Export market a powerful magnet

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Getting firmly into the export market is an overriding aim for Jacobs Energie, a relative newcomer among Germany wind turbine manufacturers. In business since 1992, Jacobs has so far mainly established itself in the expanding market of northern and eastern Germany. But at the company's headquarters in Heide, the feeling is that the real music is being played abroad. "When travelling around the world, the thing that hits you between the eyes is the enormous demand for renewable energies -- and we want to be active worldwide," says the company's managing director, Hans-Henning Jacobs.

On the home market Jacobs Energie installed eight 500 kW turbines in 1995 and a further 25 machines -- with rated capacities of both 500 kW and 600 kW -- in 1996. This year, hit by planning delays, it expects to install about 20 turbines. In eastern Germany, Jacobs turbines have been made under licence since March 1996 by Brandenburgishe Wind und Umwelttechnologie of Britz.

But it is the company's plans overseas which Hans-Henning Jacobs is most anxious to talk about. For a small company with 25 employees, sprung from the loins of its parent, Motoren-Jacobs, playing the world market is not so easy. But Jacobs Energie has made use of the various helping hands on offer, such as the now expired Eldorado programme for testing wind turbines in extreme climate conditions and the German Renewable Energy Enterprises group, GREE, sponsored by the Schleswig-Holstein investment bank. Jacobs is also quick to praise "our excellent consultant for acquisitions Dr Reiner Kniehl in Heidelberg."

The company's first foreign project consisted of three Jacobs 37/500 kW turbines installed at Urumqi in the province of Xinjiang in northern China, close to the border with Kazahkstan. They went in the ground in December, close to two Tacke and two Bonus machines. The Jacobs turbines were bought by the Xinjiang Wind Energy Company, which has led the way in wind power development in China, and the power is fed into the local grid at Urumqi. "In the first six months of operation, each machine produced 700,000 kWh," enthuses Jacobs.

Business with China has developed so rapidly that at the end of June, Jacobs Energie granted licence to the Xianjiang Wind Energy Company for manufacture of its 600 kW machines. In a first phase, parts for the first two 600 kW units to be made in China will be shipped this year. "To my knowledge we are the first company to sign a manufacturing licence contract with a Chinese partner. Other companies have so far signed joint-ventures," comments Jacbos.

Typhoon trouble

"We are enormously pleased and so are the Chinese, especially after the hitches with getting the machines there." The ship transporting the turbines was caught in a typhoon, the load slipped and blades were slightly damaged. "But experts from LM [Glasfiber] came immediately to put the blades in order again," assures Jacobs. The incident delayed installation from October to December and by that time winter had arrived. But despite the inhospitable conditions, the machines were installed in one and a half weeks at temperatures of around minus 25 degrees Celsius. Once switched on, they immediately generated at 500 kW, weathering a storm of 30 m/s on the first night when the operating system's automatic shutdown was thoroughly tested.

"Temperatures at the site range from minus 40 degrees in winter to plus 35 degrees in summer. This is just what we want," says Jacobs. The project is one of those within the Eldorado programme and is doing "just what the programme intended -- testing turbines in extreme climates. For us, its one of the best things which could have happened. We now have the perfect reference for our machines. If they can work under these conditions, then we can confidently sell them all around the world. In Schleswig-Holstein the climate is too tame for us to demonstrate the technology fully."

The next foreign project will be the installation of two 500 kW units near Minsk in Belarus this autumn, again with the support of Eldorado funds. Jacobs is also planning a stand alone system comprising two 500 kW machines and diesel generation at a site near the polar circle in Russia. Initial contracts have been signed and financing is now being organised. Jacobs will provide 50% of the financing of this Build-Operate-Transfer (BOT) project with the aid of German banks and investors. It will also operate the turbines for three years before they are handed over to the Russian utility purchaser. The Russian partner must finance the other 50% up front, guaranteeing it will pay off the loan through sales of power generated by the turbines. This means it must guarantee that the power payments are secure and high enough to satisfy the German investors. Jacobs hopes the power system will be installed and working in 1998. He predicts that BOT and Build-Lease-Transfer models of financing will become increasingly common.

In India too, Jacobs is getting into gear. Its initial foray onto the market was a joint venture set up in 1995 with a Delhi company, the Controls Group. This venture was named Controls and Jacobs Wind Energy Limited, but it did not develop satisfactorily and was finally dissolved in January.

Learning from this experience, Jacobs has been more cautious in its approach to India. A year ago it entered into a co-operation agreement with Himalaya Machinery, based in Baroda about 700 kilometres north of Bombay in the state of Gujarat. "Himalaya has a good name in India," says Jacobs. He says he is confident that this time things will work out. Its partner employs about 400 people and specialises in plate-bending machines. "A good partner for us, not too big," he adds. The co-operation contract involves transfer of know-how from Germany to India. Initially Himalaya will produce the towers and machine housing, while more intricate components will be supplied from Germany. The aim is to steadily increase the share of local manufacture.

With the help of GREE, Jacobs also has projects in Egypt and Mexico in the early stages of development, but is unwilling to discuss them in detail. In Greece, a deal was expected to be clinched in August. "But the Danes are everywhere," says Jacobs, with a knowing undertone.

Thinking about the future, Jacobs acknowledges that the resources needed to play the world market are not inconsiderable and admits that having a financially strong partner in his company's parent could help a lot. "A national partner is not enough, however. It has to be active internationally like the Nordex Balcke-Dürr arrangement. That's a great link up."

Technology development

"Firm confidence in the future," is behind the company's decision in July to develop a pitch controlled variable speed 1.5 MW machine, the first of which should be installed in the spring. Jacobs confidence is underpinned by a deal with a wind plant development company, Pro und Pro of Rendsburg. It has commissioned Jacobs Energie to build the 1.5 MW turbine using a design to be developed by Aerodyn Energiesysteme, also of Rendsburg.

According to Jacobs, Pro und Pro "has many wind sites at its disposal just waiting for development." He adds that negotiations have been held with competing wind turbine manufacturer, Husumer Schiffswerft, to join the 1.5 MW project as a development partner. Husumer is currently developing a 1 MW turbine.

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