GE Renewable Energy ended 2020 with a record order backlog amid what its group CEO said was the momentum needed to take a leading role in the energy transition – and despite posting a $700m-plus loss for the second year in a row.

GE Renewable Energy – one of the global clean-energy equipment giants being tipped to benefit from new US President Joe Biden’s green agenda – recorded a $715m loss for 2020, improving on a $791m deficit in 2019.

Full-year revenues were slightly up at $15.67bn and included $2.8bn for services, a growing part of the company's renewables business, led by North America where GE is the market leader and has the largest installed wind turbine fleet.

Full-year orders fell back 3% to $16.33bn but surged 34% year-on-year to $6.3bn in the final quarter of 2020 thanks to big onshore wind deals and the first confirmed contract for the Haliade-X offshore wind platform, for which GE Renewable Energy said it now has 5.7GW in customer commitments.

US developers rushed to place orders in the fourth quarter to maximise value of the expiring federal production tax credit (PTC) only to see Congress in late December extend it through 2021 at the same level ($15/MWh for power sent to the grid in a project's first decade of operation).

The onshore wind operation had a record year for volume despite the obstacles of the Covid pandemic, including 1,013 new turbines and 146 repower upgrades in the final quarter. Onshore and offshore orders in 2020 totaled 3,602 turbines for 12.7GW while sales were 3,744 units comprising 10.8GW.

The US is by far the largest onshore wind market for GE. Biden is expected to seek a multi-year renewal of the PTC from Congress later this quarter. Analysts see a robust US onshore wind market continuing through his four-year term in office that began last week.

The $900bn Covid relief package in December also enabled offshore wind projects to claim the investment tax credit (ITC) at 30% value that began construction after 1 January 2017 as well as those that will begin construction through 2025.

The industry has about 9GW in offshore wind projects under contract or awarded and in negotiation, while east coast states have made commitments to procure 29GW of capacity through 2035.

GE's renewables business – which also includes hydro and grids operations – said it ended 2020 with a record $30bn order backlog.

The fourth quarter saw a year-earlier loss of $227m improve to $87m as the division said it reaped the benefits of improved cost productivity, pricing conditions with onshore wind in North America and project execution.

"In Renewables, we're focused on improving operational execution and driving structural cost out. This will help us expand margins and improve cash," CEO Larry Culp told analysts. The division's performance continues to be weighed down by losses in hydro and grid that are going through a multi-year turnaround.

“As 2020 progressed, we significantly improved GE's profitability and cash performance despite a still-difficult macro environment. The fourth quarter marked a strong free cash flow finish to a challenging year, reflecting the results of better operations as well as strong and improving orders in Power and Renewable Energy," said Culp.

He added: “Over the past year our team proved resilient, and momentum is growing across our businesses. We are in leading positions to capture opportunities in the energy transition, precision health, and the future of flight.

“As we continue our transformation, we remain focused on strengthening GE and delivering value for the long term.”

The company will provide a more detailed presentation for its renewables strategy and outlook for 2021 in its March Investor Call.

Transition

GE Renewable Energy ends 2020 with 'momentum' despite $715m loss