Areva, Gamesa Negotiate Joint Venture in Offshore Wind

It is official: Areva and Gamesa are entering into exclusive negotiations to create a 50/50 joint-venture company in the field of offshore wind power. 

The companies announced this yesterday via official press release, just a couple of days after the rumors about their joint venture had come out in the media.

They stated that, from its launch, the JV will enjoy the confidence of numerous customers, including Iberdrola, which selected the M5000 turbine for its offshore farms near Saint-Brieuc in France, and Wilkinger in Germany. Iberdrola also has a 20% stake in Gamesa.

Definitive agreements concerning the creation of the JV will be signed within the next few months following final negotiations between the parties and discussions with personnel representative bodies at Areva and Gamesa.

The JV will fulfill existing industrial development commitments both in the UK and France, that have up until now been led by Areva, which notably include the creation of a turbine assembly and blades manufacturing plants at Le Havre and the implementation of a network of sub-contractors and partners.

“By choosing to create a European offshore wind champion with Gamesa, Areva is playing a key role in the consolidation, already underway, of the offshore wind sector, and confirms its long-term commitment to renewable energies,” declared Luc Oursel, President and CEO of Areva.

“This agreement with Areva allows Gamesa to position itself as a market leader in the offshore wind industry. The JV will provide Gamesa with an additional profitable growth platform complementary with its 2013-2015 Business Plan and which shall create material synergies with our onshore wind activities,” declared Ignacio Martin, Chairman of Gamesa.

“Likewise, this joint venture will pave the way for the creation of a leading and cutting-edge company in the offshore segment with know-how across the end-to-end wind energy value chain.”

The companies further specified goals and tasks of their new joint venture:

By joining forces, Areva and Gamesa will enable the JV to become one of the leading players in the global offshore wind market, contributing to the development of this growing sector through:
– expertise, innovation and investments in R&D to develop competitive and reliable technologies of the future;
– industrialization capacity and expertise in the development of a supply chain, both internal and external;
– application of efficient onshore practices into offshore activities.

This JV will benefit from significant synergies:
– on the one hand, the experience gained by Areva since 2004 across several wind projects, notably through the ongoing installation of 120 5 MW turbines in the North Sea;
– on the other hand, Gamesa’s comprehensive technological capabilities in onshore and offshore, leveraged on its 19 years leading track-record in the industry throughout the wind value chain. The company also has a strong capacity for industrialization, based on its proven knowledge and experience in supply chain development.

Areva and Gamesa will pool personnel and offshore wind related technologies and assets to the JV:
– for Areva, the German Bremerhaven (turbine assembly) and Stade (blade manufacturing) plants, as well as offshore wind technology and commercial contracts;
– for Gamesa, existing multi-megawatt technologies applicable to offshore, the 5 MW platform and Arinaga turbine prototype, as well as offshore related engineering, operation and maintenance capabilities
– Additionally, the JV will enter into a preferred supplier agreement with Gamesa for some key components.

The JV will develop a best-in-class product portfolio aimed at covering offshore market needs:
– 5 MW: the JV will continue to market Areva’s M5000 turbine, which benefits from a strong track-record. Moreover, an enhanced 5 MW generation turbine will be developed in the short-term benefiting from the full potential of Gamesa’s multi-megawatt cutting edge technologies;
– 8 MW: acceleration in the development of the next generation of turbines, benefiting from investment efforts undertaken to date by both parties and from the technological synergies of the JV.

Press release, January 21, 2014; Image: Areva