NZ Windfarms to protect Te Rere Hau from Windflow’s difficulties
Aug 22 (BusinessDesk) – Concerns about the viability of NZAX-listed wind turbine pioneer Windflow Technology Ltd. have led New Zealand Windfarms Ltd. to buy a stock of strategic spare parts and an option to buy out Windflow’s maintenance operation for the Te Rere Hau wind project.
Windfarms and Windflow went through protracted legal wrangling last year over the specifications and certification of Windflow’s 500 kilowatt two-bladed turbines, 97 of which are installed at Te Rere Hau, in the Tararua Ranges.
Windfarms is so far the only major customer to emerge for the Windflow turbines, which Windflow had hoped would fill a niche in a British subsidy scheme encouraging small-scale embedded renewable generation. But that scheme has become bogged down and the small turbines have met greater competition from alternatives.
Windflow has warned for some months of fundamental uncertainty about its future, has contracted its manufacturing operation in Christchurch and has said it is seeking new capital.
In an announcement to the NZX today, Windfarms says it has restructured its maintenance and operation agreement with Windflow, acquiring spare parts previously owned by Windflow, which has also created a subsidiary, Te Rere Hau Services Ltd (TSL) covering operations staff at the power station.
Windfarms has been granted an option to acquire TSL “in the event that Windflow Technology becomes insolvent.”
The windfarm operator has also been “granted security over, and a licence to use, various drawings, specifications and other documents” to ensure it can maintain Te Rere Hau in the long term, should Windflow prove unable to fulfil its operations, maintenance and warranty obligations.
Shares of both companies were unchanged this morning at 15.3 cents for Windfarms and 50 cents for Windflow.