Vensys Energy AG is a global pioneer in the production of gearless wind turbines primarily for small and medium wind farm projects across Europe. The company is headquartered in Germany and present with a branch office in Poland since 2015 which mainly serves the Polish and Belarusian market.
You took over Vensys’ activities in Poland in 2014, how was the decision made to set up shop here, and what is the company’s overall reach at the moment?
The company at large has two main facilities in Germany, one located in Neunkirchen which is also company HQ, and the second in Diepholz, which produces electronical components tailored to our turbines. In 2016 we launched additional factory in Granada in Spain, a Vensys subsidiary called Ebladesfor the production of rotor blades.
Our branch in Poland was set up in 2015 as we observed growing interest in our turbines here. Our main activities are naturally focused on the domestic market, however we also cover Belarus, and provide reliable services to existing wind farms in Eastern Germany.
While we do not (yet) have factories here, we nevertheless source components from local producers, who supply various pieces of equipment and services. Especially we use local logistics, installation teams and crane companies both in Poland and across other European markets, and we are impressed with their high quality of work.
Given that the dominant chunk of your work is geared towards small and medium projects, how do you assess the opportunity pool for these in Poland?
Small projects for us start with two-three turbines, and a medium projects averages 10 or so, this is what Vensys is tailored to handle. And yes for sure, there is a growing demand for these in Poland but the biggest pace of cake is still given to larger scale projects. Our current strategy is to reach 130-150 MW/year. So far our revenue stream has been complemented through the sale of various licenses across the past years.
Moving forward we are able to leverage the relationship with our international partner Goldwind which will allow us to access the large projects market and also to larger scale production capabilities of Vensys` technology.
In 2003 Goldwind has become licensees to manufacture turbines in China under their own brand, based on our Vensys` original design. Goldwind is now in the top 3 global turbine producers, having supplied over 8 GW in 2019. Stakes are higher and competition is mounting, so we are excited about fostering this relationship to diversify our offering on the European market.
Good luck, it sounds like interesting times ahead! Looking a bit behind, you started operations here just as the market took a bad turn, how have you been handling the challenging wind business environment that the government created in Poland?
That’s right, we started operations in 2015 which means we didn’t even witness one truly good year on the local market. The first few years were challenging, everyone was engaged in this fine balancing act between respecting or negotiating contracts and surviving as a business. But here we are today, having survived the storm, and much of how we achieved that was thanks to business coming from Belarus, which is still ongoing. Additionally, we were lucky to have reliable services provided by the Polish service teams to the already built turbines. Auctions have been helping, and we are working on several auction projects ourselves, but this brings me to an ongoing challenge.
Poland is locked into using old technology (previous generation of the wind turbines) due to the Wind Investment Act in 2016. Back then turbine technology revolved around 2.0-2.5 MW and 100 m rotor diameter, with a turbine tip heigh maxing 180 m.
Fast forwarding to 2019, despite the fact that new technology is available going up to 5-6 MW, 170 m rotor diameter, and 250 m height, permits impose the use of the older versions.
What this ends up meaning for producers such as ourselves is that we have a harder time producing the turbines, and even sourcing the needed components for such older technology, and we face a longer lead time. At the moment there are ongoing discussions to unlock Poland’s wind power’s development. We can only hope that the government’s response to this will allow Poland to jump straight into 5 MW+ technology as of 2021. After all this is what is being demanded in other European countries, everyone wants to go higher, better, more efficient – as they should.
What are the main priorities for Vensys in Poland in the coming two to three years?
The are two main goals – firstly we would like to strengthen our team to cover increasingly large medium size projects. We know how to design and supply turbines, but would also like to hone our skills in the construction side, so that we can cover more business aspects in house. Last but not least, we would like to educate the market about the importance of embracing new technology – 5MW+ is the future. Flexible supplier can sometimes be more competitive, react faster to market needs and adapt its products to the requirements of a given project. Individual project development and special solution is where our strength lies, ranging from the small wind park and supply solutions for companies all the way to the incorporation of local interests into Community Scales.
How do you expect COVID-19 to impact business, and have you already noticed a shift?
Undoubtedly there will be delays as a result of it, in component production as well as delivery - there already are in fact. As we are entering a force majeure situation we must prioritize human safety and wait until business is allowed to resume, for us as well as everyone else in our business.
It will be important here to adjust the dates of launching the projects which have been awarded in the auctions and are going to enter the support system, as well as to extend the grid connection agreements and other administrative decisions, which are necessary for the final alignment of the entire investment. Additionally, Covid 19 will have a significant impact on the targets for the share of renewable energy sources, which Poland has committed to meet by the end of 2020. The actual challenge for the parties is to execute those complex transaction for projects awarded in auction, especially in relation to the lead time of the wind turbines and project finance.
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