EDP Aims to Boost US Wind Power, Enter Solar
Date: 11-Jul-07
Country: US
EDP, Portugal's largest power group, finalized the deal to buy wind power company Horizon from US investment bank Goldman Sachs for US$2.2 billion.
Chief Executive Antonio Mexia told reporters after completing the deal that EDP wants to expand Horizon's slice of the US wind market from about 9 percent this year to about 12 percent by 2010 and above 12 percent by 2020.
"It's time to export our capabilities and our leadership," Mexia said.
European power companies have been investing in wind for nearly 20 years, much longer than many of their US peers, and are moving aggressively into US wind power markets.
EDP's experience with wind in Portugal and Spain should translate into installing and running US wind farms better and more cheaply than US companies can, Mexia said.
Some European power companies are buying small US wind power companies because their long term supply agreements let them buy turbines cheaper than US companies can.
Mexia said that is not the case with the combined EDP and Horizon company, which has all of its wind turbines needs secured for this year, 85 percent secured for 2008, and 80 percent secured for 2009.
EDP wants to use Horizon as a base to expand into adjacent markets like Mexico and perhaps Canada as well as into other types of alternative energy, particularly solar power.
Finding money to do so shouldn't be difficult, he said.
"Financing is not really a problem for alternative energy development in the US market," he said. When it was looking to buy Horizon, banks offered EDP more than twice the money it needed, he said.
The company will not invest in conventional fossil fuel in the United States like coal-fired power plants, citing concerns with greenhouse gases.
EDP is aiming to float Horizon and NEO Energia, an alternative energy subsidiary in Europe, together on a stock exchange in 2008. Mexia said the company was mulling whether to list the shares in New York or Europe.