Windbiz

Asia: Dutch Out, Spanish In

Recent European moves into Asia show a clear shift as the Spanish step up their profile.  In the past six months, a string of deals involving Endesa, Acciona Energía, and Gamesa show wind energy is a major export for Spain into the region.  In the meantime, Nuon has recently sold its Chinese wind operations to refocus on the Benelux region.  While all the big technology providers zero in on Asia from Denmark and Germany, succeeding as project  developers will certainly be a trickier business.      

Baltic Wind, Coast to Coast

Since E.ON bought Airicole, and Vattenfall bought Lillgrund last year, I've been saying there's an evolving Baltic offshore strategy.  This has been limited so far to unconnected project investments in Sweden, Denmark and Germany, and possibly Poland.  Now Vattenfall says it may buy the German section of Kriegers Flak and connect the whole thing to the German grid.  You can expect a 3-player market to evolve: Denmark's DONG/Elsam/E2 has a stake in Borkum Riffgrund (along with Vattenfall), Germany's E.ON is involved in German and Swedish offshore, and Vattenfall has stepped up with Kriegers Flak.  But, being realistic, all this is a good 4 years from becoming the gigawatt market hyped up since 2000.         

Horizon Stockpiles Turbines

With all the talk of turbine shortages from the US market boom, it seems Horizon Wind has quickly picked up on the trend.  The clever folks at Goldman Sachs have snapped up 1,400 MW of turbine capacity through 2008 from Gamesa and Vestas.  Horizon is not the largest player in the market, and bigger players probably should have bought up more turbines when they could, as the market looks sold out through 2007. 

I counted a good 2,000 MW pipeline on Horizon's website - figuring half of that goes through, they might be sitting on 200-400 MW of turbines in late 2007 with the clock ticking on the PTC.  I haven't heard of reselling turbines from one developer to another, although it definitely puts them in a strong position as other projects move faster and may scramble for machines.    

Acciona Energía Getting into Korea

In a big crunch these last few days before the holiday - as we all are.  Nonetheless, the deals keep flowing and Acciona keeps extending its reach. Doing over 100 MW in Korea will be a nice credential to round out the Asian portfolio - putting them in three countries of the region including Australia and China.  Now can they leverage Ingetur into these markets, as I suggested earlier?   

2005 Ends with Ka-Ching! December Deals top €1bn

Another big deal in the final weeks of December, by another investment player.  The question is - who's next?  In Portugal, Finerge and Tecneira were already bought this year.  There are probably a few more €400-€500mln targets in Spain like CESA or Molinos del Ebro, and perhaps more foreign utilities will divest like Energi E2 or RWE Harpen.  Italy's other independent players like Fri-El and Sanseverino are still small at under 100 MW apiece - but next year there will surely be another round taking a look at these guys.      

Italian Wind Project? Show Them the Money

They've already got their meathooks into UK and German wind - now Italy's delivering deals for Europe's big wind investment players. Two worth mentioning have happened in the space of two weeks.  One is Trinergy's acquisition of IVPC4 - good for over 300 MW.  Two is Alllianz's buying up a 72 MW farm from WKN.  These types of players want to put a portfolio together that would look something like this.  Between utilities, IPPs, and these finance players competing for deals, developers selling projects are riding high.      

DESA Sale: And Then There Were Three

The field of DESA bidders has narrowed down to Endesa, Acciona, and EDP.  I'll stick with my bet on Acciona to acquire the developer as it firms up its domestic strategy with over €400 million to spend.  That will leave EDP hungry for a deal in Spain following its recent buy of Portuguese farms and its announcement to spend another €800 million. 

UPDATE

In the end DESA goes to EDP - at the hefty price of €478 million for 274 MW plus 1,000 MW of pipeline.  I'd say the price was not right for Acciona that has significant positions outside of Spain to focus on - while EDP consolidates its Iberian positioning.    

CDM / JI Pipeline Stacking Up

Just received a list of CDM (Clean Development Mechanism) and JI (Joint Implementation) projects which is a rough indicator of developing country wind energy activity. There is over 2,500 MW of wind capacity up for consideration to receive CO2 reduction credits. 

The project list can be considered a rough measure of wind energy market environment attractiveness, and is a more concrete metric than other indexes out there.  Consequently, India tops the list with over 40% registered at 1,100 MW, followed way behind by China at around 350 MW. Interestingly, six countries spread over the globe have around the same amount in the pipeline.  CDM and JI are not the foundation for a wind farm business model, but an extra 3-5% on the top line can make or break bankability.      

Acciona Earnings 3rd Quarter: It's All Energy

Acciona just put out their Q3 results. Energy is now its top EBITDA contributor at 47% of the total (€165 mln) on 10% of total revenues (€349 mln). This is impressive considering Acciona just bought the remaining 50% of EHN last year, and it has a €2 billion infrastructure business which is quickly becoming superseded by Energy. 

High production incentives in Spain (over 9 eurocents/kWh for pool market sales) are making EHN's 1,073 MW of wind capacity a particularly strong profit center.  This company is chomping at the bit to take on the world with turbine manufacturing, development, operation, and soon it will be commercializing its own green electricity.  It is going for the big time with a pipeline of large projects in Canada, the US, and China - while it will need to solidify growth in Spain outside of Navarra, and also in the rest of Europe. Being all things in renewables to all markets probably won't be sustainable - expect a sell off of turbine manufacturing down the road, at the least.