Wind Power Faces Zero Margins, U.S. `Boom and Bust,' Suzlon Says

Nov. 14 (Bloomberg) -- Wind-turbine makers have seen profit margins wiped out, and the potential end of tax credits in the U.S. will see its "boom-and-bust" market persist, Suzlon Energy Ltd. Chairman Tulsi Tanti said today.

"Today everyone is selling just at cost level," Tanti said in an interview in Mumbai. "You're almost getting Chinese prices in the U.S. Nobody is making any margin whether it's a supplier, a turbine company or a project construction company."

Tanti's remarks add to concerns voiced last week by the heads of Vestas Wind Systems A/S and Gamesa Corp. Tecnologica SA, Suzlon's rivals in Europe, about the health of the world's second-biggest wind-turbine market. The companies already are coping with slimmer margins caused by cuts to subsidies across Europe and the growth of Chinese competitors led by Sinovel Wind Group Co., which benefit from state funding to expand abroad.

You will also notice that three of the others on Jé̂rôme's list are quoted saying the same. What they are talking about is the failure of AWEA to capitalize on the industry's strength over the past five years, and a return to the traditional insanity of the US boom and bust cycle.

Some of the 2nd tier companies are already under intense pressure to survive. Vestas is downsizing as we speak, and Spain's socialist turncoats have effectively cut off much of 2012 for development, which will hurt Gamesa more than it already is.

In the US i've seen this boom and bust cycle three times already, each time driving key players into bankruptcy or near. I stopped fighting after a while, as it was fruitless. One not only had to fight the entrenched conventional energy interests, but they owned some of the wind industry's key players, and made sure not to upset the parent's apple cart. Since the industry had no where else to support, it had to let players like NextEra have their way. Now see what that's brought.

There is now also in the UK a concerted effort to skew the debate with false new analysis. Jé̂rôme likely knows better how successful the UK attack is going, since it's relatively new i can't say.

At the end of the day, the fate of the wind industry has nothing to do with engineering or finance. It's all political, with the biggest global firms in the game, and the politicians a veritable sideshow, with some notable exceptions.

I haven't been so frustrated in a decade or more. I haven't been so feisty either, especially this early in the morning.

(But see the next comment for some good news.)

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

Vestas Launches One-of-a-Kind Marketing Campaign

In its largest marketing campaign to date, Vestas, the global leader in wind energy, is using LinkedIn and Bloomberg Businessweek to reach out to corporate decision makers, informing them about the brand building and financial benefits of investing in wind energy. Vestas believes that corporations are part of the solution for climate change and they are in the position to do more by investing directly in wind energy. (Since corporations run our world now. Ed.)

"We have launched one of the most unique marketing campaigns to talk to the top executives and decision makers from many Fortune 500 companies about the financial and brand building benefits of investing in renewable energy and specifically wind energy," says Morten Albaek, Group Senior Vice President of Global Marketing and Customer Insight at Vestas.

Notice the campaign has to use the language of the robber barons, as if stopping CO2 and poison production is "brand building."

Still, you've got to give Engel's team some credit.

Recipients of the customized magazine are directed to customized versions of EnergyTransparency.com with energy consumption data specific to their company and industry sector; and/or consumer brand perception data.

Simultaneously, select executives will receive a personalized InMail through LinkedIn, guiding them to customized websites. Over 400,000 employees of these firms will be encouraged to click on company-specific banners on their LinkedIn pages, guiding them to the same sites. Over 650 custom sites have been created for all audiences with individual data for each brand.

At the beginning of commercialization of offshore wind, it was expected that project costs could only be born by major utilities, and similar global companies.  Jérôme has shown offshore parks can be developed by institutional finance as well.

He is also responsible for bringing in governmental banks such as the European Investment Bank and the similar German KfW into the mix, a very important step.

Respect, and a doff of the cap to  Jérôme and the Green Giraffe team. Looking forward to meeting in Amsterdam.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin