Enercon partners with EWE to continue project development

As turbine maker Enercon struggles with the impact of Germany‘s collapsed onshore wind market, its owner is planning to set up a joint venture with German energy company EWE, pooling their existing portfolio and pipelines to "generate national and international growth".

Enercon is trying to secure a pipeline of projects to offset the collapse of its domestic market
Enercon is trying to secure a pipeline of projects to offset the collapse of its domestic market

EWE, 74% owned by towns and districts in its core supply region of Oldenburg, Lower Saxony, and 26% by French investor Ardian, has an existing onshore wind portfolio of around 360MW.

A joint venture between EWE and the Aloys Wobben Foundation could have around 2.5GW of existing projects and a 2.3GW pipeline.

If the partners' electricity trading arms — Enercon's Quadra Energy and EWE Trading — also combine their wind energy portfolios, it would create Germany's largest renewables power trader, with some 10.5GW of mainly wind capacity.

"Enercon can then concentrate on its core competences of development, manufacture, marketing and servicing of wind turbines," said Heiko Janssen, the foundation's chairman. EWE would run the new joint venture, with the foundation providing the chair of the supervisory board.

Back in 2018, as part of the company's restructuring, Enercon's portfolio of around 160 German projects in which it owns at least 50% was transferred to Enercon Windpark Holding — directly owned by the foundation — with stakes in foreign projects to follow.

Under the joint venture structure, Enercon would presumably benefit from spreading the burden of project development and administration costs but have an almost guaranteed stream of orders and growth in its servicing business.

Talks on the new venture are slated to be completed before the end of 2020.

Factory closure

Meanwhile, Enercon is continuing the restructuring of its supply chain.

At the end of June, the WEC Turmbau facility in Magdeburg, eastern Germany, will close. The site produced 5,491 concrete tower segments for Enercon in 2018, but made a loss of €3.3 million due to high costs and logistical disadvantages.

With the use of concrete towers dwindling in favour of steel, from July Enercon will concentrate concrete tower production mainly at WEC Turmbau's site in the port city of Emden, Lower Saxony, close to its Aurich headquarters.

The North Sea port allows transport by ship, reducing logistics costs, and is close to the Netherlands and the Benelux region, where most of the concrete towers will be installed in the coming months.

Enercon also plans to cease rotor blade production in Germany by around mid-2020, from when on it will rely on its works in Portugal and Turkey and, for the new EP5 product range, in Asia.

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