Dutch consolidate Spanish business -- Settling in

With starting orders to build new wind projects totalling 106 MW, Dutch utility Nuon has tightened its grip on Spain through affiliate Desarrollos Eólicos SA (DESA). Part of the new capacity is to come via Nuon-DESA's first acquisition outside its own development portfolio -- the 36 MW Santa Quiteria project in Aragón bought from Denmark's NEG Micon prior to construction.

The Danish company relinquished the project as added value to an EUR 85 million turbine supply deal with DESA-Nuon. The contract is for 118 NEG Micon 900 kW machines: 40 for Santa Quiteria and the rest for the 70 MW Monseivan project in Galicia, developed by DESA long before it was taken over by Nuon in 2001.

Nuon's Dirk Kooman confirms the company is aiming at building 100 MW of wind a year in Spain to 2008. He stresses Nuon's careful approach. "Our aim is to define risks and reduce them. The introduction of new technology has been too fast on the whole," he says. Nuon prefers technology with an identifiable track record, he adds.

"DESA's experience contributes to Nuon's search for technology guarantees," says Tomás Andueza, boss of DESA since the 1980s when it developed much of the early wind plant in Andalucia. As a one-time "fully integrated wind company, covering developing, operating and turbine manufacturing," DESA had much to offer Nuon, he adds. Santa Quiteria marks what sounds as if it could be a chain of project purchases by DESA-Nuon. "We are exploring opportunities," says Kooman.

Nuon rests most hope, however, on DESA's 600 MW project portfolio. "These are mature and strong projects involving considerable amount of money," says Kooman. Construction of the new Galicia and Aragón projects has started and will bring DESA-Nuon's installed wind power in Spain to 242 MW. Not much by Spanish standards, but Andueza is confident DESA will surmount what he sees as temporary obstacles to the 600 MW portfolio. Securing grid access in Aragón is one of them.

In Andalucia, DESA's home base, the company is one of the few through the region's notorious grid bottleneck that has all but frozen wind growth since the late 1990s. With just 68 MW online in the region, DESA-Nuon's main hope rests on its 300 MW portfolio of mature projects, soon to be reviewed under Andalucia's grid plan (Windpower Monthly, May 2003). Andueza agrees that co-operation with competitors to build out the grid could get things moving. "It's better to enter other projects than to leave them entirely to competitors," he says.

In Galicia, the shortage of grid space is also slowing progress on DESA-Nuon's 283 MW wind concession. "DESA signed an agreement for grid improvements and access in the north-west of the region three or four years ago but we still have to see how much will become reality," says Andueza. DESA has a 170 MW framework deal in Galicia with Izar-Bonus. It operates 43 MW there today, and the 70 MW Monseivan project will complete its concession.

DESA-Nuon is also developing projects in Castile-La Mancha and searching for opportunities in other Spanish regions. One option not being considered is entering one of the pair of offshore projects proposed off Cape Trafalgar. "Nuon is already involved with Shell in a 100 MW offshore project in the North Sea," says Kooman. "Nuon is not prepared to take another [offshore] risk until we have gained solid experience from this existing project."