GE Vernova Pivots to Smaller Wind Turbines

General Electric’s energy business, GE Vernova, is shifting its wind turbine development strategy as the industry faces economic challenges. In a regulatory filing, the Massachusetts-based company detailed the tenets of its “workhorse strategy,” focusing on fewer product variants in large quantities. 

In a recent filing with the Securities and Exchange Commission (SEC), GE Vernova said it was pivoting its wind portfolio to focus on simplified product offerings and a smaller geographic footprint targeting markets with competitive advantages. The company also plans to improve its quality management by deploying repairs and other corrective measures to boost its fleet availability. 

 

GE Vernova’s 6 MW workhorse turbine in New York. Image used courtesy of GE

 

The company will focus on building smaller turbines, including 3 MW and 6 MW models for the land-based market and the next-generation offshore Haliade-X 15.5 MW turbine with an 820-foot rotor. This marks a notable pivot from a year ago when GE boasted industry interest in its 17-18 MW variant. 

Demand is already high for products in this newly refined workhorse portfolio. Earlier this year, GE Vernova announced its largest-ever single onshore turbine order for the 3.5 GW SunZia Wind project in New Mexico and Arizona. The company will supply 674 units of its 3.6 MW turbine with a 505-foot rotor, generating more than 2.4 GW for the project. 

 

Slides from a March 2024 investor presentation detailing GE Vernova’s workhorse strategy. Image used courtesy of GE (Page 36)

 

GE Vernova’s Wind Segment Pivot

GE Vernova expects workhorse products to enable higher capacity factors with greater efficiency. GE’s SEC statement noted technical advancements have raised the average onshore wind capacity factor to 40% for projects built between 2013 and 2021, compared to 23% from 1998 to 2003. GE’s 3.6 MW turbine, for example, boasts a 60% capacity factor. 

GE plans to apply its workhorse strategy to address needs in transmission-constrained markets like the U.S. It will also expand its domestic manufacturing footprint to capitalize on incentives from the Inflation Reduction Act (IRA), which provides tax credits for American-made renewable energy projects. 

 

GE Vernova’s 3 MW workhorse turbine. Image used courtesy of GE

 

Workhorse products are expected to account for about 90% of its 2024 wind turbine shipments in its onshore business. Higher-capacity onshore products include those with high output to maximize wind generation for pad-constrained installations with limited space. 

Since launching in 2020, GE Vernova’s 5 MW+ platform has commissioned over 1,000 units. It’s the largest onshore turbine constructed in the U.S. and qualifies for the IRA’s production tax credits. The 6 MW model is mainly used for land-based applications, but the company offers a 6 MW offshore direct-drive turbine with a 492-foot rotor for bottom-fixed and floating offshore wind installations. 

Under its Haliade-X platform, GE Vernova sells 12 MW, 13 MW, and 14 MW models for offshore wind projects. The turbines are about 853 feet high and include a 60–64% capacity factor, 721-foot rotors, and 351-foot-long blades. More than 60 Haliade-X 13 MW turbines will be installed in Massachusetts’s newly launched Vineyard Wind project. Each holds enough capacity for over 6,000 homes and businesses. The first unit recently started delivering its first megawatts of power to the grid in January. Developers plan to have five operating at full capacity soon. 

 

Slides from GE Vernova’s Investor Day presentation in March 2024. Image used courtesy of GE (Page 37)

 

Wind Industry Challenges

The last year has brought significant economic challenges for the wind industry. Many offshore wind developers are renegotiating contract prices or canceling projects altogether due to high inflation, interest rates, and building material costs. Some onshore developers have delayed projects, too. 

GE Vernova isn’t immune to these challenges, even as it dominates the market with an installed base of 55,000 units. The SEC filing cited several barriers, such as insufficient transmission capacity, interconnection delays, land availability and costs, regulatory permits, and critical mineral supply chain concerns. The wind industry also faces fleet quality and reliability issues, with high project execution risks and limited profitability in offshore wind projects. 

According to new data from the American Clean Power Association, the pace of new onshore wind capacity slowed by 27% (2.3 GW) in 2023 due to lengthy permitting, congested interconnection queues, and a need for more transmission in wind-rich areas. 

Offshore wind procurement took a deep slide in 2023. Total capacity was down due to project cancellations such as Skipjack Wind (966 MW), Empire Wind 2 (1.2 GW), and Beacon Wind (1.2 GW). Several high-profile projects pulled out of purchase agreements (PPA) agreements with utilities, including Park City Wind (804 MW), Ocean Wind 1 and 2 (2.2 GW), Commonwealth Wind (1.2 GW), and SouthCoast Wind (1.2 GW). 

At GE Vernova’s Investor Day presentation in March 2024, an executive said current PPA prices are about 30–50% higher than when the backlog was committed. As a result, the company is repricing its turbines while focusing on the workhorse strategy to boost profits. 

 

GE Vernova’s Manufacturing Expansion

GE Vernova’s offshore wind segment has installed 155 turbines, mostly in Europe. It is ramping up production to cover its existing backlog over the next few years. The company expects margins to remain tight as it completes its first tranche of the Haliade-X backlog. 

In 2023, the company invested more than $117 million to scale up production at its energy facilities across the U.S., supporting capacity upgrades, equipment and tooling, and maintenance improvements. 

 

Video used courtesy of General Electric

 

Last May, it expanded its facility in Schenectady, New York, to accommodate a new U.S.-based manufacturing assembly line for its 6.1 MW onshore wind turbine for low-to-medium wind speeds. Months after the investment, the facility returned the largest onshore turbine ever built in the U.S., with tip heights nearing 656 feet. 

The New York site will manufacture and assemble components for over 100 6 MW onshore turbines in 2024. GE Vernova is also spending millions to expand its nacelle manufacturing site in Pensacola, Florida, which assembles components for the 3 MW workhorse turbine. 

The SEC filing mentioned that over half of GE Vernova’s remaining performance obligation (a measure of the backlog of contracted services) is 3–6 MW onshore turbines and 12–14 MW Haliade-X offshore units.