3-1-18 1:54 PM EST | Email Article
By Erin Ailworth 

General Electric Co. said Thursday that it is planning to build what would be the world's largest offshore wind turbine -- a behemoth nearly three times as tall as the Statue of Liberty.

The announcement launches the struggling conglomerate into competition with international turbine makers such as Denmark's Vestas Wind Systems A/S and Germany's Senvion SA, which are racing to make more powerful machines and economical wind farms that can be built without government subsidies.

GE's wind turbine, called the Haliade-X, would be capable of producing 12 megawatts of electricity, making it considerably more powerful and larger than any other a company has said it is developing. Rivals have been working on turbines that would approach or reach 10 megawatts apiece, a level at which the industry has long theorized wind power would achieve better economies of scale.

"We want to lead the market," said Jérôme Pécresse, chief executive of GE Renewable Energy, in an interview. He said a 12-megawatt turbine is so much bigger than what others are building that if GE can get to the market first "it will take competitors a few years to catch up."

That would represent a rare bright spot for GE, which said this week that it will overhaul its board, removing several of the its longest-serving members.

The industrial giant is attempting to restructure under new Chief Executive and Chairman John Flannery, who has slashed the company's dividend and financial projections in recent months while pledging to shed at least $20 billion in assets.

GE could use a bit of good news in its renewables business after the deterioration of its massive power division hit the company hard. GE misjudged the market for gas and coal turbines by building up inventory and using aggressive pricing, just as a shift to renewables led to decreased demand for conventional power generation.

Orders in the power division dropped 25% in the fourth quarter from a year earlier, and full-year profit was nearly halved to $2.8 billion. In December, GE said it would cut 12,000 jobs in the power business, or nearly 18% of the division's workforce. The power business accounted about for 30% of GE's approximately $122 billion in revenue last year, while the renewable division was about 8%.

Now the company is trying to one-up rivals.

Senvion has said it is working on a 10-megawatt-plus machine. MHI Vestas Offshore Wind, a collaboration between Mitsubishi Heavy Industries Ltd. and Vestas, has the largest turbine currently spinning: a 9.5 megawatt machine with prototypes installed in Denmark.

Getting a 10-megawatt or larger machine has long been a goal for the industry because the ability to generate more power from fewer machines in the same geographic acreage is considered a key way to improve the economics of wind production.

Improving the economics will be critical for developers recently vying for projects in Germany and the Netherlands, which committed to building wind farms free of subsidies. It is also important as manufacturers look to the emerging markets like the U.S., where development and operating costs are paramount in getting projects built.

At 260 meters, or 853 feet, the GE turbine would be five times as tall as the Arc de Triomphe in Paris, more than twice as tall as London's Big Ben, and nearly three times the size of the Statue of Liberty in New York Harbor, according to the company. It would be shorter than Paris's Eiffel tower, which is roughly 324 meters, or 1,063 feet.

GE said it would invest more than $400 million over the next three to five years on the Haliade-X. It expects to supply its first nacelle, or turbine casing, for demonstration in 2019 and ship the first units in 2021.

Thomas Gryta contributed to this article.

Write to Erin Ailworth at Erin.Ailworth@wsj.com


(END) Dow Jones Newswires

March 01, 2018 13:54 ET (18:54 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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