AES Wind Generation Strengthens Presence in the Polish Wind Power Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--AES Wind Generation (Arlington, Virginia), the wind power division of global power company AES Corporation (NYSE:AES) (Arlington), recently signed an agreement with Polish wind power developer Jan Reichert whereby AES will acquire a 353-megawatt (MW) development pipeline from Reichert. Under the terms of the agreement, AES Wind Generation now owns 51% of the project pipeline, a number that will go up to between 90% and 95% once Reichert completes certain pending milestones.

Construction of about 158 MW of the total project pipeline is expected to commence next year, requiring an investment of about $80 million. The complete 353 MW of projects are expected to be completed by the end of 2014 and will require an estimated investment of $175 million from AES.

Nearly one-third of the global development pipeline of AES Wind Generation is located in the European market. The company has about 288 MW of wind capacity in operation in Europe and about 1,700 MW across the globe. About 50 MW of wind power capacity is expected to begin operations by the end of this year in China. In 2010, AES Wind Generation commissioned a total of 213 MW of wind power capacity across Bulgaria, France and Scotland. Over the next five years, the company is expected to invest about $400 million to complete the development of its project pipeline. Of this, about $120 million will be used to begin construction of 200 MW of wind capacity by the end of 2011.

In addition to the 353-MW development pipeline acquired from Reichert, AES Wind Generation acquired a 51% stake in the 422-MW Polish development pipeline of 3E (Brussels, Belgium) in April 2010. The company now has a 775-MW development pipeline in the Polish wind power market. According to Paul Hanrahan, the president and CEO of AES, the acquisition of the Polish project pipeline is in line with AES' strategy to focus on high-growth renewable energy markets. He said that with 775 MW of projects in the development pipeline, AES is set to establish a strong presence in one of the most attractive wind power markets in Europe.

Poland is one of the most rapidly growing economies in the European Union, the country's renewable energy targets are aligned with those of the European Commission. The 2009 European Union Renewable Energy Directive states that Poland must satisfy 15% of the country's total energy demand through renewable sources by 2020. Accordingly, the nation plans to achieve 10.4% of its total energy from renewable sources by the end of this year and 15% by 2020. Thermal power accounts for about 90% of Poland's power-generation capacity, and focusing on the wind power sector is an essential part of the country's plan to meet renewable energy targets. With a current installed wind power capacity of 725 MW, Poland is expected to have 6,000 MW of installed capacity by 2020.

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