GE Vernova Slows in Q2, 2024 Election Impact on Wind

GE Vernova recently held their Q2 investor presentation, sharing
the company will focus on their the 3.6-154, 6.1-158 Cypress, and
Haliade-X 15.5-250 turbine lines. So far, the company's wind
division is not headed toward profitability in 2024. What can the
company do to turn their financials around? And then a focus on the
2024 US presidential election--what implications will it have on
the wind industry? Does the IRA bill hang in the balance? In other
news, Siemens Gamesa will resume production of their 4X wind
turbines this year, Dogger Bank A has installed interarray cables,
and a carbon-free cement plant is planned for Massachusetts. Sign
up now for Uptime Tech News, our weekly email update on all things
wind technology. This episode is sponsored by Weather Guard
Lightning Tech. Learn more about Weather Guard's StrikeTape
Wind Turbine LPS retrofit. Follow the show
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show? Email us! Pardalote Consulting -
https://www.pardaloteconsulting.comWeather Guard Lightning Tech -
www.weatherguardwind.comIntelstor - https://www.intelstor.com Allen
Hall: Joel, we're moving to the 2020s. We now have our email
newsletter, Uptime Tech News on Substack. Ooh, nice. I like it.
It's slick. It's almost super modern. And if you haven't subscribed
to Uptime Tech News, you need to, because who else is going to go
through the news? The right way and pick out those articles that
the technical people working in wind and the financial people
working in wind need to know besides us engineers who filter
through it and get all the riffraff out and give you the stuff that
you need. That is the whole point of Uptime Tech News. So if you
haven't subscribed to it, do it. You can actually go on Substack
and search Uptime Tech News. You can subscribe via Substack. And
it's on LinkedIn. The newsletter is nuts, crazy busy. There's
thousands of people who are subscribed to our newsletter, Uptime
Tech News on LinkedIn. I like LinkedIn, but I like the Substack
version even more. Welcome to the Uptime Wind Energy Podcast. I'm
Allen Hall, and I'll be joined by the rest of the Uptime host after
these headlines. Kicking off our headlines, Siemens Gamesa is set
to breathe new life into its turbine production. The company plans
to resume manufacturing of its 4X wind turbines later this year,
following a pause due to technical issues. This move is expected to
reactivate sales of the 4X turbine, with production of the 5X model
slated to follow next year. The news comes as a welcome relief to
staff, as the current order book has been running low, and this
development could signal a turning point for Siemens Gamesa, which
has faced challenges in recent months. Shifting our focus offshore,
a major milestone has been reached at the world's largest offshore
wind farm. Over 200 miles of interarray cables have been
successfully installed at Dogger Bank A, the first phase Of this
ambitious project. The 66 kilovolt cables manufactured by Hellenic
cables will connect 95 massive Haliade-X 13 megawatt turbines to
the offshore converter station. The EU is doubling down on its
commitments to renewables reelected EU commission president, Ursula
von der Leyen. Has announced a new clean industrial deal,
emphasizing homegrown clean energy. This plan includes support for
clean tech manufacturing and a new EU competitiveness fund. Von der
Leyen has also promised to cut red tape and expedite permitting
processes for renewable projects in the coming years. Vestas is
pushing the boundaries of onshore wind technology. The company has
completed the installation of its V172 7. 2 megawatt prototype at
its test center in Denmark. This behemoth is Vestas largest and
most powerful onshore wind turbine to date. Based on the Inventus
platform. It promises a 12 percent increase in annual energy
production compared to its predecessors in low to medium wind
conditions. Meanwhile, in the U S the town of Nantucket in
Massachusetts is making waves in the legal arena. Town officials
are contemplating legal action against vineyard wind following a
turbine failure that left debris scattered on local beaches. The
incident, which occurred on July 13th, prompted federal officials
to suspend operations at the wind farm. The town's concerns center
around potential hazards to swimmers and sailors, highlighting the
importance of safety measures in offshore wind development. A
Massachusetts startup is making strides in zero carbon cement
production. Sublime Systems is planning on building a 150 million
carbon free cement plant in Holyoke, Massachusetts, and they have
secured a 2, 000 ton cement order from Vineyard Offshore. The
cement will be used for offshore wind turbine platforms and onshore
projects, significantly reducing the carbon footprint of future
wind developments. Wrapping up our update, according to Level 10
Energy, which runs an online marketplace for energy transactions,
wind power purchase agreement prices rose 7 percent in the second
quarter, while solar PPA prices saw a modest 3 percent increase.
