In a busy corner of Enron Wind Ibérica's manufacturing plant in Toledo, Castile la Mancha, the gear box and generator of the first Spanish made 1.5 MW Enron Wind turbine stand ready for assembly. Nearby, a long line of 750 kW turbine nacelles await transportation to various sites around Spain. Fast work indeed, considering that Noblejas, the US company's third manufacturing unit worldwide, was only inaugurated in June last year.
In the background, Enron Wind has been learning the state of play in the Spanish wind sector. "Nobody gets anywhere in Spain without establishing a strong physical presence and without making a clear industrial commitment regionally," explains Sergio Castedo, director of Enron Wind Ibérica, the Spanish division of Enron Wind, part of the Texas based Enron empire. "And that's what we've been doing."
In the little more than two years since it set up its Spanish headquarters in 1998, Enron Wind Ibérica has received turbine orders totalling 206 MW. These include the first and second large scale contracts for megawatt technology ever to have been clinched in Spain. In fact, Enron Wind Ibérica is now behind about 10% of all installed capacity currently under construction nationwide, according to Spain's power sector magazine, Infopower. And this is despite the fact that the company missed out on the initial development of Spain's pioneering wind regions, Andalusia, Galicia, Navarra and Aragón.
Castedo makes no bones about the catalysts to such meteoric success -- a focus on Spain's emerging wind development regions, especially Castile la Mancha, together with the major turbine supply deals for Spain's dominant developer, Energía Hidroeléctirca de Navarra (EHN). Last year Enron Wind was the first and so far only company to set up a turbine assembly unit in Castile la Mancha -- Spain's fastest growing wind market in 2000. This went hand in hand with a deal to supply EHN, otherwise a stalwart customer for Gamesa turbines, with 100, 750 kW turbines for developments in the same region (Windpower Monthly, January 2000). Since then Enron Wind Ibérica has won contracts to supply a further 118 MW to EHN in the shape of 79, 1.5 MW machines together with an order for 17 Enron Wind 750 kW turbines from developer Electra Mestral for Catalonia's fourth wind plant (Windpower Monthly, March 2001).
Keeping up with orders
The Noblejas manufacturing facility, which cost EUR 2.5 million, has a production capacity of 720 MW of wind turbines a year. But the building only occupies 5% of the huge site on which it is located. "This leaves plenty of room for expansion," says Castedo with a grin. So far, production has gone well, he adds, and delivery of the final units for the initial 100-turbine order for EHN was completed in December, six months after the factory's official inauguration. The Electra Mestral order is also nearly complete and work has begun on the new EHN order.
Castedo does not underestimate the importance of the EHN deals. He refers to them as "entering the Spanish market on a red carpet." EHN, with over 800 MW up and running by the end of 2000, is behind 30% of the country's cumulative installed capacity. All of his had been supplied by Gamesa Eólica, which, like EHN, is largely controlled by utility Iberdrola (Windpower Monthly, December 2000). Thus the orders are a double blessing for Enron, making it not only the first manufacturer to come between Spain's sibling manufacturing and developing giants but also the first company in Spain to supply megawatt technology on a large scale.
Enron Wind Ibérica's sudden grip on the Spanish market is probably less surprising to external observers than its complete absence, to date, in the country's on-line wind statistics. In 1997 Enron Wind Corp took over two large wind turbine manufacturers: Zond in the US and Tacke in Germany (box next page). Furthermore, Enron Wind's mother company, multinational power giant Enron Corp, was also the first foreign company to receive the go-ahead to market electricity in Spain. Since then, Enron has been going it alone in a country traditionally controlled by four big utilities: Endesa, Iberdrola, Unión Fenosa and Hidrocantábrico.
High flyer recruitment
In a smart move, Enron recruited a powerful contact, Juan Abelló, president of mobile telephone giant Airtel, and made him non-executive president of Enron's activities in Spain. Although initially lured by agreements to supply electricity to a sizeable chunk of consumers in Catalonia -- some 46,000 small companies in all -- Enron's electricity generation plans have been stumped by widespread and vehement opposition to its 1600 MW combined cycle gas plant in the region. It was forced to abandon the project just before building was due to start.
Enron Wind Ibérica has had better luck by focusing its activity regionally, says Castedo. "There is no doubt regarding the pull of our technology. The question resided in how to make Enron Wind a viable alternative." And the answer lay in the up and coming wind regions, where new wind plans, starting with that of Castile la Mancha, put the burden on developers to find the right technology, rather than directly conceding large development rights to manufacturers.
Ironically, much of Enron Wind Ibérica's future in Spain is tied up with its own strategic development plan for Castile la Mancha, where the regional government has granted the company the right to research and develop an estimated 1339 MW. This is far more than has been conceded to any other of the 25 developers that have been granted such "exclusion zones" -- the average is about 430 MW. Castedo points out, however, that the estimated installed capacity figures are misleading, and he believes the number of zones conceded to be more indicative of the real status quo. In this case, he suspects that Enron Wind, with 21 areas, is likely to put up less installed capacity than utility Endesa, which has been granted 49 areas for an estimated 980 MW. Also, while declining to name prospective clients, Castedo says the company is confident it will clinch the supply contract for at least part of utility Unión Fenosa's 500 MW plan for the region.
The Noblejas facility will assemble generators and nacelles for all Enron Wind orders in Spain, as well as for Portugal and the Mediterranean basin, including North Africa, says Castedo, thus "putting Castile la Mancha on the map of turbine technology." Given the industrial demands for large scale industrial implementation made upon developers and manufacturers by the new regional wind plans, Enron Wind's decision that Noblejas should be such a key assembly plant might seem risky compared with other manufacturers; Gamesa has ten industrial units, including three assembly plants, for instance. But Castedo is adamant that the current upturn in the company's client portfolio is just the beginning and that agreements to produce tower and components locally, together with maintenance and service agreements, will fulfil the regional investment requirements of the various wind plans.
Supplier not developer
"Enron Wind Ibérica does not develop for the sake of developing," says Castedo, insisting that the company's focus is on turbine supply. Apart from Castile la Mancha, Enron Wind Ibérica only acts as a fully fledged developer in Catalonia, where it has applied to develop 150 MW. In all other regions the company concentrates on boosting its client portfolio, often involving co-development agreements and delivering turbines.
Thus in Valencia, Enron Wind Ibérica's agreement with developer Sinae is solely to supply turbines if and when Sinae's strategic plan is approved. In Castile and León, Enron has signed an agreement with the regional energy agency to generate EUR 600 million of investment in the region for a yet-to-be-decided supply of turbines. Castedo explains this means that towers, blades, electrical components, transformers and pitch and braking systems would all be contracted to regional suppliers. Indeed, the towers and blades for the Electra Mistral development in Catalonia were all produced in Castile and León by Coiper and LM Glasfiber's Spanish subsidiary, respectively.
Castedo's ambitions for Enron Wind Ibérica do not stop with Spain's new regional wind plans. As the company has become wise to the inside workings of each region, it is beginning to perceive potential in markets previously considered to be cornered. "The big agreements for Aragón and Galicia were made years ago and are far from being completed," he points out. "What if, in the meantime, a developer decides that they would like to use different, state-of-the-art technology?" Castedo, it seems, has the answer.