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Deal Radar 2010: Urban Green Energy

Posted on Tuesday, Feb 2nd 2010

Urban Green Energy (UGE) is a manufacturer of wind turbines and related products such as wind- and solar-powered street lamps. The company is a player in the “small wind” market, which includes turbines with rated capacity of up to 100 kilowatts. Such turbines are used from northern Canada to Antarctica for a variety of on-grid and off-grid purposes, from supplementing traditional electricity to powering boats, vacation homes, special radar equipment, and so forth. Small wind remains a niche market, but it is growing. Global small wind turbine sales were $203 million in 2009 and could double by 2013, according to Pike Research.

Founded in 2007 with sales commencing in 2009, UGE has a global network of over 100 distributors and has sold products in more than 20 countries. The company’s headquarters is in New York City, with sales offices in London and Beijing.

UGE’s CEO and co-founder is Nick Blitterswyk. An actuary and environmentalist by background, Blitterswyk left JPMorgan to start UGE with the goal of providing more adaptable wind turbines for applications such as building integrated energy generation. The other two founders are Wendy Liu and Xiangrong Xie. Liu is a New York native with a finance background and serves as the company’s chairman. Xie is the chairman of JiaYun International, a diversified holding company that owns real estate, tourism, natural resources, and clean energy companies, among others. Xie serves as UGE’s president and is currently based in Beijing. The co-founders hired experienced wind energy and manufacturing engineers to develop UGE’s technology.

The American Wind Energy Association (AWEA) estimates that in 2008, the United States market was approximately 10,500 units and the world market approximately 19,000 units. The AWEA estimates 78% domestic sales growth and 53% global sales growth in that year. Although UGE believes that the association underestimated annual sales levels, the growth curve is clear. The small wind market is growing rapidly thanks to increased government incentives and consumer awareness along with innovative, more adaptable products that increase small wind’s reach into new markets. The domestic industry got a boost from the recent 30% investment tax credit (ITC) over eight years, which is given for the purchases of wind turbines of up to 100 kilowatts. The government removed the cap on these benefits last February. The United Kingdom, another of UGE’s key markets, is the other country where small wind has received strong support in the form of government subsidies. Britain is likely to introduce a feed-in tariff in 2010, and last April the financial benefits of the country’s “Renewable Obligation” were doubled, according to Sun & Wind Energy.

Most wind turbines are HAWTs, or horizontal axis wind turbines: propeller-shaped devices with three blades that spin around an axis that is parallel the ground. Vertical axis turbines (VAWTs), on the other hand, have a rotor that revolves around an axis that is perpendicular to the ground, similar to a barbershop pole or corkscrew.

UGE specializes in VAWTs and currently manufactures three models: the UGE-300 (300 watts rated capacity – $3,060 for the turbine and $5,300 for the complete system); UGE-1K (1 kilowatt rated capacity – $6,120 turbine/$10,600 complete); and UGE-4K (4 kilowatts rated capacity – $16,150 turbine/$21,450 complete). All are mounted on steel towers. UGE had sales of approximately $1.5 million in 2009, with shipments of the UGE-4K starting in July and the UGE-600 and UGE-1K later in the year. The company reported a small loss for the year; it forecasts 2010 sales at $10 million. Current capacity on UGE’s 25 acres of land is approximately 2,000 units after the factory doubled in size in late 2009, and there are plans to increase capacity to 10,000 units per year within two years.

To date, UGE has been financed internally by its three co-founders and a small minority partner in one of its subsidiaries. Its “front end” has been bootstrapped thanks to its ability to take deposits for orders of current and future products. Now that the company has brought manufacturing to its current level, it is beginning to focus on increasing its sales and marketing. UGE is in the early stages of a round of capital raising, which it expects to complete in the first half of 2010.

The AWEA believes that there are about 219 small wind turbine manufacturers worldwide. UGE did not disclose how many units it has sold thus far, but according to Sun & Wind Energy, UGE’s plan to sell generators at a total capacity of 1,000 kilowatts as early as 2009 would put the company in fourth place, behind U.S.-based Bergey Windpower and the Dutch firm Fortis Wind Energy, both founded in the late 1970s, and fellow vertical turbine maker Mariah Power, the CEO of which was featured in a recent Entrepreneur Journeys interview. Mariah Power was founded in 2005 and is in its first full year of operations, with about $2 million in quarterly revenue. California-based WePOWER also specializes in vertical axis wind turbines. Most of their products are 1.2 kilowatts to 12 kilowatts, somewhat larger than UGE’s. And others are hard at work: three French designers have created Wind-It, a solution that uses VAWTs very similar to UGE’s. These turbines are attached to existing electrical structures such as pylons or telecom towers. The electricity generated is fed into the power grid.

UGE has also used this approach and recently mounted turbines on  Alcatel-Lucent’s cellular communication spires to generate power for the company to use. Other clients include Verizon, Raytheon, the U.S. Air Force, and Gazely’s.

UGE believes that in the vertical axis market, its advantage lies in devoting equal energy to product performance, patent ownership, management experience, engineering skill, manufacturing capacity, and international reach. Establishing a low-cost manufacturing base was also important and was achieved thanks to the founders’ connections. The goal is to build a premium product at an affordable price that is available worldwide, and to continue to create innovative products for the wind industry.

As a new company, UGE has the short-term goal of rapid sales growth and is focused on expanding its product line and distribution network. As the wind industry continues to grow and attract attention, UGE is interested in strategic partnerships that will allow its products to be sold to a wider audience.

