Wind

Nordex CEO: 'We've laid foundation to reclaim US market share'

José Luis Blanco also sees Europe, in particular Germany and Turkey, as key growth markets

Nordex CEO José Luis Blanco.
Nordex CEO José Luis Blanco.Photo: WindEurope
European Editor, Recharge
Nordex has “laid the foundation” to reclaim its former market share in the US, which alongside Europe is the most promising for the German wind turbine manufacturer, its CEO José Luis Blanco told Recharge.
Last year, Nordex clung to a 9% market share in the US, while domestic giant GE Vernova and Danish peer Vestas divvied up most of the rest among themselves. This year started even worse, with GE Vernova taking all new US orders during the first quarter, and dividing them with Vestas during the second, according to the latest numbers from industry group American Clean Power Association (ACP).

Blanco is upbeat that his company can reverse the trend.

“Just a few years ago, we had a market share of 12-18% in the US,” Blanco said in an interview.

“With our recent US activities, we have laid the foundation to reclaim our former market share in the region which today is already the strongest market for onshore wind outside China, with large opportunities ahead.

“To capitalise on these, we recently reactivated our production plant in West Branch and launched the N169/5.X.”

After determining Canada and the US as focus markets, Nordex in June announced it would revive output at the previously mothballed factory in the state of Iowa to produce nacelles both its current N163 turbine variant and the N169/5.X, a new machine specifically tailored to the US market.

The move is likely to be welcomed by the wind industry in North America which is poised for sustained growth in the second half of this decade and is looking for a third onshore turbine supplier to offer price competition, supply diversity and flexibility.

“The current N163/5.X will in the future serve very specific projects and stronger wind sites,” Blanco said.

The CEO stressed that his company’s supply chain concept will fulfil all domestic content requirements to maximise benefits under the US Inflation Reduction Act (IRA).

“Combined with the Inflation Reduction Act and its incentivisation of local manufacturing and so utilising the production plant in Iowa, we see great potential for Nordex with this turbine in North America in the coming years.”

‘Wind turbines are critical infrastructure’

Asked whether Europe should follow the US with its strict local content strategy laid down in the IRA to halt the push by Chinese OEMs into its domestic market, Blanco said Europe needed to improve its competitiveness “as the Draghi report shows”. But he also welcomed EU efforts “to strengthen the competitiveness and resilience of European clean technology production, such as the introduction of pre-qualification criteria related to responsible business conduct, cybersecurity or data security.

“Wind turbines are an integral part of the critical energy infrastructure and hence of the national security in Europe,” he added.

The European Commission in April kicked off a probe into “dangerous” subsidies for Chinese turbine suppliers concerning projects in Spain, Greece, France, Romania and Bulgaria, and in July extended that to more countries, including Nordex’s home market Germany.

Whether cheap and possibly unfairly subsidised Chinese OEMs get unfettered access to the European market is critical for Nordex, as the company identifies Europe as the second promising region next to North America for the coming years.

“In Europe especially Germany will be the main driver for increased installations,” Blanco said.

“With the political aims set, our existing product portfolio along with our good results in the last auctions we will see a high degree of activity for us in the future. Further in Türkiye, we are doing very well, and we expect here more activity in this onshore market in the future as well.”

Germany’s onshore wind market had been stagnating in recent years amid a severe permitting bottleneck, but government action to speed up bureaucratic processes and grant wind projects the status of being in the ‘overriding public interest’ are likely to boost the expansion of wind on land in coming years.
Net additions during the first half of this year in Germany were less than 1GW. But wind groups have pointed out that government measures to boost onshore wind expansion were showing first significant signs of success, with new permits soaring by 32% during the first half of the year, and tenders meeting more investor interest.

The government of Chancellor Olaf Scholz wants to bring onshore wind installations to around 10GW per year for the latter half of this decade to help reach a renewable power share of 80% by 2030, up from 58% during the first half of this year.

Rising sales in Europe and North America would help to reinforce an ongoing recovery process at Nordex, which during the first half of this year already saw sales jump by a quarter to €3.4bn, while the OEM reached an earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of 3.4%.

The Ebitda margin is a measure of the operational profitability of a company.

The two main factors behind the better financial figures at Nordex “are the declining share of lower-margin projects and the further improved project execution,” Blanco explained.

The company has reconfirmed a medium-term target to reach an 8% Ebitda margin.

(Copyright)

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Published 24 September 2024, 04:43Updated 24 September 2024, 09:20
EuropeGermanyAmericasUSNordex