GE Gains Vattenfall’s Backing for Massive 12-MW Offshore Wind Turbine

Swedish utility Vattenfall will take up deployment of the massive 12-MW Haliade-X offshore wind turbine in Europe, marking a major milestone for GE Renewable Energy’s effort to boost sales of the largest turbine currently on the market. 

The two companies agreed to cooperate after a year of “intensive exchanges during which Vattenfall conducted an in-depth technical due diligence and both companies jointly worked on the customization of the platform,” Vattenfall said on May 16. The companies will likely finalize details of the cooperation this summer, after which Vattenfall plans a “deep dive on specific projects” within its offshore wind pipeline. 

Wind power has increasingly buoyed earnings at Vattenfall, a company that wants to achieve “fossil free living” within one generation. During its first quarter 2019 earnings call on April 25, Vattenfall AB CEO Magnus Hall said Vattenfall’s wind investments have grown beyond 3 GW. Projects include the company’s first unsubsidized offshore wind farm, the 750-MW Hollandse Kust Zuid 1 and 2, which is being built off the Dutch coast and expected to come online in 2022. 

“Wind is where we put our investment money, and of course we can see also here now an increase in the profitability from roughly SEK1 billion [$103.4 million] first quarter last year to 1.5 [$155.1 million], almost, this year,” he said. This week, as Hall assumed the presidency of European electricity trade group Eurelectric, he highlighted priorities to support Europe’s changing power profile, and the group’s ambition to help the power sector become “fully carbon neutral” before mid-century. He called on policymakers to adopt a long-term strategy to deliver the Paris agreement objectives that would recognize the importance of electrification. 

Vattenfall last week noted cooperation with GE Renewable Energy would allow it to “remain one step ahead in wind turbine technology developments.” Gunnar Groebler, senior vice president and head of Business Area Wind, said the size and performance of the 12-MW Haliade-X turbines would help the company further improve the competitiveness of offshore wind energy production. “Due to a lower number of turbines needed for future wind farms, there is also a positive impact on the environmental footprint,” he said. 

According to the Global Wind Energy Council (GWEC), offshore wind capacity around the world stood at 23 GW at the end of 2018. By 2025, it expects the share of offshore wind installations to exceed 10% of total wind installations, growing to 100 GW in the near future. “While Europe will continue to add 3-4 [GW] per year based on current targets and planned auctions, Asia could add between 5 to 7 GW of new installations per year if governments stay committed and investments are executed.” Key growing markets in Asia are in Taiwan, South Korea, and Japan, and it notes India and Vietnam are in “early stages” but harbor substantial potential of up to 27 GW. In North America, GWEC expects about 1 GW could be installed as early as 2023, as activity in the Northeast picks up and states like New York execute tenders with capacities between 200 MW and 800 MW. 

GE Renewable Energy already has a leg up in the North American market, installing five first-generation Haliade wind turbines (the 6-MW Haliade 150) at Block Island in Rhode Island, America’s first commercial offshore wind farm. 

Haliade-X features a 220-meter rotor and a 107-meter blade designed by GE subsidiary LM Wind Power. The turbine design also includes digital capabilities. GE says the wind turbine model features a 63% capacity factor—which is “five to seven points above the industry standard.” For GE, scaling up is important. “Each incremental point in capacity factor represents around $7 million in revenue for our customers over the life of a wind farm,” it noted. GE hopes to accelerate commercialization of the turbine by 2021. In January, the company said it would install a Haliade-X 12-MW offshore wind prototype in the Netherlands this summer. 

However, GE faces stiff competition from other offshore wind turbine makers, including rivals like Siemens Gamesa Renewable Energy and MHI Vestas, which last year together controlled 60% of the offshore market. According to Wood Mackenzie Power & Renewables, in 2018, GE Renewable Energy held a sparse 3% share of the global market. 

To boost its competitiveness in the growing renewable market, GE in January moved to integrate its renewables, grid, and energy storage assets into a simplified, single business that nearly doubles the size of its Renewable Energy division. But in March, the company finalized the sale of seven fully operational renewable plants totaling 650 MW to Enel Green Power North America Renewable Energy Partners. 

This April, meanwhile, the company ceded rights outlined in a 2012 contract to exclusively supply wind turbines to three French offshore wind farms—potentially totaling 1 GW. The company said the projects owned by French firm  Eolien Maritime France (EMF) had suffered “cumulative excessive delays since 2012.” The delays “have significantly impacted the financial characteristics of those projects for GE Renewable Energy. GE has therefore decided to review its engagement in the implementation of all these projects.” However, the company signed a memorandum of understanding with EMF confirming its commitment to provide and service Haliade 150-6MW turbines to the first of the three French EMF offshore wind farm to be cleared of any legal recourse.

“Since the award of the three offshore wind farms to EMF in 2012, GE Renewable Energy has committed the necessary resources and investments to design and manufacture the turbines, with the installation of a dedicated engineering office in Nantes and the construction of its manufacturing plant in Saint-Nazaire, which has enabled GE to produce already more than 80 turbines for other offshore wind farms in Europe, Asia and North America,” the company said. 

GE would continue its contribution to the development of France’s offshore wind sector through the development of its new generation of Haliade-X 12-MW turbines,” it said. “Resources from Saint-Nazaire, Nantes and Cherbourg will be mobilized in order to ensure the development and commercialization, then the delivery, of this new turbine.”

Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)