Eleon is an Estonian based wind turbine manufacturer, that distinguishes itself as the developer of multimegawatt-class direct drive technology – the technology has proven to be 20% more cost efficient than existing technologies.
As the co-founder of Eleon, what led to the company taking shape and what sets your wind turbine technology apart?
My brother and I laid the foundations for the wind business in 2001 as wind park developers. By working hands-on with Siemens, Enercon, Vestas and their varying technologies we gathered significant experience. From those days one challenge became apparent – regardless of the scale of the turbine itself, the technology employed was pretty much the same and a need for innovation was arising. Eventually we invented our own direct drive technology in 2007.
The advantages for direct drive are obvious – they are more reliable, with no losses due to the absence of a gearbox. Nevertheless, traditional direct drive turbines need to secure the generator in order to avoid issues with the air gap caused from off-axial loads caused from large rotor blades, making the nacelle and tower dimensions larger and increasing the overall weight and CAPEX.
Eleon’s single-sided supported direct drive (SSDD) invention allows to build 30% lighter (compared to any other technology on the market with the same parameters) and cheaper turbines – this is completely new technology on the market and has the overall end advantage of reducing the levelized energy cost.
What were the main challenges you encountered as a newcomer on a market dominated by global OEMs?
First of all, this industry has a long history– Vestas for example was founded in 1945, producing agricultural equipment before ever entering the wind segment, and they had more than 40 years of building references and establishing their market position. Newcomers such as Eleon must start from scratch and be able to build a strong enough case to banks and investors in order to obtain financing, in a world otherwise filled with good ideas.
Another challenge was getting universities and tech companies to commit their time and energy to working alongside us – at present we are lucky to became innovative academic team and having strong industrial partners by our side. As soon as the first stones were set and our dreams became a nut and bolt reality, we installed the first turbines in Salme Wind Park in Estonia, starting with a prototype and then scaling up by building another, 100 MW Aidu wind park. This was meant to serve as our first reference to kick off a regional and global expansion, at which point we encountered an unexpected obstacle – our own government.
Salme Wind Park has been running successfully since 2013 – are you pleased with the results?
We installed the first 3 MW wind turbine prototype in Salme in 2013 and I must say it truly surprised all of us through its efficiency and reliability. The average reliability since commissioning is over 99%, which is an absolute record. The prototype produces 12 GWh/year on average, where the capacity factor is over 44%, which is the typical rate for offshore applications.
And for the second part of your previous statement, you mentioned the state as an obstacle. Estonia has a reputation for being very transparent and business friendly, does your experience speak differently?
Estonia has a public face and a real face. Sure, the state is very encouraging of SME’s but in a country of only 1,4 million, as soon as your business grows beyond a certain point it becomes significant – and in some ways, a threat for what we call state capitalism.
The government thus starts competing with the private sector in all kinds of business segments, from energy to transport, aviation or the media. And competition tends to favor whoever makes the rules.
More specifically, our hurdles came as we were ramping up our references and were in middle of building the Aidu wind park. The state-owned energy company Eesti Energia lay dormant for a while, but then in 2015 discovered, that they have missed the opportunity they had slept during and started plotting nasty tricks to make up for the lost years. In cooperation with government authorities, the Ministry of Defense changed the legislation by coming up with a so called zero tolerance settlement for radars, which means that no wind parks could be built even with a half-millimeter of radar visibility.
There were wind parks of over 1 GW under development and with building permits that were suddenly stopped in their tracks, with the exception of Aidu, which was in a more advanced stage and had valid permits in place. But finally authorities found issues here as well – the initial permit was issued for Vestas V112 turbines which had a rotor diameter of 112 m, which took Eleon’s 116 turbines out of the equation, because the blades are 2 m longer compared to Vestas. We won the court case, but as some of authorities continued fighting against Eleon’s technology, we realized there was no future for Eleon and decided to move out of Estonia.
Congratulations on your recent partnership signed with the Chinese State Shipbuilding Company (CSSC) – how did it come about and what are your plans moving forward?
Given the hurdles encountered on the local market and the painstaking reference building process, we decided to speed-track the process and instead look for a strong partner abroad. After several options and meetings, we found a perfect match from China with CSSC, which is the world biggest shipbuilding company employing over 300,000 people. As subsidies are finishing at the end of 2020 the Chinese market is poised for changes. Together with CSSC we are able to compete on the Chinese wind market, and the ambition is to move from the top ten to a leader wind turbine manufacturer worldwide. CSSC already has thousands orders in the pipeline and an efficient direct drive patented technology is exactly what the Chinese market needs, as older technologies struggle in competition for turbines over 5 MW in size.
How has the COVID-19 pandemic impacted your business and where do you see the future of the global wind industry?
Every coin has two sides. On the one hand it has been difficult, we have never met face to face our new business partners and to this day we do not know when we can travel to China. Nevertheless business is ongoing thanks to the digital tools at our disposal. New technological communication opportunities have allowed to move Eleon’s R&D from Estonia to Germany, benefiting from German academic wind energy specific capabilities and scientists, so we are really taking advantage of the global change of business culture due to corona.
I do believe the crisis will boost renewables, and it has already boosted overall CO2 emissions reduction. Undoubtedly wind has huge potential – we are at the right time in the right place and technology is the tool that can propel us forward.
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