Vattenfall has first right of refusal on the purchase of up to 200 MW of onshore wind power projects in Sweden and Norway that Gamesa Energía is developing, or intends to develop. The value of the contract, which runs until 2010, could reach up to EUR 240 million, according to Gamesa.
Vattenfall's Goran Dandanell, head of investment and power development in the Nordic region, says the deal will help the company build up its onshore expertise without the need to add personnel. While Vattenfall has developed offshore expertise in the last two years and added to its project portfolio, mainly through acquisitions, it has been "not so successful onshore," says Dandanell. Gamesa, on the other hand, "has incredible onshore experience," he adds. "This way, we get to see what they can do and it doesn't cost us a penny."
In the week following the signing of the agreement, Gamesa pitched two projects to Vattenfall, both bigger than the 10 MW minimum size specified by Vattenfall. Dandanell declines to name the exact location of the proposed projects, except to say they are in Sweden. He says the company will be fact-gathering and doing due diligence on the projects until sometime in the first quarter of 2006. "I probably won't have any more information for you or for anyone else until at least February," Dandanell says.
Vattenfall wants to become one of the biggest wind power providers in Europe and with Gamesa's help intends to amass a portfolio of Nordic projects, continues Dandanell. He agrees that another approach could have been to buy Swedish wind developers with projects in progress. "We could do that, but it's a tremendous investment, and we think we'd have to pay a hefty premium for that approach. This way we've made sure that we don't pay a premium."
In an assets for shares swap with Danish utility Elsam last year, Vattenfall gained stakes in a series of offshore projects including Horns Rev (160 MW) in Denmark and Kentish Flats (90 MW) in the UK (Windpower Monthly, July 205). As part of the deal it also gained the Borkum Riffgrund project in German waters, where it has control of the 640 MW Krieger's Flak project after its purchase of Sweden Offshore Wind. It also acquired the offshore wind interests of Norway's Fred Olsen A/S.