France’s EDF makes renewables move in US

Recharge News provides information on France’s main electricity company, EDF’s venture in the US renewable energy market. It certainly appears to haves long-term intentions and this has to be a positive note for renewable energy.

Newly-named EDF Renewable Energy ‘in for the long-term’ in US

After 10 years as a unit of EDF Energy Nouvelles (EDF EN), North American renewable energy developer enXco is being renamed to reflect its full integration with a French parent group that is taking a long-term view of the US market.

The name change – to EDF Renewable Energy (EDF RE) for the development arm and EDF Renewable Services for the operations and maintenance (O&M) business – is the last step in an integration process ongoing for a decade, says chief executive Tristan Grimbert.

It comes a year after French energy giant EDF bought-out the remaining position of Energy Nouvelles founder Pâris Mouratoglou, and delisted EDF EN.

EDF took the opportunity to affirm its commitment to the North American renewables market, despite challenges ahead and job cuts at other developers.

Grimbert pledges no layoffs as he faces a much smaller US wind market in 2013 and 2014. Uncertainty about the federal production tax credit (PTC) for wind, limited new electricity demand thanks to a lingering economic malaise, and competition from cheap natural gas are conspiring to vastly reduce installations next year.

“We are looking at fighting for the best projects,” Grimbert tells Recharge. “We have pretty modest ambitions and we are prepared to go through a little bit of crossing the desert.”

The parent company is looking ahead to the market potential three to five years down the road.

“We’re really growing, we’re not downsizing,” he says. “We think there is the potential of new business afterwards and we want to be ready for that. It’s not a business you build in one day, so you’re not going to take it down in one day either, or one year.”

Moreover, EDF RE is not as dependent on US wind as enXco was a decade ago. It has diversified its markets – with major programmes in Canada and Mexico – and technologies, launching into solar about five years ago.

“This year, in the 1,200MW that we are building, it’s only 50% US wind. The rest is either non-US wind or non-wind US,” Grimbert says.

In addition to diversification, Grimbert is focusing on the US O&M opportunity, which grows bigger and more competitive with each passing year.

With 50GW of US wind installed, bigger players are entering the game and turbine vendors – struggling to replace revenue lost from plummeting equipment sales – are refocusing on the O&M market, Grimbert says. But the barriers to entry are also increasing, thanks to the scale of the equipment being serviced, and stringent safety and reliability requirements.

“This is no longer a business you can do well with a wrench and pickup truck,” Grimbert says.

EDF Renewable Services has some 6GW of O&M contracts for wind and solar projects and is looking for more, both from its own projects and from those developed and owned by third-parties.