Toshiba ventures into wind power with $36.5m deal

JAPAN: Japanese giant Toshiba has made a major move back into wind, in a turbine development deal with Korean manufacturer Unison.

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Japanese conglomerate Toshiba has signed a memorandum of understanding to invest $36.5 million in turbine manufacturer Unison. The deal in May is its first major move into the wind sector since a brief tie-up with Gamesa between 2002 and 2006.

Unison is one of South Korea's most established turbine manufacturers. The company, whose products include Aerodyn-designed 750kW and 2MW turbines, has built many of the country's wind farms. It is also one of a select group of Korean manufacturers to have won business in the US.

Explaining the rationale behind its decision, Toshiba cited predictions that, by 2020, global wind power generation would be almost quadruple the 2008 figure.

The deal will see the companies cooperate on product development, likely to include the 3MW and 3.6MW machines Unison is working on. Toshiba will take over marketing and worldwide distribution for Unison.

With the agreement still subject to regulatory approval, there is little information available on what direction the collaboration will take in terms of research and development. However, specific mention was made in Toshiba's statement of Unison's direct drive technology, which is available on its 750kW model.

Toshiba also plans to bring over key skills and knowledge from its energy business and work with Unison on developing higher-efficiency wind turbines, applying design technologies for fluid mechanics derived from experience in steam turbine generators.

The right move?

There is no doubt Toshiba is serious, but some industry figures have suggested the company has left it too late. There is also a question over whether Unison is the right match for Toshiba.

One analyst says: "It is difficult to know whether they will succeed. When you look at the Korean shipbuilders they have a lot of R&D resources and yet we haven't really seen any significant penetration.

"But Toshiba has large resources in R&D. If they want to do something significant they can make an impact. They may not overtake the likes of Vestas or Siemens but they can be competitive with some of the smaller manufacturers such as Nordex."

In energy terms, Toshiba is better known as one of the world's biggest suppliers of nuclear power equipment. Recently, it has extended into solar energy and transmission, with the $2.3 billion acquisition of Swiss smart grid specialist Landis and Gyr.

The deal with Unison is not Toshiba's first foray into the wind sector. In 2003 it launched a 400kW vertical axis turbine for urban environments, dubbed Wind Flower.

Nor is the partnership the company's first tie-up with a major turbine manufacturer. In 2002, it signed a deal with Gamesa to develop larger turbines and distribute the Spanish company's products in Japan.

The main success of this arrangement came in 2006 when Gamesa supplied Toshiba Plant Systems with ten G80 2MW wind turbines to be installed at Kashima, Ibaraki prefecture, northeast of Tokyo. The Kashima project was the last time the companies worked together.

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