http://www.enn.com/news/2003-05-16/s_4482.asp
GE's move into wind power business seen as significant 16 May 2003 By John Christoffersen, Associated Press FAIRFIELD, Conn. - General Electric Co. is injecting some pinstriped corporate muscle into the still-evolving world of wind power. A year after its purchase of Enron Corp.'s wind turbine business, GE expects the operation to generate more than $1 billion in revenue during 2003 and expand about 20 percent annually. GE Wind Energy has landed several major orders, including turbines for a project that would be the first offshore wind farm in the United States. As a major supplier to the electric power industry, GE's lead is closely watched. "The purchase of the wind manufacturing company by GE is really a historic move that symbolizes the maturation of the wind industry," said Randall Swisher, executive director of the American Wind Energy Association. The company's foray into wind energy comes as its Power Systems Division, which makes traditional gas turbines for power plants, is on the down side of a very long business cycle. GE has laid off hundreds of workers at its turbine plants, shipments are down, and the near-term outlook is weak. At the same time, wind power - which in the past often involved smaller companies - has become one of the fastest growing segments of the global energy industry. Wind turbine sales represents a $7 billion business globally and should grow to about $20 billion in the next five to 10 years, Swisher said. "The market has been doubling about every three years," Swisher said. Government incentives and advances in technology have made wind power more economical, while utilities are under pressure to develop alternative sources of energy, Swisher and GE officials said. Thirteen states now require utilities to include renewable energy such as wind and solar power as a portion of their business, Swisher said. GE chief executive Jeffrey Immelt said at the company's annual meeting last month that the wind energy business has taken in more than $2 billion in orders in the past year. The revenue it produces is a small fraction of GE's total revenue of $131.7 billion last year and won't be enough to totally offset a sharp decline in gas turbine sales. But wind energy is one of several new growth areas targeted by GE; others include Hispanic media, security, and water treatment. John Rice, president and chief executive of Power Systems, which operates the wind business, said of the operation, "It's met or exceeded our expectations in the year we've operated it." GE studied the wind power business for at least three years and saw an opportunity to make the acquisition when bankrupt Enron began shedding its assets, Rice said. He cited three main reasons for entering the industry: The cost of electricity generated from wind power dropped to the point where it was competitive with other sources; the business could benefit from technology from other GE businesses; and GE customers were increasingly interested in renewable energy sources. The company said it's using its expertise from other businesses, such as rotating machinery parts, grid technologies, and gearbox advancements, to expand the business and introduce new models with the latest technology. GE also could benefit in terms of public image. It has been battered for years because of PCB pollution in the Hudson River and GE's opposition to a dredging project to clean the river. GE argues that dredging could make the problem worse. Chris Ballantyne, director of the Hudson River campaign for the Sierra Club, said he was encouraged that GE was recognizing the value of wind energy. "If they weren't so scurrilous on other environmental matters, they'd probably get much higher marks," Ballantyne said. "All you have to do is look at the Hudson to see the whole other side of the story." GE officials deny buying the wind business for image reasons and defend the company's environmental record, saying many of its products are more energy efficient than those of other manufacturers. They also cite GE's move into other clean forms of energy. Swisher said he is convinced GE is a serious player and not just looking for a public relations coup. "They are positioning themselves to be one of the leading companies in the industry," he said. But the company faces competition, mostly from companies in Europe, where wind power is more widely employed. And more than a dozen U.S. wind turbine manufacturers have come and gone in the past two decades, with many first-generation commercial turbines unable to handle the fatigue of continuous, powerful winds, Swisher said. "I think it's an extraordinarily challenging business," Swisher said. "It requires a special combination of technical capability and business acumen." GE has landed several significant orders since its entry into the business. GE Wind Energy was selected to supply 130 wind turbines for a proposed project off the coast of Cape Cod. The project would be the first offshore wind farm in the United States and could provide enough clean electricity to meet about three-quarters of the annual requirements of the cape and nearby islands, GE said. The company announced in April that it supplied 10 wind turbines for one of the largest wind farms in Japan, and in February said it will supply 80 wind turbines for the first wind project of the Los Angeles Department of Water and Power, the nation's largest municipally owned utility. GE Wind Energy also supplied 20 wind turbines for the largest operating wind farm in New York, located in Fenner. Depending on their size and location, wind farms can be controversial. Opponents of the project off Cape Cod said the 420-foot towers would be an eyesore and would interfere with navigation and the environment. But the project's supporters say it would produce no polluting greenhouse gases. "This is a technology whose time has come," said Dennis Murphy, a spokesman for GE Power. Source: Associated Press ------------------------ Yahoo! Groups Sponsor ---------------------~--> Get A Free Psychic Reading! Your Online Answer To Life's Important Questions. http://us.click.yahoo.com/Lj3uPC/Me7FAA/uetFAA/FGYolB/TM ---------------------------------------------------------------------~-> Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuels list archives: http://archive.nnytech.net/ Please do NOT send Unsubscribe messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
