They are so big that they are hard to photograph. GE has developed the most powerful and enormous wind turbine on the planet. What are they and how can they help GE gain their honor back?
The Fall of General Electrics
Although the company is not yet dead, the last decade, was no success story for General Electrics. The company is experiencing what we call a "mid corporate life crisis". We barely ever talk about GE anymore, which can make us forget what it was.
GE used to be the Apple of the 2000s. In August 2000, GE was the most valuable company in the world, with a market capitalization of over $601 billion. If we convert this amount to today's dollars, that is around $900 billion.
GE was making everything, from airplanes, lightbulbs, and motors, to microwaves and fridges. It was one of these huge conglomerates without which the economy would not really be the same. It was the perfect example of the giant successful American Business.
Sadly, it seems that the company never recovered from the 2008 financial crisis and has gone through countless financial and managerial problems since then.
It was the top member of the Dow Jones, and was the last original member to leave the index in 2018, replaced by Walgreens Boots Alliance Inc. Now, the company sits at the kid’s table. Its stock is down 70% in the last 5 years, enough to blush for an ex-empire.
In terms of products, they are now making only four things: power generators, airplanes engines, healthcare machines such as Ultrasound, Xray and ICU ventilation Resources, and finally, renewable energy.
General Electric stock (Source: Trading View)
General electrics Renewable Energy champion: The Haliade X
This might be the last hope of General Electric to stay competitive in the market. The Luke Skywalker of their arsenal. The pass or fail of the company.
The Haliade X does sound like a Star Trek spaceship name, but it is actually nothing else but a monster wind turbine in the Netherlands. Have you seen a wind turbine? Well, imagine one, but on steroids. The beast is 853 feet tall (260 meters), which is almost tall enough to challenge the Eiffel tower in a 1v1 wrestling match. The turning diameter of the blades is as large as two football fields. One single revolution is enough to power a family home for 48 hours. Monstrous. That means that even one single unit could basically supply a small town of roughly 12'000 homes.
The wind turbine at a scale (Source: General Electrics)
GE is working on projects to install fields of Haliade X near the Netherlands coast, and further infrastructure could potentially come to the UK and the US (if sales manage to take off). The machine costs close to nothing: a reasonable $100 million apiece.
The titan is packed with sensors gathering data on wind speed, electricity output, and warns of any extra stresses on components. The blades are made of a material combining carbon fiber and glass fiber, making for a lightweight yet strong and flexible material.
The first one is a test model for a series of offshore models that GE would like to build. Whether they will be able to develop it and sell it, the machine represents a massive technological leap: nothing so big was ever made. It is about a third more powerful than any turbines in commercial use and is making companies recalculate their investments.
GE aims for a large-scale offshore deployment
The turbine should be deployed at sea, where it is easier to plant them and where it can capture stronger and more reliable breezes. As of today, offshore turbines only generate 5 percent of the global wind energy industry, but this number is expected to grow in the coming years much faster than on-land wind turbines.
The offshore wind industry started in Northern Europe but is slowly making its way to the US East Cost as well as Asia. It has been an attractive way for companies like BP and Royal Dutch Shell to diversify, as these companies want to enhance their green energy exposure.
GE knew that they had to make a bold move to have a chance to dominate this market so they simply DOUBLED the size of their offshore machine, which they acquired through the acquisition of Alstom in 2015, a French power business.
They succeeded in building a machine that is larger and makes more electricity than that of its competitors: Siemens and Vestas Wind Systems. The size also helps cutting costs of building and maintenance, as fewer turbines can produce the same amount of power. It is therefore likely that we will see continuously bigger machines being produced, and we can only wonder what the limit will be – as far as our physics knowledge take us, I guess.
So far, analysts estimate that the company sold contracts worth over $13 billion, including the maintenance contracts. What is great is that GE has no experience with the matter. Their business unit, G.E. Renewable Energies, said to have spent $400 million on design and engineers.
The real challenge will be to start efficient production at a scale, and find a way to reliably install them.
Why is it coming at the right moment? the beginning of the Green Rush
Investment in offshore wind has more than tripled in the last decade to $26 billion, according to the International Energy Agency. But green energy goes far beyond simply making cool looking giant turbines.
Everyone wants to go carbon free by 2050! More than 110 countries have pledged to go carbon neutral by 2050. Big corporations have made promises as well such as Amazon who has pledged for carbon neutrality as soon as 2040. On the other hand, Microsoft went on full-flexer mode, pledging carbon-NEGATIVITY by 2030. All in all, this would mean that about 50% of the world’s gross domestic product is covered by a net-zero commitment.
Imagine Microsoft wind farms or Amazon wind farms that you could see from the shore. Companies completely independent – and green – with their energy production and consumption. This could also be very important for Bitcoin, which is very demanding in energy, both for mining as well as supporting servers.
These are noble pursuits, but governments and companies alike will need the tools to produce the clean energy they need in order to achieve their goals and maintain their promises. And this is where GE comes in with its revolutionary Haliade X.
Bear in mind that the company is rather new to the wind business, but if they do succeed to build and install monster turbines at scale, it could be one of the biggest stock market comebacks we've ever seen.
Offshore wind turbines (Source: GE website)
Haliade-X offshore wind turbine, in General Electrics