Wind Business: Move into O&M and offshore - American division comes to Europe

EDF Energies Nouvelles (EDF EN), the renewable energy arm of French utility EDF, is setting up its own operation and maintenance (O&M) division in Europe and is considering more offshore activity based on its experience in Belgium.

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In the United States, EDF EN has operated an O&M unit since 2002, when it bought California-based Enxco, originally a Danish company. According to EDF EN, Enxco is now the market leader in independent O&M services in the US, with over 5200 machines under contract for a total of 4 GW. In 2008, the company signed 19 new maintenance contracts for nearly 1400 turbines representing over 2100 MW, more than doubling the contribution of O&M activity to consolidated revenues compared to 2007.

EDF EN now wants to expand this model to Europe, taking Enxco back to its Danish roots. The group is setting up a European hub in the south of France which will take over O&M activities on EDF EN's wind farms currently carried out by the respective wind turbine suppliers. The new office will be equipped with remote monitoring facilities, backed up by regional maintenance units.

As for offshore activity, last year EDF EN helped commission the first 30 MW phase of the 300 MW Thornton Bank project as part of the C-Power consortium, in which it has an 18% stake. On the back of this experience, the group now envisages further offshore involvement, particularly in the UK and France, but mindful of its investment strategy of a "selective approach to projects and limited risk exposure."

In its recently released 2008 "activity report," EDF EN confirms continued international expansion. In Turkey it bought a 50% stake in Polat Enerji, while in Canada the group was awarded 954 MW by Hydro-Quebec as part of St-Laurent Energies, in which it holds a 60% share. In Mexico it started construction of the first 67.5 MW of the La Ventosa plant and signed a 15-year power purchase agreement with mass retailer Wal-mart. US company Clipper will supply the turbines. All three countries satisfy the group's investment criteria, says EDF EN. "They boast great potential, attractive conditions and a healthy risk profile." At the same time, it is also "keeping a close eye" on China and India, as well as markets in central and eastern Europe.

Organic growth

Overall, EDF EN's priority is to continue its strategy of organic growth in preference to acquisitions, even though it recognises that the current financial crisis may present "acquisition opportunities." Not that it is immune to the global turmoil. Financing projects is "harder and taking longer to set up," admits CEO David Corchia. The credit squeeze may affect the group's development and sale of "structured assets" that do not satisfy its investment criteria or are sold for regulatory reasons - because potential purchasers find it harder to secure financing.

At the end of last year, EDF EN's gross installed wind capacity stood at 2030 MW (table), representing nearly 90% of its total capacity, including solar, biomass, hydro and thermal cogeneration.

During the year, wind energy production grew by 67% as more than 800 MW of new capacity came online in which EDF EN has an ownership stake. This included 240 MW at Ventominho in Portugal; 189.6 MW split between three plant at Villeseque, Chemin d'Ablis and Salles-Curan in France; and over 450 MW in the US on its own account and for third parties. Last year EDF EN also started construction on a further 887.7 MW, while its development portfolio grew to 14,494 MW.

Growing faster - EDF EN capacity1
Operating Building
Country MW MW
France 263.4 160.0
Portugal 475.8 20.0
Italy 234.1 32.0
Greece 149.4 154.6
UK 143.2 88.0
Turkey 49.0 79.2
Belgium 0 30.02
Germany 3.0 0
US 712.7 256.0
Mexico 0 67.5
Total 2030.6 887.3
1. end 2008; 2. offshore now online

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