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Four bidders include major wind firm -- Closing in on Enron Wind

Enron Wind apparently expects to have a new owner within weeks and is negotiating with four interested parties. It is understood that three of these are major financial institutions from outside Germany and the fourth is an established wind power company, believed to be Vestas. Enron Wind is an autonomous business unit within the crisis hit Enron empire and not directly involved in the implosion of the American gas and energy trading giant (Windpower Monthly, January 2002). Last month all four bidders for Enron Wind were reported to be in the process of presenting their strategies and negotiating terms. So far the aim seems to be to sell the company in its entirety, which would include production facilities at Saltzbergen, Germany, at Noblejas in the Toledo province of Castile La Mancha, Spain, and Tehachapi, California.

The German and American halves of the company -- merged into Enron Wind in 1997 -- have not rubbed along well, however, and it is uncertain whether top management from both the European and American end will remain. Differences in business philosophy and arguments over technology development have more than once been aired in public. Enron acquired the German facility when it took over Tacke in 1997, shortly after its purchase of long established California wind company Zond in the same year. The two wind companies were merged into Enron Wind. The Spanish production line started, which currently employs 100, started turning out wind turbines in June 2000.

Vestas interest

Vestas managing director Johannes Poulsen indicated already in December to Danish wind magazine Naturlig Energi that his company is following the saga of the collapse of Enron Wind's mother company with interest. This is not because Vestas is considering a takeover of Enron Wind, but because the Danish company, the world's largest supplier of wind turbine technology, is interested in acquiring Enron's wind turbine production facilities, he said.

Having now split from Spain's Gamesa (Windpower Monthly, January 2002), Vestas no longer has access to extensive wind turbine manufacturing facilities in Spain, one of its major markets of the past five years. The 60,000 square metre Enron factory at Noblejas is built to turn out 720 MW a year.

Neither has Vestas yet set up a production line in North America, another major market. It does, however, have an established and well staffed office in Palm Springs, California. Creating a production plant in the same area would be less disruptive than setting up shop in a different state. Nonetheless, Vestas has earlier indicated that it is looking at a location in Colorado for a North American assembly plant, while just last month Poulsen confirmed that Oregon is also in the frame -- but only if the federal government approves a long term Production Tax Credit for wind power, thus securing a stable US market (page 35).

Sought after patent

Vestas may also well be interested in yet another Enron Wind asset -- its patent on power control of wind turbines operating at variable speed. This patent, bought by Enron from long bankrupt Kenetech Windpower, has successfully stopped European companies from selling their most optimised technology into the American market. Enron's activities to secure the same patent in Europe has long since cast the shadow of a costly patent war over the wind power industry. By acquiring Enron Wind, Vestas could blow this cloud away.

General Electric

Among the three financial institutions reported to be negotiating for Enron Wind, UBS Switzerland is considered a likely candidate. As well as being connected with a possible takeover of the mother company, or part of the company, UBS already has hands-on experience of the wind industry. It was instrumental in the merger of Nordtank Energy Group and Micon to create NEG Micon after it had first bought a large chunk of Nordtank. When UBS sold its stake in the new company, the bank pocketed a sizeable profit. As a result, it is likely to be more favourably inclined towards the wind industry than some of its competitors. General Electric has also been named by British business press as an interested party.

Enron Wind reports that it operates 5150 turbines worldwide with a combined capacity of 2548 MW. Of these it has manufactured 2527 machines (2282 MW) -- 1303 turbines in America with a combined capacity of 1177 MW, and 1224 (1105 MW) turbines in Europe. By far the most popular model has been the Enron Wind 1.5 MW, of which 822 were made up until the end of last year. The next most popular model is the Zond 750, of which 673 were made, followed by 370 of the Tacke 600 kW. Between them, the Tacke, Zond and Enron companies have marketed no less than 18 different turbine versions over the years with rated capacities ranging from 60 kW to 1.5 MW.

Spain, where Enron employs 160 people, has become a serious centre of manufacturing activity for the company in the past two years. Orders amount to 373 MW, of which 138 MW have been installed so far. The largest order supplied so far is 75 MW (100, 750 kW units) to Energía Hidroeléctrica de Navarra (EHN). The company is processing a further EHN order for 79, 1.5 MW units.

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