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Cleantech magazine, a Cleantech Investor publication
FREE CONTENT: WIND & WAVE WRAP, March 2007 PDF Print E-mail
First published in Cleantech magazine. March 2007 © Cleantech Investor Ltd. 2007

 

Wind turbine manufacturers performed strongly in 2006 as strong demand boosted order books throughout the industry. Turbine prices have risen, but shortages of components such as gear boxes and rotor blade bearings – as well as higher steel prices – meant that higher prices have not entirely fed through to profits.

Bid battle for Germany’s REpower Systems


2007 kicked off with a bid for German turbine manufacturer, REpower Systems. French based Areva Group, which already owns 29.9% of REpower (quoted in Germany), launched a bid for the remaining shares in January. At €105 per share, the bid valued REpower at €800 million. A counter bid from Suzlon, the Indian WTG producer, in conjunction with Martifer of Portugal (a unit of Lisbon quoted Mota Engil), emerged in February. The counter offer, at €126 per share, valued REpower at €1 billion. Martifer already owns 25% of REpower – but Suzlon is the financial backer of the deal. Both bidders are attracted by REpower’s expertise in the offshore wind sector, where it has a successful 5 MW product. In mid March, Areva raised its bid to €140 per share, valuing REpower at €1.14 billion – a 56% premium to REpower’s share price before the initial bid announcement in January. Areva has received approval from the EU antitrust authorities. The Areva offer period ends on 20 April. It remains to be seen whether Suzlon will increase its offer.

GE/Theolia assets for equity swap


In February, General Electric agreed to buy a 15% stake in Theolia SA, of France. GE agreed to transfer ownership
of installations in Germany with 165 megawatts of capacity to Theolia, and pay €20 million in cash, in exchange for the holding. GE will also be granted warrants for the equivalent of a further 7% holding in Theolia.

Clipper Windpower orders


UK based Clipper Windpower continues to see strong order intake. The company announced in January that it will supply 60 MW (24 units) of 2.5 MW Liberty wind turbines to a joint development company owned 85% by BP and 15% by Clipper, for 2007 delivery.

It had announced the sale of 80MW of wind turbines, 32 units, to California based Edison Mission Energy in December as part of a previously announced agreement to supply Edison with a total of 130 MW, or 52 turbines, to Edison for delivery in 2007 and 2008. In February, Clipper announced a further agreement with Edison to supply up to 60 units or 150 MW, for delivery in 2008. This latest deal is a mixture of firm orders for 19 units and contingent orders for 41 units – the latter are subject to availability of turbines committed to other customers via option agreements.

Clipper claims that its Liberty turbine, a 2.5MW WTG, requires 25- 30% less operating and maintenance costs over its lifetime than its peers. The technology is still relatively unproven, but endorsements from customers such as BP are highly encouraging. Like other turbine manufacturers, Clipper faces a challenge to match the strong demand for its turbines as industry interest soars.

The shares have been on an upward trajectory since the listing in September 2005, at 190p. Non executive director Albert J Baciocci Jr, recently sold 10,000 shares at 583p – missing out on the latest surge: the shares now stand at another high of 674p, valuing the company at £721.5 million. Low Carbon Accelerator raises stake in Proven Energy AIM quoted Low Carbon Accelerator has increased its stake in Scottish small scale wind turbine manufacturer, Proven Energy, to 25%. Proven Energy provides high performance turbines for clients including Sainsbury’s, B&Q, T-Mobile and Shell (it provides marine grade, explosion proof wind turbines to power offshore gas platforms to Shell). Low Carbon Accelerator listed on AIM in October 2006, raising £4.5 million. It has invested £8.36 million to date in five investments, including Proven Energy.

REG approaches 16 MW of wind generation in UK


Renewable Energy Generation (REG) has confirmed that the six months to December saw significant progress in operations. In the UK, the company’s High Sharpley wind power project has started service and High Pow is expected to commence commercial operations in February. REG is approaching 16 MW of wind generated power in the UK and is currently installing turbines at a rate of one per month. REG’s Polish operations have become cash generative over the period. REG has accelerated its construction programme in Canada and expects to commence operations there in October.

OPT revenues fall


US based Ocean Power Technologies Inc (OPT) released results at the end of January for the six months ending October 2006. OPT, which is listed on AIM, reported revenues of $0.86 million for the six month period compared to $1.1 million in the corresponding period of the previous year. However, revenues are largely irrelevant at this stage. OPT reported an operating loss of $5.4 million, up from $3.4 million. The contract backlog was reported at $5 million compared to $2.8 million the previous year. After the results were released, OPT confirmed that it had been awarded a $1.2 million grant through the Scottish Minister’s Wave and Tidal Energy Support Scheme for a PowerBuoy project in Orkney, Scotland.

OPT has an impressive list of partners. The company is working with Iberdrola and Total in Spain and in September 2006 announced a marketing agreement with Lockheed Martin. However, its PowerBuoy system is still effectively at the prototype stage and remains some way from being capable of supplying energy on a commercial basis.

OPT is valued at $45 million: some $29 million of this is represented by cash (the net cash position at end October 2006). OPT raised $38 million in October 2003 and plans to raise up to $100 million through a Nasadaq IPO. The longer term outlook for the wave industry is positive: the Carbon Trust anticipate that up to 3% of UK electricity could be generated by wave energy by 2020 and up to a fifth of the UK’s energy needs could be supplied by wave energy longer term. However, profitability is still a long way off for OPT.

Ireland’s Finavera listed on TSX Venture Exchange


Irish company Finavera Renewables, which was reported to have considered an AIM float in the past, has plumped for a listing on Canada’s TSX Venture Exchange. Finavera, which has activities in wind and wave energy, achieved a listing in January through a reversal into Cascade Minerals Inc.
 
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