The emergence of Finland's Winwind as a major Nordic player in wind-turbine design and production was something of a surprise. Finland has been the Scandinavian wind industry's equivalent of Sleepy Hollow, a country where, when Winwind delivered its first 1 MW turbine in 2001 to a wind farm in the remote north, the total installed wind power capacity was a mere 39 MW.
Helsinki-based Winwind, with 300 workers mostly in the north-west in Oulu, has patiently worked against odds, betting on reliable turbines requiring minimal maintenance to open doors to foreign markets. Winwind supplied 59 MW worldwide in 2008 - placing it well behind German competitor Nordex, which last year ranked tenth worldwide in terms of installed capacity, with 1.1 GW. However, Winwind received a push towards the big leagues in September 2008 when Masdar, the Abu Dhabi-based clean technology company, invested EUR120 million in exchange for a stake of more than 40% in the company and three seats on the board.
"Our knowledge of Finland was limited, except to know that it produces good clean technologies," recalls Ziad Tassabehji, Masdar's director of utility and asset management. He expects that those technologies will have appeal far beyond Finland's shores. "The global market for wind turbines could be worth billions in years to come and Winwind's products are well placed to quickly take a share of this market - including major potential markets in Egypt, Abu Dhabi and Syria," he says.
Part of Masdar's investment will fund a new factory in Hamina, located near shipping routes in the Gulf of Finland, for 3 MW turbines targeted at the European market. When completed in 2010, the factory will produce up to 160 units a year, equivalent to over three times Finland's current installed wind power capacity of 144 MW. The factory will have a knock-on effect for Finnish parts suppliers such as: wind turbine transmission firm Moventas Oy; ABB Finland, a supplier of generators and frequency converters for wind turbines; and wind turbine gearbox manufacturer Metso Drives. Winwind is also building a factory in India to serve the broader Asian market and Tassabehji says it is considering a factory in Abu Dhabi. "We now have ambitious plans for Winwind and these include erecting Winwind turbines in the Gulf."
The stake in Winwind is part of the Masdar Initiative, a $15 billion investment by the United Arab Emirates in renewable energy projects around the world, and a far cry from the backing of such original shareholders as utility Pohjolan Voima (PVO), PVO Engineering, Suomen Head Eco Technologies and Voimarakenne Oy.
"The arrival of Masdar is a huge development for us. It will mean new opportunities and stronger growth than what we have been used to," says Ilkka Hakala, Winwind's newly appointed group CEO. "The company will focus on organic growth. We may look at acquisitions but the immediate focus is on developing our core business organically."
At least part of this projected growth will be at home in Finland where, by the end of 2007, Winwind was supplying just over a fifth of all operating turbines. "The government has outlined what it wants from its national renewable-energy strategy and personally I think its objective of reaching two thousand megawatts of wind-generated energy by 2020 is conservative," adds Hakala. "I think the figure could be higher." The Finnish Wind Power Association says as much as 5.9 GW of wind capacity can be built offshore alone (Windpower Monthly Special Report European Offshore, September 2009).
In the longer term, Winwind plans to expand its operations to India, Pakistan, Sri Lanka and Russia, says managing director Jari Varjotie. "Russia is a market that we feel we know, and we know how the business is conducted there," he says. "It is a challenging market, but we believe it will be stronger when the investment boom there starts." For now, though, Varjotie says that the global financial crisis has made an expansion into Russia, which has just 11 MW of installed wind power, "a little bit more difficult than it used to be."
Focus on simplicity
Winwind's competitive edge relies largely on the technology in its 1 MW and 3 MW turbines - a compromise between conventional turbines, which use gearboxes to step up the low speed of the rotor shaft, and direct drive generators with no gearbox. "Direct drive generators have their advantages in their reduced maintenance - given that there is no maintenance," says Kari Sundstrom, a technology analyst with Abobank in Finland.
Winwind's hybrid turbine, for its part, combines a small ring generator and a simple and robust one-stage planetary gearbox, says Sundstrom, adding: "Winwind's one and three megawatt turbines use this design successfully in the wind parks they have supplied in Finland, Sweden and Estonia."
Turbine endurance is key to attracting utility companies that are accustomed to operating plants over decades and with little maintenance, says Varjotie. "In a way, the whole concept of our product is pretty much the same idea as the utilities'," he explains. "It means that our customers will get longer lifetime for the production and that after loans are repaid on investments, it's basically free energy for them because the maintenance cost is relatively low, and in low wind speeds we are getting more production than the competition."
Winwind currently remains Finland's only producer of megawatt-scale wind turbines, but there is competition on the horizon. Finnish small-scale wind turbine manufacturer Windside said in June that it will produce a 1 MW wind turbine by 2012.
The early investors
Prior to the arrival of Masdar, Winwind's earlier investors ensured that the company could cultivate its technology until a breakthrough order came through. Winwind received its first overseas order in 2003, for two 1 MW turbines at a wind farm near Lille, France, operated by InnoVent Sarl. They sold for a combined EUR2 million. Then in 2005 it secured a EUR24 million contract from Norway's Vardar Eurus to supply and install eight 3 MW turbines at its Viru Nigula wind farm in Estonia.
This put Winwind firmly on the map, attracting attention from new customers and backers. The following year, Mauritius-based investment company Avis Ventures acquired a stake in Winwind. Environmental technology firm Proventia also bought in, later selling on part of its stake to Avis.
Fuelled by the injection of capital, the company ramped up turnover fivefold, from EUR15 million in 2005 to over EUR75 million in 2008. With the brisk pace of development and backing from Masdar, Winwind is ready to benefit from a sharp increase in domestic orders that are expected to result from the government's newfound enthusiasm for wind, and Hakala predicts that the company's turnover could reach EUR100 million by 2010.