Vestas the Danish Wind Turbine provider which was upstaged by Sinovel as the biggest wind energy company in the world has just got a lifeline.
Note Vestas has been facing tough headwinds in the last few quarters as wind energy turbine orders dried up in the developed countries.
The company has been bleeding red ink forcing it to fire expensive workers at its home base in Denmark.Note the rise of China as the most important wind power market in the world has made Chinese WEG Companies bag 7 of the top 15 Wind Turbine Producer ranks.
Foreign companies have faced tough times in penetrating the 18 GW Chinese market which has been seeing fierce price wars between Wind Turbine Companies.
Even Sinovel the biggest Wind Energy Company has been facing problems recently canceling payments to a US supplier American Superconductor.With the Chinese companies turning their attention to foreign markets like India and USA,life is going to get tougher for Vestas.Note Vestas does not have cheap financing sugar daddies like Chinese companies to support it.
Vestas has been getting bigger orders and has been streamlining operations,however its stock price has continued to go down as investors see bleak future prospects wit hthe entry of Korean shipbuilders into the industry.Other heavyweights like Gamesa and Suzlon too have faced massive losses as margins have evaporated in the face of declining topline and prices.
But now Vestas has got a lifeline from the renewable energy subsidiary of the French giant utility EDF.The order from EDF Energies Nouvelles could reach 2000 MW of Wind Turbines over the next few years.While pricing was not disclosed,it would be certainly be at a discount to the normally premium prices charged by Vestas.
This given order visibility to Vestas and provides price safety for EDF.The next frontier for Wind Energy Companies is going to be Offshore Wind and Siemens has stolen a march.Vestas is not going down without a fight recently introducing a 7 MW wind turbine for this segment