MHI Vestas Offshore Wind is born

MHI Vestas Offshore Wind (MVOW) was today officially declared open for business, with CEO Jens Tommerup insisting it has a bright future despite the uncertainties surrounding the sector and the presence of big competitors.

MVOW – a 50/50 joint venture between Japanese giant Mitsubishi Heavy Industries and Vestas – was formally established with its HQ in Aarhus, Denmark, and 380 employees.

Tommerup said the new venture will be underpinned by reliability, safety, the performance of its V164 8MW offshore turbine and the financial strength of its two parent companies.

But is there enough to play for in a European offshore sector that is on course to be smaller than was widely hoped a few years ago, and one in which big competitors are active, and in some cases already well-established?

Tommerup won’t talk about the competition, or put any figures on the level of orders MVOW hopes or expects to see, but said: “We are fully aware that there is a lot uncertainty, but we are also confident that there will be space enough.

“This will be a good business and offshore wind will find its place in the renewable energy space.”

And he claimed the offshore sector has welcomed the new entrant after many months of “talking to stakeholders” by him and his team.

“The market expects to see change and more competition. We have a clear feeling that we have been very well received, they tell us ‘it’s really good you are here as a very strong player’.”

MVOW will now set about trying to deliver what the sector wants – a driving down of costs, world-class performance and major leaps forward in areas such as O&M, he said.

Tommerup said the V164 prototype in place in Denmark has been run at its full 8MW rating, with testing “progressing well”.

Vestas is not making any announcements about its longer-term manufacturing plans for the V164 and will wait to see how orders pan out.

But the decision of Dong to name the turbine as its preferred choice for the 258MW Burbo Bank Extension project has already been a “boost for staff morale”in the important UK market, Tommerup said.

Tommerup is keen to stress MVOW’s global ambitions. While the key markets will be in Europe for the time being, “we see ourselves as a global player” that is alive to the first stirrings of the offshore wind market in Asia and the US.

The MVOW boss – formerly president of Asia Pacific & China for Vestas – faces the task of knitting together the teams from Japan and Denmark that make up the new joint venture.

He admits there will always be some challenges in such a venture, but pointed to the painstaking preparation that led up to the formation of MVOW – which was first revealed as a possibility as long ago as August 2012.

“I've been involved in JVs for many years. I've seen JVs that are less well prepared than this one that have still worked.”

It also emerged today that senior MHI executive Jin Kato will be "co-CEO" of the JV. Vestas said this is not an unusual arrangement in JVs of this kind, and stressed that Tommerup will be in ultimate operational charge of MVOW.

The two are joined at the top of MVOW by chief operations officer Flemming Ougaard and chief sales officer Uffe Vinther-Schou.

Chief technical officer is Torben Hvid Larsen and the chief financial officer is Takao Arai.

Vestas said the JV will have “only a marginal impact” on its 2014 revenues and earnings.

Assets booked at €350m ($483m) will pass to the joint venture in the form of the V164 project and the offshore service order book.