Denmark

Denmark

Price cut possible from wind giant

A possible cut in Vestas' turbine prices of up to 10% is on the cards. The aim of the price cut is to arm the company for sharper competition on the international market. A half year profit of DKK 275 million-a 200% increase on the same period last year-gives Vestas a comfortable margin for its threatened price reduction. Vestas' half year results do not include an extra DKK 25 million, which the company has set aside to work out a flaw in a coating on the blades of the company's 660 kW wind turbines.

Within days of Vestas' announcement of its impressively buoyant half year results, company head Johannes Poulsen said a possible cut in Vestas' turbine prices of up to 10% was on the cards. The aim of the price cut is to arm the company for sharper competition on the international market, said Poulsen. A half year profit of DKK 275 million-a 200% increase on the same period last year-gives Vestas a comfortable margin for its threatened price reduction (Windpower Monthly, September 1999).

"But this does not mean that we will definitely set our prices down in year 2000," Poulsen stressed. "Only that we can be forced to do so if necessary."

The price of Vestas shares-which rocketed 17% on the Copenhagen stock exchange after the half year results were posted-has been predicted by Danish bank Spar Nord to rise 20-25% by next year. They are now trading at DKK 945 for a DKK 10 share.

Vestas' half year results do not include an extra DKK 25 million, which the company subtracted from the end figure. The money has been set aside to work out a hardening flaw in a three-component coating on the blades of the company's 660 kW wind turbines. Vestas expects to replace the coating on up to 1000 blades, which the company produces itself.

In the meantime, testing of its next generation technology is nearly ready to go ahead in Denmark. Special dispensation has been granted by the national forest commission for the erection of between three and six test turbines of 120 metre total height at Stensø, south of Nakskov, where the company is building a new factory (Windpower Monthly, June 1999). The turbines will not be subject to a new county ruling on minimum distances between machines, but authorities still await an environmental impact assesment for final approval.

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