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Enrique Pedrosa of Siemens Gamesa: ‘In renewable energy, it’s better to have modest but realistic goals’

By Olivier Caslin
Posted on Thursday, 20 June 2019 10:08

Siemens Gamesa is a major player in wind power in Africa and across the world. REUTERS/Vincent West

The Siemens Gamesa group, a world leader in wind power, was created by the merger of two European giants. A large player in Africa, its objective is to help the continent make a successful energy transition.

The 2017 merger between Germany’s Siemens and Spain’s Gamesa created a global wind-energy giant with €9.1bn ($10.2bn) in turnover. Siemens Gamesa is present on five continents.

In charge of the Africa region since September 2017, Enrique Pedrosa, onshore CEO for South Europe and Africa, talks about his company’s goals and the challenges it faces to support Africa’s energy development in a sustainable way.

How long has Siemens Gamesa been interested in Africa?
Enrique Pedrosa: Siemens, our main shareholder, has been present in Africa for more than 162 years, while Gamesa arrived in 2004, setting up wind farms in Tunisia, Morocco and Egypt. Thanks to its experience, Siemens Gamesa is now the continent’s leading wind-energy company, with an installed capacity of nearly 3GW, representing a 55% market share.

Has the merger between the two groups led to a renewed focus on the continent?
It has strengthened relations with our local partners and enabled us to position ourselves better in the market to help the continent make a successful energy transition. More than ever, Africa offers many opportunities in the field of renewable energy – based on its available resources, population growth and economic dynamism.

More than ever, Africa offers many opportunities in the field of renewable energy

We are therefore determined, in a highly competitive environment, to maintain our leadership and ensure our profitability. [We intend to] maximise our competitiveness through technological differentiation and cost reduction. Our three-year strategic plan for 2018-2020 should strengthen our ability to meet our customers’ expectations in a constantly changing market, while optimising our economies of scale.

Why did you merge at the time?
Due to the technological, operational and geographical complementarity between the two companies. Siemens Wind Power is a leader in offshore, with strong positions in Europe and North America, while Gamesa, number one in onshore, is a leading player in Latin America, Africa and the emerging markets of Asia. This operation has therefore enabled us to consolidate our positions and our competitiveness. We are in a stronger position to invest in new technologies that help make energy greener and more reliable.

And what is your assessment of its impact?
The merger of two giants, with their own cultures, is still a major challenge, but our efforts have paid off as we are now the world leader in offshore and number two in onshore and services. We currently have more than 90GW installed in 90 countries, and our order book stands at €23bn. This year, our shares were the best performers on the Ibex 35 [main index on the Madrid Stock Exchange], with a 27% increase.

In Africa, Morocco has a third of your installed capacity and your only blade-manufacturing plant. Does the kingdom have a special place in your strategy for the continent?
It is indeed one of our most important countries in Africa, along with Egypt and South Africa. Morocco offers a stable political and economic environment, with a clear commitment from the authorities to encourage the role of renewable energies in the country’s future energy mix, which is set to reach 52% by 2030.

We set up our first blade factory in Tangiers because the city is ideally placed to supply many countries in Europe, Africa and the Middle East. This location also confirms our commitment to encourage the development of local skills.

Why did you choose to set up a factory in Africa?
We are manufacturers. The location of our plants is dictated by factors such as costs, the size of future markets, logistical proximity, export competitiveness and the availability of skilled labour. With the expected growth of the wind-energy sector on the continent, it made sense for us to set up there at some point.

So far, you seem to have focused on North Africa. Do you have other projects for the rest of the continent?
There are historical reasons for our presence in this region. North African countries were the first on the continent to put in place the necessary frameworks to ensure the development of renewable energy. But we are also present in Mauritania, Mauritius and Kenya. And many African countries are now interested in the sector, from Ethiopia to Senegal, Zambia and Ghana. We are listening and ready to offer them our services and solutions.

What are the particularities of the African wind-energy market?
Energy consumption is surprisingly low, and, as renewable energies are now among the most affordable, Africa represents for us one of the most important markets in the coming decades. However, due to its climatic, geographical and demographic characteristics, the continent poses specific problems, such as access to energy, due in particular to the low development of electricity networks, the mobility of populations and low levels of banking penetration.

These challenges require tailored solutions, in which Africans must take the lead. More and more companies are emerging locally, offering solutions adapted to the needs of the continent. And this trend is just beginning.

How can the renewable energy sector develop further across the continent?
Throughout the world, we have seen that the successful countries in developing renewable energy have done so by setting clear medium- and long-term objectives, which they have then met. In renewable energy, it is better to have modest but realistic goals. The most important thing is to bring visibility and credibility to the sector, to attract investors and industrialists.

What are your goals on the continent?
As Africa’s leading supplier of wind energy, we are committed to supporting the continent’s economic growth in a sustainable way. First, by providing access to clean energy for an ever-increasing number of Africans. Then by ensuring that the value chain is integrated locally as much as possible.

This article first appeared in Jeune Afrique.

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