- SHI concludes LOI for the installation of three wind power generators in Texas (US) within nine months of business launch
- Aiming to become one of the world’s top seven wind power generator providers through investments of KRW 600 billion and the annual production of 800 wind power generators by 2015

Samsung Heavy Industries announced its successful entry into the US wind power generator market, which it achieved by concluding an LOI on May 21 with Cielo, a US-based firm, for the installation of three 2.5MW wind power generators by 2011 in Texas.

Unlike other domestic firms advancing into global markets after launching their business in Korea, SHI adopted a strategy of global market entry first, which had been used in the past by the domestic shipbuilding industry.

Launching the business in 2008, SHI has developed a 2.5MW wind power generator in cooperation with a UK engineering firm, which it unveiled at Wind Power 2009, the global wind power fair held in Chicago (US), in early May of 2009.

As the US government has announced its intention to increase the portion of wind-generated power from its current level of 1% to over 20% of the power used in the US by 2030, SHI decided to advance into the US market, recognizing its high growth potential. These efforts have now borne fruit, with SHI signaling its US market entry just nine months after launching the business.

SHI was able to conclude an LOI with only its internally developed model despite having no previous experience with wind power generation. This remarkable success can be attributed the fact that the blade (the core part of the wind power generator that converts wind energy into power) is closely related to ship propellers, enabling the company to apply the expertise that it has accumulated through decades of shipbuilding experience to the development of operation and controlling systems. In addition, the company will be able to leverage its experience with large-scale civil projects to successfully install the generators.

The 2.5MW wind power generator developed by SHI has a 10% higher power generation efficiency, a lifecycle of 25 years, which is five years longer than existing products, and ease of maintenance thanks to the permanent magnetic-type generator. SHI can provide a one-stop service, from manufacturing to installation.

As SHI is equipped with the world’s best technology in numerous areas related to wind power generation, including ship propellers, noise and vibration analysis, operation systems, and controlling systems, the company was able to develop economic wind power generators.

In addition, SHI unveiled its mid-term targets, which include investments of KRW 600 billion, annual production of 200 units of 2.5MW in-land power generators and 5MW offshore power generators by 2010, revenues of KRW 3 trillion through the production of 800 units of wind power generators in 2015, and the world’s 7th largest market share (10%).

To this end, the company plans to increase the current 4 teams consisting of 80 employees to 1,000 employees by 2015, and is now searching for an ideal location for the plant, which will have an annual production capacity of 1,600 units.

SHI aims to operate in the US, Chinese, and Indian markets with large territories through its 2.5MW in-land wind power generators in the initial stage, and then increase its Asian and EU market shares with offshore generators that boast high efficiency and lower noise from 2015.

SHI will also launch its domestic business through the contribution of 2.4MW generators to the Yeongheung Domestic Wind Power Commercial Complex Project, which Korea South-East Power operates as a project designated by the Ministry of Knowledge Economy, in 2009.

As wind power generation does not require investments other than the initial installation costs, and as its power generation costs are just 20% those of solar power generation and are lower than those of natural gas and oil, it is expected that wind power will fulfill 12% of the global energy demand in 2020, and that the wind power generator market will grow to USD 74 billion.

Vice Chairman Kim Jing-wan of SHI said, “We will succeed in the wind power generator business, in which the six top US and EU companies hold 90% of the market, by utilizing the technologies we have possessed in the shipbuilding and construction sectors for the past 35 years. We will also aggressively foster the deep-sea resources development business as our future growth engine.”