Mention "Energía Hidroeléctrica de Navarra" (EHN) in European renewable energy circles today, and chances are "hydropower" will not be associated with the Spanish company, despite its name. Instead, what began as a regional industrial initiative with small hydro plant in Navarra more than a decade ago has blossomed into one of the biggest wind energy developers in the world. In Navarra today, EHN is known as a socially and environmentally responsible company which has given birth to a strategic industry for the region. And there's no stopping there.
"In the next eighteen months we are going to build [the equivalent of] a nuclear power station in Spain," says Esteban Morrás, EHN's chief executive officer, referring to the company's recently clinched project financing to put up 1173 MW of wind turbines in Castile La Mancha by December 2002. In addition, EHN plans to expand its range of wind developer services by offering operations and maintenance, consulting and turnkey plant installation to other developers. Moreover, adds Morrás, "EHN has demonstrated the viability of wind and now we are going to work in all other renewables, anywhere in the world." The company is currently building a 1.3 MW PV plant -- the largest in Spain -- and a 25 MW straw-fired biomass plant, both in the company's home base of Navarra.
Since bringing its first 3 MW wind plant on-line in 1994, the company has installed a total of 847 MW. Nearly all of this has gone up in just two Spanish provinces: Navarra, a single province region in the north, and Albacete, in the south-central region of Castile La Mancha. In Albacete, EHN's affiliate Energías Eólicas Europeas (EEE), has put up 420 MW in 18 months. Now EHN is increasingly active in other Spanish regions, most significantly in Valencia, but also in Murcia and Catalonia. EHN has also built 10 MW of wind plant in France through La Compagnie du Vent, a joint venture with French developer Cabinet Germà. And EHN is also behind initiatives in 25 other countries, including Italy, central and Eastern Europe, the Near East and North and South America.
EHN's most immediate, massive wind plans for Castile La Mancha are soundly backed. In February this year, the 1173 MW project -- of which 419 MW are now up and running -- pulled a record credit assurance agreement from five European financial entities to the sum of EUR 913.5 million (“uåX˜äŠÊ˜·³Ç, April 2001). "The international market actually offered us ESP 600 billion; four times the amount we asked for," claims Morrás. "This is a clear indication of the economic viability of wind power and EHN is working towards driving this message home."
Morrás names the philosophy that has driven the company for the last decade: "The conventional energy model represents a dead-end for everybody and an increasingly important part of the world's future lies in renewables," he says. Appropriately enough, successful realisation of this view won EHN the 2000 Financial Times prize for Best Renewables Company in the World, awarded under the jury's criteria of "a company with practical and commercial solutions that make the dream of renewable energy a practical reality."
The beginning
The company was initially formed in 1989 to take over and improve Navarra's many small hydro plant, mostly used by riverside industries to provide their own electricity. The main driving force behind this project was the regional government's determination to reduce its near full dependency on electricity supplies from outside the region. Just under half of EHN is publicly owned by the regional government's development agency, Sociedad de Desarrolla de Navarra (Sodena), and regional bank Caja de Ahorros de Navarra, with 38% and 10%, respectively. The majority capital is privately owned, with 37% controlled by utility Iberdrola -- which also owns Navarra's electricity distribution network -- and 15% by cement giants Cementos Portland.
In 1990, EHN started wind measurements in Navarra. Morrás explains that by 1993 these readings had pinpointed such rich wind resources that within a year the company had outlined a 100 MW wind development plan for the region -- seen by industry insiders at the time as overly ambitious. Since then, EHN has put on-line 416 MW in Navarra.
EHN chose Vestas of Denmark to be its turbine supplier for its Navarra plan, but it preferred not to simply import turbines. Instead, the company insisted that the implementation of the plan also have extensive industrial benefits for the region. One of Spain's leading aeronautical manufacturers, Gamesa, was keen to enter the wind industry. EHN's need for turbines was Gamesa's way into the market. Thus, prior to the installation of the Vestas El Perdón demonstration plant of six 500 kW units, Gamesa Eólica was created to build Vestas wind turbines in Spain. Gamesa dominated the new company with a 51% share, followed by Vestas (40%) and Sodena (9%). Shortly after the first phase of El Perdón came on-line in December 1994, EHN signed up for 181 Gamesa Eólica turbines worth EUR 72 million, then the world's largest ever single turbine contract and what constituted "the birth of Gamesa Eólica," says Morrás.
