European wind turbine manufacturer targets emerging markets in Argentina

Growth-hungry European wind turbine makers have set their sights on Argentina's booming renewable energy market
.
The latest example is German turbine supplier Nordex, which is planning to build its first assembly plant
in Argentina.
This is the second time the country has attracted European manufacturers
in the past week.

Argentina presents a new growth opportunity for international turbine companies as the wind industry faces falling prices and slower
growth.
According to Bloomberg New Energy Finance, the country generated $1.
8 billion in revenue from clean energy investments last year, compared to little growth in 2016, and the Argentine government has also set ambitious renewable energy targets
.
This is particularly attractive
to Nordex, which expects weak demand in Europe's core markets this year and is looking to reduce costs.

Vincent Riedweg, head of Nordex in Argentina, said in an interview: "We intend to be a very active market player
in Argentina.
Localizing production in Argentina is one way to
reduce energy costs.
”

The company is in talks with a local industrial partner who will help it set up the plant and expects to make an official announcement within a few weeks
.

In 2016, fossil fuels accounted for 60% of Argentina's energy mix, with almost no renewable energy
.
The Argentine government has set a goal to increase clean energy consumption to 20% by 2025, including 10 GW of new wind farms, equivalent to about 10 nuclear power plants
.

This goal is attracting large international turbine companies
like Denmark's Vestas.
On March 13, the company said it would build an assembly plant
in Argentina.
Vestas, the world's second-largest supplier, is already the country's leader, with orders approaching 600 megawatts
last year.

Hamburg-based Nordex also received its first orders in December 2016 and agreed last October to supply turbines
for the 101.
4 MW project.
Before acquiring Spain's Acciona Windpower SA in 2016, about 80 percent of its revenue came from Europe, and a series of projects were introduced in the Americas to bring that figure down to 50 percent
.
In addition, Nordex has installed approximately 2,300 MW of wind turbines in Latin America and has production and assembly facilities
in Brazil, Chile and Mexico.

Ana Verena Lima, an analyst at Bloomberg New Energy Finance in São Paulo, said: "The fact that large companies have entered Argentina shows that the market is promising
.
A key hurdle will be the lack
of transmission infrastructure.
”

Verena said: "Turbine manufacturers are very interested in the Argentine market, but they have to think about the long-term view
.
If new transmission lines are not built, it may be difficult for them to sign contracts
in the future.
”

In addition, financing could be another hurdle for Argentina, which has nationalization of foreign-owned enterprises and credit ratings
below investor level.

Argentina's key mechanism for promoting wind and solar power generation is the RenovAr renewable energy tender program
.
To stimulate confidence, the government has created a loan guarantee mechanism
to reduce risk.
Nordex spokesman Ralf Peters said the company has partnerships with international banks and may help clients access financing
.

Bloomberg said, "Argentina needs to install new capacity, and it has a lot of potential and has excellent wind resources
.
" ”