Home Business Shell joins alphabet in power-generating kites plan

Shell joins alphabet in power-generating kites plan

Makani Power, an experimental wind power venture at Alphabet, has taken over the Royal Dutch Shell as part of a company.

The investment comes 13 years after Makani started working on developing kites that generate electricity, and six years after it was acquired by Alphabet, Google's parent company.

Separating Makani from X, Alphabet's experimental projects lab, including the "moon shot" projects, including Waymo and Loon driverless car unit, which uses high-altitude balloons to deliver wireless signals.

Alphabet turns new projects into freestanding business units when they are ready to move beyond the prototyping stage and start developing a commercial product, though full commercialization could be quiet.

However, the Makani transition marks a rare decision by a letter to a renewable energy project beyond its initial science phase. Two other ventures – Malta, an energy storage system using molten salt, and Dandelion, a geothermal energy project – were spun out of alphabet entirely, discussing their distance from one another ,

The size of Shell's minority investment is said to be an agreement between the two companies. Shell said the deal would help develop its offshore wind business, which has already staged projects in the Netherlands and the US. As the company tries to diversify its business out of fossil fuels and to meet its climate targets it has started looking for investments in areas such as renewable energy, electric vehicle charging, and low-carbon energy start-ups.

Until now, Makani has been developing a prototype kite that is tethered to land, floating at about 1,000ft above the ground where prevailing winds turn to keep it aloft and generate power. Taking advantage of Shell's long history of offshore development, Alphabet said it would now turn its attention to coastal waters at 50 meters, where the winds are stronger.

Makani's kites want to give them an advantage in offshore development, making it possible to attach the kites to floating buoys that are weighted down with anchors.

The concept of airborne wind turbines that has been generating power in the sky for years has been an elusive goal for the wind industry, and no company has succeeded in making the technology commercial.

Antonello Cherubini, a researcher specializing in airborne wind energy systems at the Sant'Anna School of Advanced Studies in Pisa, said there is a need for more space in the air compared with stationary turbines.

"The downside is that an airborne wind energy system requires a lot of airspace," he said.

Mr Cherubini said it was still unclear Makani could escape the fate of the other airborne wind energy start-ups that had already failed.

"There have been a few multimillion-dollar investments. However, they did not make it, "he said. "I wish this could make a difference, but there is no reason to think that this is the one."

The Shell investment is not the first time Alphabet has brought in outside backers for its side projects. Verily, which started its existence as Google Life Sciences, has taken in $ 1.8bn of outside capital, including a $ 1bn cash injection from private equity group Silver Lake at the start of this year.

Or the fact that private equity group generally looks for an exit in a relatively short timeframe. The venture's chief executive said the investment was "increasing flexibility and opportunity" at the healthcare business.

Makani's new status as a standalone subsidiary means it will now be rewarding its employees with equity committed to the future performance of the business – an important assessment tool when it comes to competing for talent with standalone tech start-ups. Similar arrangements at other Alphabet subsidiaries have been a significant factor in a recent jump in the group's costs.

Revaluing the equity at the "other bets" businesses Alphabet's research and development costs jump 40 per cent in the latest quarter, according to the group's most recent earnings call with Wall Street.


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