What Starbucks Has to Do with Wind Farming

Posted by: Michael Arndt on October 11, 2009

Over lunch with the top execs of Suzlon Energy, Andris Cukurs, CEO of the multinational’s U.S. subsidiary, brought up Starbucks. Turns out there’s something called the Starbucks Rule when it comes to siting wind farms. He said Suzlon and its rivals plot where Starbucks are in the general area and then make sure their project is at least 30 miles away. Any closer and there’d be too many NIMBYs who’d object to having their views spoiled by a cluster of 265-foot-tall wind towers.

Who knew?

I also was told by Tulsi Tanti, chairman and managing director of the Pune (India)-based energy company, that the U.S. is a good place to build wind-turbine towers. The devices, made largely of steel, are simply too heavy to be worth shipping from low-wage countries. They’re also custom-made. But that is changing, he said. And I think that, in turn, could eventually shift production from the U.S. to China or India.

Suzlon, which ranks three in wind-power turbines, is now selling its gear boxes to other producers, with the aim of standardizing components, the way auto parts like batteries and tires are standard. If Suzlon succeeds, it could boost its output of gear boxes, lower costs and—though Tanti didn’t explicitly state this—centralize production. Other parts might be standardized, too. Once that happens, manufacturers could ship components rather than build a wind-power generator from scratch in each market.

Pay attention, policy makers.

Suzlon claims 12.3% of the wind turbine market globally, with operations in 21 countries and on every continent. Its largest markets by volume are the U.S. and China; by market share, they’re India, Brazil, and Australia, where Suzlon has more than half the market. Tanti predicted that Suzlon and its affiliates will build towers capable of generating 5,000 to 6,000 megawatts of electricity in 2010, up from 4,000 megawatts of new capacity in both 2008 and 2009.