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France

France

Pioneer marries well and heads for gold

Not many small scale pioneers have made it to the big time as wind plant developers and owners, but La Compagnie du Vent is a thriving exception. Its willingness to marry a far stronger partner to help it grow has had much to do with the company's subsequent success

In 1991, when Jean-Michel Germa installed the first ever grid-connected wind turbine in France -- a Vestas 200 kW unit -- he said to his one and only employee that to own 2 MW was an impossible dream. Ten years later, with 11.9 MW installed in France and a share in a 50.4 MW development in Morocco, he said the same thing, but this time the figure was 100 MW. Today, the Montpellier-based company, once a small consulting firm called Cabinet Germa, is one of France's leading developers.

La Compagnie du Vent, with a turnover of EUR 17.5 million, employs 55 people. It has built around 121.8 MW and has around 900 MW in development. It has also forged a joint-venture partnership with one of the world's leading wind energy companies, Spanish developer Energía Hidroeléctrica de Navarra (EHN), now part of the country's huge industrial group Acciona. The driving force behind La Compagnie du Vent is Germa's unshakeable belief that wind power is an unbeatable energy source.

The company's first big break came in 1996 when it won around a third of the power purchase contracts tendered under France's ill-fated Eole 2005 program. In those days, getting wind power projects permitted and built in France was even more of an uphill struggle than it is now. "A real obstacle race," is how Germa describes it, explaining how he and other like-minded pioneers formed the French Wind Energy Association (FEE) in 1996 to gather and disseminate information and to counter disinformation -- still a major concern today, he adds.

Realising that development in France was going to be "long, expensive and difficult," Germa began prospecting abroad. Top of the list was the north African coastal land of Morocco with its French connections, strong and consistent winds and a long empty coastline, not to mention the all-important political will. Towards the end of 1996, when Germa's three-man company with an annual yield of FRF 7 million (EUR 1.07 million) had its hands full developing its Eole 2005 commitments, the Moroccan Office d'Electricité du Maroc (ONE) awarded the turnkey contract for its 50.4 MW Al Koudia Al Ba•da project to a consortium led by Germa with French utility Electricité de France and Paribas Bank. When it came online in 2000, the $64 million installation was not only the first wind power plant in Morocco, supplying 2% of the nation's electricity needs, but also the biggest in the Arab world and the first major development in the whole of Africa.

Spanish marriage

They were exciting times, recalls Germa. The Moroccan contract turned out to be a critical trigger for La Compagnie du Vent, though it soon also became apparent that it needed to establish a more solid financial footing to secure its future. So in 1998, Germa entered into a 50-50 partnership with EHN. "It was a very strong and immediate fit," says Germa. EHN had 500 MW up and running and was looking abroad for projects to work on when there was no room left in Navarra. Germa had projects but lacked the funds to develop them.

It turned out to be a highly successful marriage. Recognising that France was a "tricky" market and busy managing its own booming activity elsewhere, EHN left Germa free to pursue his goals in France. With increased equity and the weight of EHN behind it, La Compagnie du Vent grew by leaps and bounds. From a base of just 2.2 MW capacity in 1998, the company has since installed an additional 119.6 MW. It was recognised by the international accounting and consultancy firm Deloitte as France's fifth fastest growing technology company in 2005, with a growth rate of 2226% in five years.

Slow progress

Even so, Germa remains frustrated at how slow progress is in France due to long administrative delays and bureaucratic hurdles. He notes that La Compagnie du Vent erected around 60 MW in the same time it took EHN to install 1500 MW or so in Spain and abroad. Yet he has no doubt it was "more difficult for La Compagnie du Vent to achieve what it has in France than for EHN to build all those thousands." And now, as Acciona grows ever bigger, so Germa recognises that the partnership has to change and that La Compagnie du Vent may lose some autonomy as its strategy has to match more closely that of the group. It is a pay off he is prepared to accept, however. La Compagnie du Vent will not disappear, he says, nor will it "lose its own particular way of doing things." But the partnership gives his company more presence in the market and makes it easier to raise equity.

Big plans

In view of La Compagnie du Vent's big plans for the future, it will need all the equity it can get its hands on. The target is 800 MW installed capacity by 2012, representing an investment in the region of EUR 800 million. Germa acknowledges the geometry of the company will have to change to raise this kind of financing. He and his team are currently studying various options, including listing on the market or reorganising the shareholding internally.

