Vestas directs the winds and adjusts the sails

Kelly Dawson
December 19, 2017
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Wind probably isn’t something you think about much in your day-to-day life.

Either it’s a refreshing sensation that cooly brushes across your face on a sunny day, or it’s a gust of action that makes you struggle for every step on a rainy one. Unless it’s decidedly good or unanimously bad, wind doesn’t dust up much attention on our thoughts for prolonged periods of time.

But it’s different if we’re talking about wind as a source of energy.

For the past few decades, and especially in the last several years, wind has distinguished itself as a viable source for electricity, which can be used to power millions of homes in place of other traditional alternatives. This is famously showcased by soaring three-pronged turbines — which have a build resembling the average fan — that stretch across open spaces throughout the world. Simply put, as these turbines move through the air, their blades catch the wind and connect it to generators used for electricity. The more turbines there are, the more energy can be made. And as sustainable resources continue to grow in necessity, the option of wind turbines is becoming ever more popular.

So how did we get here? Wind has been used as a resource for generations (just think of those classic windmills in the Netherlands), but this modern incarnation isn’t just about efficiency. Wind turbines also suggest a new way of thinking about energy and how it can best be harnessed throughout the world. The conversation around this way of thought isn’t an easy one, and there are plenty of critics, but those at the helm of the argument are making quite a compelling case.

Vestas, the sole energy company entirely devoted to wind production in the world, has been a part of the conversation from the beginning. As a global leader in the development, construction, and implementation of wind turbines — and a company that has been in production for more than a century — Vestas is in many ways responsible for our collective understanding of this technology. As wind turbines become more well known, Vestas is showing how this initial out-of-the-box invention is becoming a routine reality.

And perhaps, slowly, it’ll be something we all consider in passing as part of our everyday lives, just like the wind itself.

Gone with the wind

Long before Vestas was shaping a 21st-century conversation around wind power, it was simply running a 19th-century small business in Denmark.

In 1898, in the small town of Lem, Hand Smith Hansen bought the blacksmith shop and made a name for himself in the community as a guy who stands by his work — if a customer came back with complaints, Hand fixed it. By the end of the 1920s, Hand had a productive business on his hands, and he and his son Peder moved on from a simple blacksmith shop to a company that constructed steel-framed windows for industrial buildings. Customers abounded, but by World War II, production slowed as a result of rationing. Nevertheless, by the end of the war, the Hansen father-son duo and a few coworkers decided to go big. They took over barracks abandoned by the Germans to build household appliances, and they named their company VEstjysk STaalteknik A/S. Yes, they realized the name was a problem, too. So they shortened it to Vestas and went on their way.

By 1950, Peder had his sights on international business. As the owner of a company based in farmland, whose employees all knew a thing or two about agricultural equipment, Peder bought the global patent for a milk urn cooler. The team applied their know-how to its production, and they sold their products to nearby European countries. Eventually, the company moved on from milk coolers to intercoolers — thanks to a tip from Peder’s brother — but by 1960 Peder bought out the rest of the team and takes sole control of the company. His big solo success? Focusing production on hydraulic cranes for light trucks, which was a new and pressing need. The product is exported to 65 countries by 1968.

This jump is what started Vestas initial interest in wind turbines. The robust crane production prompted the company to hire its first engineer, Birger Madsen, and his ingenuity led the company on the course of creating alternative energy. At the time, in the 70s, all of this production was done in secret. Vestas had a design — the same one used today — and even installed its first turbine by 1979. But mass production didn’t take place until the 80s after the American company Zond takes interest and made an order.

We wish we could say that Zond solved everything: that after this order was made, the rest was history. But there were big issues, mostly revolving around faulty prototypes and money, and for a while, things looked bleak. In fact, it wasn’t until the late 80s that the company decided to focus entirely on wind production and its past issues gave way to innovation. By 1990, the team figured out the proper weight of the blades so that they didn’t fall apart in inclimate weather, and orders started coming in from the likes of the U.S., New Zealand, India, Great Britain, and more. In 1995, a farm of wind turbines was constructed off the shores of Denmark, marking the first location of its kind and proving that production of the product increases by 15 percent in the water.

Around the new millennium, more and more countries took an interest. Technology improved speed and power, and a merger with NEG Micon increased Vestas’s reach, insight, and operations. In 2007, Vestas was installing one turbine every four hours globally — from Europe to Asia, to America and beyond. By 2012, the number reached 50,000 wind turbines across the globe, in more than 70 countries overall. Vestas had now brought power to millions of households, and its commitment to increasing wind turbines’ visibility as a viable source of energy hasn’t stopped today. By 2020, Vestas predicts that 10 percent of the global electricity production will be from the wind.

Against the wind

Like everything in Vestas’s past, adaptability was key. The company saw the need for alternative energy during the early 70s oil crisis, which spurred its focus on wind energy. And its long-ago commitment to getting it right as a small-town blacksmith shop continued with every failed test or installation that occurred in the ensuing decades, prompting the company to reassess its strategy and eventually build stronger, more efficient products.

The issue Vestas faces now isn’t simply about reaching more places. Nor is it entirely about listening to those who think that wind turbines are too loud, or negatively impact their health, or lower the value of their homes (although that’s a challenging part of the conversation). The most pressing problem Vestas faces is what to do when the world sees too much of a good thing.

These days, the payoff for installing wind turbines isn’t as great for companies as it is for consumers, thanks to changes in tax credits and lowered prices of solar power. And even though the interest in offshore turbines is growing globally, it’s still a new territory — what to do in bad weather and other factors are still being worked out.

Still, all of this can change. Vestas knows that the demand is still there, and even growing in some respects, as more customers see clean energy as an ordinary option. The uncertainties the company faces now are familiar because of the challenges it faced in the past.

Vestas always finds innovation when necessary, and its current outlook is no different. Much like the wind it harnesses, the company will work on finding a way.

There are more than 250 companies in our combined portfolios, and they are all making amazing advancements. From names you know, like Tesla, to those little gems you haven’t heard of yet, like Xylem, we want you to know all about what your holdings are up to. These ‘deep dives’ will help you understand what you’re invested into and how your dollars are making the world a better place.

Vestas is part of our Renewable Energy portfolio!why-wind

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