Gamesa (GCTAF)

The Hindu Business Line  Aug 22  Comment 
Renewable energy company Siemens Gamesa has announced the commissioning of 3.375 MW of wind-solar hybrid power pilot project for NTPC.This being smar
The Economic Times  Jun 25  Comment 
The order was for supply, erection and commissioning of 75 units of SG 2.0-114 MW wind turbines for the farm coming up in Kutch district, the city-based company said in a release here.
Financial Times  May 27  Comment 
Chief of world’s largest wind turbine manufacturer says battery tech ‘missing part’
The Economic Times  Apr 17  Comment 
The industry faced a painful period in India when production of wind turbines dipped sharply, but the company resisted the temptation to downsize.
The Hindu Business Line  Apr 12  Comment 
Achieves milestone of connecting 5,000 MW to the grid
The Hindu Business Line  Apr 12  Comment 
Siemens Gamesa Renewable Energy today said it has achieved a milestone of connecting 5,000 MW (5 GW) to the Indian Grid and became the second largest  Mar 5  Comment 
Here's what you need to know about the markets before you start your business day.


Gamesa is a Spanish wind energy manufacturer that was originally a more diversified renewable energy company, but in 2008 the company sold off its solar arm, allowing it to focus exclusively on developing wind technology. Gamesa's market share of 11% makes the company one of the world's largest developers of wind technology.[1]

At $800 per kilowatt, the installation cost of large wind farms rivals those of traditional gas and coal plants. Because of this, the wind market has gained a cost advantage over other renewables. To take advantage of this, in 2009 Gamesa introduced the world's first 4.5 MW turbine that can be transported and assembled with the same means as those used for a 2 MW wind turbine.[2]

Despite the economic viability of wind energy, however, it cannot hold up in the face of coal, which is available for continuous power generation, while wind is only available 20-30% of the time[3] . For this reason, Gamesa's expansion in the U.S. and China may yield limited results: both are among the top three coal exporters and consumers in the world. Currently, however, public opinion is on Gamesa's side, and legislative mandates for increased renewable energy use have led to subsidies that give wind an economic advantage. Gamesa competes with other wind developers like Vestas, Suzlon, General Electric, Enercon, and Siemens.

Business and Financials

Gamesa produces mainly small-to-medium sized turbines with capacities between 850 kW and 2 MW. The smaller turbines are ideal for high-wind regions, while the mid-size turbines can generate even from weak gusts. In 2009 the company released the world's first 4.5MW turbine that took the same amount of transportation and assembly as a 2MW turbine. The company also builds wind farms with its turbines. At the end of 2008 Gamesa's production capacity in the US exceeded 900 MW, 1,000 MW in China and over 2,200 MW in Europe and total capacity reached 4,500 MW, and in 2009 they opened up a new production facility in Chennai, India to service India and neighboring its neighboring countries in a more cost effective manner. [4]

Year 2010 Summary

For the fiscal year 2010, Gamesa earned net income of €50 million, a 57% decrease from 2009, with revenues falling 16% to €2.76 billion, and total sales decreasing 14% to €2.76 billion. These decreases were mainly due to the company's decision to change manufacturing to project delivery schedules and the impact of the financial crisis, which lessened over the course of the year. During the year, Gamesa focused on cost optimization plans, and was able to keep an order book of 1,414 MW by the end of the year, 25% more than at the end of 2009. Additionally, the company entered 10 new countries, securing contracts to supply wind generators. In total, Gamesa sold 2,405 MWe of wind turbines with an EBIT margin of 4.9%. Gamesa delivered 2,685 MW to wind farm sites during the year, 11% more than the previous year. 93% of sales could be attributed to foreign sales, as opposed to 73% in 2009. Notably, China and the US both grew from 15% to 28% of the company's total sales, while India grew from 1% to 8% of the company's total sales.

Gamesa has implemented a 3-year business plan spanning from 2011 to 2013, with emphasis on reducing the cost of energy, maximizing growth, and maximizing efficiency. The company has set goals to reduce its customers' cost of energy by 20% during the three-year span, to launch five new product families of wind generators, and to sell 4,000 MW in 2013. Despite the recovery in demand during 2010, Gamesa still emphasizes the necessity to reduce the cost of energy and to reduce their energy dependence in the long-term to ensure stability in the industry.[5]

Business Segments


Manufacturing is the largest business unit and includes wind generators and wind components.


