Bloomberg News

Vestas Competes to Keep Half of Wind Turbine Market in Australia

November 21, 2012

Vestas Wind Systems A/S (VWS), the world’s biggest wind turbine maker, expects to keep more than 50 percent of the Australian market even as China and companies such as Siemens AG (SIE) and General Electric Co. (GE:US) boost competition.

Vestas forecasts that Australia in a couple of years will start adding 1.2 gigawatts to 1.5 gigawatts of wind farms annually in the period to 2020, Morten Albaek, its chief marketing officer, said yesterday in an interview in Sydney.

Vestas, which is providing turbines to AGL Energy Ltd. (AGK)’s A$1 billion ($1 billion) Macarthur wind farm in Victoria state, wants to maintain the biggest share of the Australian market as the country moves toward a target of getting 20 percent of its power from renewable energy by 2020. Australia in July started charging polluters a fixed price of A$23 a ton for carbon emissions and plans a market-based system for 2015.

“Australia is a very important market for Vestas, for sure a top 10 market,” Albaek said. “You have a price on carbon, an ambitious renewable energy target and privileged wind resources that will make Australia a very prosperous market for wind energy, not only for Vestas but any turbine manufacturer. Therefore the competition is going to be fierce.”

Suzlon Energy Ltd. (SUEL), Siemens and Acciona SA (ANA) trail Vestas with the biggest shares of the Australian wind turbine market, according to Bloomberg New Energy Finance data.

Chinese Competition

Aarhus, Denmark-based Vestas estimates that its technology will account for about 60 percent of the Australian wind turbine market after AGL’s Macarthur project and the Musselroe wind farm in Tasmania begin next year, Albaek said.

Chinese companies also are adding to the competition in Australia, vying for some of the same projects, Naveen Balachandran, head of public affairs and business development for Vestas Asia Pacific and China, said in the interview.

“The big conglomerates are competing with us, but the trend we’ve seen in the last year is the emergence of the Chinese players in the market,” he said.

Vestas, which last year recorded its first loss since 2005 as overcapacity in the industry squeezed margins, is struggling to return to profit and said earlier this month that it will cut 3,000 more jobs. Vestas has also been discussing a “strategic cooperation” with Mitsubishi Heavy Industries Ltd. (7011)

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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