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Path Dependency and Wind Energy Industry Part II: Enercon GmbH


In first section of my article, I had given a brief information about path dependency ( http://www.windonline.org/2010/06/path-dependency-and-wind-energy.html ) and Vestas Wind Systems A/S in terms of path dependency and factors directly effecting it.

Here in second part, you will be able to find evaluation of Enercon GmbH in terms of path dependency and factors directly effecting it.

Enercon GmbH
Enercon was founded by Aloys Wobben in 1984. Its established as a wind turbine manufacturer company. Their first product was Enercon E-15/16, 55 kW wind turbine. Enercon sold its first ten wind turbines in 1986. When Enercon was established, it did not have its own production facility. They only had a design of wind turbine and outsourced production in those days. If there was not any subcontractors to manufacture these turbines then Enercon wouldn’t have a chance to manufacture its own product. So it existence has a close relationship with actor-network theory. After having required financial background, managerial intentionality was going to shape future of the company. The important point about Enercon is that everything started with wind energy business for company. There was not any business area that company have operations in.


After two years, Enercon established own production facility in 1988 after gaining required background. It is considered to be path creating decision for company sourcing from managerial intentionality. It was also about to make company have resource advantage not only in knowledge and experience terms but also in means of manufacturing their own designs. Just after this period, Enercon developed E-17 / 80 kW and E-32 / 300 kW wind turbines. By the help of organizational learning which is shaped by knowledge and experience gained from E-15/16 wind turbines, helped the development of this product (Url-1).

In 1991, Enercon developed the prototype of gearless wind turbines. This development could be considered as a path creating development for Enercon was the first company having considerable amount of  market share that manufactured gearless wind turbines, although in terms of wind turbines manufacturing, it can be considered as a path dependent decision.

In 1993, Enercon started serial production of E-40 / 500 kW wind turbines. They also started construction of a plant to produce their own rotor blade. Investments on wind energy business gained momentum for Enercon because actors in the market is inclined to maintain their interest to company products.

In 1995, Enercon started serial production of gearless E-30 / 230 kW in India. It is first time that they started to produce wind turbine components on a continent other than Europe. Managerial intention to internalization was to key to this decision which can be considered as a path creating one. They also tested a prototype wind turbine which is E-66 / 1500 kW on company site in Aurich. So meanwhile, knowledge and experience through organizational learning continued to shape company’s future.

In 1996, Enercon purchased a production facility in Brazil. As the demand from market grew, managerial intention was to expand which resulted in path creating decisions in terms of entering new markets.

In 1997, Enercon installed a wind powered desalination plant in Tenerife in Germany. This development can be considered as a path creating decision for the wind turbine manufacturer for it is the first time it focused on another business area. On the other hand, for it is a wind powered desalination, it could also be considered that the company was still walking on the path that it started its journey on.

Enercon invested on another manufacturer company to produce E-66 / 1500 kW wind turbines in Magdeburg in Germany in 1998. By using its resource advantage, Enercon continued its investments in wind energy business.

In 2001, Enercon built foundations and towers for E-112 / 4,500 kW wind turbine prototypes and established a production facility in Magdeburg-Rothensee.  Its total production area reached up to 285,000 m2.

Enercon established rotor blades manufacturing facility in Turkey in 2002 and erected the first E-112 / 4,500 kW prototype in Magdeburg-Rothense. Enercon came on to an agreement with Demirer Holding in those days. The main idea of the frame agreement between both companies was to work together on Demirer Holding’s wind farm projects in Turkey. So, Turkish actor played an important role in terms of making Enercon open a facility in Turkey to reduce its production cost. So, actor in the network was considered to shape Enercon’s decision which was a path creating one. By the advantage of know-how gained in establishing facilities and Turkish investor’s market awareness, Enercon realized this path creating decision.

A rotor blade manufacturing facility for it also built in Magdeburg-Rothense in 2003.

In 2004, Enercon sold its first E 70 / 2 MW wind turbine with new rotor design. Also two wind farm of E-112 were constructed near Emden in Germany. Enercon also installed first near shore E-112 wind turbine in this year. This development can be considered as a path creating development because onshore and near shore wind turbine technologies have some certain differences.

In 2005, a concrete tower facility opened in Emden. It can considered as distinct path creating decision for the tower production prices was considerably decreased and complexity level of production phase of towers decreased. After this progress, worldwide production area was expanded to 370,000 m2. 6 MW Enercon E-112 wind turbine was developed. A prototype of E-82 was erected near Aurich in Germany. So, Enercon continued to realize path dependent decisions sourcing from knowledge, experience gained from wind energy business.

Enercon built a new headquarter in Aurich in 2006. Not only they further developed E-112 and E-126 wind turbines but they also built prototypes of E-44 and E-53 within this year.

New production facility was opened in Portugal in 2007. One year after development, first prototype of E-112 6 MW prototype was installed.

In 2009, they started production at new factory in Gusszentrum Ostfriesland. They had completed and commissioned a hydro power plant in Raguhn in Germany and expanded facilities in Magdeburg. Construction of hydro power plant can be considered as a path creating decision for another business area was chosen for investment.

Summary of historical development of Enercon GmbH can be found below in Table 1.1.

Table 1.1: Enercon and Factors Effecting Path Dependency










To sum up, Enercon continued on the path, that it started in wind energy business. Although it invested on hydro power and desalination plant, its main focus was always wind energy business. Although these investments can be considered as a path creating decisions, path dependent decisions shaped the future of Enercon beginning from its establishment up to now in general means in macro scale. It can be also indicated that technological lock-in was not a matter of subject in any phase of company’s existence.



Abbreviations

ANT               : Actor Network Theory
BL                  : Bootlegging
LI                    : Lock-in
MI                   : Managerial Intentionality
MIS                : Micro Scale
MAS               : Macro Scale
OL                  : Organizational Learning
PD                  : Path Dependent
PC                  : Path Creating
RAT               : Resource Advantage Theory



References

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Url-1 , accessed at 12.01.2010.

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A.Yigit NEPHAN
03.07.2010

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