The Generation segment is involved with the development, promotion and sale of wind farms. It also included a solar power unit until its sale near the beginning of 2008.

Trends and Forces

Gamesa is Focusing its Expansion on Three Growing Markets: Europe, China, and the U.S.

Gamesa has over 30 manufacturing facilities, focusing on Europe, USA, China, and India[6]. Of the 37,466 MW of wind generators installed worldwide in 2009, 34.7% was installed in China, 26.5% in the U.S., and 6.6% installed in Spain[7]; three countries made up 68% of the company's revenue. Gamesa hopes to expand its production in these three regions, where wind growth has taken off. There are, however, pros and cons to all three:

  • The United States: The U.S. saw the highest growth in wind turbine installations in 2007 due to legislative support for renewable energy in twenty-six states. The U.S. is, however, one of the three largest coal exporters and consumers in the world, and is home to three of the six oil majors. With fossil fuels so firmly entrenched in the American economic and political sphere, it will be difficult for wind to gain long-term support from the federal government or, for that matter, any of the coal states.
  • Spain: Spain receives 9% of its electricity from wind energy, with room to grow[8]. Furthermore, Gamesa supplies over half of Spain's installed capacity[9]. Spain's energy use is dwarfed by countries like the U.S. and China, however, making it far less lucrative, though producing in Spain gives the company the ability to sell throughout Europe.
  • China: Though China's growing energy demand as well as its large share of the wind market make it appear to be an ideal location for growth, a number of smaller wind companies have emerged out of the country's woodwork to steal market share from the industry's big boys. One in particular, China High Speed Transmission Equipment, is publicly traded in Hong Kong and has 90% of the Chinese market for wind power transmissions[10]. Furthermore, China is among the top three coal exporters and producers, and, unlike the U.S., has very weak environmental regulations. This drops the installation cost of a coal plant to $1000 per kilowatt[11]; when considering that the Chinese state supports the use of internal resources over those financed internationally, Gamesa's expansion in the country seems much riskier.

Wind Energy is the Most Economically Competitive Form of Renewable Energy

As one of the top turbine manufacturers, Gamesa is well-positioned to take advantage of wind's economic strengths. Wind turbines have the lowest installation costs of any of the renewables, especially with large wind installations, which take advantage of economies of scale to reach lows of $800 per kilowatt installed[12]. Small wind farms and individual turbines can cost up to $3,500 per KW installed[13], which is a bit higher than the average geothermal plant, at $2500 per kilowatt installed[14], but still less expensive than the $8,000 per kilowatt installed[15] associated with photovoltaics. Wind farms also have the capacity to generate much more electricity than geothermal or solar installations. Wind rivals natural gas ($1200 - $1600 per kilowatt installed[16]) and is much less expensive than a coal plant that has all the emissions retrofittings ($2,200 - $3,700 per kilowatt installed[17], though gas and coal plants generally take up much less land than wind farms with equivalent capacities, and are available continuously, while wind is only available 20-30% of the time.[18]

Gamesa Focuses on Bigger Turbines and Foreign Markets to Survive as Spanish Wind Market Declines

The cost difference between a large wind farm and a small one can be up to $2,700 per kilowatt hour installed.[19] This is because larger farms tend to use larger turbines, which have economies of scale: for example, moving from a 150kW turbine to a 600kW turbine (4x increase) makes the price triple, rather than quadrupleHomeProduGamesa G128-4.5 MW with innovative solutions A 4.5 MW rated power wind turbine with lower Cost of Energy which is easy to transport and install as a 2.0 MW model Individual pitch and multivariable control minimise weight, loads and noise. Sectional blade for easy transport and installation. Permanent magnet synchronous generator and full converter technology to meet the most demanding grid code requirements. Light weight, high performance modular drive train. Gamesa WindNet® advanced technology for wind farm control and monitoring.  Transport and Assembly FlexiFit® and the modular design of its components allow the Gamesa G128-4.5 MW wind turbine to be transported and assembled using similar resources as are required for a 2MW model. Reliable technology The advanced technology used in Gamesa G128-4.5 MW wind turbine makes for a more reliable system. Technological developments applied to improve reliability include load-reducing multivariable control, power train with no high-speed rotatin components and modular electric power system which allows part operation of the unit and also isolates the mechanical train from loads caused by voltage drops. Gamesa FlexiFit® The FlexiFit® crane, coupled to the nacelle, is used as an assembly and service tool to hoist and lower main nacelle modules such as the drive train, generator and hub. Using this device makes it possible to assemble and service wind turbines without large cranes, providing a manageable and cost effective alternative to traditional holsting methods. CompacTrain® The G128-4.5 MW drive train designed by Gamesa consists of a semi-integrated main shaft and a 2-stage gearbox with mid-speed range output. This integrated design makes the unit more compact, with fewer components. Mid-range speed output improves reliability with no high-speed rotating mechanical components. Gamesa InnoBlade® Gamesa's new aerodynamic profiles reduce noise and maximise production. The Innoblade® is manufactured using a combination of materials in a pioneering structure that reduces weight. Current tooling and equipment used to transport 2MW models to the site are also suitable for this innovative sectioned-blade. Gamesa MultiSmart® The wind turbine control system uses the data gathered to regulat individual blade, moderating vibration and reducing up to 30% of load on some components.

