QotW: Can wind manufacturers continue as pure players?

WORLDWIDE: After a spate of recent joint ventures such as MHI Vestas and the merger of Alstom and GE, Windpower Monthly asked Senvion vice president for offshore Norbert Giese, and Piers Guy, Vattenfall UK country manager and head of UK development, whether companies can operate as pure players in the industry.

MHI Vestas formed a major joint venture in the wind industry this year
MHI Vestas formed a major joint venture in the wind industry this year

Question: Can companies operate as pure players in the wind industry?

Norbert Giese, vice president, Senvion Offshore

The Senvion offshore story began over ten years ago: we erected the prototype of our 5M in 2004. Thanks to this early entry to the offshore market, we can now operate without joint ventures.

In terms of technology, if Senvion had not been willing to invest in offshore early on, we would not now be the only company in the world to have installed more than a hundred 5MW and 6MW turbines offshore – with outstanding availability levels.

We are proud to play a part in shaping this future and to continue developing our offshore expertise independently. Of course, this requires industry partnerships, such as the one with our customer EWE: In 2006, we jointly installed a 5M at the test location in Cuxhaven. EWE played a leading role in the first German offshore wind farm alpha ventus with six of our 5Ms, and this year we are erecting the prototype of the 6.2M152 together. We also contribute our industry expertise for the development of the market, for example for the cost-reduction studies carried out in 2012 in the UK and 2013 in Germany.

Piers Guy, UK Country Manager and Head of UK Development, Vattenfall

In the UK, there has been rapid growth in onshore and offshore wind and a variety of business models have been deployed with projects developed in partnership or with companies taking them forward on their own. This will continue but increasingly partnering will become the norm.

On the one hand for large projects with more risk – for example offshore Round 3 – it will make a lot of sense to seek those opportunities with partners. At the other end of the scale, risk in onshore wind construction and operations is low and well understood so we can also expect new investment partnerships. Both will prove useful sources of finance for the sector as the UK looks to invest £110 billion (EUR 139 billion) by 2020 to deliver UK renewables targets.

It's also worth considering the process from development to operation. There's a lot of value in consented schemes with a grid connection if the market continues to provide a route to a reasonable rate of return. Players working on their own are nimble, flexible and can have a good knowledge of place – this can serve them well in gaining consent. The support framework is key, as this becomes less certain then development partnerships may also become the norm to help mitigate the risks and drive down costs.

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