EGP has earmarked investments of EUR3.5 billion for wind energy in 2011-14.
Analysts see an advantage in locking in current prices for wind turbines, which have fallen considerably in recent years but may be close to the trough. "We've seen price decreases up to 20% over the last two years," explains James Magness, a financial analyst with HSBC. "So it may be that EGP wants to tie in good prices that are at the bottom of the price cycle or near it." HSBC expects turbine prices to decline by up to about 5% next year, before they bottom out.
The contracts with Siemens and Vestas, announced in October, are for delivery of 1GW in turbines in 2011-14, with an option on another 1.6GW. EGP has ordered up to 600MW from Siemens in 260 turbines, including 2.3MW and 3.6MW machines. These are for use in Italy, France, Spain, Portugal, Greece, Romania and Bulgaria. EGP has an option on another 600MW of Siemens turbines in the same four-year period. EGP's contract with Vestas covers 400MW in turbines to be used globally, with an option on another 1GW.
EGP had roughly 5.8GW of installed capacity by mid-2010, of which 41% was in wind farms. The company wants to grow its wind business to reach 9.2GW by 2014.
Out of the 1.2GW in EGP projects implemented by mid-2010, 82% were wind farms. Another 29.9GW of projects is in the pipeline - 90% of it in wind.
Recent research from analysts at Swiss bank UBS shows EGP's wind energy capacity next year surpassing that of its hydroelectric facilities. In 2014, wind should become the group's main renewable energy source in terms of electricity production.