* Areva, Alstom in competing French offshore consortia
* GE would sell Alstom wind unit if it wins bid
* Areva keen on Alstom’s contracts, not its technology
* Areva favours gearbox, not direct-drive turbines
* But source close to EDF says gearbox turbines too fragile (Updates with comment from source close to EDF)
By Geert De Clercq and Benjamin Mallet
PARIS, May 23 (Reuters) - France’s nuclear group Areva would be interested in Alstom’s offshore wind turbine contracts but would use its own turbine technology rather than the engineering group‘s, a source with direct knowledge of the situation told Reuters.
State-owned Areva and Alstom plan to build 3,000 megawatts of wind power off the French coast for separate consortia, under a state drive to boost renewable energy use. But U.S. conglomerate General Electric has made a 12.35 billion euro ($16.9 billion) bid for Alstom’s energy business and says it is willing to sell its wind turbine unit.
Earlier this month, the government awarded a 4 billion euro ($5.6 billion) tender for two offshore wind farms to a consortium led by GDF Suez, for which Areva will build 124 8-megawatt turbines - some of the largest in the world - with a combined capacity of 1,000 megawatts. Areva will build a further 500 megawatts for Spain’s Iberdrola
Alstom meanwhile was chosen to build 240 6-megawatt turbines for a consortium led by utility EDF which in 2012 won a tender for 1,500 megawatts.
Alstom’s turbines will use “direct-drive” technology, whereby the blades directly drive the generator. Areva’s turbines use a gearbox to speed up the blade’s slow rotation into a fast-spinning generator shaft.
Direct-drive turbines have fewer moving parts and need less maintenance than gearbox models, but are more expensive to make. Dropping the prototype Haliade turbine could have implications for jobs and would be a blow for Alstom, which has spent millions on development and plans to build manufacturing plants on the French coast.
An Areva takeover of Alstom’s offshore wind activities would primarily mean taking over the EDF contract, as Areva would not want to offer two competing technologies.
“For EDF it is immaterial whether their parks turn on gearbox or direct-drive models. Areva could perfectly well take over that contract and execute it with its turbines rather than the Alstom direct-drive models,” the source said.
A source close to EDF renewable energy unit EDF Energies Nouvelles said things were not that simple, however.
“We do not want gearbox turbines, as these are very fragile,” the source said, adding that the foundations foreseen for the Alstom turbines would not be suitable for Areva‘s.
“This would require a new technical study, and a new public enquiry,” the source close to EDF EN said.
The first source said a merger would be good for the entire sector, as too many players are chasing too few contracts.
“Consolidation is needed. This is why Areva linked up with Gamesa,” he said, noting any move would be via the joint venture it announced in January with the Spanish wind turbine specialist.
The source added that he expected the cost of taking over Alstom’s offshore wind activities to be relatively modest and well within Areva’s financing capacities.
The source declined to comment on whether Areva would also consider buying Alstom’s more mature onshore wind turbine business, but experts have suggested that Areva would not want to enter this highly competitive business.
German engineering giant Siemens, which is preparing a rival bid for Alstom, is the world’s top player in offshore wind and a major player in onshore. It offers both gearbox and direct-drive turbines and has made no comment about what it would do with Alstom’s wind unit.
France’s energy minister Segolene Royal has said France wants to become a leading player in offshore wind, but the government has not commented on what it wants for the two French firm’s wind activities if Alstom’s energy unit is sold.
A French newspaper reported that the government wanted Areva to take over Alstom’s offshore wind turbine unit if General Electric’s bid for Alstom succeeds.
Areva CEO Luc Oursel told a parliament hearing this week that if Alstom’s wind activities came up for sale, Areva “would be ready to examine any possibilities”.
Alstom CEO Patrick Kron, also speaking in parliament, said he wanted to ensure the long-term viability of its offshore wind arm and warned against slicing up its wind unit.
Areva entered the offshore wind business in 2007 with a bid for German Multibrid, after losing a $1 billion bid for Repower to India’s Suzlon. It has since installed an offshore base of six 5 megawatt turbines at the Alpha Ventus wind farm in the North Sea, operational since 2009, and has contracts to supply 120 turbines in Germany. It expects to have total offshore installed capacity of 600 MW by end 2014.
Alstom also entered the wind business in 2007, by taking over Spain’s Ecotecnia. It has more than 2,600 onshore turbines installed or under construction in more than 200 wind farms with total capacity of about 5,000 MW.
Both late to the game, the two French engineering firms never caught up with the top wind turbine makers like Siemens and Denmark’s Vestas. Together, they would be a force in France but be a relatively small global player in this capital-intensive nascent industry, which strongly depends on government subsidies.
European Wind Energy Association (EWA) data show there was 117.3 gigawatts of installed wind energy capacity in the European Union at end-2013, of which 110.7 GW on land and just 6.6 GW (6,600 MW) at sea.
A total of 2,080 offshore wind turbines with an average capacity of 4 MW were installed, of which 74 percent by Siemens, 12 percent by Germany’s Bard, 10 percent by Vestas and 4 percent by Suzlon unit Senvion. (Editing by Sophie Walker)