Specialist
Former Sales Head at Senvion SA
Agenda
- Onshore and offshore US and Canada GW volume and pricing outlook
- Tax equity phase-out, regional volume and pricing within the US market
- Competitive positioning of Senvion, GE, Vestas, Siemens Gamesa and Nordex
Questions
1.
Could you highlight any key trends and key developments in the North American wind market?
2.
What level of installations do you expect in 2020? Presumably that will be linked to the order volume from some of last year and most of this year?
3.
Vestas and GE were head-to-head in terms of market share, based on installations in 2018. Would you expect a similar market share picture in 2019?
4.
North America is a huge market for installations. Do you expect any sub-regions in that market to have particularly high installation activity?
5.
You mentioned some additional regulatory requirements around noise and shadow flicker. Which players do you think are best positioned to tackle those regulatory hurdles in the most cost-effective way? Would you say it favours players such as Vestas and GE?
6.
GE’s Cypress and Vestas’ EnVentus are both above 5MW, but players such as Senvion do not yet have anything of that size. How do you view the trade-off between noise pollution and size, and the cost of energy difference between those?
7.
In 2018, potentially 40% of global turbine sales were rated 3MW or above. What would you say that metric is in the US? Do turbines with a rating of 3MW-plus typically comprise a smaller portion of total sales?
8.
How would you expect the platform mix to change in 2019?
9.
Senvion is experiencing a lot of issues. What do you think drives Senvion’s regional competitiveness and where do you find it is most competitive in North America?
10.
Senvion in North America has historically been quite a small player in terms of overall volumes. Do you think there is potential for Senvion to gain market share in the US?
11.
You mentioned an estimated decline from 13GW of new installations down to 5GW in the US market. Is that a direct result of the PTC [Production Tax Credit] phase-out?
12.
What impact do you think the PTC phase-out will have on the overall market, besides a decrease in installation volumes?
13.
Would you expect the PTC phase-out to bring pricing down for manufacturers? You mentioned they have to be more competitive.
14.
How much impact do you expect PTC to have on megawatt pricing? Does that feed through almost 100%? Would the phase-out theoretically increase the cost of energy for energy companies?
15.
Would you expect that to be the case or would you expect any of these projects to accept a lower return or a lower margin?
16.
How important do you believe is it that the original equipment manufacturer is the one that services the wind farm or the portfolio?
17.
What would you say is the typical warranty period under which the OEM will service the portfolio after installation? After that period, is the warranty then renewed?
18.
When the initial warranty moves to the longer-term 5-10 years, do you think it is expected that the OEM offers the owner a discount to maintain that portfolio under its own servicing arm?
19.
Would you expect a player such as GE to do more of its own servicing and potentially consider acquisitions to do this?
20.
Many articles suggest that the PTC phase-out will increase the popularity of solar power and its prevalence in the overall energy mix. Do you think that will be borne out in reality?
21.
How do energy companies compare PV [photovoltaics] and wind in terms of the lowest cost of energy?
22.
What potential impact might PTC have on pricing from the manufacturer’s perspective? How does the power dynamic work between the energy company and turbine manufacturer when negotiating prices? Presumably the energy companies have a lot of OEMs [original equipment manufacturers] they can choose from.
23.
Do you have a sense of how much market share, if any, Chinese manufacturers have in the US?
24.
Which OEM do you believe might be best placed to enter the US market from that perspective?
25.
How far down the line would you say Asian OEMs might be a meaningful competitive risk for domestic or European OEMs in the market?
26.
How do you think customers view the bankability of different turbines? Qualitatively, how important is that in driving decision-making?
27.
Would you say those tax equity partners are typically more conservative than the energy companies?
28.
How significantly do you think the PTC phase-out might affect market shares, considering GE and Vestas’ dominance in the market? Do you expect to see a reduction in their respective shares of new installations as a result?
29.
What is the main decision-making criteria for energy companies? Now that the tax equity partners have less or no say, does the lowest cost element become more prevalent than previously?
30.
What competitive advantage would you say Asian manufacturers have in terms of cost of energy? Would it be 20%, 30% or more for the cost of producing these components?
31.
Do you have any view on the offshore market in North America and how you might expect that to develop?
32.
What would you say are the most notable challenges for Senvion in the US?
33.
How far do you think the level of uncertainty around Senvion is an unacceptable risk for energy companies? For the tax equity partners, is that risk insurmountable from a tender or awarding perspective?
34.
Do you view Senvion as a sustainable long-term business or as a growing concern? Could the existing backlog be worked through and delivered, could there be a potential carve-out or sale of the servicing arm, and then the servicing arm goes on to be an ISP [independent service provider]?
35.
GE’s 2018 margin was only 3%, despite the economies of scale it must benefit from. How much concern would you say that raises over sub-scale manufacturers?
36.
What opportunity do you see for manufacturers around repowering the existing installed base as turbines begin to come to the end of their usable life?
