Gamesa Suspends U.S. Offshore Wind Test, Focuses on Spain

Gamesa Corp. Tecnologica SA (GAM), Spain’s largest maker of wind-power equipment, suspended plans to install what may have become the first U.S. offshore turbine.

Gamesa postponed the deployment of a 5-megawatt prototype in Virginia’s Chesapeake Bay because of doubts about permitting and sales prospects, the company said today in a statement. It will move forward with a similar project in Spain.

There are no offshore wind projects in operation in North America and it’s not clear when there will be demand for Gamesa’s sea-based turbines in the region, said David Rosenberg, a spokesman for the Zamudio, Spain-based company.

When Gamesa initiated the Virginia project about two years ago, “we felt the market was moving along rather nicely,” Rosenberg said in a telephone interview. “Our analysis of market conditions today differs completely. We thought the market would be ready, but there are a number of conditions that have prevented a commercial market from being here.”

The Virginia project received a state approval in March and installation was initially expected to be complete by late 2013. Gamesa was developing the prototype with Huntington Ingalls Industries Inc. (HII)’s shipbuilding unit.

No Viable Market

“A viable commercial market in the United States is still farther out, as much as three or four years away, at the earliest,” the company said in the statement. The lack of a mature market makes it “extremely difficult to justify the enormous expenditure of capital” needed to build and install the prototype, it said.

Gamesa said it’s “approaching completion” of a critical design review for the Virginia turbine and will suspend the project once that’s finished.

The Spanish prototype will be anchored off Gran Canary island sometime after the second quarter of 2013 and will be the country’s first offshore turbine, Gamesa said in a separate statement on its website. The 5-megawatt turbine’s blades will extend 128 meters (420 feet).

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

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

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