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Vestas on the potential in the Middle East

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Turbine, Turbine maker, Vestas, ANALYSIS

Vestas, the world’s largest turbine maker, on the potential for wind in the Middle East.

Jordan is leading the development of wind power in the Middle East with plans to install 600 megawatts (MW) of capacity by 2015 and 1,200MW by 2020.

In April, the country broke ground on the $285mn Al Tafilah wind power project that will supply 117MW of using 38 wind turbines. The first units are due to produce electricity from early 2015 and the plant is scheduled to be fully operational by August 2015, providing almost 400 GWh of electricity per year, enough to meet the energy needs of over 150,000 Jordanians.

At JOD 85 ($120) per MWh over 20 years, electricity produced by Al Tafilah is priced at less than half the cost of generation from conventional power in the country. This will provide a vital source of energy to a country currently relying on expensive foreign fuel imports to generate power.

Al Tafilah is being developed by Jordan Wind Project Company, a consortium of Abu Dhabi’s Masdar (31%), InfraMed (50%) and EP Global Energy (19%). Vestas, the world’s largest manufacturer of wind turbines, will supply and install the V112-3.0 MW turbines.

Marco Graziano, President of Vestas Mediterranean, tells Utilities Middle East about the potential for wind power in the region.

What is Vestas’ current presence in the Middle East in terms of both operational projects and projects in development?
The Middle East is a key market for Vestas. Expanding our business further in this region will help us deliver on our ‘Profitable Growth’ strategy and position Vestas as a key partner to potential customers in these countries.

Starting with a 55 kW project in Egypt in 1986, now Vestas has more than 170 MW of installed capacity across the region. Vestas has pioneered wind in more than 35 markets around the world, some of them in the Middle East, such as Egypt, Jordan or the UAE.

Also at the end of 2013, Vestas signed an agreement to install Jordan’s first large-scale wind power plant: Al Tafilah. This project will be the largest wind project in the Kingdom with a total capacity of 117 MWs and is expected to be fully operational in August 2015.

The Al Tafilah wind farm will produce clean electricity at half the cost of Jordanian conventional power and is expected to provide 150 jobs during its construction and 30 during its operation.

Enhancing our presence in these markets is very relevant for us and we will continue to work together to help our customers in the region improve their performance and capitalise on their investments.

What are the prospects for wind power in this region generally and which countries offer the best opportunities?
The region is taking important steps to promote the use of clean energy and we are convinced that wind power will play a key role in the way these countries produce their electricity in the future. Gulf countries’ electricity demand is escalating rapidly, so the need for modern technologies is also increasing at an exponential rate.

These countries are known for being richly endowed with hydrocarbons, but they also benefit from significant wind resources. Thus, we see a great potential for the expansion of the wind energy industry in the region.

Middle East countries have been undertaking renewable energy projects for more than thirty years, but we have recently witnessed a trend for more ambitious projects across the region. Countries such as Jordan, Kuwait, Saudi Arabia, Lebanon, Oman, Egypt or UAE are good examples of this. We see opportunities all across the region.

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What are the main drivers behind the development of wind power?
Wind offers an alternative, clean and sustainable source of energy. Harvesting this resource provides countries the opportunity to be more energy-independent and secure, whilst protecting the environment and mitigating the impacts of climate change. In countries such as Jordan, which imports 97% of its energy, wind-generated power is thus a very attractive solution.

This type of renewable energy has become an increasingly attractive solution for investors in the region because wind energy does not consume water to generate electricity and wind farms are easily installed. Improving technology and growing competition have seen the cost of wind energy drop over the last years. In some countries such as Brazil, wind energy is the cheapest option even compared to fossil fuels.

Also, wind energy creates wealth in the regions which translates into jobs usually for medium and highly skilled workers

Specifically, what are the prospects for wind in the GCC area?
The use of energy is growing rapidly and wind is one of the most promising resources to provide clean and competitive energy. This is what we do at Vestas: we work to ensure reliable, affordable and clean energy in order to mitigate climate change and secure energy security and independence.

The fossil fuel rich countries in the region have realised that integrating wind power generated electricity into their energy system is paramount in order to be able to respond to the rising domestic demand and make the most efficient use of their fossil fuel reserves.

The Gulf countries have significant wind resources that make this type of renewable energy sustainable over the long term. At Vestas we offer a broad range of products and services that help our customers harvest the wind more efficiently and capitalise on their investments in all wind conditions.

Are the prospects best for land-based or offshore wind projects in the GCC?
All the potential of onshore wind has not been tapped in the region yet, so I would say onshore, definitely.

What advantages does wind power offer over other renewables, for example solar power?
It is well-known that the Gulf countries benefit from strong regular sunshine. However, just to name one, wind energy offers a very significant advantage compared to the rest of renewables: it barely consumes any water.
I think this is a fundamental characteristic in a region where water is scarce not to mention that GCC countries can make use of wind to power desalination plants, which consume a vast amount of energy.

What are the main challenges for wind in this area, in terms of technical challenges and regulatory challenges?
As I said before, Vestas has pioneered wind in 35 markets. Our expertise can help countries overcome obstacles that appear when developing a new industry. However experience has shown that clear, defined and stable regulatory framework for wind energy attract more investments. Both mature and emerging markets which have adopted mechanisms to support wind have benefited from strong investments and the creation of a local supply chain.

Besides the grid infrastructure, which is always one of the key challenges for the implementation of wind energy, we have also seen that there is a specific need in the region for turnkey projects. This means that our customers want to have a single solution for the project execution.

Fast Facts:
- Vestas founded as a blacksmiths in Denmark in 1898
- Has intalled 51,000 turbines in over 70 countries
- Generates more than 90 million MWh/year
- Market leader in 2013, installing 13% of all wind capacity

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