American Superconductor Corporation (NasdaqGM: AMSC), announced that its wholly owned subsidiary, Windtec, has signed a multi-million-dollar wind energy system joint development contract to jointly develop 3 and 5 megawatt wind energy systems with Sinovel Wind Corporation Limited.
The order significantly expands Windtec’s business with Sinovel. Since 2005, Sinovel has ordered electrical components from Windtec for 785 wind energy systems rated at 1.5 megawatts [MW].
Based in Beijing, Sinovel plans to begin series production of 3 MW systems during 2009 and 5 MW systems the following year.
AMSC’s Windtec business enabled Sinovel to quickly establish itself in the wind power market,” said Han Junliang, Chairman and President of Sinovel. “We believe the 3 and 5 MW systems we will jointly develop with Windtec will allow Sinovel to grow its market share and position us as a technology leader in the industry. We look forward to benefiting from our expanded relationship with Windtec as we continue to implement our plan to manufacture 500 wind energy systems in 2007, 800 in 2008 and reach an annual capacity of 1,000 wind energy systems in 2010.
Since its founding in 1995, Windtec, Austria, has become the leading engineering company involved in developing complete electrical systems for wind turbine applications. Their products include control, pitch and variable-speed power electrical systems as well as the complete development of wind turbines.
Under the contract AMSC also has a prior delivery right to sell future electrical components under the same conditions as other suppliers to Sinovel for the wind energy systems covered under the contract, creating a substantial follow-on business opportunity for AMSC.
According to a recent report from the Global Wind Energy Council, China’s installed base of wind generated electricity grew by 107% in 2006 alone to 2,600 MW. Li Junfeng of the Chinese Renewable Energy Industry Association [CREIA] stated:
Thanks to the Renewable Energy law, the Chinese market has grown substantially in 2006, and this growth is expected to continue and speed up. According to the list of approved projects and those under construction, more than 1,500 MW will be installed in 2007. The goal for wind power in China by the end of 2010 is 5,000 MW, which according to our estimations will already be reached well ahead of time.
With the aid of Windtec, China will have a major player in the wind power market. Major components can be made much more economically in China than in the West. This contract will allow AMSC/Windtec to become a much larger player in the wind power market by gaining a larger income stream for their specialized electrical components. Sounds like a win, win situation.