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Euromonitor International Interview Series on Sustainable Business Models: Magda Pereira at ENERCON

December 5th, 2016

The strategy briefing titled ‘Sustainability and New Ways of Doing Business,’ explored the growing momentum in clean energy. Euromonitor is pleased to publish an interview of Magda Pereira at ENERCON to illustrate the factors that are making it possible for wind energy to develop as a mainstream energy source. The developments are very inspiring given the minimal environmental impact of wind energy and need to lower our carbon footprint in order to combat the negative impacts of global warming and climate change.

Magda works in the Sales Department for the Latin American market and has been with ENERCON for 3 years. ENERCON is the sixth largest wind turbine manufacturer in the world and the market leader in Germany. The company is well-known for its innovations introducing sophisticated models that are efficient and cost effective.

Could you tell us about ENERCON?

ENERCON was founded by Dr. Alloys Wobben in 1984. The company is based in Aurich, Lower Saxony in the north of Germany. Dr. Wobben basically started in a garage with 3 employees and the first turbine was installed in his own garden!

Back in those days the wind energy sector wasn’t as developed as it is today – the turbines were small in production capacity (rated output power of 55 kW) and in hub height (approximately 18 meters). The first ENERCON turbine was developed in the same year as the company was founded and it had a gearbox.

In 1993, ENERCON developed its first gearless turbine – E-40 with 500kW. Since then, our turbines have been using the same gearless technology principle.

The company has grown in size and production and has production facilities worldwide – Europe (Germany, Portugal, France, Turkey, Sweden and Austria), Canada and Brazil. Its own cargo vessel – “E-Ship 1” with an electric main drive system supported by four Flettner rotors (using the Magnus Effect, the Flettner rotors provide the main engine with additional drive) is an essential contribution to sustainable freight transport, which depending on weather conditions, can achieve up to 15% of fuel savings. ENERCON also owns a railway company e.g.o.o. – which supplies ENERCON’s production sites with production material and delivers system components to construction sites by rail.

In 2012, Dr. Wobben transferred his shares in the business to the Aloys-Wobben-Stiftung (trust according to German civil law). By establishing the trust, Dr. Aloys Wobben intended to preserve both his lifetime achievement and the independence of the leading German and European wind turbine manufacturer in the long term.

What advantages does wind energy have over solar power?

One of the main advantages of wind energy is that the technology is lowest-priced compared to the solar energy. The wind power is less intermittent and can be produced day and night as long as the wind is blowing, whereas solar energy is mainly limited to the day time, when the sun is shining. Moreover, with solar energy, the panels must be oriented to the south in the northern hemisphere where most of the sunlight is. Wind power doesn’t require a lot of space for installation. One turbine with 2,3 MW rated power can produce enough electricity in one hour to power a house for a year. ENERCON’s E-126/7.580 kW is able to generate in just one hour enough energy to power 3 houses with two people for a whole year. One further example: One of our E-126/7,580kW produced approximately 19.200.00 kWh last year. If a household of 3 people needs round about 3.500 kW in a year, then this turbine could provide electricity for 5.485 households.

The capacity factor, which is the ratio of the input to output, for wind energy is approximately 55%, depending on the availability of the wind, higher than solar energy at approximately 15%. To put it simply, there is less loss in the process of converting the kinetic energy of the wind to electricity than sunlight to solar energy.

How is wind energy produced?

It is a very technical process, but I will try to explain it in a simple way. The wind (moving air, which contains kinetic energy) blows towards the turbine rotor blades. The rotor spins around capturing this kinetic energy and turns the generator. Inside the nacelle, i.e. the machine house on top of the tower, the generator takes the kinetic energy and turns it into electrical energy. The electric current produced by the generator is led through cables down through the inside of the tower. These cables are then connected to a transformer that is placed at the bottom of the tower. This transformer converts the energy to a higher voltage to be transmitted to the power grid. ENERCON turbines are gearless using a technology that allows the generator to operate at the same speed as the rotor blades. Gearless process is more environmentally friendly since it does not require any oil and also saves costs as less equipment is needed.

How is wind energy distributed?

