PARIS, Jan. 22 (UPI) -- A new heavyweight in the offshore wind sector took shape this week when France's Areva and Spain's Gamesa announced they were establishing a joint venture.
The two companies revealed Monday they had entered into exclusive negotiations to create a 50-50 joint-venture company that would make it a major player in offshore wind power generation and continue a wave of consolidation in the capital-intensive industry.
Areva, the world's leading nuclear power-plant maker, has plans to deliver 120 5-megawatt turbines in the North Sea, while Gamesa has produced more than 28 gigawatts of wind power capacity built or being developed in 40 countries over a 19-year span.
The announcement comes only months after the merger between the Danish wind power company Vestas and Japan's Mitsubishi Heavy Industries. The sector is currently dominated by Germany's Siemens and includes competitors such as Areva, Vestas, REpower, General Electric and Alstom.
The companies said such consolidations are necessary in the wind power sector, pointing out that the installation of an offshore field of 500 megawatts demands an investment of nearly $2.7 billion.
"By choosing to create a European offshore wind leader with Gamesa, Areva is playing a key role in the consolidation, already under way, of the offshore wind sector, and confirms its long-term commitment to renewable energies," Areva Chief Executive Officer Luc Oursel said in an issued statement.
"This agreement with Areva allows Gamesa to position itself as a market leader in the offshore wind industry," Gamesa Chairman Ignacio Martin added, declaring the joint venture "will pave the way for the creation of a leading and cutting-edge company in the offshore segment with know-how across the end-to-end wind energy value chain."
The two companies said they would pool personnel, offshore wind-related technologies and assets such as Areva's turbine assembly operations in Bremerhaven, Germany, and blade manufacturing plant in Stade, Germany, with Gamesa's new 5-megawatt wind platforms and its Arinaga turbine prototype.
Gamesa has launched a prototype 5-megawatt offshore turbine currently moored on a dock in Gran Canaria, Spain. The agreement is also aimed at accelerating development of a next-generation 8-megawatt turbine, which would be the largest offshore platform to date.
The companies said final agreements to create the joint venture were likely to be signed within a few months.
Areva didn't meet its renewable energy projections in 2013, Le Monde reported. Sales in the first nine months of the year fell by 27 percent compared to the same period in 2012. The group hopes to win a government tender for least one of the two French wind farms proposed for Treport and Noirmoutier.
"This partnership reflects the prospects in offshore wind, since some 25 gigawatts should be built off the European coasts by 2025 [up from the current 4,500 megawatts]," Areva Renewable Energy Director Louis Francois Durret told Le Figaro.
"The fact that very substantial resources are required in industry explains our alliance with Gamesa, but it's is not the only element. Size is also very important to make offers because our customers want many safeguards."