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Brazil

Brazil

Alstom's Rannou plans in fast-moving market

BRAZIL: A struggling supply chain in a fast-moving market shifting between localisation milestones is understandable, admitted Yves Rannou, senior vice president of Alstom Wind. But a united approach across the industry will help to speed its resolution.

Yves Rannou, senior vice president of Alstom Wind
Yves Rannou, senior vice president of Alstom Wind

Rannou was speaking to Windpower Monthly at the Brazil Windpower 2014 event. Brazil's thriving wind market was celebrating 5GW installations, and with growth of over 2GW expected annually, stringent local-supply requirements continue to be a major focus.

By January 2016, every turbine manufacturer supplying to the country must comply with all four local content rules: 70% of tower weight produced locally; blades built locally with 60% local content; hubs assembled in country with specific parts locally-made; and nacelles produced locally with parts and castings locally-made. Three of these four is the current requirement.

Production costs in Brazil, however, are not globally competitive and quality remains a concern. Research from industrial development agency ABDI released at the event revealed high steel costs and lack of competition largely to blame for the high costs, with flanges, welded and large machined parts, and bearings in particularly short supply. What is the solution? "Competition in the supply chain is important," agreed Pierre-Francoise Chenevier, senior vice president of Alstom Wind in Latin America, as it will force cost reduction and resolve supply chain bottlenecks.

In August, the French turbine manufacturer announced a joint venture to build a tower factory in Bahia, in the north-east of Brazil. It already has a nacelle plant in Bahia and a tower factory in the south in Rio Grande do Sul. As well as strengthening its own supply chain, the addition of a further factory for steel towers with local infrastructure firm Andrade Gutierrez, will improve logistics. "Imagine how many kilometres there are, maybe 4,000 between the north and south," said Rannou.

"We have contract obligations, which is not easy when you ramp up production," added Chenevier. "But it begins with on-time delivery of the supply chain." The company will be able to produce 900MW a year, which will more than cover the 2.5GW in its four-year pipeline.

Alstom won its first wind projects in Brazil in 2010 and, according to Windpower Intelligence figures, holds a market share of around 4%. This is set to more than double over the next few years. This is largely as a consequence of this year's contract to provide 440 turbines for Renova Energia, totalling at least 1.2GW of wind projects in Bahia. Alstom offers its 3MW Eco-100 turbines to the market, with three rotor diameters and a variety of tower heights.

The Alstom group has over 50 years of experience in Brazil through its involvement in hydro power and grid infrastructure, which provides benefits according to Rannou, who moved to the wind division earlier this year after 17 years in the company's hydro division. "We have common energy customers. We manage wind as a project not as a commodity. If a customer wants advice on grid connection, we talk to grid experts and share our knowledge," he said. He is complementary about the wind customers he has met. "Without naming names, we have dealt with proficient customers, who are impressive in technical and financial knowledge and business models."

Globally, the bid to combine Alstom and GE battles on at a higher corporate level than the wind divisions. "The deal is not closed, so we are still competitors," said Rannou. If the union goes ahead, is there potential for Alstom and GE turbine badging to continue, as European motoring group VAG did with Audi, VW and Skoda? "When you look at the portfolio, it is quite complimentary, a balanced portfolio," said Rannou. "But are we Skoda, VW or Audi?"

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