The World's #1 Renewable Energy Network for News, Information, and Companies.

Wind Turbine Manufacturer DeWind Faces Demise

With yearly business growth rates averaging 30 percent across the global wind power industry, the news cycle tends to be predictably positive and optimistic for businesses in the growing industry. No so for the Germany-based DeWind, which just received notice that its parent company UK-based FKI Energy Technology Group is pulling out from further investment in the wind turbine company.

"A number of recent developments have had a material adverse impact on the market position of DeWind and its operating model," both companies said in a joint statement. "The rapid consolidation of wind turbine manufacturers and the increasing influence of major wind power developers have significantly increased competitive pressures." The major impacts can be seen in continually reducing turbine prices, increasingly onerous contract terms and conditions, and higher levels of investment in new product and inventory, according to the statement. As a consequence, the cash commitments required have increased significantly, particularly for small turbine manufacturers. Dewind isn't exactly in the small turbine market, however, there are many competitors in and above their turbine output range. Dewind manufactures three major wind turbines, the 600 kW D4, the 1.25 MW D6 and the 2 MW D8. "At the January 2004 Strategic Review I described the wind turbine business as a high-risk but potentially high-reward venture," FKI Chief Executive Paul Heiden said. "During the past twelve months, however, a number of issues have weakened DeWind's position and delayed or impaired its growth opportunities." Now, the need to keep up with product development and the ramp-up in inventories to address future sales opportunities requires further significant investments, Heiden said. The FKI Board does not believe a material cash commitment is justified by the risk profile and potential returns of the wind turbine business and hence believes that the proposed withdrawal is in the best interests of shareholders. The companies said existing customer commitments will be met and some new transactions accepted. Discussions to seek technology transfer agreements with interested parties, notably in the Far East, will continue. In the year to March 2004 DeWind made an operating loss of £6.3 million (US$11.69 million). The full detailed financial impact of the proposed withdrawal is still being assessed but it is anticipated that exceptional charges will not be more than £90 million (US$167 million), of which £45 million (US$83.5 million) will represent the write-off of goodwill. The cash cost of exit is currently estimated at £20 million (US$37 million) and will be spread over several years. The impact will be mitigated by any proceeds from the sale of inventory and by any income from technology agreements. Consultation with employees will begin immediately regarding potential redundancies in Germany and the UK. DeWind currently employs 316 people, including approximately 130 service and support staff. The proposal is to provide ongoing customer support from a service organization based in Germany.

RELATED ARTICLES

Rooftop Solar Panels

Hypocrisy? While Buffett Champions Renewables, His Company Fights Rooftop Solar

Mark Chediak, Noah Buhayar and Margaret Newkirk, Bloomberg Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...
UK Parliament Clean Energy Leaders

UK Government Names Clean Energy Cabinet Members

David Appleyard, Contributing Editor With the UK general election now over and a majority Conservative Party government in place, the re-elected Prime Minister David Cameron has now named key members of the government charged with steering the UK’s clean energ...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Brazil – in partnership with GWEC, the Global Win...

Brazil is one of the most promising markets for wind energy.  Ranke...

Energy Storage USA 2015

Energy Storage USA is the leading conference in the United States focuse...

Wind Power Central America

Wind power projects are expected to reach 46GW of total installed capaci...

COMPANY BLOGS

SunEdison Expands Residential Market Offerings with New PPA, Sales ...

SunEdison has largely focussed on the commercial and utility-scale solar...

Are You Ready for a Natural Disaster?

Guest post by Jenna Clarke  Living in the Shenandoah Valley of Virg...

Deadline for Inclusion in Solar Power World's Top Solar Contractors...

UPDATE: The official deadline for the Solar Power World T...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS