revolutionary," he said.

The company also is developing a 20-foot-long wave-bottom generator that produces energy using surging ocean swells. Potential locations include the fronts of bridge pilings and piers, or in the enormous waves off the South Africa coast. If they clear regulatory hurdles, six generators will be tested at a site 100 feet off a granite Santa Catalina Island cliff, where the water is so choppy that even seals and sea lions avoid it. "We don't discriminate on technologies," Holmes said. "When you get down to it, the concepts are pretty similar. We don't want to pick any winners in the alternative energy game."