Spanish turbine company breaks into Chinese market

BEIJING, China, June 15, 2005 (Refocus Weekly) A Spanish turbine manufacturer has signed two joint ventures in China to produce wind turbines and foster technological development in renewable energy sources.

The first agreement between ACCIONA and state-owned China Aerospace Science & Technology Corporation will involve construction of a turbine plant in Nantong, which represents an investment of Euro 25 million and potential annual sales of Euro 400 million. The second agreement sets up a joint venture for research activities in biomass, wind energy and wind turbine components.

The plant will be the largest of its type in China and the first using Spanish technology, and will be operational by the end of this year with the ability to produce 400 of the IT 1500 turbine each year. ACCIONA will hold a 45% stake in the venture through its subsidiary EHN, a level equal to CASC, with the remaining 10% will be held by the Spanish-Chinese marketing company INCEISA.

This is the first major agreement between a Spanish group and a Chinese state-owned group in the field of renewables, and a three-hour signing ceremony in Beijing was attended by senior representatives of the Chinese government including the general manager of CASC and members of the Chinese Council of State, as well as the Spanish ambassador to Biejing. The agreement provides an opportunity to export turbines from China to other countries, to extend the supplier network and to undertake projects of interest in other areas of research, with costs shared by EHN and CASC.

The agreements will place ACCIONA among the leading manufacturers of wind turbines in the world and contribute to fulfillment of its five-year wind development business plan, says president José Manuel Entrecanales. The joint venture represents a “qualitative leap for ACCIONA in the renewables industry on an international level, because it exponentially increases our wind turbine production capacity through INGETUR, with a short-term manufacturing and sales potential of up to 600 units per year.”

China is the tenth-largest country in the world in terms of wind power, with 764 MW of capacity at the end of last year. The new Chinese Law on Renewable Energies which was approved in February, will come into force next January and “should represent a stimulus for the development of this source of energy, given that it establishes a fixed price for electricity produced, an obligation to purchase on the part of distributors, subsidized loans and special fiscal treatment,” says EHN.

“The growing environmental awareness and sensitivity of the Chinese authorities has led to the approval of support legislation and the adoption of decisions within the scope of state-owned companies to encourage greater development of renewable energies,” the partners explained. The joint venture will manufacture and market three classes of the IT 1500 turbine, with rotors of 77 m diameter.

Last year, INGETUR produced 143 units, which was a market share of 2.6% of the world market in its first year of operation. The new plant in China will mean this percentage will rise considerably in 2006, say officials.

ACCIONA Energía installed 476 MW of capacity in 2004, almost 6% of the world total, while EHN claims to be the top windfarm developer in the world and third in terms of its own assets. It has installed 2,521 MW of wind in 89 windfarms in six countries, and has three biomass plants and 59 MW in small hydro facilities. Its subsidiary, AESOL, has installed 8.4 MW of solar PV (including the largest plant in Spain) and 8,600 m2 of solar thermal collector panels.

It has commissioned seven windfarms so far this year, located in Navarre, Galicia, Catalonia, Andalusia and Germany. The combined capacity of 180 MW gives the Pamplona-based company 2,500 MW installed in wind power.

CASC is an aerospace group that specializes in launching of satellites, and covers 130 companies with 110,000 employees.

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