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The 5 Cent Savior and the Al Davis Approach to Technology Development

Back in 1993, it wasn’t the Bloom Box that was going to make clean energy “competitive with fossil fuels” but a new wind turbine from Kenetech.

The 33M-VS, which the company promoted as the “5 Cent Turbine,” was going to be the technological savior that would make wind energy as cheap as fossil fuel generation. In an American policy environment that was as streaky as the wind, these machines Were going to make the government irrelevant. Cranking out electricity at five cents per kilowatt hour, these machines wouldn’t need no stinking subsidies, no messy talk about externalities, or social goods. They’d be able to compete anywhere there was a good wind resource, company executives told Wall Street investors ahead of their late 1992 IPO. They raised $92 million and saw their stock shoot up as analyst after analyst foresaw huge growth for Kenetech.

The new turbine was a “marriage of aerodynamics and microelectronics” that allowed it to pull more energy out of the wind. The key was supposedly the introduction of a “variable-speed rotor,” which allowed the turbine to create nicely conditioned electrical power at a greater range of speeds than previous machines, supposedly from 8 miles per hour all the way up to 65 miles per hour. Over $70 million had been spent on its development, and it was implicitly endorsed by the Electric Power Research Institute, a utility-backed group.

“Sitting atop a 90-foot tower, its 54-foot-long blades facing into the breeze, the 33M-VS looks like any other wind machine. But it isn’t,” Business Week wrote. The turbine, Kenetech president Dale Osborn averred, “has been tested in the lab and in the field. It has worked beyond our wildest imagination.”

Noting the 130 patents that Kenetech received for the 33M-VS, the Christian Science Monitor bought the company line that “after 10 years of development and a year of field tests, the 33M-VS wind turbine will produce electricity for 5 cents per kilowatt-hour, making it competitive with natural gas.”

An EPRI report testified the turbine “is less vulnerable to wear and tear from wind action, lighter weight, and less expensive than a comparably sized constant-speed machine.”

Sounds great! But the problem was that this was not really true.

The machines may have been a tiny bit more efficient than their competitors, but what they gained there, they more than lost in operations and maintenance difficulty. Blades cracked. The hydraulics broke down. The list of problems was long. In August 1994, financial analyst Hank Hermann visited the site and reported “the loud groaning, clanging, whining noises emitting from several of the machines strongly suggested to my untrained unscientific ear that meaningful problems may exist with some of these machines.” The next month, Wind Power Monthly reported on what the buzz had long been in the industry. It turned out the turbines stunk.

But even before Hermann’s report was published on August 22, talk throughout the wind industry was of most of the 33M-VS blades in Palm Springs being cracked or damaged, of times when most 33M-VS turbines in Palm Springs were apparently shut down when the wind reaches about 35 mph, of most of the blades on Buffalo Ridge having cracked roots, of problems with generators and hydraulics systems, and of availability lower than usual in a wind plant — about 60%-80% compared with the normal 95-99%. For example, on August 18, out of 80, 33M-VS turbines on Kenetech’s larger wind farm in Palm Springs, 28 turbines were stopped at 08.00 in winds of 18 mph, and 18 were not operating at 11.30 in winds of 15 mph, according to a long time wind expert who says he has frequently noted that kind of low availability at the plant.

Years later, after Kenetech had gone bankrupt, the Wind Power Monthly was still bagging on the renamed turbine, then known as the KVS-33. “Operating the Kenetech KVS 33 wind turbine was likened to “life in a high maintenance environment” by Bill Barnes of LG&E Power Inc, speaking at the American Wind Energy Association’s annual conference in Austin, Texas, in June. LG&E is the largest owner and operator of the KVS 33M model, said Barnes.”

The 5 Cent Savior had become the industry scapegoat. Turned out, the turbine didn’t work nearly as well as anticipated.

This wasn’t how it was supposed to go. The story was: drop in the variable-speed rotor and — bang! — the energy problem would be solved. For historians of technology, this idea is flabbergasting and frustrating. The Danish turbines that now dominate the world market didn’t make huge leaps in performance. They just got better and better, incrementally, like things do.

“American designers constantly sought breakthroughs. They wanted to bypass the drudgery of incremental development and bat a home run,” Gipe wrote in his book Wind Comes of Age. “Americans leapt from one size to the next with little transition.”

The idea that technological breakthroughs visit engineers like gods from a nerdier dimension and change everything pervades American society. It’s a TV movie-quality narrative, but things don’t work like that. And the weird thing is that people who run technology companies often think that it does, or at least that the American public should be fed that line in order to build interest in their company.

As I was drinking too much coffee this morning, I hit on a new analogy for this mode of thinking: it’s the Al Davis approach to technology development. Davis, which you know if you watch football, is the owner of the Oakland Raiders. He’s famous for meddling with his team’s talent evaluators and coaches. He looks for quick fixes, thinking that if he can just get that one player, it will transform his team.

The classic Davis move was his signing of back-to-back Super Bowl MVP players to his roster with lavish contracts, though the two players (Desmond Howard and Larry Brown) were just mediocre. Neither player stayed with the team for more than a year.

A better analogy for how good technological development goes is Bill Belichick’s management of the Patriots. They are famous for getting older, undrafted, and otherwise unheralded players to work together within the overall scheme. They don’t look for one player who can transform their fortunes, but build the team as a team. Of course, they try to make each individual better, but they also find ways to put the players in positions where they can play their best.

Of course this is just an analogy, but I think there is a nugget of truth to it. We recognize that hit-seeking behavior in complex enterprises is kind of stupid, but with technology, we think that’s just the way it works.

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