Exclusive: Areva, Gamesa in offshore wind turbine venture talks: sources

MADRID/PARIS Fri Jan 17, 2014 6:22pm GMT

Logo of France's nuclear reactor maker Areva, is seen during the company's 2009 annual results presentation in Paris March 4, 2010. REUTERS/Charles Platiau

Logo of France's nuclear reactor maker Areva, is seen during the company's 2009 annual results presentation in Paris March 4, 2010.

Credit: Reuters/Charles Platiau

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MADRID/PARIS (Reuters) - French state-controlled nuclear group Areva and Spanish wind turbine maker Gamesa are in advanced talks over a joint venture in offshore wind turbines, two sources with direct knowledge of the matter said on Friday.

Both firms would hold a 50 percent stake in the new entity, which would focus on expanding the promising but capital-intensive offshore windfarms business, one of the sources said.

Areva and Gamesa declined to comment on the potential deal but both have been tipped in the past to be exploring partnerships in offshore wind.

"In offshore you need a strategic partner. Without a deal, Gamesa would have fallen behind," said Intermoney analyst Alvaro Navarro.

He added that in Europe, around a third of the new capacity that will be installed over the next years will be offshore.

"If you're not positioned on this market, you're missing something," he said.

A renewable energy expert who declined to be named said there was sound industrial logic behind the alliance plan.

"Given the costs, going alone makes no sense anymore," he said, adding companies have to take big risks to develop technologies that are barely profitable without public subsidies.

TURNING AT A LOSS

Nuclear energy group Areva, which builds nuclear reactors and mines uranium, is struggling to diversify into offshore wind energy. It does not make onshore turbines.

Only six percent of its 9.34 billion euro revenue in 2012 came from its renewables arm, which has been loss-making since 2010 when Areva started reporting the unit's results separately.

The French group has said it hoped revenues at its renewable energy unit - which includes solar and biofuels - would reach 1.25 billion euros in 2015, but lowered its 2013 renewables sales target to 450-600 million euros from 572 million in 2012.

Areva, 87 percent owned by the French state, said in November it would have 126 offshore wind turbines with a total capacity of 630 megawatts in early 2014.

Areva has teamed up with French gas and power group GDF Suez for a French tender to build 1,000 megawatts (MW) of offshore wind capacity (the equivalent of one nuclear reactor), of which 500 MW is off Le Treport in northern France and 500 MW off the islands of Noirmoutier and Yeu.

Areva will develop an 8 MW turbine for that tender, one of the largest in the world. Denmark's Vestas is also developing an 8 MW turbine, which will compete with German group Siemens' 6 MW offshore turbines, which have been a popular choice in recent offshore tenders.

France has set a target to build 6,000 MW in offshore wind capacity as part of a wider target for renewable energy to cover 23 percent of its energy consumption by 2020.

The first tender launched in 2012 was for a total capacity of 2,000 MW, in which Areva, with Spanish utility Iberdrola, won one of the four fields.

Gamesa, 19.7 percent owned by Iberdrola, has stepped up efforts to expand abroad since the Spanish government, in July 2013, passed a tough energy reform which cut back public subsidies to clean energy producers.

The firm had 2012 sales of 2.8 billion euros and posted a net loss of 659 million euros, its first loss in a decade, Reuters data show.

The world's No. 4 wind turbine maker, Gamesa has already installed almost 27,000 MW of onshore turbine capacity worldwide and is now developing an offshore turbine with a capacity of 5 MW. The firm is also considering a more powerful 7-8 MW model.

Most onshore turbines - whose size is limited by the difficulty of road transport for the 50 meter long blades - have capacities around 2.5-3 MW, enough to power more than 1,500 average EU households.

(Additional reporting by Jose Elias Rodriguez; Writing by Julien Toyer and Geert De Clercq; Editing by Jane Merriman and Mark Potter)

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