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South Korea

Korean turbine suppliers launch American offensive

Industrial heavyweights and a smaller rival introduce megawatt-scale turbines.

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Korean shipbuilding giants Samsung Heavy Industries (SHI) and Hyundai Heavy Industries are breaking into the United States wind sector with rivalling megawatt-scale turbines and vows to put their considerable industrial muscle into achieving market share. Hyundai, with sales last year of nearly KRW 20 trillion ($16 billion), is introducing three wind turbine models with rated capacities of 1.65 MW, 2 MW and 2.5 MW while Samsung, with 2008 sales of KRW 10.7 trillion ($8.5 billion), is unveiling a 2.5 MW machine, three of which have already been ordered by independent developer Cielo Wind Power (box). Meantime, smaller Korean manufacturer Unison, which started marketing a 750 kW wind turbine in the US market more than a year ago, plans to soon offer its 2 MW model.

The push into America is part of an aggressive effort by South Korea to expand its renewable energy profile. The country wants to increase its own installed wind power capacity this year by a third from the current 233 MW in a bid to expand the proportion of clean energy in its overall energy mix to 15% in 2030 from 2.4% in 2007. Korea's industrial sector is catching on fast with a range of companies getting into the wind business, including contracting and engineering firm Doosan. Back in December it announced it was the first company in Asia to be developing a 3 MW offshore wind turbine.

British know-how

Samsung is confident that both federal and state pro-renewables laws will be passed in the US and the time is right to move into the American wind power market. "In terms of cost, wind turbines are the most competitive compared to solar, biomass and nuclear," says Samsung's Sung-Yong Han. The current economic malaise is not a significant hurdle, he says. "The low market cycle is the best time to develop our own model and enter the market - to prepare for when the market comes back." Samsung's display at the recent American Wind Energy Association trade show in Chicago dwarfed many of those around it.

The company has been closely studying wind technology for three years and began development of the turbine one year ago. The machine will have a rotor diameter of 90 metres, a one-stage planetary gear box and two-stage spur gear, and a permanent magnet generator (PMG). Samsung is working closely with Garrad Hassan, a British-owned global wind consultancy, for the basic design and with Romax, a British transmission engineering consultancy and software developer, on the details of the drivetrain.

It plans to build a manufacturing plant in Korea by early next year and start serial production of the 2.5 MW turbine in the first half of 2011 at the earliest, says Han. Samsung is buying blades from Denmark's LM Glasfiber and generators from power industry giant ABB. No supplier has been chosen yet for the transformer and the company declined to identify the gearbox manufacturer, citing a confidentiality agreement.

Company officials say SHI has several competitive advantages: roughly 2500 researchers across the company; the ability as a major shipbuilder to procure steel and components at low prices; and know-how in the areas of aerodynamics, drivetrains, hydraulics and control and monitoring systems. The company is also of a size that enables it to secure more credit for new manufacturing plant and research and development, at a lower cost, than many rivals, say officials.

Like Samsung, Hyundai also intends to apply experience from shipbuilding, as well as power equipment manufacturing, to wind. Its 1.65 MW machine, with a rotor diameter of 77 metres and a doubly fed induction generator, will be available for delivery to the US by the end of this year. By the start of 2010, it plans to be offering its 2.5 MW model, a direct-drive turbine with no gearbox, power generation using a synchronous PMG and 92 metre rotor. Hyundai also plans to offer a 2 MW model with a doubly fed induction generator in mid-2010.

Hyundai and Windtec

The 1.65 MW and 2 MW turbines will be built with technology licenses from Austrian wind turbine design firm Windtec (Windpower Monthly, November 2008), while the 2.5 MW model is being developed under a license from wind turbine technology firm Avantis Energy Consultants, which has its head office is in Hong Kong. Production of the two turbines will start at ten units a month and ramp up to an annual 600-800 MW for all three model types by 2012, says John Sestito, a Hyundai regional vice president.

The company is building a factory in Gunsan, on the west coast of Korea. Generators for all three models will be built in-house, with some key components for the two smaller turbines supplied by American Superconductor Corporation (AMSC), Windtec's owner. AMSC makes use of its technology a condition of licence agreements for the Windtec designs. Hyundai is in discussion with blade suppliers, but declines to identify candidates.

Sestito believes Hyundai will succeed despite the challenging economic climate and its newness to the wind energy sector. The company, he says, is no stranger to the US power business. It can apply its experience manufacturing gas and steam turbines with American power technology giant Westinghouse during the 1990s to the US wind business today.

Hyundai is among the top three suppliers of large power transformers to the US, according to Sestito. He believes the sheer financial strength of a company of Hyundai's size can compensate for its inexperience as a wind turbine supplier. "Hyundai has a very strong balance sheet," says Sestito. "The risk of a project with a Hyundai turbine, versus Company X that may be a newcomer in the market that is not a very well capitalised company, would certainly be an issue."

Ahead of big brothers

Unlike Samsung and Hyundai, Unison is already a familiar name in the wind sector through its regular appearances at trade shows and aggressive advertising of its 750 kW turbine, and more recently its 2 MW model, in the trade press over the past two years.

"We are ahead in manufacturing turbines, in advance of our competitors. They are just beginning," says the company's Hyun-jin Kim. In addition to its manufacturing activities, the company has also developed two wind farms in Korea with a combined capacity of 140 MW, representing more than half the country's total wind power. Three of its own turbines are turning in Korea.

"Although we do not have a track record in the US market, we can say that if you buy our turbine you have the latest technology," says Kim. The company's 750 kW unit directly couples the rotor to the PMG generator without the intermediary of a gearbox, but reverts to using a gearbox in its new 2 MW unit, which also employs a synchronous PMG. The three-stage gearbox steps up the rotor's rpm to that of the generator, but the PMG still operates at a rotational speed that is 45% lower than in wind turbines with conventional gearboxes, says the company. Low rotational speed in general results in higher durability, it adds. Both Unison's turbine models are co-developed with Aerodyn, a long established German wind turbine design company.

Patent challenge

Kim acknowledges challenges ahead. One concern is whether GE Energy will claim that Unison's 750 kW and 2 MW machines use its patented technology for making power from variable speed wind turbines grid compatible. GE is already attempting to block Mitsubishi Heavy Industries from importing its 2.4 MW model into the US on just those grounds (Windpower Monthly, June 2009).

Kim believes the GE patent is too broad to hold up in court. "My opinion is that in principle, a patent should be put on a specific technology. This is not a specific technology," he says. He denies Unison's technology copies that of GE. "We've developed it ourselves." Nonetheless, he says GE's patent may become "an issue" if a customer installs its turbine anywhere in the US. Unison will cross that bridge when it gets there, Kim says. "Anyway, we have to sell." Unison's research and development team believes GE's patent will effectively run out by around 2011, he adds.

Jobs opportunity

While existing wind turbine manufacturers in America may not welcome tough competition from Korea, local US governments grappling with the economic crisis see an opportunity to attract new jobs. During the Chicago show, each of the Korean companies received visits by state and municipal economic development agencies eager to attract new factories.

Samsung was approached by delegations from Nebraska and Iowa, Hyundai by officials from several states in the Midwest and upper-Midwest, and Unison got invitations from Iowa, Wyoming and other areas. The Iowa delegation even handed Unison a brochure translated into Korean, says Kim.

All three companies stress they have made no decision on building manufacturing facilities in the US. That may change soon. Unison currently procures about 85% of its turbine components - including transformers, main shafts and towers - in Korea. "In the near future we need to transfer our manufacturing facilities into the United States in order to react quickly and to save on logistic costs," says Kim.

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