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September 20, 2017

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Areva, Gamesa to join forces on offshore wind turbine activities

PARIS--France's Areva and Spain's Gamesa said Monday they were holding talks on combining their offshore wind turbine activities to create a leading player in the sector.

The companies do not yet have a name for the joint venture and did not release any financial details other than to say each would hold a 50 percent stake.

Calling the offshore segment one of the most promising areas for the development of renewable energies, the companies said a joint venture would help them share the heavy costs to develop the next generation of larger turbines and "become one of the leading players in the global offshore wind market."

Gamesa has been in the wind turbine business for nearly two decades, although it has been traditionally involved in land-based rather than offshore projects.

Areva, primarily a nuclear power company, has been involved in wind turbines since buying the German company Multibrid in 2010, and will contribute four factories and its order book of 120 5-megawatt turbines to the deal.

Areva's renewable energy chief Louis-Frangois Durret said that investors were waiting for the cost of production to drop from 180 to 200 euros per megawatt hour to 130 to 140 euros by 2020 to invest in major new projects.

"To reduce costs one has to develop large-capacity turbines," he said.

The joint venture plans to accelerate development of an 8 megawatt turbine, which the Danish company Vestas has also announced it plans to bring to market.

Currently the largest turbines on the market are 6 megawatt models produced by Germany's Siemens and France's Alstom.

Even if it continues to depend on electricity purchase rates that are subsidized by governments, Areva expects the offshore wind sector to grow rapidly in the coming years.

The companies said they hope to strike a definitive deal on the creation of the joint venture in the next few months following further negotiations and consultations with unions.

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