Vestas, Gamesa Warn of Possible Faults in Older Turbines

Vestas Wind Systems A/S (VWS) and Gamesa Corp. Tecnologica SA, two of the four biggest wind turbine manufacturers, warned clients of possible flaws in a pair of their older models.

Gamesa told customers of a potential fault in a component of the G-47 660-kilowatt turbine, a spokeswoman for the Spanish company said today by phone. Vestas also told clients about a possible flaw in the “root part” of the blades for the V47 turbine of the same capacity, spokesman Andrew Hilton said.

The companies responded after ING Groep NV analyst Maurice Rosenthal wrote about the letters in a note to investors today. The component in the Gamesa turbines was designed by Vestas, Hilton said.

“This component could have faults under certain circumstances but these are not the result of a manufacturing defect,” he said in an e-mail. “Rather, this is due to a combination of wear and tear and design limitations at the time when the part was designed.”

In Spain alone, Iberdrola SA (IBE)’s renewables unit has at least 1,000 Gamesa G-47 machines installed, and Acciona SA (ANA) more than 500, according to the website of Spain’s wind energy association. Vestas, based in Aarhus, Denmark, in the late 1990s and early 2000s sold at least 1,000 V47 turbines to NextEra Energy Inc. (NEE), including 454 devices at the Stateline Wind Energy Center on the Oregon-Washington state border.

Hilton said Vestas has been contacting clients since September 2010 and the “vast majority” of the turbines have been scanned at no cost to customers. Less than 4 percent of the 4,200 V47 turbines in operation are affected and require repairs, he said. The turbines are typically 10 to 13 years old, and most aren’t under warranty, he said.

Vestas, Gamesa Decline

Spokesmen for Iberdrola, Acciona and NextEra didn’t immediately reply to e-mails and phone calls seeking comment. A Gamesa spokeswoman declined to estimate any possible costs. She declined as well to be named in line with company policy.

Vestas shares fell 4.5 percent to a six-week low of 52.50 kroner today in Copenhagen trading. Gamesa declined 3.6 percent to 2.226 euros in Madrid, a four-week low.

Gamesa offered clients a program to extend the working life of the turbines that will offset any costs arising from the possible fault, the spokeswoman with the Zamudio, Spain-based manufacturer said.

The flaw will cost customers about 20,000 euros ($26,200) per faulty component, or 27,000 euros per megawatt of installed capacity, Rosenthal said. That’s “the equivalent of more than 2 percent of total wind farm capital expenditure at today’s prices,” he wrote, making an assumption that 30 percent of the components were affected. “We consider this to be meaningful.”

Gamesa, Vestas Clients

Hilton at Vestas said the cost of repairing the part varies “considerably,” depending on the number of V47 turbines a client has and the distance from the company’s repair centers.

Other wind farms deploying the Vestas machines include New Zealand’s biggest, the 161-megawatt Tararua plant, operated by TrustPower, which includes 103 V47s, Sacramento Municipal Utility District’s Solano 1 wind farm, which has 23, and Egypt’s Zafarana wind farm with 117 turbines. Enel SpA (ENEL) owns 22 of the Gamesa devices at its Aldeavieja wind farm in Spain.

Vestas was the top wind turbine manufacturer last year with 12.9 percent of the market, according to Navigant’s BTM Consult unit. Gamesa was fourth on the list with 8.2 percent.

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net; Gelu Sulugiuc in Copenhagen at gsulugiuc@bloomberg.net

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

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