US turbine manufacturer GE has a strikingly different view of the wind market from its big European competitors.
And it’s not surprising, given that the company is the biggest player in one of the biggest, yet most volatile, wind markets in the world.
Record US installations of 13.2GW in 2012 propelled GE into the number-one spot in global turbine supplier rankings, but a year later it was in fifth place, after extremely weak US growth. This year, it is set to rise again, given the current rebound in US construction.
GE’s fluctuating fortune in the league tables is nothing new, given the continued importance of the production tax credit (PTC), and GE’s vice-president for renewables, Anne McEntee, is unperturbed.
“We are not so much about market share as we are about driving the right economics for our projects and for our customers — that means we are delivering the technology that matters,” says McEntee, fresh from presenting new products on a global tour that took in Japan, China, Saudi Arabia and Europe.
While GE is not obsessing over its annual rankings, the company is working step by step to reduce its reliance on the US market and ensure that it is competing globally. GE is serious about its ability to drive technology change, through offerings such as “intelligent” wind farms that leverage the “industrial internet”; energy storage within turbines, wind farms and at the grid level; and other innovations such as its space-frame tower and extended blade programme.
“We are continuing to drive incremental growth globally,” says McEntee. “We are clearly focused on international growth.”
Europe is a key area. “There are some nice markets in Europe,” says McEntee, mentioning the UK and Turkey among others, “and we think we have the products to win.” Although she declines to give a specific target for the proportion of the market that GE expects to win, recently appointed Europe boss Cliff Harris has said he would like to double GE’s market share in Europe from 6% in 2012 to 12% in 2015. GE recently announced a flurry of European sales, including 110MW of orders for its “brilliant” 2.5-120 turbine in Germany, and other sales in France, Scotland and Sweden.
Making big gains in a European onshore market dominated by the likes of Vestas and Enercon is likely to be tough going; and it is in emerging markets that the company seems to be able to make faster progress.
GE is currently the top player in the fast-expanding Brazilian market, with a backlog of 2.5GW of orders for 1,500 machines. Last year ended up being GE’s best ever in Brazil, with 1,045.7MW of orders and an estimated R$7bn ($2.9bn) in revenue.
GE also has a strong presence in Asia. McEntee sees India as a “very strong” market thanks to recent changes in the regulatory framework that favour the emergence of independent power producers (IPPs) such as GE customer Greenko, rather than the previous class of investors, who were focused mainly on tax breaks for capital expenditure. “We see the market really starting to emerge and evolve to a situation where technology matters,” says McEntee.
Elsewhere in Asia, GE expects to capture a good part of the growing Japanese onshore wind sector, and recently launched its specially designed “typhoon-proof” 2.85-103 turbine. She describes the new model as “the most technologically advanced turbine in the market”, pointing to its ability to capture low wind speeds and withstand typhoon conditions and Japan’s frequent electrical storms.
McEntee says she is excited about the development of Japan’s onshore market since the establishment of the feed-in tariff regime in 2012, in the wake of the Fukushima nuclear disaster. She notes that there are about 4GW of onshore wind projects in planning, and GE officials estimate that around 3GW could end up being approved. McEntee believes that Japan will eventually have an annual onshore market of 300-400MW.
In China, GE is determined to stay the course, despite the break-up of its joint venture with Harbin Electric last year.
“We like China and so we are going to go direct,” says McEntee. “Moving forward, it’s hard to stay out of a 15GW market.” She notes that the Chinese market is changing, with government authorities and big utility developers increasingly focused on quality and cost of energy.
“I think they are starting to have a bit of reality about the long-term ownership of wind assets,” she says. “I think there is an opportunity to get that high-quality turbine on the ground and show people how consistent revenue streams from those assets are when you buy the quality upfront.”
McEntee says that GE is in talks with both large state-owned enterprises and IPPs in China, and is finding “the customers that make sense for us, the ones that are really focused on return on investment and saying, ‘Can I afford not to have turbines running?’
“It will take a bit more time to evolve, but it’s all going to come down to technology innovation, and when I look at the things we are doing, we are going to be able to provide additional revenue streams and potential versus other traditional OEMs — and that will be the advantage in the future.”
GE also sees good potential in Thailand and Vietnam, and is looking closely at Saudi Arabia. “There is clearly an economic argument to put wind in as you think about fuel savings and being able to sell the oil on the open market,” says McEntee.
The company’s primary aim over the coming years is to push down turbine and power costs so that the wind industry can become viable without subsidies, says McEntee.
“I think there is going to be a next phase to transform the industry in terms of technology development and farm-level optimisation, really trying to get more out of the existing fleet, and so we are going to continue to drive our overall technology platforms and plant-level economics for our customers.”