Stamina and experience the key to Italian wind
Josef, Thomas and Ernst are the names of the three brothers behind Fri-el Green Power Group, one of Italy's leading wind developers with a claim to a 9% share of Italian wind energy production at the end of 2006. The Gostner siblings founded the company 15 years ago, initially operating in the hydroelectric business, and branched out into wind in 1999, making their company a relative old timer in the Italian wind business. Fri-el, based in Bolzano at the northern tip of Italy near the Austrian border, now operates nine wind farms in southern Italy with a combined capacity of 196.5 MW.
Fri-el's first wind plant was inaugurated in 2001 in Gorgoglione in the region of Basilicata and at 3.3 MW was on the small side. In contrast, four adjoining developments hooked up last year to the national electricity grid in Sant'Agata di Puglia in the region of Apulia come in at a combined 72 MW, making the complex one of the largest wind power stations in Italy. Aside from Apulia and Basilicata, the company also has wind plants in Campania and on the island of Sardinia. Fri-el recently further diversified its renewable business with a 74 MW liquid biofuel power plant in Acerra, near Naples, expected to begin operations next year.
The company has a strategic partnership with EDF Energies Nouvelles (EDF EN), the renewable energy arm of French utility Electricité de France, through which a majority of existing wind farms is jointly run. EDF EN is responsible for arranging financing and Fri-el is the site prospector, taking care of the permitting process and shouldering primary responsibility for overseeing construction. Fri-el also operates and provides for the maintenance of plants owned by the joint venture. These include the 72 MW complex in Apulia as well as a 22 MW plant at Nurri in Sardinia and 70 MW in two adjacent wind farms in Andretta and Bisaccia in Campania.
Closing in on 500 MW
Now Fri-el's growth rate is accelerating. Josef Gostner notes that construction is underway on 12 wind projects in southern Italy with a combined capacity of 283 MW. All of them should be up and running by mid-2008, he says, which will bring the group's capacity to 480 MW. Gostner is wary of talking about plants currently being built, although details of a few of them have already been made public. Projects underway include a 54 MW plant at the Grottole site in Basilicata and a 40 MW project at Minervino in Apulia. The Minervino project and an additional 70 MW in other wind farms are being constructed with EDF EN. In Campania, Fri-el is installing Vestas 3 MW turbines in a 36 MW project in Ricigliano. "Probably these size turbines will be increasingly used in Italy because they take up less space but it will be difficult to see larger size machines," says Gostner. "Already we had to bring them to the site with a helicopter."
For the entire 196.5 MW in its wind portfolio already up and running, Fri-el has been a faithful customer of Vestas. Gostner says the company plans to continue using the Danish turbines in the future. Given that Vestas is currently overbooked, however, EDF EN's framework turbine agreement with German Repower has come in handy on one project. The 40 MW Minervino plant will use 20 of Repower's 2 MW turbines, with an option for another seven machines.
Looking ahead, Gostner says that Fri-el has some 700 MW in its Italian development pipeline while the company has also been exploring the possibility of doing projects elsewhere in Europe, places like the United Kingdom and the Netherlands as well as developing markets in eastern Europe. "All of these countries in eastern Europe will begin to do wind power," he says.
Currently, each of the Gostner brothers owns a 33.3% stake in Fri-el. Those shares will be diluted somewhat since the company is expected to be listed on the Milan stock exchange in mid-June. Gostner says about a 25% stake will be sold through the issue of new shares and that funds will be used to finance the equity portion of new wind projects, those in its 700 MW pipeline that reach the construction stage.
The key is patience
Fri-el does not bid on wind projects put out to tender. The company is busy enough as it is, says Gostner. He adds that Fri-el has pursued no particular development strategy along its growth path but notes that "in the wind business you've got to have quite a bit of stamina and a bit of experience because everything takes so much time and development costs a lot of money."
While he agrees that competition for Italian sites has helped to drive up prices, Josef Gostner says it is not always the developer who offers the most money who ends up building a wind plant. "Towns and regions have come to realise that it is the entire structure of developing that is important. If someone doesn't have the know how or offers too much money, a project just doesn't get done."