The surging demand for clean energy is creating a global market for Endurance Wind Power, a manufacturer from British Columbia that has found a niche selling small wind turbines to farmers and rural landowners from Martha’s Vineyard in America to the Midlands in the United Kingdom.
Unlike large, industrial wind farms with dozens of skyscraper-high turbines, Endurance installs one or two machines at a time. The compact turbines help farms, dairies, institutions, and light industry trim electricity bills and generate extra revenue.
“The opportunities are huge,” says Endurance CEO Brad Bardua, who joined the company in 2014. “The continued social movement toward a low carbon economy is driving growth.”
The overall market for small wind turbines is accelerating, fueled by government support and growing global demand for distributed generation. Consultancy Navigant Research said worldwide revenue for the sector, defined as turbines up to 500 kilowatts, is expected to more than double over the next seven years to $2.4 U.S. billion.
Endurance formed in 2007 with six co-founders, including two engineers who had designed a very small, five kW turbine. Soon after, the team started supplying customers in the U.S.
The clean energy company now employs 130 people worldwide. A 40,000-square-foot plant in Surrey, B.C. makes the firm’s 50 kW E Series turbines, and a second plant in the West Midlands, U.K. builds the larger 225 kW X Series. Endurance also has an engineering team in Denmark, a test facility in Utah, and small sales offices in Nova Scotia and Italy.
To date, the manufacturer has installed more than 1,000 turbines, almost all outside Canada.
Exports surged in 2010, when the UK launched a feed-in tariff program for renewable energy. Rural operations could generate power and sell it into the electricity grid at high, subsidized rates.
“That’s really when the company took off,” says Bardua. “We began selling the 50 kW turbine to the U.K. market, largely to farmers who were looking to take advantage of revenue that comes from generating green electricity.”
Endurance quickly became the lead supplier in the under-100 kW turbine sector and now holds a 75 per cent share of the U.K. market in that sector.
The company went from a very small startup to $65 million in revenue in 2012, says Bardua. The U.K. has accounted for 85 per cent of annual sales for the past five years.
How did a small Canadian manufacturer come to dominate the U.K. market?
“We had first mover advantage,” explains Bardua. There were few other manufacturers of small wind turbines, a sector largely ignored by manufacturers of huge, multi-megawatt turbines such as Siemens, Vestas, and General Electric.
“We went into the U.K. market full force and were very successful at growing the network necessary to succeed,” he said.
However, recent policy reversals have upended the company’s key export market, forcing Endurance to rethink its strategy. After the May 2015 U.K. election, the new Conservative government promptly slashed the feed-in tariff program.
“The change was quite unexpected and substantial,” says Bardua.
As a result, by 2017 the U.K. will account for just 15 to 20 per cent of total revenue, he estimates.
“We are in the process of having to replace a market that was torn away from us with very little notice,” he said.
To meet the challenge Endurance is entering new markets, targeting regions with good wind resources, high energy costs, and political support mechanisms such as renewable energy laws or incentives.
“We’re looking at Germany and Belgium right now; Poland is also a possibility,” Bardua says. While sales to the U.S. declined in recent years, America nevertheless offers strong potential as well.
To continue propelling its growth, Endurance is also designing new turbine models suited to different wind and site conditions. Longer blades generate more power and reduce the cost of energy production.
As it grew, Endurance tapped into government support such as Canada’s federal Scientific Research and Experimental Development (SR&ED) tax credit and Export Development Canada’s export guarantee and direct lending programs.
“Having EDC as a partner has been really important for us and continues to be, as we move into newer markets,” says Bardua.
The company will continue to expand as international support for renewable energy gains momentum in the wake of the Paris climate change talks in 2015.
“There are challenges ahead of us,” he adds. “Our business will have to adapt, but I believe we have what it takes to face those challenges.”
5 Questions with Endurance Wind Power CEO Brad Bardua
What was your first export sale?
Our first export sale was actually also our first sale. It was a 5 kW S Series turbine sold into the U.S. market, specifically into Martha’s Vineyard in Massachusetts.
How did that first export opportunity arise?
The buyer of the first turbine, who still works with Endurance today, had connections with the product developers and had purchased wind turbines from them in the past. He bought the first Endurance S Series turbine and began selling them into other locations on the island. From there, connections were made with a reseller of John Deer farm equipment, and access to their network opened a new sales channel for Endurance.
When it comes to exports, what do you know now that you wish you knew then?
I wish we’d known about the amount of support that’s available from various departments in the government, things like the trade commissioners and all of the programs offered by Export Development Canada. They’ve got programs that we haven’t used, that we could have used.
How has the trading world changed since you started in business?
The big change we’re seeing is the social move towards a low carbon economy and what that is doing to the potential for the industry.
What is the #1 thing new SMEs need to know about export and trade?
Do your research before going into a new market. Research all aspects of the market, not just your sales – everything from the regulatory regime to the political environment, employment laws and risks. It’s a big decision to move into a market and if you’re not prepared there could be unexpected negative consequences.