How much of the potential 252 MW will be realised on schedule is uncertain. "Not only are production delays possible, there may also be problems with permitting," says Massart. Indeed, Gamesa has grid connection rights in Portugal for only 158 MW -- 62 MW short of the Electrabel deal -- according to its own published figures. Gamesa declines to comment on whether it is banking on unscheduled further grid rights from the Portuguese energy directorate, or is planning to buy them from other developers.
Gamesa appears to have secured a good price from Electrabel, although analysts are suspicious that the details might reveal another story. "Gamesa would like to give the impression that we are paying up front in order to benefit its share price," Massart told Belgian newspaper De Financieel Economische Tijd. On news of the deal, Electrabel shares rose slightly in Brussels, while Gamesa's rose just over 2%.
Gamesa says the deal is part of its strategy to build, operate and transfer ownership of wind farms "without increasing corporate debt." The Electrabel deal comes just weeks after Gamesa sold 982 MW of projects to its part owner, Spanish utility Iberdrola. That deal will reduce Gamesa debt, which stood at EUR 840 million at the end of 2003, to EUR 489 million already by the close of this month (Windpower Monthly, November 2002).
Electrabel, rated sixth largest European utility by sales, was attracted to the Iberian peninsula by the favourable wind regimes and the Spanish and Portuguese governments' enthusiasm for renewable energy, "which we are certainly not used to in Belgium," says Massart.
Electrabel's move into Spain comes in the wake of legislation in Belgium which requires electricity retailers to acquire green power credits. The mandate, however, has no direct bearing on the deal says Massart. "Only certificates for Belgian produced green power count in these schemes. However, we are very conscious that very shortly the European Union will start to demand all European companies have a green portfolio."
At present Electrabel's wind portfolio is modest. In partnership with Belgian wind concern, Electrawinds, it recently completed an 8.4 MW wind plant in Bruges and it owns a 4.5 MW plant at Schelle. Construction is due to start of two 2 MW wind turbines in Rodenhuize and on an 8 MW plant in Bütgenbach in Wallonia. Further licence applications are pending for more than 130 MW of wind energy projects in Belgium, the company says.
Despite its increasing interest in wind and renewables, Electrabel has no plans to follow the example of utilities such as Holland's Nuon power company and re-profile itself as green. "Wind is not considered a part of our core business. Our aim is to be a European operator with a presence in a number of European markets and as such we need green power, but only where it is commercially viable," says Massart.
Electrabel's increasing emphasis on European operations -- the Gamesa deal was followed a day later by news of its purchase of Italy's Interpower -- coincides with the liberalisation of its domestic market. Analysts believe that the Belgian market is likely to become a target for Dutch power companies looking to expand but lacking the weight to take on French and German giants.
An early shot in this power struggle has already been fired with WattPlus, a Belgian-based fully owned subsidiary of the Netherlands' largest power company Essent, looking to import green electricity from Holland to sell on the Belgian market.