The U.S. has relied heavily on tax subsidies and direct government support to move the wind energy forward. Historically, wind energy has benefited from an investment tax credit, especially in California which saw a host of installations of wind turbines in the 1980's. Unfortunately, these turbines never needed to actually generate power in order to receive the credit. The second round of tax subsidies for wind focused on the Production Tax Credit (PTC), currently at 1.9 cents per kwh produced. The American Recovery and Reinvestment Act of 2009 included a 30% tax credit on new purchases of small wind energy systems across the United States with capacity of up to 100kW.[20] Tax credits have been very beneficial for wind production, encouraging new investment and fulfillment of power production expectations.

Aside from a production tax credit on renewable energy sources (including wind), and the Renewable Portfolio Standards that have been adopted by 26 states, the U.S. government is coming out in vocal and financial support of wind energy. On May 23rd, 2008, the U.S. Department of Energy released a report titled "20% Wind Energy by 2030" stating that, even with contemporary wind technology, it will be possible for the U.S. to generate 20% of its electricity through wind farms by the year 2030, a move which would reduce natural gas consumption by 11% and coal consumption by 18%. China is planning on having 100 GW of wind energy installed by 2020.[21] Even oil maverick T. Boon Pickens is getting into wind, investing over $2 billion in a Texas wind farm in May, 2008.[22]

Since the passing of the American Recovery and Reinvestment Act, by May of 2009 $118 million has been announced to support the wind industry. Notably, in April of 2009, through the Department of Energy (DOE), $93 million was allocated to support further development of wind energy in the U.S. This strong support will move the industry forward through expanding domestic capabilities. It will allow for advancements such as the ability to test blades longer than 50 meters, which currently can only be done in Europe. It will also increase the cost competitiveness of wind energy, speed the next generation of turbines and the creation of large-scale offshore facilities.[23]

At the end of June 2009 the Obama administration announced that it had issued five offshore exploration leases for wind energy production. The leases included areas 6-18 miles off of the coasts of New Jersey and Delaware. The leases were granted to: Bluewater Wind New Jersey Energy, Fishermen’s Energy of New Jersey, Deepwater Wind, and Bluewater Wind Delaware.[24] There are other proposed leases off the coast of Northern California, Florida and Georgia.[25]

The exploratory leases will allow for the creation of meteorological towers to collect data on wind speed, intensity and direction. The leases will cost about $17,000 per year and the data collected from them will be used to support future renewable energy projects and to assist coastal states in meeting renewable energy requirements. It has been proposed that offshore wind energy could account for nearly one-fifth of the U.S. wind capacity by 2030.[24]

Gamesa's Sale of its Solar Unit Reduces its Exposure to a Highly Competitive Market

On February 28th, 2008, Gamesa agreed to accept €261 million from First Reserve Corporation, a private equity firm, for its solar power division, Gamesa Solar. Though Gamesa Solar was the largest solar company in the highly competitive Spanish solar market[26], the recent, explosive growth of entrants into the solar market means that Gamesa's international expansion would have been difficult. With companies like SunPower reaching record high efficiencies and First Solar reaching record low costs, while Chinese market entrants like Suntech, Solarfun, and JA Solar use cheap labor and a low-regulation environment to boost margins, Gamesa would have to spend large amounts of money on research and development in order to effectively compete. The solar segment had margins of 9%, stronger than the company's turbines section but weaker than its wind farm segment; however, its earnings made up only 5% of Gamesa's EBITDA, making it a relatively inefficient investment. Meanwhile, the company is already well established in the wind market; its sale of its solar segment simply allows it to cut down debt and focus on gaining market share in its primary market.


