In what it describes as Europe's biggest ever wind power deal, Nuon bought DESA for EUR 169.1 million from Spanish industrial and technological company Abengoa SA. The purchase includes six operational wind farms comprising 584 turbines with an installed capacity of 130 MW along with a further 620 MW of projects in advanced development plus an additional 500 MW of development concessions. Abengoa was an early participant in Spanish wind power, assembling and installing hundreds of 100 kW turbines in Tarifa from a design licensed from American company Kenetech Windpower, since bankrupt.
The Dutch firm beat off competition from Spanish, German, US, and other Dutch concerns to secure the deal, says Dirk Kooman, Nuon International's renewables boss. "We were not the highest bidder but we offered DESA and its workforce the best prospects for the future. We are not intent on asset stripping the company. Rather we will be using it as a base to expand into the Spanish market and tap overseas growth potential, in Latin America, for example. We are interested in the people because they are experienced people."
Kooman first encountered the Seville-based DESA in the mid-1990s when, as director of Dutch wind project developer and consultancy WEOM, he was providing financial and technical evaluations to Spanish banks looking to offer project financing for some of the DESA wind farms. "At that time DESA had manufacturing, operating and development interests. When we were asked to make an indicative offer we were very interested in the operating and development aspects. Fortunately, from our perspective, DESA's manufacturing wing had been liquidated by Abengoa in autumn 2000, so it was a perfect match."
For its money Nuon has acquired some 330, 300 kW DESA made turbines and around 254, 100 kW US Windpower/Kenetech models -- a legacy of the industrial and technological concern Abengoa's collaboration with the American company in the 1980s and 1990s.
In general Kooman is satisfied with the quality of the existing plant. "The 100 kW units are generating very efficiently and they are very profitable wind farms so there's no problem there, but the 330 DESA, A300s have had some problems, a lot of them have been solved and we see an opportunity to upgrade to a higher output, but not to a higher model."
The real value of the deal, however, lies in the 620 MW of projects currently under development. These are divided over four regions. Galicia and Andalucia account for around 200 MW each, with around 150 MW in Aragón and the remainder in the Canary Islands and Portugal.
More than 600 MW
"These projects are all in an advanced state. We will start construction of the first 70 MW early next year and the first couple of hundred megawatt in 2003, with the whole 620 MW scheduled to be built for 2005. This 620 MW are all secure in terms of grid connection and environmental permits; land-lease is secured. Apart from turbine choice, the only things remaining to be sorted are building permits and the actual payments for the grid connection -- but that's the way it works in Spain."
Beyond the 620 MW of advanced projects, the deal has also secured Nuon a further 500 MW of concessions. "With these it is mostly a question of grid connection and we are now going to explore what the best option is, because there are high costs involved of course. In Aragón most of the regional wind energy plan has not been finished yet, so we will have to see."