Denmark: Vestas Negotiates Construction of 8MW Offshore Wind Turbine with MHI

Vestas Wind Systems A/S and Mitsubishi Heavy Industries Ltd.(MHI)are negotiating on a plan by Vestas to build an 8MW offshore wind turbine.

It would be the largest offshore wind turbine with approximately 30% more power than the current record-holder, Siemens’ 6MW turbine.

This information came yesterday from Vestas’ CFO Dag Andresen, right after the company announced that it had replaced a EUR 1.3 billion syndicated facility with a revised loan of EUR 900 million with the existing lender group of nine international banks.

Haakon Levy, an analyst with DNB Markets, told Bloomberg that this revised loan has put the company in a better position to negotiate with MHI, which has access to Japanese market, industrial expertise and a strong balance sheet. Combined with Vestas’ technology and experience in the offshore wind sector, Mr. Levy expects that the companies will form a joint venture to realize this big plan.

Vestas still has to fight medium-term market challenges, despite the revised loan, which increased its credibility. The company is in a position where it needs to cut its prices, in order to compete with much cheaper Chinese manufacturers, Mr. Levy explained to Bloomberg.

On the other hand, Global Information Inc (GII) has announced a new report which predicts that “Vestas will continue to dominate the global wind turbine industry despite stiff competition from emerging Chinese wind turbine manufacturers”, as the company dominated the global market in 2011, with a market share of 12.7% on the basis of installed capacity, which was 5,054MW.

Siemens AG has won a number of offshore turbine orders and is testing its 6MW wind turbine, but it is also considering developing a 10MW turbine, the company’s spokeswoman Eva-Maria Baumann told Bloomberg.

European offshore wind market will have 57% of Siemens’ wind turbines by the end of the year, while Vestas will account for 31%.

However, Vestas was studying Japanese offshore wind sector and it is taking steps to enter the country’s market with MHI, Japan’s largest heavy-machinery manufacturer. Japan is favouring renewables after the Fukushima disaster and it is creating good opportunities for developers of offshore wind devices, since the country has vast resources for this kind of energy generation.

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Offshore WIND Staff, November 27, 2012; Image: Vestas