Marco Graziano
President
Vestas Mediterranean
/
Insight

Shaping a Promising Landscape for Leading Firm

Wed, 02/24/2016 - 13:18

Marco Graziano’s first contact with Vestas was in early 2013, a time when the company was undergoing a serious restructuring. Graziano, who now acts as President of Vestas Mediterranean, says his plans for the next three years are aimed at securing the company’s position as a leader in the global wind industry. “Vestas has the largest market share and is present in 73 countries. But more interestingly, in a large number of those countries we were the first company to install wind turbines. It is safe to say Vestas is a pioneer in the industry,” Graziano boasts, adding that Vestas actually created markets in some of the 40 countries where it pioneered. For him, it is important to engage governments at early stages in countries where the wind industry is yet to be developed.

Vestas entered Mexico in 1994, with the La Venta project in Oaxaca. Since then, the company has installed 406MW of wind power capacity in the country, and it recently signed a 148MW order for the Tres Mesas wind project in Tamaulipas. Mexico is an important market for Vestas due to the size of the fleet it maintains. The enactment of the Energy Reform, Graziano believes, will create a competitive market by inviting new players. “In my view, the Reform is moving in the right direction because it aims to reduce the costs of electricity. The end of CFE’s monopoly will create room for private investment and the market will gain transparency,” comments Graziano. Nonetheless, he finds the implementation of the Reform quite complex and thinks there may be a danger of overregulation due to its incorporation of best practices from all around the world. Graziano claims the Mexican authorities have been relatively supportive. “Vestas signed an MOU with the Mexican government and that promotes collaboration in implementing the Energy Reform. We worked on Mexico’s Wind Atlas in 2013, and now the MOU is part of this,” he tells.

Vestas plans to continue leading in the wind industry and driving down the cost of electricity, ultimately promoting growth of the market. “As worldwide leaders, Vestas continues to reduce the cost of our products not only by improving the sourcing and redesigning the cost, but also by increasing the efficiency of our product offering.” This was done by expanding its range of turbines and making them more modular. Vestas’ equipment adapts to different conditions, even high altitudes, as in the case of the Valle de los Vientos in Chile, which is located at an altitude of 2,000m. One of Vestas’ competitive advantages is its 2-3MW platforms that cover a wide range of wind conditions. Another of the company’s strengths is the size of its fleet, which is reflected in the fact that Vestas has installed 68GW worldwide. Vestas has a rich database of wind resources around the world with information gathered from the turbines it operates, enabling the company to work with developers at the earliest stages of a project. Graziano also highlights the company’s strong brand name because it gives assurance to investors both on the equity and lender side.

Vestas can play several roles according to the project’s needs and development stage. “We have a strong team and we can go from one end to the other. Vestas can just supply turbines without even doing the installation, while certain customers ask for full EPC and not many companies can offer that,” says Graziano. The role Vestas plays depends on the customer’s profile. The company prefers to enter projects in the initial stages because this gives ample room to maximize value for Vestas and the wind farm. The more experienced the developer, the earlier Vestas is integrated into a project. “Sometimes the request for us being the EPC contractor, or at least the head of the consortium, comes from the financing side because of the guarantees we offer,” Graziano explains.

There is a general feeling of confidence in Vestas because the new Mexican market will provide opportunities to take advantage of the country’s resources and the company’s capabilities. Graziano believes the ambitious clean energy targets could result in attractive projects for his company. As for establishing a manufacturing facility in the country, he says the choice is determined by the market that makes the most sense for the long-term sustainability of the industry. “I would recommend that the government focus on job creation rather than on localization.” Mexico is already an important market for Vestas, and Graziano says it can become a major industry in the coming years once the Energy Reform is up and running.