Windbiz

Coming up Next...WTG X

khays — Thu, 16 Apr 2009 14:28:28 +0200

Despite the economic downturn, the new turbines just keep on coming. Beyond the Vestas V112, we've seen a spate of new announcements this year, including rotor extensions on the Siemens 2.3, Nordex 2.3, and of course the REpower 3.X (complete with Star Wars style flash website). What's going on? With orders down 50-70%, staff reductions of 10-20%, and rumors of profit warnings - is this the time to be launching new products?

Perhaps more than ever. Why? Take a look at the target markets for these machines:

Mature West Europe. These markets are now asking for 3 MW and larger machines at Class III sites, with 100 meter and higher towers. The larger rotors offer an incremental step towards these markets. A cheaper approach than going for a 6 MW monster at 138 meter hub height.
High wind North America. Canada, US, maybe Mexico are still packed with sites requiring Class I machines. Scaling a turbine up to 3 MW, in REpower's case, while keeping the rotor size under 110 meters may be a strong bet this market.
Emerging markets. This is a new one. Typically you're used to seeing aging sub 1 MW models shipped off, or licensed, to Africa Middle East, Asia, or Latin America where they can withstand winds topping 10 m/s. Vestas' V60 is a new take on its older V50 model - will Gamesa take a cue with its G52 offer in China? This is where the growth is, and a well-proven smaller turbine may fit this opportunity.

The billions in profits these WT suppliers generated in the last two years with rising prices will now find their way into the market through these R&D investments. The appetite for any wind turbines, let alone unproven new ones with bells and whistles, is at a three year low in Europe and the US. Nevertheless, now is the time to look further out-with most of these machines aiming for serial production and major rollouts by 2010.

Offshore Wind Price - 4mln GBP/MW!!

khays — Mon, 17 Nov 2008 17:45:46 +0100

Centrica's declaration that offshore wind costs are 'alarming' is not good news, again, for an industry that's taking a decade to get out of its infancy. At 4 billion GBP per MW installed, that's topping nuclear and bringing UK offshore to a screeching halt. Luckily (wink) the UK doesn't have horrendous grid bottlenecks at its Scotland-UK interconnector. Luckily most suppliers aren't scrambling for renewables obligation certificates that are becoming scarce while targets are being increased through 2020. Luckily project permitting isn't a 4 year battle between the RSPB, local residents, and the Executive that thwarts large scale projects. The UK needs the generation capacity too badly for these problems to persist for too long - but as the global recession bears down, 4 mln/M prices for offshore doesn't help.

Financial Crisis Hits Wind Energy- Naming any names?

khays — Thu, 13 Nov 2008 16:32:10 +0100

As we all try to come to grips with the crisis' impact on wind, the challenge emerging is naming names first. Who is canceling turbine orders from GE and Vestas in the US? Who is freezing or selling their project pipeline because they're too highly leveraged? Who has cancelled capacity expansions to their manufacturing plants?

We're starting to get a trickle from 3rd quarter earnings that things are looking dicey in 09, to say the least. FPL has cut their pipeline by 400 MW, Noble Environmental Power is selling projects, CRC flipped Thanet offshore project to Vattenfall, REpower cut their sales forecasts by 10%, and rumors are bubbling up that contracts are coming under heavy renegotiation as buyers see steel prices dropping daily. It's going to be an interesting ride into 2009. Anyone with more details, willing to name where they see the trouble spots - feel free to reach out.

Suzlon - in search of good news as 09 looms

khays — Wed, 12 Nov 2008 22:36:23 +0100

If you've looked at Suzlon's recent 75% dip in share price, and seen the newsflow of quality issues and struggles to put together a finance package for acquiring REpower, it's pretty clear they're in for a rough quarter.

As turbine prices dip based on lowering commodity prices, and demand softens in key markets like the US, major customers report efforts to renegotiate order terms. No one's naming names yet, but you can expect a rapid shift come February from the current seller's market back toward the buyer side, at least in North America. It may be that orders are merely tweaked downward in price and delivery times stretched out with no further news surfacing. At the same time, a loosening up of the turbine market may be just what wind energy markets need right now to get over the hump of a frozen project finance market.

China - Dirty Wind?

khays — Wed, 09 Apr 2008 14:08:19 +0200

Back in January, a reader wrote: "Goldwind WTG are BAD, very poor quality and, obviously, shitty service and maintenance!" The comment touches upon a rising issue in China - wind power supply quality. Industry consensus says the quality isn't there yet, that the country's breakneck growth (>100% in 2007) doesn't allow for the sophisticated quality controls implemented in the West. At the same time, other sources claim at least 20% of China's MW installed isn't even grid connected. Insider anecdotes suggest an ensuing turbine graveyard evolving across Inner Mongolia with rusting 750kW and 600kW turbines.

Two points I'd make about this. First, China clearly needs to move along the turbine manufacturing learning curve and has little apologies to make. It is convenient for foreign suppliers to knock Chinese quality, but this is in the end a losing game as the Chinese scale up and take on European suppliers internationally, incrementally improving quality along the way. This is all part of the process. Maybe you're not going to see the first 2.5 MW machines a Chinese supplier produces operating with 98% availability, but thats all part of the process.

