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Analysis: Enercon plans 62GW by 2020

GERMANY: Enercon plans to have 62GW of onshore wind capacity installed around the world by 2020, compared with 37GW at the end of 2014.

Enercon plans 62GW by 2020
Enercon plans 62GW by 2020

The increase runs at an average of 4.2GW per year, according to Enercon managing director Hans-Dieter Kettwig.

The target shows the company plans no sharp leaps in turbine output over the coming years. Kettwig conceded his outlook was, as always, "conservative".

A company presentation for the next three years indicated annual installations could grow in increments of 100-200MW per year over the coming years, from around 4.2GW in 2015 to about 4.4GW in 2017.

Enercon's installations increased 6.9% in 2014, nearly reaching the maximum of the 3.7-4GW range forecasted for the year. Turbine capacity sold in Germany was up, but exports were reduced compared with 2013.

The group installed a total of 3,937MW in 2014, of which 2,039MW or 52% was in Germany, and 1,898MW or 48% elsewhere in the world. This was 253MW more than the 3,684MW clocked up in 2013, of which 1,510MW (41%) was in Germany and 2,174MW (59%) was exported.

By end 2014, Enercon had installed a total of 16,867MW in Germany and 20,284MW in export markets. For the coming years, the group's overall aim is for an export share of its total deliveries of 50-70%.

In parallel, it aims to achieve a market share of 45% or more in its home market. Enercon accounted for around 43% of the 4,750MW installed onshore in Germany in 2014, compared with 50% of the 2,998MW of onshore capacity installed in Germany in 2013.

The Bremerlandesbank and KfW Ipex bank dominate in financing wind projects using Enercon turbines in Germany, the company revealed.

Enercon now markets the electricity from 1.8GW  of its German installed capacity on the wholesale electrity market through its trading company Quadra Energy. The trading is not particularly lucrative but is important for maintaining customer contact and for trading know-how, Kettwig observed.

For Germany, Enercon predicts a strong onshore market in 2015 and 2016 before the planned introduction of an auctioning procedure puts a damper on expansion. It forecasts total German onshore wind installations in 2015 of 4.2GW after 4.75GW in 2014.

"The dip will come in 2017 due to the auctioning process, but our aim is to avoid being affected by it," Kettwig said.

The wind sector is booming to meet current high demand with a run of cheap business and lower prices, but attention will focus elsewhere abroad when the going gets harder in 2017, he explained.

In 2017, the German onshore market is likely to reach only about 3GW ( including repowering ) "and we expect our market share to rise in that year", Kettwig said.

In the ongoing design phase of the upcoming German auctioning system, Kettwig argued that only wind projects that are fully permitted should be allowed to participate in the auction process.

This is to ensure that the German expansion target of a net 2.5GW per year (after subtracting capacity dismantled in repowering projects) is actually achieved.

Allocations for support won under auction should be explicitly related to a specific location and not be transferable to other locations or projects. Kettwig added there should be a "de minimus" arrangement, outside the auctioning procedure, for very small wind projects and prototypes.

The group's turnover in 2014 reached roughly €5bn, after €4.9bn in 2013, €5.1bn in 2012 and €3.9bn in 2011. Enercon's profit in 2014 was about the same level as in 2013, according to Kettwig. Net profit in 2013 amounted to €473 million, after €607 million in 2012 and €473 million in 2011.

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