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Published on March 25th, 2012 | by Andrew

13

Clean Wind Energy Tower Shares Plunge as Downdraft Tower Construction Plans Proceed

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March 25th, 2012 by
 
Clean Wind Energy Tower on March 22 announced the selection of the site of its first two Downdraft Towers, a novel, virtually zero-carbon renewable energy system that the company says will use both induced and natural wind energy to generate electricity at a utility-scale. Management has chosen San Luis, Arizona to build the first two Downdraft Towers, which they say will reliably produce a net 1,100-1,500 megawatts per hour [sic.] of clean, renewable electricity for sale on to the grid.

The news comes as the publicly-listed, Annapolis-based company is going through some financial turmoil, however. Having gone public on the Nasdaq OTC Bulletin Board (OTCBB) through a reverse merger with a defunct, already listed company, its shares have taken a nose dive on heavy volume in the past 1-1/2 months, trading from a high of 21 cents down to about 4.5 cents per share as of market close on Friday, March 23.

Utility-Scale, Zero Carbon, Dual Wind Energy Towers

Clean Wind Energy Tower intends to build two Downdraft Towers and a component parts assembly plant at the San Luis site in southwestern Arizona’s Yuma County. Each tower is projected to supply enough electrical power to supply some 1.6 million average homes.

The US Dept. of Interior and federal Bureau of Land Reclamation have given Clean Wind Energy Tower the green light to proceed with leasing a parcel of land in San Luis, according to a company press release. It’s now proceeding through the local zoning process and with site evaluations. A City of San Luis public hearing regarding the company’s application for entitlement to build the two Downdraft Towers is scheduled for March 29, while the city’s Planning and Zoning Commission has scheduled a hearing for April 10.

As envisaged, a very large, high hollow cylinder forms the core of Clean Wind Energy’s Tower’s Downdraft Tower system. Water is pumped to the top of the Downdraft Tower and a fine mist sprayed across the cylinder’s hollow interior. Now cooler and denser than the surrounding ambient air, the moisture-laden, interior air picks up energy as it rushes down the cylinder’s interior at speeds of up to 50 mph. The high-speed, man-made wind drives turbines at the base of the structure that generate electricity with virtually zero in the way of CO2 or other greenhouse gas emissions.

Adding to the Downdraft Tower’s electricity generation capacity, wind vanes may be incorporated into their exterior where “atmospheric conditions are conducive,” according to the company. The exterior wind vanes would capture natural wind energy and likewise use it to drive turbines to generate additional electricity.

[youtube http://www.youtube.com/watch?v=Iftbh_Nj9Tk?feature=player_embedded&w=640&h=360]

Current design plans predict that each Downdraft Tower would be capable of generating as much as 2,500 MW per hour [sic.] of clean, renewable electricity. Approximately 1/3 would be used to run the tower itself. After all is said and done, a potential energy yield of 1,100-1,500 MW per hour [sic.] would be available for sale on to the power grid.

Clean Wind Energy Tower predicts the energy capacity factor for the Downdraft Tower will be 51%, with prime production periods in daytime and evening in the spring, summer and fall, which would dovetail nicely with energy usage patterns. Equipping the Downdraft Towers with External Wind Capture, which the company says would keep working 24/7 with an energy capacity factor of 75%, raises the predicted overall energy capacity of the system above 60%.

Dire Straits?

That’s the good news. The bad news is that Clean Wind Energy Tower is undergoing financial strains that jeopardize its survival along with that of the project that could prove its design and engineering concept and economic viability.

The company’s shares have nose-dived in the past 1-1/2 months, down from 20 cents to less than 4.5 cents a share. Falling below 8 cents a share triggered a default clause on a $335,000 Original Issue Discount Secured Convertible Promissory Note it had issued to Hanover Holdings I LLC, a transaction that closed on March 2.

With its shares falling fast, issuing the convertible note put Clean Energy Wind Tower in a vulnerable position, certainly from the perspective of its existing shareholders, most of whom are company insiders. Terms of the note state that Hanover has the option of converting the note into common shares at a conversion price equal to 45% of the lowest trading price for the common stock at any time during the prior ten trading days,” according to a March 8, 8-K SEC filing. A Clean Wind Energy shareholder pledged 10 million common shares to Hanover as collateral for the convertible note.

