Longer-term significance lies in an extension to the memorandum signed with Longyuan, committing Spanish wind turbine manufacturer Gamesa to helping that utility become the world's top wind operator.
Currently, the global top dog is Spanish utility Iberdrola, which is not only Gamesa's biggest turbine client but also its largest single shareholder, with a 16% stake. Spanish industry observers are now striving to understand the full implications of the deal and the possible conflicts of interests it gives rise to.
The Spanish stock market rewarded the deals. Gamesa's share price closed on April 13 with a 2.5% hike, the second biggest rise that day. Analysts underlined both the potential volume of turbines involved and Gamesa's long-term global attachment to such a giant as Longyuan.
Longyuan is reportedly the world's third-largest wind operator, with more than 6.5GW installed in China. With Gamesa, the Chinese company now targets North America, Europe and Latin America - all strategic markets for Iberdrola.
The partners will jointly develop projects until 2015 - new sites as well as some Gamesa has already identified as part of its 22.6GW global portfolio. They will also develop 200MW in China.
Meanwhile, Gamesa and Iberdrola are fast approaching a June 30 deadline, set in 2009, for deciding whether to jointly develop 10GW of their combined European portfolio. "With the Longyuan deal, Gamesa undoubtedly brings greater negotiating power to the table," says one industry insider close to Gamesa. Late last year, Longyuan chairman Xie Changjun announced the company's intention of becoming the world's top wind operator by 2015.
"There are no conflicting interests," insists Gamesa's PR department. Despite being criticised for developing wind farms in competition with its own turbine clients, the company defends that side of its business saying it offers important insight into turbine client needs. "For a long time we have been developing and selling wind plants to big strategic customers other than Iberdrola, such as Enel and E.on," says Gamesa. "The Longyuan deal is nothing new in that sense."
Still, Gamesa CEO Jorge Calvet says the Longyuan tie-up marks "a qualitative leap" in the company's global market prospects. Gamesa, currently the world's seventh-largest turbine supplier, according to Make Consulting, has never hidden its bid to rank at the top. How far Longyuan can help in that bid, and whether it can do so without damaging Gamesa's relations with Iberdrola, remains to be seen.
