Muehlhan’s Endiprev Acquisition, Energy Capital’s $4.4B Fund, FiberLine’s Production Shift

The Uptime Wind Energy Podcast

Muehlhan Wind Service acquires a controlling interest in Portugal’s Endiprev to create a global front runner in wind installation and maintenance services. Energy Capital Partners raises over $4.4 billion for its latest fund focused on power generation, renewables, and decarbonization infrastructure. FiberLine Composites is moving all production from Denmark to India over competition from Chinese manufacturers, while also working on domesticating some production in the U.S. to take advantage of tax credits.

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Allen Hall: I’m Allen Hall, president of Weather Guard Lightning Tech, and I’m here with the founder and CEO of IntelStor, Phil Totaro, and the chief commercial officer of Weather Guard, Joel Saxum, and this is your News Flash. News Flash is brought to you by your friends at IntelStor. If you want market intelligence that generates revenue, then book a demonstration of IntelStor at IntelStor. com.

Danish company Muehlhan Wind Service has acquired a controlling interest in Endiprev, a Portugal based company specializing in commissioning and electrical work for the wind industry. This acquisition aims to create a global front runner in wind installation and maintenance services. Endiprev will continue to operate under its existing brand with current executive management team remaining in place.

Muehlhan has expanded significantly over the past seven years and has acquired several companies in the last 18 months. And Phil, this seems to be the trend in any sort of repair, maintenance company is to acquire, acquire, acquire.

Philip Totaro: At this point, yes, Allen. And it’s interesting because we’ve talked over the past, six to 12 months about Any number of different deals where companies have either kind of merged together an EPC contracting capability with maintenance services or maintenance providers getting together in some cases, maintenance providers acquiring supply chain, smaller, tier three or four supply chain companies as well.

So, I mean, this is, it’s starting to get serious. We’ve talked on the show before about, the increased need for maintenance services, quality of maintenance services, et cetera. And this puts Muehlhan and, and Endiprev in in a really great position globally.

Joel Saxum: Yeah. So if you aren’t familiar with kind of what this business model looks like as it expands is Endiprev being a basically front end commissioning services company, they do a lot of build outs.

They do electrical work of these things. Muehlhan has been Classically a more of a maintenance company. So now what you do is you come in on the front end of a project, you help build it or you build it as the EPC is the front runner there. And then when that project switches over to commissioning, which normally you would walk away.

Now you just back your other players in there and you’ve already got built in work for the maintenance and operation side of things. So it’s a great tie up and you’re going to start to see a lot more of these as well.

Allen Hall: Energy Capital Partners, an investor in power transition, electrification, and decarbonization infrastructure assets, has raised over 4.

4 billion for its fifth flagship equity strategy, ECP5, or better called Fund 5. The fund exceeds its initial target by 10 percent and also raised an additional 2. 3 billion in co investment capital. Fund 5 will continue Energy Capital Partners investment strategy of transforming companies in power generation, renewable and storage assets, and critical sustainability and decarbonization infrastructure.

Phil, where are these billions of dollars coming from?

Philip Totaro: Well, they’re, they’re able to raise money for investments in infrastructure from other funds, pension funds, et cetera, where everybody, Has a general sense that, power generation in general and renewables in particular is in a market they want to be able to get into.

They’re seeing the quality of their terms they can get. It hasn’t been, fantastic compared to oil and gas, but it’s getting better now. In in recent times, it’s it’s certainly not quite dirt cheap as it used to be. But just keep in mind too for ECP specifically they own a chunk of companies like TerraGen here in North America, which has, 1.

7 gigawatts of wind and are pretty significant pipeline. So, they’re getting ready as, as we’ve talked about before on the show as well with a lot of other companies they’re getting ready to deploy. More capital in building out a pipeline that is going to dramatically change the face of power generation in North America and throughout the rest of the world.

Joel Saxum: Speaking here, of course, with Phil from Intel store, they have all of this data on performance of assets, right? So what we’ve seen and what is the truth out there in the world is there is a lot of way to make these wind farms more efficient. So there’s a Quite a few people I’ve been talking to in the investment space, and now I don’t know if this is ECP’s strategy with this fund, but there is a space where a lot of people are buying assets they’re going to run them for two to five years improve the performance of them, and then sell them again.

So there is this trade trade or buy in basically refurbish get the performance up on these things and then, and then sell at a higher level. So that’s happening as well. Some of this capital will be repurposed for that.

Allen Hall: 120 Danish jobs are in jeopardy as FiberLine Composites is moving all production from Denmark to India.

The move will occur over the next 12 months, with only 40 to 50 employees in administrative and strategic positions remaining in Denmark. FiberLine, which produces components for wind turbine blades, has faced uncertainty due to a lack of orders in idle machines. Swiss company Gerrit bought the shares of FiberLine Composites over the last two years.

The closure of production is attributed to fierce competition from state owned Chinese manufacturers. and rising interest rates. Phil, how does FiberLine and Gurrit Get this company up and running again because the wind industry needs fiber line.

Philip Totaro: Absolutely. So two things that they’re doing. One, as you just mentioned, they’re relocating some of their production capacity to India, which is actually, from a lot of Things that I’ve been hearing lately, just as competitive as on cost, for instance, as China, but without the, any kind of import duties.

Although don’t expect that to last forever. The other thing that they’re doing is they’re taking advantage of the IRA money, specifically the, the 45 X manufactured tax credits for domesticating production of some of the subcomponents of blades in the United States. They’re working on supposedly a super secret project with the Colorado Economic Development Corporation although Colorado has a funny way of not keeping things a very good secret so we, we have indications that FiberLine’s been trying to domesticate some of their production capacity over here so that basically they’re going in to to markets where there’s more of an opportunity, either through subsidies in the U.

S. or through low cost of production, like in India, where they’re going to be better able to cost effectively compete. Keep in mind as well, they were seeing quite a bit of orders for Nordex Aciona turbines, which it’s our understanding has been also either reallocated for production through India or down in Spain.

And so it looks like a lot of the Danish manufacturing capacity has just unfortunately dried up.

Joel Saxum: Well, what’s happening here is what the EU has been fighting for fighting against, and has feared for quite a few years now, and they’ve been very vocal about it in the last year about needing to make some changes within the wind industry to keep jobs in the EU to keep that local supply chain moving.

And Either they didn’t make the moves fast enough or whatever moves were made or in the pipeline are not going to be enough financially to save FiberLine from having to move their production elsewhere. So, moving it to India, I mean, a lot of blades, a lot of components are already getting built there so the world is no stranger to Indian labor and Indian suppliers in the value chain.

It’s just a fact of life when your employees cost too much or it’s too hard to maintain that facility, you got to move it elsewhere.