Acciona bullish on Brazil wind growth

Acciona Windpower's Brazil director Christiano Forman said the Spanish manufacturer has already outstripped last year's turbine orders in the country, as he played down the threat posed by a combined GE and Alstom.

Forman’s confidence is based on the choice to assemble and sell Acciona's AW3000, 3MW model in Brazil, which he claims offers the best cost-efficiency in the face of Brazil's strong and constant winds and a competitive, fast-growing market with tight margins.

“We believe we have the right product for the niche where we are present,” Forman told Recharge.

This week, however, Brazil's consolidating wind power market was shaken by the possible resurgence of a powerful leader, as the GE bid to take over Alstom in Europe signalled that it would acquire outright all the French company's global onshore assets.

In Brazil, the joining of Alstom's and GE's operations could create a giant with around 30% of market share.

Brazil's is a fast-growing market with about 2GW of new contracts up for grabs yearly, which has attracted several manufacturers to set up shop here since 2009. However, national content requirements by the government make it a high-investment and high-risk market, based on annual auctions that keep final wind energy prices down at around $60/MWh.

“Who is in the Brazilian market sees there is volume and that it will be sustained in the long term if energy needs continue to grow,” Forman said, referring to nationwide energy consumption growth of some 4% a year.

Acciona opted to produce locally its AW3000 model, with a capacity of 3MW and rotors with a 125-metre diameter. It will be made with up to 70% national content when its 300MW-a-year capacity nacelle plant opens at the end of 2014.

To make up local content – which is measured by the government according to a combination of the installed turbine's weight and value – Acciona  set up a network of local suppliers, and brought in others from abroad.

It also decided to produce its own hubs and concrete towers in two plants that are already operational and also opted to test Brazilian blade manufacturer Aeris as a new supplier.

The Spanish company markets its biggest turbine in the country and says it has 666MW in orders so far.

By comparison its competitors are selling smaller turbines, except for the new market entrant, WEG, which is developing a locally-made 3.3MW – which will be available from 2017 onwards – to replace the 2.1MW model, licensed from Northern Power Systems, which it is currently delivering to its clients.

Alstom, for example, is pushing its 2.7MW ECO 122 turbine; Vestas recently announced a $32m investment plan to produce locally a 2MW model; Gamesa markets its 2MW model; Enercon's subsidiary, Wobben Wind Power, offers turbines from 800kW to 3MW; Impsa offers locally turbines with capacities from 1.5MW to 2MW; Siemens offers a 2.3MW machine; and GE is focused on models with capacities around 1.7MW.

According to Forman, Brazil is one of Acciona's biggest markets and will continue focusing on machinery sales, some with OEM clauses, leaving out EPC contracts.

Forman believes that the combination of bigger capacity and larger rotor reduces developer's costs, since the same wind potential can be exploited by fewer turbines.

In 2013, the company announced 210MW in contracts and so far in 2014, contracts and agreements announced topped 300MW, according to information compiled by Recharge.

“We are in contact with every player in the market [to discuss supply contracts from recent auction],” Forman said.

“I think GE will have to think about its product lines for the Brazilian market, but Acciona believes whatever happens it's unlikely they will affect our profitability in Brazil.”