Germany

Germany

Heavyweights team up in Germany -- Siemens and E.ON

Two German corporate giants have cemented ties in the wind business in a major turbine supply deal. E.ON Climate & Renewables, the clean energy arm of German utility E.ON, is buying 500 wind turbines from Siemens with a total capacity of 1150 MW for E.ON wind projects in the United States and Europe.

The tie-up between Germany's biggest utility and largest company fuelled speculation that the two would now lock their wind interests together, with Siemens as the main supplier for E.ON's wind power business on land and offshore. E.ON's Patrick Woodson says that remains to be seen. "I don't think Siemens will be the only vendor, but we are a big fan of their technology. We are excited to be able to procure this many turbines in this deal and if we can replicate deals like it we would sure like to," says Woodson. The deal is as much an indication of how the turbine market is shaking out, he adds. "These companies have worked together in other forms for a long time. This is indicative of how you're going to see turbines sold for some time to come," he adds.

E.ON entered the US wind business a year ago when it bought the US portfolio of Airtricity, an independent developer of wind projects based in Ireland, subsequently sold to UK utility Scottish and Southern (Windpower Monthly, March 2008). The sheer size of E.ON means it can finance the entire 1150 MW of wind turbines from within the company, says Declan Flanagan, who heads the utility's US wind operation. "The contract is so large because we plan to build a lot of projects. And this does not represent 100% of our build plans for 2010 and 2011."

Flanagan could not provide specific project details, but says about 600 MW is headed for the US, spread between Texas, the Midwest and the Northwest. The rest goes to Europe. Should wind's federal production tax credit in the US not be extended into 2011, when the turbines are due for delivery, E.ON would think again. "I think you have to find the other markets where you can make the equipment work," says Woodson. "One advantage with E.ON is having the global footprint. If we have to, we have other options for the turbines, Europe mainly."

E.ON now has 727 MW operating in the US from a variety of turbine vendors (table) and is heading for 1120 MW by year's end and 1700 MW ending in 2009. In Europe, E.ON operates about 1043 MW split between 280 MW in Spain and Portugal, 245 MW offshore in the UK, 217 MW in Germany, 29 MW in Nordic countries, and 39 MW in the rest of Europe. Various projects are under construction, including the Robin Rigg offshore wind plant in the UK.

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