World Wind Watch | Green Energy News

December 7, 2003 – Vol.8 No.37

WORLD WIND WATCH.

Competition in industry can force prices down. But so can economies of scale and worker productivity.

Consider the take over of Danish wind turbine maker NEG-Micon by rival Vestas a good thing because could bring the cost of wind energy down. And the cheaper wind energy gets, the more competitive it becomes with other forms of energy production - i.e.coal.

For the last few years dramatic increases in wind turbine efficiency and output capacity per turbine has been reducing the cost per kilowatt hour of wind energy.

But at some point those gains in efficiency and capacity may slow. Aside from better electric generation equipment and improvements in blade design, capacity increases have been made by making turbines, bigger and bigger, taller and taller - more swept area for the turbine blades. However, even for offshore use there are probably limitations on how tall a turbine can get.

Thus when all technological ways to cut the cost of turbines down (and in the end the cost of wind energy at the meter) are met. companies must then look at their business structures as a way to reduce costs.

There are examples in the energy industry where mergers and consolidations have been created to keep prices down. Exxon with Mobil, Chevron with Texaco, BP with Amoco - all mergers that will help keep prices at the pump down as crude oil gets more and more difficult (and costly) to get.

Though considered a merger and a joining of forces, NEG-Micon has agreed to be purchased in a share-per-share deal valued at 2.5 billion Danish crowns ($409 million) by Vestas, also based in Denmark.

The purchase, or merger if you will, should be examined by other lesser known grid scale turbine makers such as Enercon, DeWind, Repower, Nordex, Gamesa, as way to become more competitive, not with each other but with conventional power generation.

Visit Vestas at http://www.vestas.com/, NEG-Micon at http://www.neg-micon.com/ , Enercon at http://www.enercon.de , DeWind at http://www.dewind.de/ , REPower at http://www.repower.de/ , Gamesa at http://www.gamesa.es/ , Nordex at http://www.nordex-online.com/ .

Wind energy, in general, is in a slow period. The U.S. doesn’t yet have its renewed production tax credit and Germany may be slowing the development of new wind capacity. Still, there are noteworthy orders for new turbines coming in, just not the huge orders for hundreds of turbines for large projects as seen in the past few years.

Vestas has received an order, through its Canadian branch - Vestas - Canadian Wind Technology, to supply 38, V-80 1.8 megawatt turbines to Vision Quest Windelectric. The turbines will be used in phase one of the Summerview wind farm near Pincher Creek in southern Alberta.

Vision Quest already has 177 Vestas V47 660 kilowatt turbines in its inventory. Vision Quest is a subsidiary of the TransAlta corporation. Visit Vision Quest at http://www.greenenergy.com/