Impsa Pursuing Wind Sales Outside Brazil as Glut Lowers Prices

Industrias Metalurgicas Pescarmona SA, the Argentinean wind-turbine maker with a factory in Brazil, is pursuing sales in other parts of the region as a glut of equipment in South America’s largest renewable energy market drives down prices.

At least 11 companies are operating or developing factories that will eventually produce turbines with 2,200 megawatts of capacity a year, Paulo Alexandre Ferreira, Impsa’s commercial manager, said at a conference in Sao Paulo today, citing data from Banco Nacional de Desenvolvimento Economico e Social, the national development bank.

Annual demand is unlikely to exceed 2,000 megawatts in the short term, he said.

Wind companies including Suzlon Energy Ltd. (SUEL), Vestas Wind Systems A/S (VWS) and Gamesa Corp. Tecnologica SA are opening plants in Brazil as sales in Europe and the U.S. slow, he said.

The increased competition is cutting into profit margins, spurring Impsa to focus on other South American countries such as Venezuela, Argentina and Uruguay, where the company already has contracts, he said.

“This extreme competition has led to a bottoming of prices,” he said. “It’s reached the lowest acceptable level for all suppliers.”

The average global price for turbines fell 4 percent in 2011 to 910,000 euros ($1.2 million) a megawatt from the prior year, and is estimated to decline to 890,000 euros this year, according to Bloomberg New Energy Finance.

The industry’s target of contracting 2,000 megawatts of Brazil wind farms a year is “wishful thinking,” he said. “There’s no government program in place that would guarantee that.”

Impsa has a factory in the northeastern city of Recife and is planning another in Rio Grande do Sul that will provide turbines for a 280-megawatt project under development by the state-controlled utility Eletrosul Centrais Eletricas SA, he said.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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