A new major player for Italy

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Italian refining and power group Erg is gearing up to become a major force in the country's wind energy sector, revealing plans to see its market share rise to about 20% in 2010 from just above 5% at the end of last year. As it seeks to get closer to that goal, Erg recently acquired a 51% stake in wind developer EnerTAD.

The acquisition adds to the small amount of Italian wind capacity already on its books through its part ownership of Erg Cesa Eolica, a 50-50 joint venture with Spain's Acciona, a major developer of wind plant on the global market. EnerTAD boasts installed capacity of 33 MW while Erg Cesa Eolica has 77 MW, giving Erg 110 MW of the 930 MW it is aiming to own by the end of 2010. EnerTAD has a further 188 MW in wind farms authorised and aims to own 490 MW in 2010.

Erg notes that it plans to exercise an option to purchase an additional 17% in EnerTAD for an investment of EUR 50 million, bringing its total stake to 68%. Erg Cesa Eolica currently has 77 MW of installed capacity, with a further 169 MW already authorised and an objective of 390 MW by end-2010.

Considering the 50 MW in capacity Erg plans to acquire from Alerion, a minority shareholder in EnerTAD, Erg says it should have a total installed capacity of 930 MW at the end of 2010. Erg sees that as equivalent to about 20% of the entire Italian wind market's cumulative capacity that year, implying that Italy as a whole could see as much as 4650 MW of wind plant by the end of 2010.

That forecast is in line with general expectations for growth of the Italian market, but way above a target of 2500 MW in installed capacity by 2010-2012 laid down in a 1999 Italian white paper on renewable energy. The Italian government has yet to raise that 1999 forecast although the country currently has nearly 2400 MW installed, having added nearly 300 MW since the start of the year.


Meantime, Erg has begun lining up suppliers for the turbines it will need as it grows. The company has signed a framework agreement with Germany's Nordex for 250 MW in turbines and it is sealing a deal with another turbine producer for another 150 MW. Erg foresees nearly EUR 1.2 billion in investments through 2010 for its wind activities, nearly half of the EUR 2.5 billion it has earmarked to develop its business in coming years.

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