November 23, 2015

Another Boost for US Offshore Wind: US-based General Electric Acquires France-based Alstom’s Renewable Energy Division

By Val Stori

Back in June, US offshore wind proponents heralded the arrival of DONG Energy to our Atlantic shores. DONG’s commercial lease acquisition of a 1GW+ Wind Energy Area off the Massachusetts coast sent a strong signal that major international developers are taking note of the US offshore wind market’s potential. There is still a lack of long-term market visibility, and there are challenges to securing electricity buyers, but those are hurdles DONG has faced in the European market and ones the company believes will eventually be overcome in the US.

This month, another major offshore wind industry announcement has strong implications for US offshore wind growth—GE completed acquisition of Alstom’s power assets and has created a new division called GE renewables. While GE did not acquire all of Alstom’s energy-related businesses, the merger is a significant move for the US offshore wind industry. In 2014, both companies had agreed to the establishment of an offshore wind joint venture. The approved 50/50 joint venture with Alstom’s offshore wind division marks GE’s entry into offshore wind turbines.  The deal also creates competition for the other major offshore wind businesses, including the recent Vestas/MHI JV. Now, GE will not only compete in the European market through the Alstom/Haliade brand, but also participate in Rhode Island’s historic, pioneering Block Island project, which is using Haliade turbines.

GE’s move has important implications for both sides of the Atlantic. The consolidation will lower costs, create competition amongst turbine manufacturers, create supply chain efficiencies, and merge two innovative designs—the massive 6MW Haliade turbine with GE’s innovative gearless permanent magnet generators.

But perhaps the merger is most significant for the US offshore sector where the industry has had a difficult time getting off the ground due to several factors including high costs, insufficient infrastructure, and a limited supply chain and experienced workforce.  The merger is reason for optimism– a major domestic company is now one of the world’s largest renewable energy manufacturers and its global reach will continue to expand into new markets. Our offshore wind market potential is huge and catching the attention of major global developers and turbine manufacturers. Let’s hope that GE’s strong stake in offshore wind will mean further expansion by all manufacturers into US markets.

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