Espionage Blow for Ireland's Wind Power Future

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Charges of corporate espionage and legal action against Chinese wind turbine manufacturer Sinovel Wind Group (SHA:601558) (Beijing), have cast doubt over the future of 1,000 megawatts (MW) of wind power projects in Ireland.

Irish renewable energy company, Mainstream Renewable Power (MRP) (Dublin, Ireland), has decided to freeze its massive 1,000-MW turbine supply deal with Sinovel until a damaging legal battle between the Chinese manufacturer and global power technology firm, American Superconductor Corporation (NASDAQ:AMSC) (AMSC) (Devens, Massachusetts) is resolved. The deal was worth a reported €1.5 billion ($2 billion).

In September, an Austrian court found a former AMSC employee guilty of stealing company software code and selling it to Sinovel employees. Sinovel has denied the charges, but AMSC has since launched legal proceedings to recover more than $1.2 billion from Sinovel, citing breach of contract and damages for unpaid bills. AMSC is claiming that Sinovel illegally obtained and used its intellectual property to upgrade its 1.5 MW wind turbines in the field to meet proposed Chinese grid codes and to potentially allow for the use of core electrical components from other manufacturers. For its part, Sinovel has claimed that "it has stopped accepting and paying for AMSC's products since April as the products did not conform with the contracts and also integration requirements of Chinese grid." Until the fallout, Sinovel was, by far, AMSC's largest customer.

Mainstream, which is developing 16,000 MW of wind and solar projects globally, has said that the deal is on hold until both firms sort out the dispute, claiming it does not want to run into intellectual property issues after delivery.

"We are all bound by law in Europe, and I suspect that I could be put in prison for receiving stolen goods," said Eddie O'Connor, CEO and founder of Mainstream Renewable Power told the media. He has said that in the meantime he will be meeting with Sinovel to find out its side of the story.

Mainstream said it is looking at closing a deal with alternative suppliers and is aiming to install 50 MW of turbines in Ireland next year.

Mainstream inked the deal with Sinovel in July this year, and at the time, Sinovel's Senior Vice President Lecheng Li said: "The first of these projects in Ireland will go into construction later this year, and we plan to supply Mainstream with a steady flow of turbines through 2012 and 2013, reaching an average of 250 MW per annum from 2014 onwards".

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