Secondly, let's be real about the 'environmental friendliness' of Chinese windpower. China is in the midst of a major Beijing Games 2008 marketing push to look green. Throwing up wind turbines forms part of that effort. But one must remember that MW installed are still a far cry from MWh here, though the political will, and the long term prospects are headed in the right direction.

Credit Squeeze Bump in Road for Renewables

khays — Tue, 08 Apr 2008 10:48:08 +0200

The recent credit crunch has sparked inquiry from several journalists on its impact concerning the renewables industry. Evidently, it's frustrating working in the space to see financial engineering in an unrelated sector undermine confidence in renewables. Analyzing the connection between unpaid subprime mortgages and project finance for a wind farm forces one to think more on macroeconomic terms and scrutinize the quality of creditors in wind energy.

The positive side to this is that the underlying fundamentals of renewables investments - security of supply, emissions reduction, cost competitiveness - simply have not changed. If anything, they've gotten more favorable as oil surpasses $100, gas supplies look geopolitically shaky, and more countries and states sign up for emissions reduction. We should be thinking of the key levers in renewables in terms of oil, gas, steel, silicon, and carbon prices rather than the knee-jerk project finance concerns from the banks.

A key indicator of all this is European utilities' continued investment ramp-up in renewables. Iberdrola, E.ON, RWE, EDP to name a few are all posting multi-billion CAPEX plans past 2010 with solidified pipelines in Europe and the US. Yes, times are going to get tough for small players looking for project finance from sub-prime ravaged banks - but two to three years from now we'll be looking back at this as a bump in the road towards longer term, cleaner energy development.

Wind Turbines by '08-'09? Who's Asking?

khays — Wed, 07 Nov 2007 08:12:04 +0100

While the industry continues to underline a turbine shortage, utility and IPP heavyweights are scoring more product by the bushel - with less than a year lead time. How is it that, despite the quarterly advisories that until 2009 or later there's no capacity available to supply more turbines, customers such as EDP can step in and buy 500 MW in the next 24 months from GE? How about 201 MW from Vestas just 18 months before delivery?

For those mid-size players stuck with turbine-less projects, or excruciatingly long lead times on their 2006 orders, the answer is clear: order intake strategy. With an eye on building competition in markets like the US, Europe and China, suppliers are turning away riskier non-strategic customers, while bending over backwards to meet the needs of utility market leaders.

The increase in turbine prices due to component shortages, and lack of product availability have been the supply side's argument for tight delivery since January 2006. But with recent deals, and continued capacity build up, it seems we're seeing some daylight on the whole supply crunch--or at least clarity in strategic account management. Turbine OEMs will have to tread carefully in to 2009-2010 when more product hits the market and control shifts away from the seller. While no two customers are equal, they all deserve honesty about availability.

EWEC07 - Bearing a Shortage

khays — Sun, 13 May 2007 12:22:54 +0200

Back for another EWEC show, this time Milan. The fears in February 2006 of turbine shortage were confirmed time and again over the past 13 months, as one OEM after another reported component unavailability, challenges delivering. But we are beginning to see a light at the end of the tunnel:

Gearbox capacity may be doubling to well over 22 GW by 2009 if you talk with big suppliers such as Winergy, Hansen.
Blade supply build out is bursting, with dozens of new plants going into the US, China, plus European expansions (Vestas, Acciona, LM all adding capacity recently).
'Component secured' turbine supply announcements are generally increasing (Gamesa, Vestas) to indicate tighter management and transparency of the critical path for assembly.

That said, the big X factor still appears to be bearings. As a non wind-specific component, what is actually being made available for the wind industry seems a bit of a guess. Wind turbine bearing supply is more a question of order book management than capacity increase for non specialty bearings like those used in gearboxes. This will be a key pinch point to watch. OEMs report adding new supply options wherever they can, from Europe to Asia and anywhere in between. In any case, the message is to 'bear with' the bearings issue - it's being sorted out, orders still being taken, and as turbine OEMs become better, more predictable customers for components, the suppliers will respond.

Wobben's Patent War

khays — Sat, 22 Apr 2006 17:44:26 +0200

Enercon CEO Aloys Wobben has learned a trick or two from GE in using patents to push out competition - while still playing on his 'power for all', grass roots PR play. The German manufacturer has not gotten around GE's variable speed patent in the US and sought to punish the American manufacturer in Germany. That was around 2003 - and GE sought to defend its patent rights in the UK as well, though a stay was granted. Well, Enercon has taken up the patent crusade in true Wobben fashion, going after lightening protection , and now a grid codes patent violation against Vestas.

The grid codes patent is as threatening as GE's variable speed in that it attempts to put up barriers around a fundamental technical concept of turbine functioning - grid connection. The patent infringement charges signal that Enercon is feeling the heat from its bigger competitors, and is having to dig deep to stay in the game. It recently called off its whole offshore turbine development program, a main driver for Germany's offshore industry, and is struggling to solidify its presence outside of Germany.

These are trying times for Wobben; however, his impressive achievements in turbine development and pushing the industry forward in Germany suggest he can do alot better than lean on patents for market share.