'Vestas is back' says Brazil boss

Ruben Lazo - the new Brazil boss for Danish turbine maker Vestas - says the sale of 400MW of turbines a year from 2016 onwards should put the company back on track as one of the leaders in the fast-growing local wind power market.

“After staying out for a couple of years, Vestas is back,” he said.

“Our CEO [Anders Runevad], who knows Brazil well, has made it clear that he wants Vestas to be one the leaders in Brazil's wind power industry,” Lazo told Recharge.

Although Lazo was named Brazil country president in April this year, joining from Areva, Vestas had already started drawing up plans for the country's wind market based on annual growth of some 20%.

Vestas currently has 700MW of turbines installed, or 16% of Brazil's total operating and non-operating wind power capacity of 4.5GW, according to data from the Brazilian Wind Power Association (Abeeólica). By 2018, Brazil's wind capacity should top 14GW.

In a price-oriented, competitive market, the Danish company's strategy is based on “state of the art” turbines and offering differentiated O&M services with high levels of power supply availability, Lazo said.

He hopes that the 2MW, V110-2.0, locally-produced machine will conquer some 15% of the 2.3GW in new wind farms that are expected to be commissioned every year at government auctions.

“We have been developing our supply chain over the past two years,” said Lazo, who revealed during the interview that he had just left a meeting over a deal to supply turbines to a customer successful in the latest A-3 auction on June 6, with commercial operations seen in 2017.

Lazo declined to talk about profit margins, but said that Brazil's current policy of setting low price caps at regulated market auctions limits the industry's development.

In early June, Vestas announced a R$100m (€32m) investment to build a new hub and nacelle assembly plant in the northeastern state of Ceará, with an initial 400MW capacity.

Lazo wants that used to the full to fuel Vestas' expansion in Brazil.

From there, the first turbines should be delivered with 70% local content in early 2016, fulfilling the orders that Vestas hopes to sign.

The company has met with Brazilian government officials to discuss bringing new suppliers from abroad that it will need to build up a regional cluster, also including local suppliers, to meet local content rules.

Lazo added that Vestas will also be deploying O&M specialists to southern Brazil, where the Danish group will operate the 27MW Xangri-Lá wind power plant for automaker Honda.

It currently has one O&M centre in northeastern Brazil, since 80% of its supply deals include related agreements.

Lazo said that new plant, which will be ready in June 2015, will be fully compliant with new, tighter local content rules instituted in 2013 under Finame II.

The factory adds to its current assembly plant, also in Ceará, designed to comply with the earlier Finame I rules, where it is producing the V90 and V100 models with lower local-content levels.

Since Vestas’ last orders in Brazil were signed in 2011, the market has grown fast.

Competitors like France's Alstom, the US's GE and Spain's Gamesa have signed contracts of about 1GW each in 2012 and 2013, and almost 5GW of new wind power plants were commissioned at government auctions and the non-regulated market.