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Europe: Powerful pairing - Industry leaders join forces

Two of the biggest names in wind energy have merged with hopes of becoming a leading service provider to the broader renewables industry.

Offerings by the new company formed by Garrad Hassan (GH), the world's largest wind consultancy, and Germanischer Lloyd (GL), a technical assurance company with growing prominence in wind, will include engineering, turbine design, certification, measurement, project management and inspection services for wind, solar, marine and other renewables.

"With the industry growing fast and suppliers getting bigger, we needed to get bigger," says Andrew Garrad, CEO of UK-based GH. "We have considered many potential partners but we have chosen GL because we share the same values of independence and technical rigour."

Pekka Paasivaara of GL's executive board adds: "The merger of GH and GL is a reflection of growing demand of customers for a single service provider who offers solutions for challenges in technology, environment and asset performance on a worldwide scale ... Together, we will offer a unique level of service expertise and global presence across the whole project lifecycle."

Garrad brushes off concerns that the merger will stifle competition in the industry, saying, "There is plenty of competition." He concedes, though, that most rivals are far smaller. Meantime, "the big consulting companies are finding it difficult to get into this business," he adds. Reaction to the merger among GH's clients has been one of surprise but positive nonetheless, he claims. "A lot of our joint clients have said this is good news." One GH client comments: "There are not a lot of overlaps," adding, "It's not like one business competes with the other. It's actually quite complementary."

Garrad insists every effort will be made to prevent conflicts of interest between GH's consultancy services and GL's certification activity. "We are very clear how that will be handled," he says. "There is a strict code of conduct." Certification will continue to be run from Hamburg as a completely separate organisation and isolated from other activities in the new renewables business, he says. "This is more of a perceived conflict rather than reality. There will be no change" from the previous relationship, he says.

All together now

After the merger, Garrad Hassan will form a separate business segment dedicated to renewable energy within the GL group. Headed by Andrew Garrad as president, it will retain the Garrad Hassan name and the company's 360 engineers and consultants in 26 offices in 18 countries in Europe, America, Australasia and Asia. These will be joined by technical experts from GL, resulting in over 600 staff at 34 locations around the world.

In its 25 year history, GH has provided services to turbine manufacturers, developers, banks, lenders, governments and nongovernmental organisations. It has conducted due diligence on some 22 GW of operating projects and energy assessments for over 100,000 projects - more than 80% of global wind capacity.

Recently, GL has focussed increasingly on the renewables market - particularly wind, where it provides certification, measurements, consulting and engineering. The group has already acquired wind energy consultancy and engineering firm Helimax, of Canada, as well as Windtest Kaiser-Wilhelm-Koog a company specialising in measurements for wind turbines and wind farms located not far from GL's Hamburg base. In April, GL took ownership of Noble Denton, a British firm offering lifecycle marine and offshore engineering services from its base in Aberdeen, Scotland. The company is particularly experienced in project management.

Need for growth

Garrad calls the merger a platform for growth. Despite his company's predominance among wind consultancy firms over the years, he believes the entry of international utilities and financial firms into the sector necessitates further expansion. "I felt that we needed to change gear and become a bigger, more professional and global organisation," he says. "This is a way of getting better resources and providing better products. We will be able to offer a one-stop shop and between us cover a very wide range of technical ability."

There is surprisingly little doubling in activities and geographical markets between the companies, Garrad maintains. GH's consulting services are complemented by GL's strength in turbine measurements. And with GL's acquisition of Noble Denton's 50-strong team, offshore wind will assume a higher profile for the merged business. "We had 25 people working on offshore, GL had 25. Suddenly, we have 100 people working on offshore wind."

Moreover, GH now has access to GL's international network of engineers and offices in emerging markets. Garrad says GL's existing office in Korea makes it easier for the renewables business to ease into the potential offshore wind market there. A similar example is South America, where GH had plans to expand beyond its existing offices in Mexico and Brazil. "Now with GL's offices in Chile, Argentina and Brazil, and with infrastructure (already in place), we can go and start work immediately." It works both ways: GH has a strong presence in the United States, where GL previously had little presence, he says.

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