Wed Apr 28, 2010 9:25pm IST
By Richard Solem and John Acher
OSLO/COPENHAGEN, April 28 (Reuters) - Two of Europe's leading renewable energy industry groups, Vestas (VWS.CO: Quote, Profile, Research) and REC (REC.OL: Quote, Profile, Research), expect demand to pick up during the year as economies recover from the downturn.
Norway's Renewable Energy Corp (REC), one of the world's biggest producers of solar-grade silicon used in solar panels, said on Wednesday it expected the second half of 2010 to be better than the first, despite uncertainty in its key German market.[ID:nLDE63Q216]
Vestas (VWS.CO: Quote, Profile, Research), the Denmark-based world-leading wind turbine maker, stuck to its full-year outlook, saying it expected deliveries to pick up later in the year and 2010 earnings and revenues would be "heavily backloaded", after a surprise first-quarter loss. [ID:nLDE63Q27V]
Vestas' results were hit by lower-than-expected production in the first quarter, which tends to be its weakest three months.
Suppliers of renewable energy equipment struggled in 2009 when orders dropped off due to the global financial crisis, which halted or delayed infrastructure projects around the globe.
"The situation is different today and we hope that continues," Vestas Chairman Bent Carlsen said.
Vestas Chief Executive Ditlev Engel noted in a presentation in New York that Vestas got no orders in 2009 from the United States, which had been its biggest market in 2006-2008, but now the activity in the U.S. business is increasing.
He said Vestas was well on track to reach its target for order intake this year for turbines with capacity of 8,000-9,000 megawatts, up from last year's weak level of 3,702 MW.
Engel said prices of some components were rising as a consequence of increasing raw material costs.
Solar energy firms too have seen demand picking up after being hit by a lack of financing for their customers' projects and a glut of panels last year, though green project finance costs are expected to stay high through 2010. [ID:nLDE63M0Q]
Shares in REC lost 5 percent, underperforming the FTSE cleantech energy index , which was down 1.5 percent. Vestas shares closed down 4.6 percent.
"We are going to see a 2010 that is heavily backloaded both in terms of revenues and earnings," Engel said, meaning that profits and sales would come in the latter part of the year.
Vestas results came two days after it announced its biggest ever order, a 1,500-megawatt order from Portugal that lifted its shares sharply on Monday. [ID:nLDE63P1B9]
Analyst Henrik Schultz at Argo Securities said REC's positive outlook for the second half had to be weighed against uncertainty for the industry and its upcoming share issue.
"That is making the market very schizophrenic just now," Schultz said. REC is expected to announce terms of a 4 billion crowns ($724 million) share issue on Thursday.
INCENTIVES
U.S.-based First Solar (FSLR.O: Quote, Profile, Research), the solar industry's lowest-cost manufacturer, releases its results after the closing bell on Wednesday. [ID:nN26206698].
Much of this year's surge in solar demand has occurred in Germany, where renewable energy developers have rushed to get projects in place before planned cuts in feed-in-tariffs for new rooftop solar installations. [ID:nN26169467]
REC said growth in other markets was expected to compensate partly for weaker demand in Germany, adding that return on investments on solar power systems would remain attractive after the incentive cuts.
"Although the estimate range remains wide, industry analysts seem to have increased their demand estimates for 2010 towards 10 gigawatts," REC said. It had previously said demand forecasts ranged between 7-10 gigawatts.
The solar industry added a record 6.4 gigawatts new capacity last year, bringing total capacity to more than 20 gigawatts (GW), despite tightened credit. [ID:nLDE62T1AC]
Source: http://in.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idINLDE63R0QS20100428?sp=true
By Richard Solem and John Acher
OSLO/COPENHAGEN, April 28 (Reuters) - Two of Europe's leading renewable energy industry groups, Vestas (VWS.CO: Quote, Profile, Research) and REC (REC.OL: Quote, Profile, Research), expect demand to pick up during the year as economies recover from the downturn.
Norway's Renewable Energy Corp (REC), one of the world's biggest producers of solar-grade silicon used in solar panels, said on Wednesday it expected the second half of 2010 to be better than the first, despite uncertainty in its key German market.[ID:nLDE63Q216]
Vestas (VWS.CO: Quote, Profile, Research), the Denmark-based world-leading wind turbine maker, stuck to its full-year outlook, saying it expected deliveries to pick up later in the year and 2010 earnings and revenues would be "heavily backloaded", after a surprise first-quarter loss. [ID:nLDE63Q27V]
Vestas' results were hit by lower-than-expected production in the first quarter, which tends to be its weakest three months.
Suppliers of renewable energy equipment struggled in 2009 when orders dropped off due to the global financial crisis, which halted or delayed infrastructure projects around the globe.
"The situation is different today and we hope that continues," Vestas Chairman Bent Carlsen said.
Vestas Chief Executive Ditlev Engel noted in a presentation in New York that Vestas got no orders in 2009 from the United States, which had been its biggest market in 2006-2008, but now the activity in the U.S. business is increasing.
He said Vestas was well on track to reach its target for order intake this year for turbines with capacity of 8,000-9,000 megawatts, up from last year's weak level of 3,702 MW.
Engel said prices of some components were rising as a consequence of increasing raw material costs.
Solar energy firms too have seen demand picking up after being hit by a lack of financing for their customers' projects and a glut of panels last year, though green project finance costs are expected to stay high through 2010. [ID:nLDE63M0Q]
Shares in REC lost 5 percent, underperforming the FTSE cleantech energy index , which was down 1.5 percent. Vestas shares closed down 4.6 percent.
"We are going to see a 2010 that is heavily backloaded both in terms of revenues and earnings," Engel said, meaning that profits and sales would come in the latter part of the year.
Vestas results came two days after it announced its biggest ever order, a 1,500-megawatt order from Portugal that lifted its shares sharply on Monday. [ID:nLDE63P1B9]
Analyst Henrik Schultz at Argo Securities said REC's positive outlook for the second half had to be weighed against uncertainty for the industry and its upcoming share issue.
"That is making the market very schizophrenic just now," Schultz said. REC is expected to announce terms of a 4 billion crowns ($724 million) share issue on Thursday.
INCENTIVES
U.S.-based First Solar (FSLR.O: Quote, Profile, Research), the solar industry's lowest-cost manufacturer, releases its results after the closing bell on Wednesday. [ID:nN26206698].
Much of this year's surge in solar demand has occurred in Germany, where renewable energy developers have rushed to get projects in place before planned cuts in feed-in-tariffs for new rooftop solar installations. [ID:nN26169467]
REC said growth in other markets was expected to compensate partly for weaker demand in Germany, adding that return on investments on solar power systems would remain attractive after the incentive cuts.
"Although the estimate range remains wide, industry analysts seem to have increased their demand estimates for 2010 towards 10 gigawatts," REC said. It had previously said demand forecasts ranged between 7-10 gigawatts.
The solar industry added a record 6.4 gigawatts new capacity last year, bringing total capacity to more than 20 gigawatts (GW), despite tightened credit. [ID:nLDE62T1AC]
Source: http://in.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idINLDE63R0QS20100428?sp=true
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