Plenty of long term strings attached

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Gamesa has sold its 56% share in the 24 MW Coriscada wind plant in Spain to Italy's ENEL Unión Fenosa Renovables (EUFR). EUFR is a renewables joint venture 80% controlled by Italy's top utility, ENEL, and 20% by Spain's third utility, Unión Fenosa. The EUR 9 million deal represents a sale price of EUR 667,000/MW, well below the current price trend for wind plant, which is running at EUR 800-EUR 1200/MW (page 31).

The strings attached to the bargain include an agreement by EUFR to buy an undisclosed number of Gamesa Eólica turbines as well as to use Gamesa machines in the event of an extension to Coriscada. It also binds EUFR to using Gamesa's electricity trading agency, Wind 2 Market, should EUFR decide to trade its production on the wholesale market instead of selling it at a fixed premium under Spain's alternative wind support system. Such "framework" deals are an integral part of Gamesa's business model as competition for turbine sales in Spain heats up, particularly with Vestas and GE Energy. EUFR recently announced a plan to invest EUR 217 million over the next year or so in beefing up its renewables portfolio, mainly through wind. Before last month's deal, Gamesa had already lost a 33 MW contract with EUFR to Vestas.

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