Hanover on March 8 notified Clean Wind Energy management of the default, requesting that the company’s escrow agent transfer the pledged 10 million common shares and repay $481,562.50 as a result of the claimed default. So rather than raising net capital of some $300,000, Clean Wind Energy stands to see its already strained cash base reduced by nearly half-a-million dollars, as well as the shareholder who pledged his or her shares suffering a loss of some $440,000.

Management Responds to Unusual Trading Activity

Responding to the unusual trading activity in its shares, Clean Wind Energy Tower in a March 15 press release stated “that there have been no material changes to its operations or its business affairs. The Company is not aware of any undisclosed developments that would account for the recent unusual trading activity of its shares which created downward pressure triggering the default of a Convertible Promissory Note with Hanover Holdings I, LLC.”

“Ordinarily we do not comment on atypical market activity or on market rumors. However, due to the recent unusual trading activity of our stock, I would like to take this opportunity to convey to the investment community that our operations are progressing as expected,” added president and CEO Ronald W. Pickett.

“We have recently announced that the Company has made significant progress in assessing the potential of CWET’s emission reduction on the worldwide carbon markets and estimating the expected revenue generation. The Company canceled 120,600,000 shares of common stock held by the ‘Former Employees’, which were retired to treasury stock of the Company reducing the number of outstanding shares from 329,683,408 to 209,083,408.

“We announced the final approval of our Unique Hydraulic System Patent that maximizes the capture and use of available wind tunnel energy. We have applied to a bureau of United States Department of the Interior for permission to lease a substantial parcel of property located in the southwestern United States, suitable for the development and construction of our first Downdraft Tower and we were recently notified by the Bureau of Reclamation that CWET may proceed with the local zoning process and site evaluations.

“We reported on March 9, 2012, the timely repayment of three segments of incremental project financing. We are pleased with the progress we have made on the project development aspect of our business. One of our top priorities is maximizing shareholder value and I am confident that as we head into the future, we will achieve our goals.”

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About the Author

I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.



  • perejo

    So, let me understand the concept here: You take hot, dry air and you spray a mist of water into it at the top of a very large tower. The mist evaporates and mixes with the air, thereby humidifying the air, which makes it lighter than the non-humidified air. How is it supposed to push the heavier air out of the way?

  • Pingback: 3000 Foot Downdraft Energy Tower Planned by Israeli Professors on Mexico-US Border | Green Prophet

  • Stan

    OMG!!!!!!!!!!! Another perpetual motion machine..”some of the power is used to run it, and the rest is net production”…and THIS one, doesn’t even use more than 2 forces of nature in concert….
    This is yet another example of the emperor’s new suit of clothes.
    So, it’s supposedly as powerful as 2 nuclear reactors? (2x1200MW each if they meant 2500MWH)
    IT”S A GIANT SWAMP COOLER people!!!!!!!!!!!!!! The principle is the utilization of the latent heat of vaporization…very sorry folks….this displacement of air will NOT turn the equivalent of 1250 5 MW wind turbines at their nominal annual rate of output….come ON! The turbine blades would have to be almost a 1/3 of a million miles in diameter (1000x 300′) or 100×300′…30,000 miles… if there were 10 turbines in each tower.
    Do they mean “2500MW EACH hour”?
    I am rushing out to go to the NYSE and register my own inventions in renewable power to go public…OH BOY, I’m gonna be RICH!!!!!!!!!!!!

  • http://profiles.google.com/vandammes James Van Damme

    “speeds up to and in excess of 50 miles per hour”…? BTW where is all this fresh water going to come from? You can pipe it in from Lake Ontario if you like, but it’s a long way to the desert.

    • Bob_Wallace

      I think we need to establish a criterion for publication of concepts like this one…

      “Show your math.”

      How about a slightly higher threshold for new tech pieces? Hold back on the wild claims stuff and require better explanation of extraordinary claims….

