Comments Off Today’s interesting tidbits come again from Jeffrey Ball, WSJ writer, via the Star Tribune. I’ve posted the link to the article in the CONVERSATIONS section of our blogsphere because I anticipate much discussion – and I encourage it.
In trying to set up a fertilizer machine for an agribusiness company, I realize there are obstacles that come about when trying to make all the components work; especially when trying to incorporate components that are used and not supported by tech support. What connectors do you need? How do valves, flow meters, and modules hook up with each other and interact? It’s kind of like trying to heard cats in a tornado.
After thinking about this a while (sitting on my butt in a combine and going around in circles) I realized that in starting a new business and attempting to bring a brand new product to the market, there needs to be simplicity for a user. Yes I will say it should be “so easy a caveman can do it!” Well, it should be at least easy enough for a farmer or other people in the field. Not only does a product need to be simple to work with during setup and the initial “first date”, but it needs to do the job properly.
The UAS I am prototyping is a great example. What needs to be simple for the end user and how should it function properly for commercial use? What should the payload be and what should it be made of? By asking these questions, hopefully we can avoid having trouble with tech support and customer dissatisfaction later on.
So how can a new product such as a UAS fit in with traditional equipment, software and thinking? By using the SWAG method (Scientific Wild Assed Guess) it can work. Currently yield monitors are providing the information needed to determine production zones, to vary the rate of fertilizer, and to show where weeds are at. Although it is great information and can be utilized on any farm, it is reactive information. A UAS can provide timely information that can be utilized during the growing season.
By understanding the intricacies of current precision ag equipment and uses, a UAS can be made to work in harmony. Now I’m not gettin’ sappy and singing around the campfire, but this type of scenario has led us to where we are at today. Build the better mouse trap.
Where does that leave us? I continue to work on understanding what is currently being used, what is needed, and how the end product should perform. That darned ol’ thing called money crops up and I am trying to get enough to go into production. In the mean time I am gathering the information necessary to come out of the gate running with hopefully a product that will fit the bill.
Until next time,
HAPPY TRAILS!
Comments Off I’d like to kick off discussions by sharing an article that we enjoyed here in the office a week ago. It was originally published in the WSJ on 8-31-09.
After nearly a six-month lull, Wall Street is getting back into the business of financing new wind farms.
Morgan Stanley and Citigroup Inc. have invested $100 million each to finance separate wind farms this month, taking advantage of a brand-new federal program that is paying substantial cash grants to help cover the cost of renewable energy investments.
Bankers say this is the beginning of an active pipeline of new wind-farm financing, as well as investment in large solar installations and geothermal facilities. Project developers and Wall Street appear to be viewing the federal cash grant program as such a good deal, industry experts say, it may grow much larger than its Washington creators expected.
“The money is coming back,” says Ethan Zindler, head of North American research at consultant New Energy Finance Ltd.
Under the program, the government will give a cash rebate for 30% of the cost of building a renewable-energy facility, awarded 60 days after an application is approved. Investors are also given valuable accelerated depreciation deductions, which help offset taxes.
The Energy and Treasury departments have said they expect to spend $3 billion on the program, which started July 31 and runs through the end of 2010, and was part of the stimulus bill. But a government spokesman says requests for $800 million in grants were submitted during the first four weeks.
Some Wall Street bankers say they expect applications to grow to $10 billion, based on projected wind-power installations.
“We see opportunities and we are pursuing them pretty actively,” says Kevin Walsh, managing director of General Electric Co.’s GE Energy Financial Services division, which was a major financier of wind deals in the past.
The strong interest echoes the $3 billion cash-for-clunkers program that provided incentives to trade in older, lower-gas mileage cars, and which was quickly overwhelmed by demand. “We are concerned that this may evolve into a cash-for-clunkers version 2.0,” says a spokesman for Rep. Darrell Issa, a California Republican.
But unlike the popular cash-for-clunkers programs, there is no spending cap on the renewable energy grants, and the government has committed to spending as much as is needed to keep renewable-energy investments flowing.
Under an earlier renewable energy program, the government gave companies tax credits over 10 years, which were attractive as long as financial firms believed they would be generating taxable profits for years to come. When Wall Street imploded last year, profits turned to losses and appetite for these investments disappeared quickly. Some of the companies most active in these deals — including Lehman Brothers Holdings Inc. and American International Group Inc. — were hobbled or destroyed by the turmoil.
But the new cash grants are offering the potential for attractive returns. Several bankers interviewed said they expected deals to provide an annual return of anywhere from 9% to 15%.
Most of the investments are expected to go to wind projects, because the industry is more mature and in a better position to capture limited funds. “I would not be surprised if the program is ridiculously successful and spurs a huge amount of development,” says Liz Salerno, director of industry analysis for the American Wind Energy Association.
More
Duke Energy Makes More Investments in Wind Farms
Even capital-constrained financial giant Citigroup has been drawn to wind power. In August, it made a $120 million investment in a large wind farm under construction in the rolling hills of northern Pennsylvania. The project, called Armenia Mountain by developer AES Corp., will deliver about 100.5 megawatts of power-generation capacity from 67 turbines, each the size of a 20-story building.
The quick returns provided by the cash grant “made it an attractive investment option,” said Sandip Sen, Citi’s global head of alternative energy.
It’s not just Wall Street banks that are attracted. Iberdrola SA, a Spanish company that is the world leader in renewable energy by capacity installed, said in July that it expects to tap $500 million in cash grants for U.S. wind projects. “We’ve been in contact with the Treasury Department and we think the $3 billion is a minimum-type number,” said Ralph Curry, chief executive of Iberdrola’s U.S. business unit.
The Treasury Department didn’t return calls seeking comment.
Additional financing from the grants would potentially benefit major wind-farm developers such as Florida utility FPL Group Inc. and large-scale solar developer Edison International. It could also give a boost to manufacturers who make the turbine blades and solar panels, such as Vestas Wind Systems A/S and First Solar Inc.
Morgan Stanley recently made a $120 million investment in a Montana-based wind farm developed by Grupo Naturener SA. “The cash grants are a good deal for both developers and financial backers,” says Martin Torres, a Morgan Stanley vice president who worked on the deal.
“If we have a quick recovery and we’re going like gangbusters again, you could easily get to $10 billion in two years,” says Kevin Book, managing director of ClearView Energy Partners LLC, a Washington consultant.
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