Union Fenosa, with debt running at EUR 7.7 billion, wants to bring in finance to bolster UFEESA's plans for 1000 MW of new renewables up to 2006. The company has 300 MW online and another 300 MW building, nearly all of it wind. The utility wants to keep full control of its renewables development and seeks a sleeping partner "such as a bank," say company sources. It does not discard selling a majority, but insists it will retain executive control.
Like Union Fenosa, Endesa also cites financial difficulties as the main reason for divesting Ecyr and Made. Group debt is EUR 23 billion, yet its intentions for wind are to build "2060 MW in the next few years," according to Endesa's Alfredo Llorente. Ecyr lays claims to 800 MW of operating wind plant today.
Rumours are rife in the industry that it is not just financial cramp behind the eagerness of both utilities to find new blood for their wind businesses. Tension has long been building between the utilities' core conventional generation business and non-core renewables concerns. The suspicion is that Union Fenosa and Endesa are seeking to resolve those tensions by jumping ship and getting out of wind.
All electricity distributors in Spain, mainly the utilities, are obliged to buy wind at premium. Utility association Unesa has long since attacked the model, not only because distributors must pass the cost of the purchases on to consumers, but also because they have to juggle non-scheduled wind power into their complex supply and demand models. Divestment would alleviate the tensions deriving from conflicting interests.
Scramble for Made
Meantime, Endesa is blunt about its reasons for selling Made. "It makes no sense for an electricity company to make its own machines," Llorente told newspaper Expansión. Seen in the light of Endesa's decision to also invite bidders for part of Ecyr and Union Fenosa's copycat announcement, industry observers are heralding the departure of both utilities from direct involvement in wind.
The scramble for Made has started, though Vestas says it is not bidding (page 41) and NEG Micon's Torben Bjerre-Madsen merely remarks he has not been in Spain since October 2001. A bid from Vestas would have been a major threat to Spain's Gamesa Eólica, which split from Vestas last year. According to Expansión, German manufacturers Nordex and Enercon could also be making bids, while Reuters reports that GE is intending to significantly step-up its Spanish operation.