Sept. 3 (Bloomberg) -- Clipper Windpower Plc, the partner of BP Plc in U.S. wind-energy projects, fell to an 11-month low in London trading because a faulty component will lead to a delay in shipments.
Shipments will be reduced to between 125 and 145 turbines from a previously estimated 181, according to a statement distributed today by the Regulatory News Service. A testing facility at Clipper's Cedar Rapids, Iowa, plant detected the fault in the 2.5-megawatt drivetrain, which is used to speed up the blades of the turbine.
Production of Clipper's 2.5-megawatt Liberty wind turbine has been hampered by problems relating to the supply of externally-sourced components. The company forecast a first-half loss after turbine production was ``constrained'' by difficulties in obtaining parts.
``They have slipped up on quality issues twice,'' said John-Marc Bunce, an analyst at London-based Ambrian Partners Ltd. ``This could potentially be damaging to their sales ability going forward.'' Bunce lowered his recommendation on Clipper to ``sell'' from ``hold.''
Clipper slid as much as 63 pence, or 11 percent, to 492.5 pence, the lowest since Oct. 11. The stock traded at 510 pence as of 12:50 p.m. local time.
Production Shortfalls
Some turbines already installed may be affected by the fault and the company said it could face costs of as much as $15 million to remedy the problem. Clipper expects production shortfalls this year will be made up in 2008.
Completion of Clipper's Endeavor project, a 40-turbine, 100-megawatt development in Iowa planned for the third quarter of this year, has been delayed to the fourth quarter, the company said. Clipper assembled 83 drivetrains this year as of Aug. 30.
``Suppliers' deliveries have been temporarily slowed,'' the company statement said. ``These component delays could result in a limited amount of turbine delivery delay damages.''
Clipper and London-based BP last year agreed to jointly develop five wind projects in the U.S. with a total generating capacity of 2,015 megawatts. The five projects are located in New York, Texas and South Dakota. Clipper today said it's negotiating a merger of its wind resource portfolios with another developer and expects to announce further details within two weeks.
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
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