Order intake and financial performance
During the first two quarters of the year, Vestas achieved another record-high order intake of 5,436 MW compared to 4,716 MW in the same period of 2017. This resulted in an order backlog of 13,521 MW. The order intake was broad-based across 21 countries, and led by the USA. Activity levels remained at a high level with more than 5.8 GW produced and shipped and 3.2 GW delivered to the customers.
In the first half of 2018, Vestas’ total installed onshore capacity increased from 79 GW to 88 GW – an increase of 11 percent.
Revenue from Power solutions amounted to EUR 3,175m, which was a decrease of 6 percent compared to the first two quarters of 2017. The EBIT margin for the segment was 9.1 percent in 2018, down 4.4 percentage points compared to 2017.
Trends in the onshore wind power market
As wind power is becoming increasingly competitive, the trend towards market-based mechanisms continues, and in the first half of 2018 alone, close to 12 GW has been allocated to wind power through auctions. Markets with an already established presence of wind power such as India, Brazil, and Germany were the main contributors, but adding to this, other countries new to wind power conducted auctions, one example being Russia, that has now decided to include wind power in the future energy mix with more than 2 GW allocated during the last year.
In the first half of 2018, Vestas continued to expand its strategic initiatives to support customers across the entire wind power plant value chain, including co-developing projects together with strategic partners and key customers.
In the USA, Vestas was involved in the development of two projects of a total of 312 MW, and in Sweden, Vestas partnered with Swedish utility, Vattenfall, and Danish pension fund, PKA for a 353 MW wind energy project. Through development and ownership of wind energy projects, Vestas is leveraging its unparalleled experience and addresses a wind power plant’s full value chain to maximise return on investment and profitability.
Technology for the future and optimisation of the manufacturing footprint
Following the announcement of the world’s first utility-scale hybrid project in Australia in 2017, Vestas continues to develop initiatives that will accelerate the transition to an energy mix led by renewable energy. In March, Vestas, together with EDPR, installed a wind and solar photovoltaic hybrid demonstrator that explores new ways to combine sustainable energy sources.
The ability to continuously lower the cost of energy through new and more efficient wind turbines remains the single most important objective for Vestas. Earlier in the year, a prototype of the newly introduced V120-2.0 MWTM generated its first kilowatt hour of electricity. The wind turbine is part of the extensive upgrade of both the 2 MW and 4 MW platform announced in 2017, offering a significant improvement in power production.
In the first half of 2018, Vestas continued to strengthen its manufacturing footprint to support regions and countries with a strong development. Vestas opened manufacturing facilities in Russia, and in Argentina, Vestas announced its plan to establish a nacelle assembly facility to support the success in a promising market for Vestas and for wind power in general.
Furthermore, Vestas strengthened the flexibility and cost-effectiveness by adding a supply agreement to its existing relationship with TPI Composites. With production scheduled to commence in the first half of 2019, the agreement includes producing blades for the newly introduced V150-4.2 MWTM turbine in China to supply primarily Asian markets, but also markets globally when applicable.