Ramon Fiestas, AEE (Spanish Wind Energy Association)
Release Date: 2009-12-08
Ramon Fiestas, Secretary General of the Spanish Wind Energy Association, was interviewed by GreenTechFocus to talk about the competitive strategies of the Spanish wind energy industry, its strategic advantages and the prospects of cooperation with China.Spain is among the leaders in the wind energy industry in Europe and globally. How important is the Chinese market for the Spanish companies and what keeps them competitive in face of the growing offer from Chinese manufacturers?
Spanish companies have, of course, established themselves in the Chinese market and in that sense they are getting large knowledge about the Chinese wind power manufacturers and stakeholders. The Spanish wind power industry is very well-placed to play a very important role there due to large expertise and good technological developments in the world of its companies. China has room for a lot of wind turbine manufacturers but, at the end of the day, investors would be very conscious of the quality of the machines and turbines they’re going to install, so in that sense they know big global companies like Gamesa that have large expertise over the years are able to provide the right support for the long-term contracts in wind power. Usually the decision on the turbines and wind farms is also done with a very strong input from the financing institutions. If you’re going to finance your wind farm, you’ll need a very robust manufacturer to deploy overseas for a long term. It’s a good advantage of the foreign companies and those who share an equally big piece of the market as Gamesa. You’re investing with funding from the financial institutions who want to be very quiet and confident in the sphere of technologies, so when you can choose between a major technology and a borrowed technology and you are investing over 20 years, you’ll probably choose those who can provide more confidence.
How Spanish companies are providing their much needed technology to the Chinese wind energy market without loosing it all and hence losing their competitive advantage?
There are two different schemes in the Spanish wind power sector. On the one hand, it’s the way Gamesa does its business in China which does not imply any industrial partners in China, so there is no technology transfer. They’re on their own in the market, and this is providing good results for Gamesa, namely satisfaction with investments and market deployments. Companies like Acciona Wind Power, partner of a Chinese company, represent the other side of the story. I agree with your concerns that it can be tricky but if the partnership is working fine and the technological issues are well-established and well-defined there should be no issue. In the case of Acciona, they should have the right position to keep the real core business in the hands of technological investors. Also it is not just about selling wind turbines, but operating wind farms up to 20 years at least and providing support for the long term. It means that you need the structure in the country that you’re selling your wind turbines to provide good guarantees and supply in terms of having wind farms running all over the period. You need to have a very professional structure created in the country where you’re providing wind mills to ensure confidence with the customers and, especially, with the financers.
What are the unique competitive advantages that make the Spanish wind energy companies partners of choice for China? What sets them aside in the European context?
I would say that the Spanish case in terms of wind power deployment is really different from that of Germany and Denmark. What has been done in Spain were huge investments by utilities and electricity companies, taking into consideration that more that 60% of the market share of wind power plants in Spain belongs to utilities. It means that the approach to wind power in Spain is a large-scale generation approach in terms of big wind farms and big wind power areas that are supplying large-scale electricity to the system. It is something different in Germany where the wind power sector is hugely spread all over the country and the ownership is also largely spread into wind farms of ten and less MW all over the country. In that sense, the Chinese development is much closer to our economic model in terms of wind power deployment. It means that the Spanish industry and the Spanish investments in wind power in China have got the experience of large-scale wind power electricity generation plants and it is probably much closer to the power needs and the way of deployment in China. In the same package, we can offer the technological expertise, the capital provider expertise and the promotional development expertise and, probably, also the regulatory expertise that we have had with the Chinese laboratories in terms of sharing our expertise in the regulatory framework that probably has much to do with this specific model.
China is already the main market in the world for new installed wind energy capacity and is set to become very soon the main market I term of overall installed capacity too. Which do you foresee to be the main challenges to further development of the Chinese wind energy industry?
For the Chinese industry, it is probably really necessary to come to large investments in R&D. Large investments in R&D could be the main issue to tackle in the future because the wind power industry is developing very fast in terms of profitability and more efficient power generation. Europe and other regions of the world are obsessed with producing electricity and wind power in the best way to achieve the targets and goals that the electricity systems are putting to the industry in terms of enabling large-scale wind power integration into the electric power system.
We are also now facing huge developments in terms of R&D in offshore wind power which is really going very rapidly. Looking over the past 20 years, you can see how far and fast the industry has developed in terms of installed MW per unit and installed energy efficiency and, of course, behind that is always the quality of the machine. So, large-scale investments in R&D are probably the future issue for the Chinese industry.
| Company: | AEE (Spanish Wind Energy Association) |
| Position: | Secretary General |
| Country: | Spain |