How Hydrovolts’ $250k Development Deal Could Turn into a $20M Contract and Global Market

Hydrovolts has scored an investment deal that looks small at first blush, but could take the cleantech startup to the next level. The Seattle-based company, which develops small hydropower turbines that generate renewable energy from small streams and canals, last week received a $250,000 investment from civil engineering firm DLZ Corp. to develop prototype turbine for the company. DLZ plans to use the 25kW hydrokinetic turbine on the 14-km Chilla Canal in northern India.

While $250,000 may sound like small potatoes for a cleantech company—or even a tech startup, for that matter—CEO Burt Hamner says this deal, the first for Hydrovolts, is a big opportunity. The investment, in fact, could lead to an estimated $20 million in product orders down the line.

“It’s a huge accomplishment for small company,” he says. “This is our first deal and our first sale, and it has potential for being $20 million. The customer is investing $250,000 to get the first machine built specifically for his application.”

The U.S.-based DLZ, which reports annual revenues of more than $100 million, recently obtained permits to develop a 10 Megawatt hydrokinetic power project on the Chilla Canal, which feeds water into a traditional hydropower plant on the Ganges River. If Hydrovolts’ prototype turbine works as planned, DLZ says it intends to order another 400 just like it (though this agreement is not binding).

Hydrovolts first appeared on our cleantech radar in May 2009, when we spoke with Hamner about his invention—the “flipwing” turbine—one that he hopes will revolutionize the industry. Hamner’s turbine, which is designed to fit in flowing waterways such as canals, rivers, and even wastewater channels, operates like a submergered paddle wheel turbine—only it’s much more efficient. Here’s how they work: Flowing water pushes each blade from the front of the turbine back, as the “paddles” go around, they flip. This simple change reduces drag, and increases the ability to harness the renewable power generated. (See the flipwing turbine in action in the video below).

The floating turbines are also easy to deploy—all you have to do is drop them in the water and tether or anchor them. The electricity generated by the turbine is then sent to shore by a power cable. And because the wheel blades turn slower than the water current, the turbines are designed to be safe for fish, who can either swim around them or through them.

The turbines are small, built in modules that can be shipped and assembled on site, and generate renewable energy from water currents at rates as slow as 1 meter per second. This, according to Hydrovolts, makes the technology an inexpensive and viable option for many man-made canals and waterways in the U.S. and abroad. It also sets them apart from the competition—and the DLZ investment is proof, Hamner says.

“There have been perhaps a dozen entrepreneurs in the last 20 years who have or actually are trying to make turbines for canals, but there is only one really significant competitor to us. It is a Canadian firm with a different technology that is both more expensive and less adaptable to customers,” he says. “DLZ shopped the entire world for a turbine to fit their needs, and they found us.”

HydroVolts estimates that some 80,000 turbines (which would cost an estimated $1.6 billion) could be used in the western United States. Rural communities in developing countries are also a good market for Hydrovolts because the turbines are inexpensive, can be easily fit into smaller existing canals, and can provide power to populations who currently don’t have adequate access.

“Several of our angels invested in us because they know our technology will improve the lives of millions of poor people,” Hamner says. “Our business model enables us to get to large scale production in profitable Western markets, this drives down the turbine cost, and makes it more affordable for expansion to developing countries and sales to their governments.”

India alone has more than 50,000 man-made canals that could be potential sites for the turbines, according to Hamner, who says Hydrovolts is in talks with two other Indian hydropower companies that are also interested in high volume orders.

“The DLZ investment now brings new focus to large canals in India,” Hamner says. “This actually creates a high-volume government sales market for Hydrovolts because governments are working hard around the world to provide electricity to rural communities.”

The two-year-old Hydrovolts was spun out of Puget Sound Tidal Power, Hamner’s consulting firm founded in 2006. To date, the company has a number of accomplishments under its belt, including being awarded a $50,000 grant from the Zino Green Fund, earning the first slot at the McKinstry Innovation Center cleantech incubator, and winning the National Sustainability Award at the Cleantech Open last year (the company is one of 16 semifinalists this year as well).

Back in October, Hydrovolts inked a development agreement with the Woods Hole Oceanographic Institution in Massachusetts, which plans to use its technology to power batteries on remote sensors deep in the ocean, and just last month they signed an agreement with Raytheon to help it develop new technology.

The 4-person company (that also has a dozen of what Hamner calls “intimate advisors” on board) will be more than busy preparing DLZ’s turbine over the next several months—“In fact, we will be obsessed,” he says. He estimates that it will be built and ready for demonstration by February. Other turbines like it—with output ranging from 20 watts to 25 kW—will be available for sale in mid-2011.

Hamner says the Chilla Canal is “just the tip of the iceberg” for Hydrovolts. The fact that one canal alone can support up to 400 floating turbines, he says, demonstrates the company’s “enormous potential market,” he says. “Our turbines can generate reliable, clean energy from water currents in tens of thousands more canals, channels and spillways around the world.”

Trending on Xconomy

By posting a comment, you agree to our terms and conditions.

5 responses to “How Hydrovolts’ $250k Development Deal Could Turn into a $20M Contract and Global Market”

  1. Wayne says:

    It is still hard to believe that these will be allowed to be placed in rivers in the US without some government fish habitat expert making ridiculous claims that somehow the turbines will cause problems for salmon or whatever species they claim will be effected. I am sure the permitting will become a huge issue and just another way to generate fees.

    No price was mentioned for someone wanting to place one of these in their back yard. What is the payback period and the bottom line for initial cost.

  2. Its only a stupid drag machine, totally discredited by anybody that breathes, except for idiots & hustlers, in the wind industry, decades ago.