When the company moved into Castile La Mancha with its initial 450 MW plan for the Albacete province, it took its tried and tested partners with it. Gamesa Eólica set up a blade factory in Albacete, initially to supply EHN developments in the region. Shortly following the completion of its first 111 MW Higueruela plant, EHN signed another record contract with Gamesa Eólica, this time for 1800 machines totalling 1400 MW at a cost of EUR 841.4 million (“uåX˜äŠÊ˜·³Ç, February 2000). The contract spurred Gamesa Eólica to set up another fabrication facility in Cuenca province. Similarly, EHN's order for 100, 750 kW machines from US Enron Wind in December 1999 was instrumental in the final go-ahead to building the manufacturer's turbine factory in Toledo (“uåX˜äŠÊ˜·³Ç, April 2001).
Before the Enron Wind contract, all of EHN's installed capacity was supplied by Gamesa Eólica and the tie between the two companies seemed inviolable. But Morrás turns the table. "It is a sign of the wind industry's immaturity that two of the world's top five turbine manufacturers have not even come to visit us," he says. Ever since the first contract with Enron, the door has been wide open. Now, a total of 118 MW have been signed with Enron Wind. EHN is also putting up 50, 750 kW units from Dutch Lagerwey in the Las Llanes de Codés wind plant in Navarra. "What more proof that we are open minded could the industry want?" asks Morrás. He adds: "Our own 1300 kW prototype is working well (box). Before the year is out we will have produced a pre-series of another twenty machines. We do not aim to become a manufacturer, but if turbine suppliers cannot offer competitive solutions to our needs we will have to provide our own solutions."
Positive poll
Morrás stresses how EHN's growth is inextricably linked with "exquisite care" for the environment. "We were the first to install the transformer within the tower, innovating an air-cooling system based on a grill fitted within the door," says the company's communications director, José Arrieta. He adds that a considerable part of EHN's overall investment has gone into building a series of traditional rural stone buildings to house wind plant substations. At its 19 MW Leitza-Beruete wind plant, accessible only by forest track, the company carries out on-going repairs to the access route rather than laying down gravel or tarmac.
Arrieta notes the company's cultural contributions, such as the reconstruction of a traditional wheat mill uncovered during excavation work and the erection of a monument to the pilgrims that walk the Santiago way near the El Perdón wind station. Such care has resulted not only in high praise from the World Watch Institute but also in positive reactions locally. In a poll, 81% of participants considered the installation of new wind plant as very beneficial or beneficial.
EHN's president, Nuria Iturriagagoitia, is also Navarra's regional minister of industry. She explains that, with a population of just half a million, "Navarra does not have many opportunities to lead an industrial sector, but renewables is one of them and biomedicine another. EHN is a strategic company in a strategic industry for the Navarra government." Iturriagagoitia points out that the central administration's choice of Navarra as home to a national renewable energy centre is largely due to EHN's activities. EHN also promotes the recently founded renewable energy professorship at one of Navarra's universities.
On the other hand Iturriagagoitia says that Gamesa Eólica no longer forms an essential part of the region's strategy and says that Sodena is planning on selling its share in the company (story page 38). While recognising the turbine manufacturer's fundamental role in supplying the bulk of Navarra«s wind power, Iturriagagoitia points out that the sale is to be expected for an industry entering maturity. Furthermore, she adds, "EHN has opted for diversifying its suppliers and for carrying out its own R&D."
The Navarra link will be stronger than ever despite a change in emphasis. "EHN was never a public company but a private company with public backing," notes Morrás. "In 1989 the private sector did next to nothing for renewables and public input was essential. But now it is the private sector that is leading the way in wind power in all Spain's autonomous regions." He adds, however, that part of EHN's commitment is that "Navarra stand as a region that experiments with sustainable energy models." Morrás says the regional government's role will be more important, for other renewables, "such as boosting the use of flexible motors in order to be able to develop bio-diesel."
But with EHN's small hydro projects amounting to only 60 MW, Morrás sees that the company's full name says more about its beginnings than its future. "We aim to maintain the initials with no reference to the words behind them", he says.
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