Gamesa's turbines make up over half of Spain's installed wind capacity, and the company itself held 11% of the world wind market in 2008.[27]

  • Suzlon Energy Limited - By acquiring REpower and taking advantage of global wind opportunities, India's strongest wind entrant has captured a global market share of 7% in 2008.[28][27]
  • Vestas - Vestas is the largest wind turbine and system manufacturer in the world and held 19% of the global market share in 2008.[27]
  • General Electric Company (GE) - GE held 18% of the global market in 2008 and has installed over 10,000 wind turbines with a worldwide capacity of 15,000 MW.[29][27]
  • Siemens - Siemens Wind owned 7% of the international wind market in 2008, though the electronics company wants to expand its annual production to 4,500 MW (enough to give it 15%).[30][27]
  • Enercon - Enercon in 2008 held 9% of the world market share through installation of over 13,000 turbines in more than 30 countries.[31][27]
Wind Turbine Power Capacity in 2008
Manufacturer <500kW 500-800kW 800kW-1MW 1-1.3MW 1.3-1.5MW 1.5-2.5MW >2.5MW
Suzlon Energy Limited/REpower 350kW 600kW - 1.25MW 1.5MW 2.1MW -
Nordex[32] - - - 1.3MW 1.5MW 2.3MW/2.5MW -
Siemens[33] - - - 1.3MW - 2.3MW 3.6MW
Enercon[34] 330kW 800kW - - 1.5MW 2 MW/2.3MW 6 MW
Gamesa[35] - - 850kW 1.3MW - 2MW -
General Electric Wind[36] - - - - 1.5MW 2.5MW 3.6MW
Vestas[37] - - 850kW - - 1.65MW/2 MW 3MW


  1. Gamesa 2008 Annual Report
  2. Gamesa Press Release July 29, 2009
  3. Ocean Power Technologies Inc. Presentation to U.S. Senate, May 30th, 2001
  4. [1]
  5. Gamesa 2010 Activity Report
  6. "Gamesa's G90 Class II wind turbine"
  7. Gamesa 2009 Annual Report Pg. 15
  8. "Energy companies make wind power a top investment"
  9. "Wind Power and Gamesa Corporation: 2007 in Review, 2008 in Expectations"
  10. Maria Energia: "Chinese Wind Power Company Plans IPO"
  11. Gristmill Post by GreyFlcn, July 19th 2007
  13. California Energy Commission: Economics of Owning and Operating DER Technologies"
  14. U.S. Department of Energy, Energy Efficiency and Renewable Energy: Geothermal FAQ
  17. Gristmill Post by GreyFlcn, July 19th 2007
  18. Ocean Power Technologies Inc. Presentation to U.S. Senate, May 30th, 2001
  19. California Energy Commission: Economics of Owning and Operating DER Technologies"
  20. Database of State Incentives for Renewables and Efficiency
  21. SeekingAlpha: "Wind Power, Big and Small"
  22. MarketWatch: "Department of Energy Says 20% Wind Power Achievable"
  23. U.S. Department of Energy Energy Efficiency and Renewable Energy News, Recovery Act Announcement: Secretary Chu Announces $93 Million from Recovery Act to Support Wind Energy Projects, April 29, 2009
  24. 24.0 24.1 Mouawad, Jad First Offshore Wind Leases Issued Green Inc. June 3, 2009
  25. U.S. Department of the Interior- Offshore Energy Minerals & Management, accessed on July 6, 2009
  26. Gamesa News: "Gamesa sells its solar unit to first reserve for 261 million euros"
  27. 27.0 27.1 27.2 27.3 27.4 27.5 Environmental Leader: Wind Turbine Market Share Revealed
  28. "FT: Suzlon Sizzling"
  29. GE Energy
  30. "Siemens AG's Siemens Wind Power to Set Up Wind Turbine Plant in China-DJ"
  31. Google Finance: Enercon
  32. Nordex Wind Turbines
  33. Siemens Wind Turbines
  34. Enercon Wind Turbines: Technical Specifications
  35. Gamesa Products
  36. GE Wind Turbines
  37. Vestas Wind Turbines
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