Gamesa, a global leader in wind turbine manufacturing and a benchmark in wind farm development, today announced that it has signed a framework agreement with power company Caparo Energy India Limited (CEIL) to deliver turbines with combined capacity of 2,000 MW over the next five years.
The deal, the largest one of its kind ever signed in India and one of the biggest in the wind energy market anywhere in the world, encompasses the delivery, installation and start-up of Gamesa's G58-850 kW and G97-2.0 MW turbines between 2012 and 2016. The contract calls for Gamesa to supply Caparo Energy with about 150 MW of turbine capacity in 2012.
Gamesa will produce the newly contracted turbines at its factories in India. The deal marks the first time that Gamesa will sell its G97-2.0 MW turbines in the country. The agreement is part of Caparo Energy's long term strategy to secure its supply of turbines at a preferential pricing.
According to Gamesa Chairman and CEO, Jorge Calvet, "this long-term agreement with Caparo Energy illustrates the soundness of Gamesa's commercial approach in the Indian market, which leverages our experience and commitment to manufacturing and energy efficiency to enable us to offer viable, profitable solutions for an energy source that is not only sustainable and clean, but that also guarantees a safe supply of energy."
According to Gamesa India Chairman and Managing Director Ramesh Kymal, "This order underlines the acceptance of wind energy as a viable and profitable solution to meet the increasing appetite among corporations for reducing their carbon footprint and meeting energy needs through sustainable energy sources. Gamesa is glad to be bringing to India our vast experience in the wind energy space and thus playing a major role in defining the country's energy future."
The deal represents a turning point in the Indian wind energy market and heralds further progress in the industry's rapid growth in India. Wind turbine capacity totalling 2.5 GW was installed in 2010, and the country's targets call for the installation of 5 GW per year through 2015. Forecasts suggest that combined installed capacity at wind farms in India may amount to 64 GW by 2020.
"This is an important relationship with a strong and committed partner that will help us move into the next phase of our wind farm development and roll out in India," said Caparo Energy India Limited Chief Executive Ravi Kailas. "This agreement with Gamesa will be a significant step in meeting the long term development goals of our company."
The wind sector in India has been growing at 30% to 40% per annum in the past five years and the growth rate is expected to increase significantly in the coming years. Also, the future market will predominantly have more IPPs developing wind farms where the key drivers for the growth are higher IRR and tax incentives.
In March, Gamesa announced the strengthens of its industrial presence in India, where the company will invest more than 60 million euros through 2012 to build new manufacturing plants to meet the growing demand in the country.
Gamesa plans to open a turbine blade factory in Gujarat, with initial production capacity of 300 MW, and will continue with the localisation production of its G9X-2.0 MW.
Likewise Gamesa intends to open new manufacturing plants in the country to produce nacelles and towers (via joint venture) at several locations in Gujarat and Tamil Nadu states.
Since February 2010 Gamesa has a nacelle manufacturing plant in Chennai, with an initial capacity of 200 MW. By 2010, the plant's manufacturing capabilities were expanded more quickly than planned due to the need to meet sharp growth in demand. So that Gamesa boosts the factory's assembly capacity to nearly 500 MW by the end of 2010.
As part of its strategy for cementing its Indian business with footholds in both manufacturing and technology, Gamesa has inaugurated its first technology centre in the country, in Sholinganullar, in Chennai.
In the 1Q 2011, Gamesa's sales in India expanded 8-fold and accounted for 24% of the quarter's total. According to the Indian Wind Turbine Manufacturers Association (IWTMA), Gamesa has attained a market share of 10%) after just 18 months in India, placing it the third wind energy company in the country.