Could a 12-MW Wind Turbine Save GE?

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It’s no secret that GE has been struggling lately. The stock price has plunged and rumors abound that the company might be broken into different segments.

If that’s true then at least one segment, renewables, is garnering a lot attention. On March 1, 2018, the company announced it would be making a $400 million investment in offshore wind, specifically to build a 12-MW turbine, the largest the world has ever seen.

“We see the offshore industry at 17 GW today growing to 80 to 100 GW by 2030,” said John Lavelle, CEO of GE Offshore Wind. “It’s the fastest growing segment in the renewable segment, which is the fastest growing in energy and so we want to participate,” he said.

Lavelle said the company bases its strong growth projections for offshore wind on industry trends, specifically pointing to projected growth in Germany, the UK, France, Asia and, to a lesser extent, North America.

“China is very committed to growing their offshore industry. Taiwan, Japan, South Korea, all have ambitions plans that seem to be gaining steam every time I go there,” he said.

Not for the Faint at Heart

Today GE’s largest wind turbine is 6-MW and the largest commercially operating turbine in the world is 7-MW. MHI Vestas is about to begin testing a 9.5-MW machine at Clemson University. Siemens Gamesa was just awarded a contract to supply its 8-MW machine to the Hornsea Wind Farm, which began construction in January and is set to be operational in 2020.

So GE’s plan to build a 12-MW turbine will be no easy task. Suppliers of the components inside the turbine will have to re-tool to make larger pieces and logistics providers (the boats, trucks and trains that move these behemoths around) will also need to adjust.

LaVelle doesn’t see any of those as concerns.

“We have a synergistic supply chain with our onshore business,” he said, explaining that it uses “a high percentage of the same suppliers” for its offshore turbines. GE has more than 35,000 onshore turbines currently installed.

“It’s not for the faint of heart; you have to be committed to developing it,” said LaVelle.

And there’s precedence for GE providing technology that leads to step-changes in industries, according to LaVelle.

“[This] is something that very few companies can do,” he said. “We’ve done it in aviation with our LEAP engine, in our gas turbines with our HA technology and the leading efficiencies for combined cycle systems, leading efficiencies in emission reductions in our aircraft engines,” he said.

“We are taking that same philosophy as aviation, healthcare, power, bringing that into offshore and not many companies can do this but we can do it with confidence because we have done it before.”

Lowering the Cost of Renewable Energy

For wind, the bigger the turbine, the more energy you can produce from it and the less balance of plant components are needed in a wind farm. Yes, a 12-MW turbine will require a larger foundation on which it sits, but the overall number of turbines in a wind farm can be significantly reduced or even as in this case, cut in half if you are going from a 6-MW machine to a 12-MW machine. That means less cables and wiring, and other balance of plant considerations.

LaVelle said the capacity factor of the turbine is a whopping 63 percent, which is a significant bump for the industry.

“[That is] at least 7 points better than anything we’ve seen in the industry and every point is worth about 7 million dollars,” said LaVelle, adding: “that enables you to capture, we estimate, 67 gigawatt-hours of annual energy production.”

“When you eliminate your capital costs for non-economic products like platforms and balance of plant [and] you put your investment in your turbine that is going to generate revenue…you are going to improve your economics,” he said.

GE said that it will leverage its factories in Saint Nazaire and Cherbourg, France for building the new turbine. The company is now developing a prototype machine that it will begin to test this year in order to ship to a (to be announced) test site in 2019. Once testing is complete, GE expects to begin serial manufacturing in time to ship orders in 2021 for wind farms that will begin commercial operation in 2022.

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