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Spain

Spain

A marriage of opposite attractions

When a giant of the engineering world decided that it lacked wind turbines from its product line a small Spanish team of veteran experts was looking to secure a future for its product. As opposites they proved irresistible to one another

A 310 MW international contract with Spanish utility Iberdrola marks the half-year milestone after Alstom, a French engineering giant, finalised acquisition of Spain's wind turbine veteran Ecotècnia for EUR 350 million. It also coincides with the power up of the first Ecotècnia 3 MW turbine prototype. Meantime, post-deal synergies are crystallising and Alstom-Ecotècnia -- as it is now called -- has set a clear target to corner a 7-9% share of the world turbine market by 2015, up from around 2% today.

So confirms Robert Gleitz, boss at Alstom Wind, a division created in 2006. Headhunted from the top of the wind turbine division of GE Energy, Gleitz's brief was to grow Alstom Wind "very, very fast." He does that from Alstom headquarters in the Swiss town of Baden, though Ecotècnia's headquarters will remain in Barcelona for the foreseeable future, says Gleitz, with staff and basic structure largely intact.

Alstom is the world's third largest power generation supplier; the largest when it comes to hydro plant. "But wind turbines were missing," says Gleitz. With the global wind boom and all Alstom's major power clients taking on large wind operations, "we wanted to be part of that picture," he adds. Gas and hydro customers, like Iberdrola and French counterpart Electricité de France (EDF), often asked when Alstom would offer wind technology and services as part of its portfolio of solutions. So Alstom Wind was created with the primary task of looking for a way into turbine production. "Ecotècnia appeared as an excellent target: medium-sized and affordable with a good, renowned product," says Gleitz.

The attraction was mutual. Ecotècnia's installed capacity grew 45% over 2007, when it installing 341 MW, with a further 317 MW already building or booked. That stretched the company, a cooperative since birth in 1981. "Alstom's scope and reach is just what we need to keep evolving," says Pep Prats, one of Ecotècnia's founding fathers. In 1998, the company became part of Spain's biggest industrial cooperative, Mondragón Cooperative Corporation. While Ecotècnia keeps quiet on the subject, circulating rumours suggest that a change of leadership at Mondragón may have pushed Ecotècnia into seeking a new partner. After the Alstom deal, former Mondragón chairman told newspaper La Vanguardia: "I wouldn't have let them [Ecotècnia] escape."

Global synergies

Gleitz says the mother company's global clout, mainly through sales offices across 70 countries, is already producing important customer leads for Alstom-Ecotècnia's internationalisation, especially in Europe. "Customers want frame agreements and we are now in the process of that," he says. "We've established a good basis to double the size of the company in the next three years in terms of megawatts delivered." Just a week after uttering those words, Alstom-Ecotècnia sealed the 310 MW Iberdrola deal -- its biggest ever with a third party customer -- for developments across seven countries.

Spain, where Ecotècnia has supplied 7.32% of all wind turbine capacity, will remain one of Alstom-Ecotècnia's main markets, though Gleitz says over half of sales will be for exports from now on. France and Poland make up two key export targets. Ecotècnia already has 124 MW up or building in France, as well as commercial offices. On Poland, Gleitz holds Ecotècnia's cards close to his chest.

Those main markets are closely followed by Italy, UK, Turkey and North Africa. "The China boom is also very interesting," says Gleitz, highlighting Alstom's workforce of 8000 people there: "So we have a strong base; but not yet for wind. First we need to find the best way of ensuring viable supply chains." And there lies the key to Gleitz's work in Baden: "To grow strongly, but without overstretching." For that reason, the first step is to keep the focus close to home.

Technology

While the potential for technological synergies is huge, those will start taking shape years down the line. For the time being, Ecotècnia will carry on consolidating the Eco 100, 3 MW machine as the new workhorse for the foreseeable future.

Alstom's deep financial pockets have already accelerated the extension of Ecotècnia's Buñuel factory in the Navarra region of northern Spain for series production of the new machine. Gleitz expects completion of the facility by end-2008, with an annual capacity to produce 100, 3 MW turbines. That will be alongside production of the 2 MW machine, launched last year, and the previous 1.65 MW workhorse. Those two models are also produced at Alstom-Ecotècnia's Samoza's factory in Galicia. "We have what we already need. No other factories are being considered yet," says Gleitz.

By 2010, results will be complete from the four-year, EUR 28 million Windlider program in which Ecotècnia joined forces with Spain's leading turbine manufacturer, Gamesa, to create a virtual wind turbine computer model for developing machines of rated at 5 MW and more (Windpower Monthly, May 2006).

After 2010, technological synergies will naturally start falling into place from Alstom's "extensive activity in casting, generators and power electronics," says Gleitz. Those synergies will also roll into machines for the offshore market, says Prats, which is Alstom's main reason for targeting the UK. But Gleitz cannot guess just how much of Alstom's annual EUR 400 million research and development budget will go to wind: "Right now, the focus is on full validation of the Eco 100 and continuing with Windlider."

Will Alstom-Ecotècnia emulate the commitment of its big Spanish competitor, Gamesa, to strong vertical integration within the wind turbine component chain? So far, it only integrates towers. "There's no need to cover the entire chain, but yes, more integration is essential to ensure technological independence and control of the supply chain," says Gleitz. "Again, that will be a gradual process over the years ahead."

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