Vestas hopes new model will catch the wind

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Vestas Wind Systems A/S, the Danish wind turbine manufacturer, is rolling out a new model — its largest yet — in hopes of building its share of the U.S. wind energy market.

The new model, called the V112-3.0MW, will be built in Vestas plants in Brighton, Windsor and Pueblo, the company said.

Vestas announced Aug. 12 its first sale of 140 of the new V112-3.0 MWs to an Australian wind farm. Company officials believe customers across North America will follow with their own orders.

The company trades on the Copenhagen stock exchange under the symbol VWS.

"Customer interest has been very high, and we’re very excited about bringing the product to market,” said Martha Wyrsch, the Portland-based president of Vestas Americas, during an interview at Vestas’ "Capital Markets" day Sept. 1 in Colorado Springs. The event drew more than 100 wind-industry analysts and investor representatives from around the world to hear from company officials and tour its Pueblo and Brighton plants.

"The V112’s focus is on the upper Midwest, where there are steady but lower wind regimes," Wyrsch said. "Our intent is to build the V112 here in the U.S. for the U.S. market."

Vestas touted its cutting-edge technology and commitment to building turbines that, though costly, will be reliable.

"The ability of that machine to perform ... is critical to the financial performance of the wind project," Robert Fritz, Vestas’ senior vice president, told the analysts.

Among the V112’s features:

• With blades nearly 180 feet long, the V112 is 54 percent larger than Vestas’ V90-1.8 MW model.

• It operates best at relatively low wind speeds, between 6 and 20 miles per hour.

• Weighing 400 tons, the three-megawatt turbine produces 30 percent more power per kilo than Vestas’ V90 model.

• Its need for maintenance has been cut in half and tower costs cut by 20 percent compared to the V90.

Higher cost, results

Vestas didn’t reveal the turbine’s price. Company officials would say only that the V112 is more expensive than its other turbines but also produces more energy.

"The V112 complements our existing production, but there’s no cannibalism between products," Finn Madsen, Vestas senior vice president of research and development, told the analysts. "The V112 will win head to head compared with the V90, but regulations, infrastructure and other parameters will dictate which model is chosen."

Analysts at the meeting said they were intrigued by the V112, but still worried about how Vestas might fare in the U.S. market.

Vestas in mid-August cut its 2010 sales forecast by $1.3 billion — to 6 billion Euros from 7 billion Euros — citing delays in orders in the United States, Spain and Germany due to the difficulties wind-farm developers are having in getting financing. Company officials have said they expect more orders in 2011.

"The V112 is interesting and seems to be a very good technology," said Patrik Setterberg, senior analyst for equity research for Nordea Bank AB, the largest bank in Scandinavia. "The big question going forward is: Will it get orders, and also, will they earn decent money on it?"

Christian Nagstrup, an analyst with Jyske Bank, the third-largest bank in Denmark, said he thought the V112 will be a "strong competitor" to 2.5-megawatt turbine built by General Electric, the leading U.S. turbine manufacturer.

He also said Vestas' Colorado factories "in the long term [are] a good investment."

Vestas announced last month the company was overhauling a Pearl District building for its U.S. headquarters in Portland.