France

France

Gamesa and Areva formally sign EUR 475m offshore JV

EUROPE: Gamesa and Areva have signed off their offshore joint-venture with the aim of taking 20% of the European market by 2020.

The formalisation of the deal follows talks between the two companies over the year. Negotiations were revealed in January, covering the continued development of Areva's 5MW platform and the development of an 8MW platform.

Gamesa said the name of the JV would be announced in Q4 this year.

Under the deal, Gamesa will contribute its 5MW offshore platform, operations and maintenance, research and development (R&D), and supply-chain access knowledge. It values this at EUR 195 million.

The Gamesa 8MW turbine, under development since last year, was not mentioned explicitly, indicating that the turbine is still in an embryonic stage.

Areva said it would include its 5MW turbine, offshore R&D experience, and its German manufacturing centres in Bremerhaven and Stade. This was valued at EUR 280 million. Areva also included its 8MW turbine, which was announced in December.

Areva is the only company with a significant order pipeline. It has around 3.1GW set for projects going up to 2021, with most of these (2GW) lined up for its M5000 turbine. The orders cover Germany (1.6GW) and France (1.5GW), with customers including Iberdrola and GDF.

The headquarters for the JV will be in Zamudio, Spain. An eight-member board will be equally split between Gamesa and Areva, with Gamesa's current business CEO Xavier Etxeberria becoming chairman. The general manager will be Arnaud Bellanger, current Areva executive vice-president of offshore wind.

In terms of offshore products, both Gamesa and Areva's 5MW turbines will be on offer. The Gamesa 5MW is designed with a monopile foundation for depths below 30-metres. The Areva 5MW uses a tripod foundation for deeper waters. The two companies will jointly develop an 8MW turbine.

Commenting on the possible clash between the two 5MW turbines, Gamesa business CEO Xabier Etxeberria said: "These turbines offer very different things for different markets, but there are also similarities that will enable cost reductions. They are fully developed so capital expenditure is non-existent."

Interestingly, a joint statement from the companies stated the JV will "fulfil existing Areva industrial commitments" in France and the UK. Areva has substantial orders in the French market, but has yet to announce an order for a UK project.

The JV will be founded on a debt-free basis as the industrial platform is already in place, with limited funding requirements. Concerning the funding of the development of the 8MW turbine, Etxeberria said: "it will be supported by the financial success of the joint venture based on existing orders."

He added that the partners would contribute further funds on a 50:50 basis if necessary, rather than turning to external debt.

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