Wind PPAs continue to face ongoing challenges, including land
scarcity, interconnection delays, and rising insurance premiums,
while solar prices remain relatively stable thanks to recent
government incentives. That's this week's top news stories. Now
let's welcome our co hosts, CEO and founder of IntelStore, Phil
Totaro, and the Chief Commercial Officer of WeatherGuard, Joel
Saxom. Mark your calendars for AMI's Winter in Blades conference
happening October 2nd and 3rd in historic Boston, Massachusetts.
This two day event, which is similar to the well established
edition in Europe, We'll bring together the whole blade value chain
to examine market outlook, innovations in blade materials, design,
manufacturing, testing, and lifecycle management with a special
focus on the North American market. Gain insights from experts from
Vestas, along with scientists and engineers from the National
Renewable Energy Laboratory and the Oak Ridge National Laboratory.
Plan your trip to Boston this fall by visiting the link in the show
notes or just Google 2024 Blades Boston. GE Vernova just had their
Q2 investor event and it was quite a show Phil. I don't know if you
got to watch this online but It was a real stage show, right? They
had the first speaker was about safety and the culture of safety
and safety is job one, and then the CEO gave presentation. Great
talking about the overall GE Vernova performance and where they
were going. There's really good pieces of GE Vernova at the minute
that are making money and they have growth opportunities for sure.
When Vic Abate was talking about GE Wind. Those the wind part was
rather, um, maybe the word is troubling in terms of where they want
it to be right now. Maybe that's where I'll put it is that if they
were hoping to be cash flow positive this year, right now, and
they're not going to be, and that is from a couple of different
sources. Problems that they're sorting through right now, which is
one, I think they're still dealing with supply chain and what it
seems price increases coming up through that supply chain, the
ability to sell product at a decent margin, plus the backlog
they're going through, particularly offshore. There is a lot of
concern outside of GE about their offshore. Portfolio that they're
going to lose money on this thing, and they locked into it. So they
have to produce it, lose the money, and then come out on the other
side. So as I put into Slack today for everybody what GE, the win
part was saying was, we're going to be profitable sometime in 2025,
maybe 2026. That's the way I read it, which is a little bit of a
setback. And if you, and also the orders have come in. It's about
year on year, about half of where they were in 2023. That I think
is due to a large order. I think that was Sunzea probably that was
driving some big numbers there, but still seeing an uphill climb
for GE Vernova on the, in the wind sector. Now, guys, I think
there's a lot going on in the United States at the minute. And I
wish Rosemary's here because she could give us some Australian
point of view. Is GE going to turn that corner on the wind side?
Because the other parts of GE Vernova are profitable. Philip
Totaro: Allen, if you remember about a little over a year ago, we
had a chat about Vic Abate being brought back in, at which point,
this was obviously before the Vernova spinoff, and they were
talking about things like, the power generation business, including
wind being profitable by the end of 23. Yeah. I think they
technically achieved that, but the wind business has taken longer
to turn around for some of the reasons Allen mentioned. But at the
end of the day, it their order book is down because we're still
stuck with a lot of projects in the consenting queue. And the
interconnection queues and the price increases that have,
necessarily so subcomponent costs are increasing, the turbine
prices are increasing and the cost of capital is still very high
because interest rates are still high. Everyone was deferring
orders in anticipation of all these costs coming back down a little
bit. And now that the market's kind of realizing that these prices
are high, it's getting baked in more and more. And a fundamental
kind of tenet of economics, if the price keeps going up, demand is
going to keep going down a little bit eventually. And that's just
the situation we're in at the moment. Until everybody can
acclimatize to the new the new market reality. Joel Saxum: Yeah.
Interesting thing here in some of these metrics that they put out
in their Q2 report here is that services are doing well. Their
service revenue year over year has grown. I think they're up like
12 percent or 15%. It's the new order book, like you said,