La Compagnie du Vent does not get any special favours from Acciona when it comes to securing turbines. Indeed, it is only just now signing its first contract with Acciona Wind Power for eight 1.5 MW units to be installed at Kerigaret in Brittany early next year. Though he likes the technology, Germa says he could not get any turbines before because Acciona's order books were full.

Among other news, the company recently received siting permission for a 17 MW extension at Roquetaillade in Languedoc-Roussillon. This is one of five projects, with a combined capacity of 122.35 MW, which the company was awarded following the French government's 2004 tender call for 500 MW of onshore wind (Windpower Monthly, January 2006). Only two other projects, totalling 156 MW were retained. Roquetaillade is the first of the seven to receive consent.

La Compagnie du Vent was less successful in the tender for 500 MW of offshore wind. Its bid in conjunction with Shell Wind Energy for 102 MW in the Mediterranean was rejected, but Germa still hopes the project might go ahead one day. For the moment, however, he is more excited about an ambitious 702 MW project La Compagnie du Vent is developing in the English Channel, 14 kilometres off the coast of Picardy and Haute-Normandie. It is a "wonderful project" says Germa, clearly proud of various engineering solutions his company has found to exploit the shallow-water site where British fighter pilots dumped unused bombs during World War II.

He believes he can build the facility at an affordable cost. There is room on the grid here and "very strong support" from local politicians, attracted in part by the prospect of local employment. If the project gets the green light, La Compagnie du Vent plans to establish a turbine assembly plant in the region.

Business model

The rest of the company's 5000 MW portfolio is all onshore. Its business model is to handle the whole process from identifying, developing and financing projects to construction, operation and subsequent ownership. This accounts for around 80% of its activity, though the company also acts as project manager and takes on turnkey contracts, such as those in Morocco, if they arise. On rare occasions it may also sell projects on. The only sale so far has been at Névian in Languedoc-Roussillon, where it sold three turbines to keep below the 12 MW limit for wind projects to be eligible for preferential tariffs. For similar reasons, it may sell 6 MW at its recently commissioned L'Espinassière plant in northern France.

Given the difficulties facing the wind industry in France, La Compagnie du Vent continues to look for opportunities abroad with the same pioneering spirit as before. Following the Al Koudia Al Ba•da project, in 2004 it was selected by Lafarge Maroc, a large building-supplies company, to install a 10.2 MW plant at a cement factory at Tetouan in the north of the country. The plant is the first in the world to directly power a cement works, supplying 40% of its electricity needs. It is also the first project in both France and Morocco to qualify for Clean Development Mechanism (CDM) status under the Kyoto Protocol. While La Compagnie du Vent was disappointed not to be selected earlier this year for a 60 MW project in Morocco at Essaouira, which went to Gamesa, it still sees the market as having great potential and intends to be there for the long term; in 2005, it established a subsidiary office in Casablanca.

Diversification

Back in France, La Compagnie du Vent is also diversifying into biofuels. In January this year it announced a EUR 100 million investment plan with Acciona Energia, which produces half of Spain's biodiesel, to build three biodiesel plant with an annual production of 200,000 tonnes each at the ports of Bordeaux, Marseille and Dunkirk. The projects were bid into the French government's "Plan Biocarburants 2006-2008" call for tenders, but rejected in favour of a wholly French company. Germa says he was "very surprised and disappointed" at what he feels was an unfair decision. "We have the skills and the money and the government wants to develop biofuels," he argues. He is considering an appeal. Meantime, however, La Compagnie du Vent is forging ahead with new projects. "We may have missed the first step, but it is an open market and there are other opportunities" he says with typical optimism -- and determination.

The final string to La Compagnie du Vent's bow is its GeoWind software package which helps assess the wind power potential of any given area and for any number of turbines. Its strengths are its user-friendly interface and the fact that it runs with the industry's standard Wind Atlas and Application Program, known as WASP, or any other aerodynamic software. Clients for the software range from individual developers to utilities and national governments. GeoWind has been used to create wind atlases for a number of regions in France and its overseas territories and in Morocco.

Looking back to when he started out in the business 17 years ago, Germa says the biggest change in France is that wind power and renewables in general are now part of the energy landscape. It is no longer possible for the politicians and opposition groups to dismiss it. "Now wind energy has to be debated, and it is here to stay."

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