      • Gocheltree

        The water would be pumped from the Sea of Cortez. They would be securing permission from Mexico to pump the water to the southern border of the US

        • Bob_Wallace

          That’s not math. Just more hand-waving.

          Pumping water, dealing with the concentrated brine, hardening the system against corrosion – those are more system costs and we’re seeing no numbers that indicated that this idea works under ideal conditions.

  • dougt

    What the heck unit is “megawatt per hour”???? I know what a “megawatt – hr” is (that would be 3.6 gigajoules) and I know what a “megajoule per hour” is (that would be an averge power of 278 watts over a period of an hour), but “megawatt per hour” is meaningless as a unit of energy production. It’s not very confidence building that the company’s website also uses the unit on their website.

    The unit makes no sense unless you are talking about the maximum power rampup speed of a system, which is irrelevant in this context.

    If this sort of gross technical incompetence gets onto the company’s website, I really wonder about their design. Looking at the list of company executives, I don’t see a CTO or any reference to a reputable technical expert. Its all marketing and finance peope…big red flag. They raise capital, pay themselves well in cash and stock options, cash out the options, and let the company crash…repeat with new company. Wether they build the thing or whether it works is irrelavent, all they care about is creating buzz that will bring investment.

    • Akbweb2

      Thanks, Doug. Their use of this (meaningless) unit )MW per hr.) had me perplexed…

      but I figured they must know what they’re talking about, having been able to raise all that capital! Big mistake perhaps…and that’s all I had to go on at time of writing…

      That’s the beauty, and power, of science and mathematics, I guess…Thanks for cutting through the fog on that, and going further to look at the make-up of management…

    • Dcard88

      What are you talking about. kWh is used millions of times a day by every renewable co in the world. Since when is the number of watts of energy used in an hour not a real measure?
      http://en.wikipedia.org/wiki/Kilowatt_hour
      I dont claim to be a scientists, but this makes you the replier seem less than knowledgeable.

      • Tom Cohenno

        Yes, a kWh is a commonly used term to talk about a unit of energy. But it terms of power production, we use the term “watt” ( or kilowatt, megawatt, or gigawatt). But to say that a power plant is capable of production “megawatts per hour” is meaningless. Now, if they claim to produce a certain amount of “megawatt-hours” per day or week or year, that makes sense. (Honestly I think this would all be much simpler if we would just use “joules” instead of “watt-hours”. )

        Bottom line – We pay for and consume ENERGY (power for a certain amount of time). Power plants produce POWER (energy per unit time). Power per unit time has no meaning.

      • dougt

        kwh is “kilowatt – hr” or “kilowatt * hr”, not “kilowatt per hr”. The former is multiplied by hours, the later divided. This is not symmantic nitpicking, it is important.

        and as to “Since when is the number of watts of energy used in an hour not a real measure?”… Watts are not an amount of energy, they are a rate of energy transfer. So saying you used 1 watt in an hour is meaningless as saying you drove 50mph in an hour The joule is the unit for an amount of energy. A watt is the transfer of one joule in one second. Thus a megawatt-hour is 1 million joules per second for one hour, or 3.6 billion joules. A megawatt per hour is nonsense unless you are talking about the ramp-up rate of energy transfer (which the manufacturer obviously isn’t.

    • Tom Cohenno

      I completely agree that their website is an embarrassment to supporters of renewable energy. The claim that an energy production technology is capable of producing “megawatts per hour” suggests the lack of even a high school physics background. To be fair, I wondered if they just meant “megawatts”, but 1,500 megawatts is a HUGE amount of POWER. Maybe that is the case, but my impression is that one of these is not more powerful than a commercial nuclear reactor.

      Also, as the humid, cooler air (in the middle of the desert!) falls across the “man-made” wind turbines (what else would they be? natural, wind carved turbines complete with naturally occurring ball bearings?).

      What is the water consumption of this thing? Seems that even if it worked, the sheer amount of water used in the middle of the desert would counteract any environmentally beneficial aspect of clean electricity production.

      Don’t get me wrong – I’m a huge supporter of renewable energy technology and think that eventually it should and will provide a large part of our energy portfolio – BUT, I’m not buying any of this stock.

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