Gamesa reaps rewards abroad

As Spain’s energy reforms kill off the construction of new wind farms in Gamesa’s domestic market, the turbine manufacturer has been searching for alternative business opportunities — in services at home, as well as overseas and in offshore.

“Our expectation for wind energy in Spain is that after the new regulation is in force, hardly any new parks will be developed, at least in the short term,” chief executive Xabier Etxeberría tells Recharge.

This is prompting clients to maximise the revenue of the plants they already operate, ensuring that they continue to run profitably for as long as possible.

“That fact has turned into an opportunity for Gamesa, which is developing maintenance and operation services capable of prolonging the operating life of parks and turbines above the lifespan foreseen in their original design — both for Gamesa models and those of other manufacturers,” he says.

Allowing turbines to operate longer than the 20 or so years for which they have been designed is a concept also being looked at outside Spain, in countries where support regimes are more generous.

A study by Imperial College London shows that the UK’s oldest onshore turbines, installed in the 1990s, are still producing 75% of their original output after 19 years of operation and are on course to run effectively for up to 25 years.

“This study gives a ‘thumbs up’ to the technology and shows that renewable energy is an asset for the long term,” says Richard Green, co-author of the study and head of the department of management at Imperial College Business School.

Another avenue for Gamesa to escape the disastrous effects of Spain’s reforms has been to intensify its already significant overseas activities.

“Gamesa years ago had laid out a strategy to internationalise its activity — we started to expand overseas in 2000 — to anticipate possibly regulatory changes and minimise regulatory uncertainties in various countries, among them Spain,” Etxeberría explains.

More than 85% of the company’s sales are made outside Spain, with Latin America accounting for 51% in the third quarter and India 18%.

Studies by BTM Consult point to growth of more than 10% a year in the company’s key markets of Brazil, Mexico and India over the next four years.

However, Gamesa could not avoid being hit by the near-collapse of the Spanish wind market and had to shrink its manufacturing capacity there.

In the past 15 months, it has shed more than 600 employees, closing its Albacete and Tudela blade plants and downsizing other factories across Spain.

Etxeberría claims, however, that the offshore joint venture with France’s Areva has nothing to do with the trouble in his company’s home market.

“Gamesa has always declared that it wants to be present in the offshore industry together with a strategic partner,” he says. “This accord will allow us to position ourselves as a leader in the offshore industry, contributing with a profitable growth... and generating important synergies with our onshore business.”