TOKYO/MANILA -- The Philippines frequently finds itself in the path of powerful typhoons, and a Japanese startup is working on wind power equipment that can stand up to the storms.
Challenergy, the startup, is betting there will be high demand for typhoon-proof turbines on remote Philippine islands that often take direct hits and lack sufficient power infrastructure. The company has formed a joint venture in the Southeast Asian nation with a local partner, after raising about 500 million yen ($4.5 million) by selling shares to four Japanese backers in a private placement.
The company plans to use the money to mass-produce its uniquely shaped turbines.
"So far, the company looks promising with good potential to succeed," said Gregg Ilag, an energy analyst at Daiwa Securities in Manila. "Wind turbines that can withstand and generate power during Category 5 typhoons are a new technology."
The venture's technologies could solve problems for the Philippines, which is made up of over 7,000 islands. The country is struggling to supply power to all of the roughly 2,000 islands that are inhabited. And while the archipelago is blessed with a huge potential supply of wind power, the frequency of typhoons poses a major obstacle.
In January, Challenergy set up a joint venture with Natures Renewable Energy Development Corp., or Naredco, a local renewable energy project developer. Challenergy's first overseas unit is now working with the state-owned electric utility in the Philippines to win a government license to build a wind farm.
The startup hopes to deliver its first typhoon-proof turbine in the country by the end of this year.
The company's Magnus VAWT, or Vertical Axis Wind Turbine, relies on the Magnus effect -- the same phenomenon that causes a spinning object flying through the air, like a soccer ball, to deviate from a straight path. Instead of a propeller, the turbine has three vertical cylinders, or blades, that rotate around an omnidirectional vertical axis to generate power.
While conventional propeller turbines are prone to collapsing in fierce winds, and may have to be stopped in an emergency shutdown, the Challenergy system is designed to keep on spinning and generating power.
"These are typically small scale (less than 1 megawatt) compared to the coal and natural gas plants that we have," Ilag said. "However, we do need projects like this to help people in off-grid areas which have really high cost electricity."
Challenergy, founded in 2014, hopes to start commercial production of small Magnus turbines with 10 kilowatts of capacity in 2020, aiming to sell 50 units in the first year.
Investors that signed up for the private placement are helping Challenergy move forward.
Machinery component maker THK, which was already a shareholder, took part alongside satellite broadcaster Sky Perfect JSAT, insurer Dai-ichi Life Holdings and agricultural machinery maker Kobashi Industries.
Challenergy adopted THK technology to boost the strength and accuracy of core components. Challenergy is also considering cooperation with Kobashi on production of certain parts. And the startup is eyeing ways to combine wind power generation with satellite communications to create new businesses.
It envisions enabling telecommunications in areas outside the electric grid by installing turbines to power telecom equipment. The company has already run successful tests with Sky Perfect JSAT.
"There have been wind power installations in the past and so far these plants have done well, especially with the benefit of [a feed-in tariff system] which gives them better returns," Ilag said. "I think these power plants are mostly onshore and I'm not sure if they can withstand strong typhoon winds."
Challenergy believes its turbine system is an economically viable answer for coastal areas.
"I think the bigger challenge will be regulatory," Ilag said. "There are more than 30 required documents and permits for renewable energy projects so I expect rollout to take some time."