Deal signed for new wind turbine factory -- German foothold in North America

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A Quebec company says it will begin making German designed wind turbines in the Canadian province in the fall, a plan it hopes will help it win contracts to supply equipment for at least part of the 1000 MW of wind power that the province's electric utility, Hydro-Quebec, is seeking to buy by 2012.

AAER Systems Inc of Montreal intends to invest C$7 million over the next three years in a turbine making facility in the community of Matane on the south shore of the St Lawrence River on the Gaspe Peninsula. Here it will make a 600 kW model and a 1.5 MW unit under a technology transfer agreement with Germany's Pfleiderer.

Since AAER signed the agreement with Pfleiderer, the German company has all but pulled out of wind power. A medium sized company with diversified manufacturing interests, Pfleiderer has sold its 5 MW Multibrid offshore wind technology to Prokon Nord Energiesysteme (Windpower Monthly, January 2004) and partnered with Fuhrländer, another German wind turbine manufacturer, to form a company that will take over Pfleiderer's onshore wind energy activities. Fuhrländer has the majority stake and management responsibility in the new company, named Fuhrländer-Pfleiderer (page 42).

The change is a positive one for AAER, says company boss Dave Gagnon, because it will give it access to a wider range of technology. "It is a gift for us," he says. "It is an opportunity too for Fuhrländer to make an association with a group here in North America. Now they have a foothold here."

Long build-up

AAER first announced plans to build a wind turbine facility in late 2002 after securing a C$49 million order to supply machines to Fujian YongFeng Science and Technology in China (Windpower Monthly, November 2002). At that time, manufacturing was expected to begin in fall 2003. It later revised its start date to May 2004 (Windpower Monthly, June 2003). Gagnon says AAER still has the Chinese contract, as well as two orders to supply projects in California and Texas, for which he declines to provide details. "At this time we have over C$100 million in firm orders and letters of intent," he assures.

AAER's new facility will be able to make about 100 MW of turbines a year. But Gagnon says AAER is ready to double its investment if it can win part of the Hydro-Quebec tender. It hopes that making a commitment to build turbines in the province will improve its chances. "It is important for us, but it is not our only consideration. When we started this, we envisioned creating this industry in Canada for export to the United States and the Asian markets," says Gagnon. "But with this announcement we are in a very good position to be awarded part of the bid from Hydro-Quebec."

Local content

Hydro-Quebec issued its request for proposals (RFP) for 1000 MW of wind for delivery between 2006 and 2012 in May 2003. The utility, owned by the provincial government, set some strict local content requirements as a way to create jobs and investment on the economically depressed Gaspé Peninsula.

Not only must the projects be installed in the regional municipality of Matane or in the administrative region of Gaspésie-Iles-de-la-Madeleine, but the turbine nacelles must also be assembled there. As part of its bid, a developer will have to provide a statement from a turbine manufacturer guaranteeing it will set up assembly facilities in the region. Gagnon did not say if AAER has agreements with any of the potential bidders.

bidding process

In addition, the RFP requires that 40% of the total project costs for the first 200 MW must be spent in the region, a proportion that rises to 50% for the next 100 MW and 60% for the remaining 700 MW. Bids are due by June 15, but developers had until March 1 to register their intent to bid with Hydro-Quebec. The utility's Flavie Côté will not reveal either the number of bidders who registered or their identity, saying the information "could influence competition."

While AAER is the only manufacturer to announce its plans prior to the awarding of contracts, local media in the Gaspé region have recorded the visits of representatives of a number of major turbine and component manufacturers, including GE Wind Energy, Gamesa Eólica, NEG Micon and ABB.

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