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Siemens Gamesa group plans production and R&D after Turkey win

Siemens Gamesa Renewable Energy has won a 1GW wind power tender in Turkey as part of a consortium that will build local production and R&D facilities in the country within the next two years.

The winning offer, in a consortium with local construction and engineering players Türkerler and Kalyon, was announced by Turkey’s energy ministry after a successful bid of $34.8/MWh for the 15-year power purchase agreements (PPAs) on offer. The winning bid continues a sharp downwards trend in onshore wind prices in recent tenders.

The result means Siemens Gamesa emerged victorious from a pack of heavyweight international contenders featuring most of the big players in the global wind sector, including Vestas, GE and China’s Goldwind and Ming Yang.

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A Siemens Gamesa spokesperson confirmed to Recharge that its consortium expects to sign a contract with Turkey's Ministry of Energy and Renewable Resources within the next 30 days.

The consortium will then have 90 days to define specific sites and projects in five regions of Turkey under the 1GW tender, with the first turbine orders expected within a year. The first machines are likely to be grid-connected in 2019.

The spokesperson confirmed that "within the next 21 months, the consortium will establish a manufacturing and R&D facility in Turkey and create local jobs".

Before the auction it was expected that the winning consortium would achieve over 65% local production.

The wind tender follows a 1GW solar auction held in March, which saw the whole capacity awarded to a joint venture including Korea’s Hanwha Q Cells with a bid of $0.0699/kWh ($69.9/MWh).

Turkey’s onshore wind power additions saw another strong surge in the first half of 2017 with 378MW added, to take the country’s cumulative wind capacity to 6.51GW, according to first-half figures from industry group WindEurope.

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But the political turmoil in the country since the failed coup a year ago has presented new challenges – both commercial and ethical – to foreign players seeking to tap into Turkey's emerging status as a global renewables hotspot.

Turkey’s energy minister Berat Albayrak claimed the results of the wind tender proved Turkey’s status as one of the safest investment havens in both the region and the world, despite the country’s ongoing political crisis.

Siemens chief executive Joe Kaeser faced questions from journalists over the industrial group's approach to Turkey yesterday morning, just hours before its majority-owned wind OEM business emerged as the tender winner.

Asked about reports that Turkish businesses were seeing "forced firings" of employees not perceived as loyal to the government of President Recep Tayyip Erdogan, Kaeser said: "It's always the case that when you're faced with political challenges as a private company, it's a very difficult situation."

Kaeser said Siemens' was "first and foremost" focused on its customers in Turkey, adding that by working closely together with partners in the country it can promote its values. "We need to keep an open mind but also some common sense."  

The result in Turkey comes as a boost to Siemens Gamesa, which last week revealed an underwhelming debut set of financial results, partly due to a slowdown in the Indian onshore wind market.

Note: Update adds further details and comments

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