Siemens AG (SI) is moving into the Latin American market for wind-energy turbines - beginning in Mexico - as it seeks a place among the world's top suppliers for wind-driven renewable energy.
Siemens AG (SI) is moving into the Latin American market for wind-energy turbines - beginning in Mexico - as it seeks a place among the world's top suppliers for wind-driven renewable energy.

"We have a defined target of becoming one of the top-three wind turbine producers," said Jan Kjaersgaard, vice president and general manager for Siemens Wind Power Americas, part of U.S. subsidiary Siemens Energy Inc.

"It's important to be in the markets where we see growth," he said in a telephone interview.

Latin America has little installed wind-energy capacity even as global growth in the sector hit 30% a year at the start of the decade before slowing to 24% from 2004 to 2007, according to the International Finance Corporation. It has slowed further in recent years due to the debt crisis.

The IFC and top wind turbine manufacturers see a recovery around the corner and an eventual boom, as governments provide incentives to meet international commitments for clean, renewable energy.

Currently, Siemens wind turbines have a global installed capacity of 9,600 megawatts, with about two-thirds of that in Europe and the rest in the U.S. , Canada and elsewhere.

Kjaersgaard said that puts Siemens at fifth or sixth in the world for wind turbine manufacturers.

"We are very strong especially in Canada and the U.S. and are starting up in Latin America ," he said.

Unlike its competitors - including Gamesa Corporacion Tenologica (GCTAY), Acciona (ANA.MC), Denmark's Vestas Wind Systems (VWDRY) and Clipper Windpower (CWP.LN) - Siemens isn't making its Mexico debut in windy Oaxaca state, but rather will install 70 of its new 2.3-megawatt turbines along the Gulf Coast.

Siemens joined with the private Mexican energy producer Grupo Soluciones en Energias Renovables SOE, or GSEER-SOE, to fuel the Los Vergeles wind farm in the Mexico-Texas border state of Tamaulipas.

The turbine order exceeds $270 million, with a ground-breaking ceremony scheduled for this month, Siemens said.

Kjaersgaard said the proximity to the Gulf offers wind speed of about eight meters per second, allowing the turbines to operate around 40% of capacity. "It's less than Oaxaca , but it's still a very nice wind speed."

Sergio Lopez, director of operations for GSEER-SOE, said the company has an agreement with the 43 municipalities in Tamaulipas to provide energy for government installations such as schools and hospitals.

Before deciding on Siemens, Lopez said, the company did a series of studies on how wind turbines from the biggest global companies would perform as part of the project.

"We spoke to the largest European and U.S. manufacturers," he said, adding that Siemens' size and financial stability "was a plus" since it helped a small firm like GSEER-SOE to obtain financing.

Dana R. Younger, an IFC official, said Mexico had just 88 megawatts of installed wind-energy capacity in 2008 but will have another 300 megawatts this year.

Mexico could develop up to 3,800 megawatts of capacity by 2014, he said at an energy conference this month.

The wind energy market, Younger added, is going through a tough time due mostly to financing issues, but new renewable energy funds should help.

The financial statements of two wind turbine giants shows global suppliers are facing a mixed bag of demand.

Denmark 's Vestas reported an 11% increase in turbine sales based on megawatt capacity for the 2009 third quarter as compared with the same time period last year.

Meanwhile, Spain 's Gamesa reported a 16% fall in the megawatt output of its turbine sales during the first nine months of the year, compared with the same period in 2008.

Mike Revak, vice president for sales at Siemens Wind Power Americas, said the company is preparing for an upcoming energy auction in Brazil to assign several wind projects.

Meanwhile, Chile has specific goals for companies on renewable energy usage, making it a favorable market.

Those three nations make up the "economic engines" of Latin America , he said, and Siemens is betting that its wind turbines will be increasingly fueling them.

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