Landmark turbine deal powers Vestas shares

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COPENHAGEN (Global Markets) - Shares in Danish wind turbine maker Vestas jumped 8 percent on Friday after the company late on Thursday said it had signed a major deal to supply turbines to France's EDF Energies Nouvelles.

The shares traded up 7.8 percent at 128.80 crowns by 10:38 a.m. EDT, after touching a near two-week high 132 crowns, outpacing a 1 percent rise in Copenhagen's blue-chip index.

Vestas said the French renewable energy company would buy at least half its onshore wind turbines in Europe, and at least 30 percent of future onshore turbines in the U.S., from Vestas for delivery in 2012 to 2014.

The deal included an immediate firm order for turbines with 180 megawatts (MW) of capacity.

But Vestas Chief Executive Ditlev Engel said on Thursday the deal had potential to bring in orders for turbines with total capacity of 2,000 MW or more.

Vestas does not disclose the value of orders, but a rule of thumb is that turbines cost 1 million euros ($1.45 million) per megawatt, meaning it could be worth 2 billion euros or more.

"We consider this framework agreement to be strategically important," Sydbank senior analyst Jacob Pedersen said in a note to clients, adding he expected this kind of deal to become more common and for Vestas to win more of them.

Vestas, the world's biggest wind turbine manufacturer, has forecast its order intake this year will be between 7,000 and 8,000 MW.

Orders so far this year total 2,109 MW. This includes unannounced orders of an estimated 300-500 MW in the second quarter, Pedersen said.

"So orders are continuing to come in later than we had expected," Pedersen said. "We believe the pace of the order intake must increase markedly over the next two months for Vestas to get projects going by the end of 2011 and achieve its 2011 prognosis."

Vestas said on Thursday the new agreement with EDF Energies Nouvelles did not alter expectations for 2011 results.

The company on Friday announced two more orders of 60 MW from Brazil and 29 MW from Mexico.

($1=.6876 Euro)

(Reporting by John Acher; Editing by David Hulmes)