GE prefers growth to acquisition

GE's Vic Abate

GE's Vic Abate

US turbine manufacturer GE is happy to rely on organic growth amid consolidation in the wind-power sector, vice-president for renewables Vic Abate tells Recharge.

"When you think of consolidation you think of a buyer and a seller," he says, "but I ask myself ‘what can't I do organically?’”

Abate points to GE Renewable Energy's ability to leverage the wider resources of the GE group – such as its power business, its aircraft engine operation and its global research centres – to develop new technological solutions.

He questioned the logic of buying more turbine assembly capacity in the current market, which he described as one of "rampant capacity", and said that there is a danger of acquiring out-of-date industrial technology.

Commenting on the current state of the market, Abate said concerns over the financial viability of some turbine suppliers are increasing among customers.

"We are talking about 20-year infrastructure assets, and customers are asking is this company still going to be around when (at the moment) the turbine is only part of the way through its life."

On the competitive threat posed by Asian turbine suppliers, GE officials say they don't expect these to have a major impact until the second half of the decade outside of China.

Chinese companies still face major challenges in terms of competing with Western suppliers in more complex areas of turbine technology such as pitch control, and in achieving competitive levels of availability and durability.

"It’s one thing to close a deal, but it’s another thing to deliver 20,000 units at 98% availability, with safety, and with customers satisfied over the lifetime of the turbine," says Abate.

GE is currently involved in a series of initiatives to lower costs and reduce the intermittency of wind power, including its industrial internet project, a wind turbine including battery storage that allows operators to exactly predict power output 15 minutes into the future, and a fabric-based rotor blade.

Abate says that despite continued challenges from unstable regulatory frameworks and increased competition from shale gas, he feels more bullish about the wind industry than at any previous time.

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