Spanish wind turbine major Gamesa has been present in India since 2009. In a short span of seven years, the company has been able to establish itself as a leading original equipment manufacturer (OEM) in the Indian wind industry. It has installed about 3,500 MW of capacity and services an additional 3,200 MW in India. India’s share in Gamesa’s global sales has increased from 12 per cent in 2012 to 26 per cent as of March 2016.
While Gamesa was a relatively late entrant in India, which was dominated by several mature players such as Suzlon, it has been able to scale up quite rapidly. The company took four years to install the first 1,000 MW in India, and then 17 months to add the next 1,000 MW. After that, it was able to install the same capacity in just nine months and is targeting to install another 1,000 MW in about four months. This growth has been made possible by the company’s clear focus on the independent power producer (IPP) segment, unlike many other players who have been driving their sales through investor clients looking for tax benefits. For Gamesa, 98 per cent of its sales in India come from IPPs.
Globally, it has an installed capacity of 35,257 MW across 53 countries. In addition, the company undertakes operations and maintenance for over 22 GW of wind capacity worldwide. Moreover, Gamesa has constructed 7,450 MW of its own wind farms. In 2016, it achieved the highest ever turbine production capacity of more than 1,880 units aggregating 3,880 MW. This is an international milestone as the turbines were assembled all over the world with India in the lead (36 per cent), followed by Europe (28 per cent), China (26 per cent) and Brazil (10 per cent).
Recent developments
For Gamesa, India remains a key market and it has proven its commitment towards the country by opening a new blade and nacelle manufacturing facility at Nellore in Andhra Pradesh. The company has invested Rs 5 billion in the plant, which will manufacture blades for its flagship product G114-2.0. The company will further invest Rs 5 billon in the manufacturing of nacelles at the facility for the India market. In addition, Gamesa will manufacture solar inverters at the plant. The facility has already created 500 jobs, which are likely to double in the next three years. “The inauguration of this factory fortifies Gamesa’s industrial presence in India, a country where we have cemented our position as the leading OEM. We are certain that this new facility will generate wealth through job creation and purchases from local suppliers,” says Ramesh Kymal, chief executive officer of Gamesa’s India business. In addition to this new blade facility in Nellore, Andhra Pradesh, Gamesa has another blade plant at Halol, Gujarat, a nacelle factory at Mamandur in Chennai, Tamil Nadu, and a repair centre at Red Hills in Chennai, Tamil Nadu.
The new manufacturing facility will help the company deliver its recent and upcoming orders in India. In 2016, the company secured a number of contracts in India. In November 2016, Gamesa secured five new orders for the supply of 304 MW of turbines. As per these contracts, Gamesa will supply, install and commission the turbines, as well as handle the operations and maintenance services. It will supply 80 units of its G114-2.0 class S turbines (160 MW) and 72 of its G97-2.0 MW class S (144 MW) turbines. Both of these were configured specifically for the Indian market with the aim of maximising turbine performance at low wind speed sites. These projects are slated to be commissioned by March 2017.
In addition, Gamesa secured a 100 MW turnkey order from Orange Renewable for setting up wind power projects in Gujarat and Karnataka, a 40 MW turbine supply contract from ReNew Power for a project in Karnataka, and a 90 MW order from SMDPL (a joint venture company of EDF Energies Nouvelles and the SITAC Group) for the supply and installation of wind turbines in Gujarat.
Back to solar
Gamesa marked its foray back into the solar power segment in November 2015 with the commissioning of a 9 MW solar power project in Tamil Nadu. Since then, it has been actively tapping into solar opportunities in India. In the April-June 2016 quarter, the company was commissioned 58 MW of solar power projects across Tamil Nadu, Telangana and Uttarakhand.
This was followed by a large contract in the latter half of the year. In October 2016, Gamesa entered into an agreement with Atria Power for executing 130 MW of solar power projects in Karnataka and Andhra Pradesh on an engineering, procurement and construction (EPC) basis. This is the largest solar order received by Gamesa since its entry in the solar sector in India last year. As per the terms of the EPC contract, Gamesa will develop two solar power plants, with a capacity of 90 MW and 40 MW. The company will be responsible for the design and engineering of the facilities and the procurement of 96 units of E1.37 MW photovoltaic inverters, to be made by Gamesa Electric. Gamesa has also been mandated to handle operations and maintenance at the facilities. The projects are slated for commissioning in March 2017. “This order is a testimony to the faith of our customers in our solar power project capabilities. There is a huge demand for solar EPC and technology solutions in the country and we look forward to meeting this demand with our solar EPC services and hybrid cooled central inverters,” said Kuruppanparambil Viswambharan Sajay, executive vice-president, Gamesa’s solar business unit.
Other global developments
Apart from strengthening its presence in the Indian renewable energy market in 2016, Gamesa has had an interesting year globally too. In June 2016, the company signed a binding agreement with Siemens for the merger of their wind power businesses. As per the agreement, Gamesa will absorb Siemens’s wind power assets in exchange for newly issued shares in Gamesa. The merged entity is expected to be a leading player in the global wind industry as the two companies are highly complementary in terms of their geographic footprints, and product and technology portfolios. The joint firm will have a global reach, with a presence in all the main wind markets, as well as reinforced industrial capabilities on all five continents. In addition, it will have an installed worldwide capacity of around 70 GW, an order book valued at Euro 21 billion, and revenue of around Euro 10 billion. The deal is expected to close by March 2017.
Meanwhile, Gamesa achieved a new milestone in the development of its off-grid technology with the installation of a lithium battery for energy storage at a prototype hybrid plant installed by the company in La Muela, Aragon, Spain. Gamesa’s off-grid system, launched in May 2016, enables power supply to regions without grid access. It is a pioneering prototype as it enables the bundling of four power sources – wind, solar, diesel and energy storage batteries. “The start-up of the lithium battery is an important step in the development of Gamesa’s off-grid proposition. The production of power by combining these four sources will bring down the cost of electricity in remote locations without grid access, and generate cleaner energy,” said David Mesonero, managing director, corporate development, Gamesa.
Gamesa’s foray into the off-grid segment comes under the company’s strategic interest in exploring business opportunities that complement its traditional wind business such as solar and off-grid power.
Future plans
Gamesa recently announced its plans to invest $2.6 billion in the development of utility-scale solar and wind power projects in India. It will set up 2,500 MW of renewable energy projects in Andhra Pradesh as part of the investment.
In addition, the company has been taking concrete steps to mobilise funds for large-scale investments in the coming years. It has recently agreed to extend its Euro 750 million syndicated loan facility till 2022. This agreement not only extends the facility’s repayment date, but also improves its financial terms. Apart from this syndicated facility, Gamesa has other undrawn credit lines totalling approximately Euro 1.8 billion, giving the company enough financial bandwidth for future expansion.
Going forward, the company is well-placed both financially and operationally to leverage the emerging opportunities in the global and Indian renewable industry.
