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Wind Energy Joint Ventures: A Sign of the Times?

Henry Ford was, of course, a man who knew a few things about working together. He pioneered cooperation with Giovanni Agnelli of Fiat in 1912, when the Ford Motor Company was only nine years old. This enabled Ford to establish a foothold in the European markets and challenge other early manufacturers.

One wonders what Ford would have made of today’s wind industry, and in particular, its supporting manufacturing processes.

The joint venture announced last week between Areva and Gamesa for offshore turbines would perhaps have given him plenty to think about.

In the face of stiff competition from Vestas and Siemens, the collaboration makes a lot of sense.  Whilst Areva has been successful in supplying turbines to many offshore wind projects — including Alpha Ventus, Global Tech 1 and Borkum West, as well as a number of French developments — Gamesa lags far behind, having only recently debuted its 5-MW offshore turbine.

Interestingly, this 5-MW machine will apparently not form part of the deal, but will be destined for onshore use instead. Both firms, however, will work on a new 5-MW machine, and an 8-MW unit.

The joint venture will provide some breathing space to both manufacturers struggling to balance the ever-shifting sands of political support and policy for offshore wind, and is a way of reducing the competition and sharing efficiencies.

This, as many will remember, is not the first joint venture that the offshore wind industry has seen — Mitsubishi and Vestas entered into a similar agreement back in September.

It is then, perhaps, a sign of the times. The wind industry has, despite the continued fluctuation in the market, managed to avoid large amounts of consolidation — unlike other parts of the renewable energy industry, such as solar panel manufacturers.

But for the smaller players, there is strength in unity. Auto manufacturers have suffered a similar fate as their industry has gone through its own tumultuous times.  Existing partnerships such as Renault-Nissan and Fiat-Chrysler — long standing relationships borne out of the need for cost sharing — have been replaced by new joint-ventures between existing European and US brands and new Chinese firms as the former look to open up a new market. 

We’ve said before that the wind industry can learn a lot from a sector that is essentially its polar opposite.  For the wind sector, the true test will be in how these ventures last, and whether they deliver what is truly hoped for.

If differing businesses with different cultures, albeit ones operating in the same industry, aren’t able to maintain synergies and make things work culturally as well as commercially, success, as Ford noted, will ultimately remain a stranger.

This article was originally published in A Word About Wind and was republished with permission.

Lead image: Wind turbine via Shutterstock

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