Recommended Readings
Toward Zero-Energy Buildings: Kevin Surace, Serious Materials
Engine For Green Jobs: Premier Power CEO Dean Marks
Deal Radar 2009: Hydro Green Energy

This segment is a part in the series : Deal Radar 2010


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. InHouse Inc ,Santa Ana, California
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. HyperQuality ,Seattle, Washington
. LeadForce1 California, Michigan
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. JAM Paper & Envelope ,New York City
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. RetailMeNot.com ,Melbourne, Australia
. Arthrosurface ,Franklin, Massachusetts
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. Riskonnect ,Marietta, Georgia
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. Applico ,New York City
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. Suncoast Capital Group ,Coral Gables, Florida
. i-Jet Media ,Silicon Valley, California
. MyCorporation.com, Calabasas, California
. Craig Technologies ,Cape Canaveral, Florida
. StyleCaster
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. Greytip ,Bangalore
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[...] Today found this great post, here is a quick excerpt : Entrepreneur & Strategy Consultant Sramana Mitra’s Blog on Technology, Business and Strategy. Read the rest of this great post Here [...]

Deal Radar 2010: Urban Green Energy | Sramana Mitra on Strategy « Earth4energy Tuesday, February 2, 2010 at 3:25 AM PT

[...] Host Sheryl Parks, speaks with leaders in the alternative energy industry. Learn small wind turbine information from Nick Blitterswyk, President & CEO of Urban Green Energy.  Learn more about small wind the US Dept of Energy.  Urban Green Energy and Blitterswyk were recently blogged about by Sramana Mitra. [...]

Alternative Energy Leaders On the Show | Sparks to Flame Radio Show Monday, February 8, 2010 at 4:04 PM PT

I always applaud when someone has the entrepreneurial spirit, and definitely applaud when they are in the green energy market. We need more companies like this to step up to the plate and offer services that will help consumers save money on their energy bill. With the economy the way it is (and likely not going to change for the next few years), we need to pinch every penny we can.

Green DIY energy Sunday, September 5, 2010 at 1:29 PM PT

I definitely think that UGE is on the cusp of something huge here, both for the wind industry and the green energy market as a whole. I agree with Green DIY about, that we really need more companies like this to step up. Unfortunately, especially this day in age with the economy the way it is and battles overseas, our priorities for these types of things seem to be a bit skewed.

Security Guard Pete Monday, September 13, 2010 at 12:33 AM PT

This is Going to be a little tough to sell to a lot of localities. Turbines are pretty noisy, there was an article on this recently on the New York Times. Oh well, but yes, I truly admire these efforts. It's the startups that usually bring about the biggest culture changing innovations.

Luke Cheap Longboard Wednesday, October 27, 2010 at 3:33 PM PT

I think a lot of people will have the attitude "We want wind power, just not in my backyard." Unfortunate but true. Just my 2 cents.

survivalknife Tuesday, November 9, 2010 at 10:55 PM PT

We definitely need more startups like this to bring more eco-friendly power generation products to the market. Wind power will become increasingly more important as its efficiency increases.

John Jackson Saturday, November 13, 2010 at 5:29 PM PT

Urban Green Energy (UGE) are making real moves within the industry and i applaud their fantastic work as they continue to reinvent the wheel so to speak. Keep up the fantastic work.

Bethany HGV Training Monday, November 29, 2010 at 5:32 AM PT

I've heard some mixed feelings about wind turbines. I've heard they are particularly loud? Can anyone confirm or speak into this at all?

James Play Guitar Thursday, December 9, 2010 at 12:39 PM PT

No, it's not that loud. Not to mention they're never placed anywhere close to residential areas.

Da Buddha Thursday, December 23, 2010 at 11:26 PM PT

I live in Holland and I’m certainly not a stranger to wind mills. It good to see this technology become commercially viable as up until now it remains heavily subsidized.

McGlovin Sunday, January 16, 2011 at 7:18 AM PT

California should be focusing its resources on solar energy with all this sun!

elle Friday, March 4, 2011 at 5:31 PM PT

I think now we are living in an earth where everything is affected by our new technology. In this tuff situation Urban Green Energy plays an important role through making green technology and products. Hope more other companies will come with new green technology which will be helpful for our environments.
Shajjad from ( best skin care products )

shajjadjuis Thursday, May 12, 2011 at 8:58 PM PT

Small wind is pretty interesting, but what about micro wind power? I'm talking about single households using their own machines — perhaps using roof mounted turbines to generate power alongside solar cells. This idea interests me a great deal, but there are still some hefty design challenges that need to be overcome. Like, how do you protect wildlife from such turbines, and how do you increase efficiency with small diameter turbines? The world is waiting…

Biofeedback Machine Monday, May 16, 2011 at 7:32 PM PT

We've had some large turbines installed out to sea where I live. They're hardly noticable and hopefully will make an impact into energy generation.

Fred PCO Licence Saturday, June 11, 2011 at 4:21 AM PT

I'd really love to see wind and solar energies take off in the U.S.

Angel Fire Rental Saturday, June 18, 2011 at 9:11 PM PT

@McGlovin: I also live in Holland. But believe me wind mills and wind turbines are very different form each other. But I also hear a lot of different stories about how successful wind turbines are. Only time will tell if the investment was worth the return.

Snoep Bedrukken Sunday, June 19, 2011 at 12:07 PM PT

Green energy is a long way from being sustainable without government help.

Lisa Wednesday, July 6, 2011 at 3:14 PM PT

What Lisa said. Unfortunately the market won't pay for green energy until they have to :(

– Sarah

Nettle Tea Tuesday, July 19, 2011 at 7:20 AM PT

At this point I thought that going green would be a bit more head than what it is now. However, I really think that it's the future.

Suzi Chin Wednesday, August 10, 2011 at 6:05 PM PT

@Lisa: I don't really agree with you. The thing is that it is our all responsibility to make green energy affordable and sustainable. If more people would invest in green energy it would become cheaper for the mass.

jenny Wednesday, August 24, 2011 at 5:53 AM PT
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