EDF Buys 80% Stake of UPC AWM to Enter Chinese Wind Market

  • Acquisition adds 1.3 GW of wind power in operation, pipeline
  • EDF also eying China’s solar, energy-management markets

Electricite de France SA, the French power company, took control of UPC Asia Wind Management Ltd. to enter China’s wind energy industry and tap the expansion of the world’s largest market for renewable power.

EDF bought the 80 percent stake of the Hong Kong-based wind farm developer for an undisclosed sum from UPC China and Global Environment Fund, which retain 20 percent of the UPC AWM, the Paris-based company said Tuesday in a statement.

“With this acquisition, we’re becoming the first European operator to enter this very promising market,” Antoine Cahuzac, the head of EDF’s renewable energy business, said at a press conference in Paris. “China’s the largest market for renewable energies worldwide. Prospects for wind development is the largest in the world.”

The move, which adds more than 1.3 gigawatts of wind power in operation, construction or development to EDF’s portfolio, is part of the group’s strategy to almost double its renewable energy production capacity to 50 gigawatts by 2030.

UPC AWM has 174 megawatts of wind power in operation, 130 megawatts in construction, and a development pipeline of more than 1 gigawatts, said Bruno Fyot, Cahuzac’s deputy. The goal is to reach 2 gigawatts in four to five years, he added.

Development costs in China are about 1 million euros ($1.1 million) a megawatt, in line with the rest of the world, Cahuzac said. The projects typically benefit from feed-in tariffs equivalent to 75 euros to 95 euros a megawatt-hours of power produced over about 20 years. They’re in areas where their production is curtailed because of oversupply on the grid during about 5 percent of the time, the EDF executive added.

EDF, which operates more than 10 gigawatts of wind power worldwide, will bring its expertise to the small Chinese developer, while the French company will improve its own knowledge of Chinese wind turbine makers, Cahuzac said. It will probably partner with Chinese investors to develop new wind farms, he added.

EDF may also invest in solar energy in China and renewable energy management systems at a later stage, Cahuzac also said.

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