Suzlon Says European Companies Delay Turbine Orders as Crisis Cuts Funding
Stock Chart for Suzlon Energy Ltd (SUEL)
Suzlon Energy Ltd., India’s largest wind-turbine maker, said companies in Europe are postponing orders as the debt crisis makes it difficult to raise funds for renewable-energy projects.
“A lot of projects are being deferred,” Chairman Tulsi Tanti said in an interview recorded with Bloomberg TV in Brussels yesterday. “Small and medium customers are heavily affected by the financial crisis,” he said without naming companies. “2010 will be a moderate year” for orders.
The European Union’s $1 trillion bail-out plan is yet to revive a credit-market rally as investors doubt the measures will bolster confidence in government finances. Companies are delaying orders until they have obtained funding, cutting Suzlon’s delivery to six months from 18 months, Tanti, 52, said.
“Any slowdown in wind-generation projects would only be temporary,” Walter Rossini, who helps manage about $1.2 billion of emerging market stocks, including Suzlon shares, at Aletti Gestielle Sgr Spa in Milan, said by telephone today. “There is a consensus in Europe on the need for wind power and to reduce dependence on oil and Russian gas.”
The wind-turbine maker is expecting Asian demand and offshore projects in Europe to increase orders by at least 20 percent in the five years ending 2015, Tanti said.
Suzlon has fallen 26 percent in Mumbai trading this year compared with the 1.5 percent decline in the benchmark Sensitive Index. The stock dropped 1.6 percent to close at 66.90 rupees, the lowest since Nov. 13.
Offshore Wind Projects
“Most of the growth is in the Asian market as it needs more and more energy and there is no financial crisis,” he said. “In Europe, we are expecting high growth in the offshore market because that is where large projects are possible and big utilities have the financial strength.”
The European Union aims to boost the share of renewable energy to 20 percent of its energy sources by 2020, driving growth in the industry, Tanti said.
European countries including Germany and the U.K. are planning a 50-fold increase in the number of sea-based wind towers in the coming decades. Developers get more electricity output per turbine offshore, where winds blow 40 percent more often than on land, according to the European Wind Energy Association.
Investment in ocean-based windmills will rise about 30 percent this year to $3.9 billion, outpacing growth of less than 10 percent onshore, Bloomberg New Energy Finance estimates.
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