Wind

Native New Yorker GE looms large as state's offshore wind bidders lay plans for a win

US turbine maker founded in Empire State enjoys strong local support, but 4.7GW auction could still have room for European contenders

. NY Governor Kathy Hochul.
. NY Governor Kathy Hochul.Foto: Metropolitan Transportation Authority via Flickr https://creativecommons.org/licenses/by/2.0/
  • Tim Ferry

Recently unveiled bids into New York’s round 3 offshore wind solicitation reveal that US turbine maker GE’s proposal for manufacturing facilities has support of all developers involved.

European rivals Siemens Gamesa’s and Vestas’ proposals for manufacturing capacity meanwhile have each gained support of a single developer in supply chain proposals that by law have to accompany the bids.

The OEMs are aiming for a slice of New York’s burgeoning supply chain. The state under governor Kathy Hochul recently closed its solicitation for up to 4.7GW of capacity, which attracted a record six developers putting forward over 100 bids.
GE “has continuously dominated the US onshore turbine market and is the only US-based offshore wind OEM,” Chelsea Jean-Michel, wind energy analyst for BloombergNEF, told Recharge.

“Given the manufacturing tax credits and domestic content bonus credits in the IRA [Inflation Reduction Act], it could be that developers see GE as better positioned to capture those additional benefits, leading to better project economics,” she added.

The IRA passed last year offers some $369bn in incentives for clean energy, some 70% in the form of tax credits. The law’s Advanced Manufacturing Production Credit offers specific tax breaks for component and vessel manufacturing for offshore wind.
GE is proposing to build both nacelle and blade manufacturing sites at the Port of Coeymans near the state capital, Albany, some 150 miles (241km) north of New York City.
Siemens Gamesa’s plans for nacelle assembly are backed by US renewable energy giant Invenergy, while Vestas’ blade maker has the support of fellow Dane Orsted.

GE’s New York ties also help. The conglomerate was founded over 130 years ago in Schenectady, New York, little more than 20 miles from Albany, and still employs around 5,000 in the state.

“GE is still a preferred vendor in the US because of their deep-rooted relationships with politicians and government officials in every state in which they operate,” said Philip Totaro, CEO of renewable energy data analytics firm IntelStor.

Patent troubles

The endorsement of the company's proposed manufacturing site is a turnaround for the company that last year saw its flagship 12MW Haliade-X turbine barred from the US market after being found to have infringed on rival Siemens Gamesa’s patents in federal court. The court allowed a carve out for two early projects – the 800MW Vineyard Wind 1 and Orsted’s 1.1GW Ocean Wind 1 – but slapped GE with royalties of $60,000 per MW for each violating turbine installed.

The company has since released a redesigned model that excludes the offending tech.

“With the injunction forcing the design change to a non-infringing design, and their intent to use the non-infringing design on the ~16MW platform for these NY Round 3 projects, I do not foresee the same headaches for them which they have with the 12MW Haliade-X,” said Totaro.

The largest turbine GE has publicly discussed is 14.7MW, although as Recharge reported on Monday the CEO of the new GE Vernova energy business has flagged a 17-18MW Haliade-X as being in the works.
GE’s advantage doesn’t preclude other OEMs from also investing in the region, which is already slated for tower manufacturing at the Port of Albany by a joint venture of Canadian onshore wind manufacture Marmen and Dutch offshore supplier Welcon.

New York has 4.3GW already under contract towards its 9GW by 2035 mandate, and its round 3 tender at nearly 5GW is the largest ever for a US state, potentially providing ample opportunity for multiple OEMs.

Siemens Gamesa intends to move ahead with its proposed nacelle plant “upon being selected by a winning developer for any of the projects,” Andrew Luther, North America communications manager for the German-Spanish OEM confirmed to Recharge.

Supply chain fragmentation

The concentration of capacity in New York might come at the expense of neighbouring states, though.

All US states require supply chain packages in their procurement rounds, which may lead to smaller, state-specific facilities that inhibit economies of scale and result in higher costs.

Josh Irwin, senior vice president for Vestas’ offshore business unit in America, said at Recharge’s Global Offshore Wind Summit in Washington DC last November that the US needs “a common market where there is reciprocity between the states in terms of local content” to drive regional collaboration.

The New York State Energy Research and Development Authority (Nyserda), the state agency overseeing offshore wind, weighs 20% of round 3 bids on supply chain proposals.

GE is in the frame for manufacturing capacity in the New Jersey Wind Port and declined to comment on how its New York proposals may have impacted those talks.

Samantha Woodworth, senior wind energy analyst at research consultancy Wood Mackenzie told Recharge that GE’s proposal may make New York a “hub for the North Atlantic markets, but with state targets and the overall appetite for offshore plus the local content incentives, there will be a need for a decentralised manufacturing network.”
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Published 13 March 2023, 17:49Updated 14 October 2023, 11:15
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