The chief executive officer of Denmark’s Vestas Wind Systems A/S says the world’s biggest wind turbine maker wants to expand in the Middle East and the Asia-Pacific region as it taps into growing demand for renewable energy in new markets.
Vestas intends to be a “pioneer in new markets,” CEO Anders Runevad said in a phone interview Thursday.
“There are markets in the Middle East which we hope will open up, and in Asia-Pacific there are markets opening up now or that we have high hopes for when they open up,” he said. “These markets have growing energy needs.” Vestas this week even introduced a new turbine that will be able to operate during the kinds of typhoons and tropical storms that can hit the Philippines and Japan.
The comments follow an announcement earlier this week that Vestas expects to start operating in Russia, where the company is planning facilities after winning contracts to supply turbines to Fortum.
“Russia has a lot of potential,” Runevad said. “We have always been good at pioneering wind in new markets and have been good when we come in early.” He estimates the country “can become a good mid-sized market.”
The company is moving into new regions as the political landscape grows less certain. Investors sold Vestas shares earlier this month after U.S. President Donald Trump announced he was pulling the U.S. out of the Paris climate accord. Vestas has since said the move will not prompt it to alter its North American strategy as the all-important production tax credit, which provides an incentive for renewable energy producers, stays in place for the foreseeable future.
“The U.S. will continue to be the second-biggest market globally for the foreseeable future,” Runevad said. “You could argue that looking very long ahead, India could challenge.”
“In China there’s an increase in electricity demand,” he said. “It continues to be the biggest market not only for wind, but also for other forms of energy. We’re definitely getting traction and we definitely improve our position.”
Runevad said Vestas wants to be the biggest foreign wind company in China, but acknowledged it probably will not be able to dominate that market in the same way it does other regions.
To chase growth, the firm is also focusing heavily on generating revenue from servicing turbines, which Vestas expects to continue to outgrow the market for new turbines.
Over the past two years, Vestas has bought German service provider Availon for €88 million ($98 million) and UpWind in the U.S. for $60 million.
“The two acquisitions we’ve done were the biggest independent service providers that existed in the market,” Runevad said. “If we can find something similar that has a reasonable scale, we are definitely interested in looking at that.”
“Integration is going well, we’re a bit ahead of our internal plan,” he said. “We feel now the integration is well in place. It’s definitely part of the strategy if we can find bolt-on strategies in that space.”