Juhl Wind, Inc.
TWST: How would you describe the current demand you see for wind power, and what indicators do you use to forecast demand over the three to five years?
Mr. Juhl: I think that the demand for renewable energy development in this country is very strong. We have a need for more and more energy every day, and the options to produce it are limited, given that it's very difficult and expensive to build the big power plants and transmission lines. There are a variety of social and economic limitations that we see right now in development of conventional power plants and getting power lines built. With the technical advancement we are seeing in wind, solar, storage and smart grid technologies, the distributed renewable energy sector will play a major role in our energy mix.
TWST: Each form of renewable energy has its different advantages. You're in wind, so tell us what you believe are the particular advantages of wind as compared with other forms of alternative energy.
Mr. Juhl: Developing commercial-scale community wind has been and will continue to be a very important part of our business. In my 35 years involved in wind development, I have seen commercial-scale wind become a mature and seasoned technology.
Actually, Juhl Wind (JUHL) is evolving. We have a division of the company, Juhl Renewable Energy Systems, Inc., which manufactures a small, 35kw, wind turbine for farms and small business, manufactures the SolarBank system and works with a multitude of renewable and conservation technologies. So we're not just in wind, we're in all forms of renewable energy.
They all have their benefits to the system. We feel solar can be more peak-load matching; wind can be more baseload. There is no silver bullet for the energy picture. None of the resources are perfect by any means, but renewable energy can be a big player in a lot of different ways when we look at both the solar and the wind, especially when you team them with storage.
TWST: Would you tell us about the other renewable energy segments of Juhl Wind?
Mr. Juhl: We're working with some municipal utilities on community solar, too. We've developed a product that's called SolarBank, smart grid solar system that can be used to do load management. So I think that's going to be a very important part of our business in the future. Its gained support from different utilities that have different peaking issues. The SolarBank system uses solar power and advanced battery storage, along with intelligent controls connected to the Internet to become smart grid technology.
TWST: Acquiring existing wind farms is part of Juhl Wind's growth strategy. Would you highlight for us some recent acquisitions you believe the investor community should know about? What will the company's acquisition strategy look like over the next 18 to 24 months? Are there any particular targets you have, or more generally, geographic areas or types of farms you're interested in?
Mr. Juhl: We recently acquired some smaller projects that we've built in the past like the Woodstock wind farm. Juhl bought out the equity on that community-based project, and is partnered with the local owner. I think our strategy is to target those kinds of projects as our division, Juhl Energy Services, is a services company whose expertise is to maintain and operate these types of wind farms. We can come in and buy the projects, and then operate and maintain them under our own umbrella and turn all of that into a profit center for the company. So we have a distinct advantage in the marketplace that we know these projects, a lot of them we've developed, and we have all of the in-house talent to make them profitable.
TWST: Is that one you previously had co-owned with the customer, but then you decided to acquire 100% interest in it? Is that how it started?
Mr. Juhl: Pretty much, yes. Although we have been planning the strategy for a while.
TWST: Will you do that with all of Juhl Wind's projects?
Mr. Juhl: There is no one-size-fits-all transaction. All of these projects are put together differently with different financing patterns, different turbines, different off-takers and so on. Our basic strategy is to grow this part of our business. We're flexible enough, and have the knowledge and skills to be able to go in and work with the existing local partners, and keep the projects performing at a high level.
TWST: Juhl Wind recently announced the completion and startup of a project with Gundersen Health System. Would you tell us about that project?
Mr. Juhl: The Gundersen project was basically the Gundersen Lutheran Health System. Their management wanted to get their arms around their energy costs and become more sustainable. They brought us in to develop the project and provide construction oversight for them. It's a model that we are very good at, partnering with corporate partners that want to develop sustainable energies and own their own power generation to control their long-term energy costs. That's our niche in the marketplace as we can do distributed generation very efficiently.
TWST: What level of project completion and startup do you expect over the next two years?
Mr. Juhl: It's too variable. The lack of transmission in the Midwest has really affected how things are to be built out in the future. We're working on projects in New York, Montana and different places of the country right now to deal with the market variability. These days it is so hard to predict the future in any business, let alone this business.
TWST: In the State of the Union address, President Obama talked about the importance of wind power. To what extent do you believe the government is supporting the development of wind power, and what could the government do that you believe would make a meaningful difference for a company such as Juhl Wind?
Mr. Juhl: I think the government completely supports the development of domestic sustainable energy, of which wind power is one. Hopefully there will be the extension of the tax credits for wind power. Considering that for years and years, we taxpayers have been subsidizing nuclear and fossil fuels; we should foster the development of renewable energies like wind power, which have tremendous potential to be a solid contributor to the future energy mix for our country.
TWST: Are there any particular regulations or pieces of legislation, that if they were to come to fruition, would make a meaningful difference for a company such as Juhl?
Mr. Juhl: Along with the extension of the production tax credit, we have been working on some legislation that has been introduced by Senator Franken called the Community Wind Act. The CWA is designed to support the development of locally owned, community-based wind projects, which brings jobs and rural economic development to areas of our country that really need it. Both of these would be beneficial to the wind industry, Juhl Wind and rural America.
TWST: Do you believe Juhl Wind's potential customers have a good understanding of the benefits of wind power, including the cost and savings, that would lead them to make the switch?
Mr. Juhl: Of course, the utility marketplace that we deal with fully understands the cost of the energy. The advantage of wind power is that the cost of the energy is the cost of capital to put the equipment in the ground, so the long-term cost of renewable energy is very cheap. In this marketplace, it's always a function of what is the all-in cost of energy.
The benefits of developing sustainable energy like wind power and solar power is that you have no fuel, no waste to dispose of, no emissions, no transportation of fuels, and you require no water. All of these things add up to be a value to all of the players, consumers and the utilities. I think most people recognize the benefits of renewable energy and that's why you see the movement, and that's why wind power is the fastest-growing energy resource in the world. It's because everybody's recognizing values of this clean sustainable energy.
TWST: What are the top three goals on Juhl Wind's agenda for 2012 you would like to see the company make significant progress toward this year?
Mr. Juhl: We are working with the utility marketplace to manage off-peak energy with our SolarBank system. We will also continue doing distributed small wind and community-based wind generation projects throughout the country, along with acquiring, operating and maintaining existing wind farms.
TWST: Thank you. (MES)
Chairman & CEO
Juhl Wind, Inc.
1502 17th St. SE
Pipestone, MN 56164
(877) 584-5946 - TOLL FREE