Wind-Power Makers To Combine in Face of Competitive Market
By Staff -- Consulting-Specifying Engineer, 3/1/2004
In one indication of the continuing maturation of the wind-turbine market, two of the industry's major players—Vestas and NEG Micon, both based in Denmark—have announced plans to merge. The new entity, operating under the Vestas name, is expected to corner up to 35% of the worldwide market, employ 8,500 people and earn up to $3.3 billion in sales in 2004.
The move was made in anticipation of expiration of the U.S. production tax credit (PTC), which provided incentives for utilities to invest in wind-energy farms. The credit expired Dec. 31, 2003, and its fate remains uncertain in the face of haggling over energy legislation, which continued as this issue of Pure Power went to press. In addition, according to a SolarAccess.com news story on the topic, GE's entry into the wind-turbine market has raised the stakes—and lowered margins—for all turbine manufacturers.
Managers at the newly re-formed Vestas remain bullish, despite these events, citing installed capacity growth of 100% since 2000, and 400% since 1998, in press statements related to the merger.