Usually, before you install a turbine you will need to know what the grid code is, rules formulated by the countries on how to connect energy into the grid, the voltage required and how much can be injected into the grid. These rules vary from one country to another depending on the infrastructure, systems and needs. The distribution of the energy itself works in the same way as other types of energy. The only difference is that the rules or grid code vary. This energy then goes, as previously mentioned, to the grid and is directed to where it is needed.

It seems the infrastructure is very costly? What motivation is there to invest in wind energy?

The infrastructure is costly when it needs to be built from scratch, but it needs to be seen from the perspectives of developed countries and emerging countries. In the cases of emerging countries there is usually an infrastructure deficit. The installation of wind farms needs to be associated with other infrastructure including road and national grid. Another challenge with emerging countries is also that some crucial steps could be overlooked. For example, in some countries significant investments have been made to develop wind farms, but the connection points are occasionally not available on site, which is one of the first things that need to be put in place. Without the connection points the farms are of no use and the governments are then bestowed with the responsibility of having to sell them at an auction, which is a long bureaucratic and time consuming process. In the developed countries, infrastructure does not pose a challenge unless they are situated in very remote areas. While the cost of installing wind power is competitive, some countries also offer various types of incentives including tax breaks, making it more affordable.

In the long run from the consumer point of view, the cost of wind power is cheaper than fossil fuel which is a finite source. Wind energy, on the contrary, is endless. Finally, it is environmentally friendly and with the pressing need to lower our carbon footprint, renewables including wind energy offer a practical solution.

It seems China now wants to establish its position as a leader when it comes to innovations in wind and solar technology. What advantages does China have?

China has some of the world’s leading clean energy providers including Goldwind – which is the biggest with a worldwide market share of 12.8, compared to ENERCON’s 5.1% market share. Other providers are Envision (3.5%), Ming Yang (3.8%) and United Power (4.7%). Most of them mainly produce and supply within China, but are now trying to enter the European markets.

It seems wind energy has been picking up quite strongly? Are there any specific reasons for it?

Before the renewable energy boom, the governments weren’t much interested in this matter. In fact we need to go back in time to understand a little bit about how it developed. With the 1973 oil crisis, there was a need to reformulate the excessive overuse and dependence on fossil fuel. At the same time, it was understood that the fossil fuel reserves are finite, which was the main factor that led to the interest in renewable energies. In 2009, the EU launched the RES Directive 2009/28/EC that determined the binding targets of 20% share of renewable energy sources in final consumption by 2020. The governments are also starting to notice how important it is to reduce the carbon footprint of their countries and that renewable energy sources can help to reduce the CO2 they produce. Even poorer countries (48) signed to commit to 100% renewables by 2050 at COP22, the UN conference on climate change held at Marrakesh in November. This is definitely a record.

Do you foresee wind energy taking over fossil fuel at some point in the future given the technological progress and growing environmental concern?

Wind energy as the main renewable source in combination with other renewable sources such as solar, thermal, biomass and hydropower can definitely take over fossil fuel one day! It is just a question of time. There are small countries, such as Costa Rica, who ran, this year, on renewable energy for two months straight! Those are definitely great news and great examples for the future!

What other challenges do wind energy face apart from that it is costly to install and can be intermittent when there is little or no wind?

There are challenges in the wind energy sector, as there are with any other renewable energy source. One main challenge we see today is the unequal competition with fossil fuel and nuclear energy producers. With the development of bigger and more powerful turbines, we also have to take care of the people’s acceptance. The initiators of wind farms near residential areas sometimes are confronted with fears of the noise impact a turbine might generate. Just one example to show that at ENERCON we take this serious: We outfit the rotor blades of our new turbines with so called trailing edge serrations – an aerodynamic feature applied directly on the blade, which is able to reduce noise emissions up to 20%.

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Oru Mohiuddin

Oru Mohiuddin is a Strategy Analyst for Euromonitor International. She has a Master in International Development from University of Birmingham and has been working in the company since 2007. Professional interests include tracking beauty trends with a particular focus on colour cosmetics, hair care and evaluating company performance.

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