GE Vernova Q2 Results, Massive Iberdrola Share Sale

The Uptime hosts review GE Vernova's Q2 financials, noting strong
gas turbine orders and delays in onshore wind. They discuss PTC
impacts on future turbine orders and Iberdrola's €5 billion share
sale for power grid expansions. An update on Vineyard Wind
highlights ongoing blade issues and legal complexities. The wind
farm of the week is the Nobles Two Wind Farm in Minnesota. Register
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a part of the Clean Energy Revolution. Visit build turbines.com
today. Now, here's your host. Alan Hall, Joel Saxon, Phil Ro, and
Rosemary Barnes.  Allen Hall: Welcome back to the Uptime
Wind Energy Podcast. I'm Alan Hall from the Queen City, Charlotte,
North Carolina, and I got Phil Totaro in Santa Barbara, Cali, and
Joel is back in the Lone Star state of Texas near Austin. And. Uh,
Q2 results came out from GE Renova. In fact, they had a little
webinar this morning to discuss it. Uh, a lot of different aspects
to ge. Renova, as we all know, nuclear sort of high voltage, little
tiny bit transmission, but, uh, wind of course gas turbines. So
they are definitely setting the course for [00:01:00] a
gas turbine world. And Phil, how, how far out are orders for their
gas turbine products?  Phil Totaro: The last I heard
talking to somebody from GE who said it was 2031 at this point, um,
although things can be accelerated depending on if you're willing
to pay a bit of a premium, they can, uh, you know, move you up in
the queue, so to speak. Um, but it's, uh, you know, it's a pretty,
uh, far off thing. Um, and unfortunately. You know, it looks like
GE hasn't announced a lot of new orders for onshore wind, but
nobody has in the United States. Everybody was waiting in Q1 and Q2
to see what the outcome of the production tax credit, uh, changes
were gonna be. Now that we have definitive, you know, legislation
on that. Um, it's going to actually trigger a lot of safe harbor
orders, uh, assuming that companies can actually deliver
turbines. [00:02:00] Um, because in order to safe harbor,
you actually have to physically receive and store, um, something
equivalent to 5% of the CapEx cost of the project. So that has to
happen now before. Uh, July, 2026. And because of that, uh, I think
you're actually gonna see a lot of companies that had been holding
off on placing their turbine supply orders. Uh, all of those are
gonna start getting announced in Q3 and Q4, so it's gonna be like a
monster quarter. Uh, that's gonna more than make up for any
shortcomings from, uh, from this past quarter. Joel
Saxum: This is a, I'm, I'm dreaming here. Uh, could you see
that this thing is, this legislation, the way it sits right now,
all of a sudden all these orders come in and people are buying
turbines to safe harbor them. And it's just making that, that
renewable industry economy just churn for a year. And then it comes
down to it. And like that is taking notice of by the
administration, taking notice of like, Hey, actually there is
demand for this renewable [00:03:00] energy. There is a
ton of jobs happening here. There's all kinds of people trucking,
there's all kinds of people delivering. And then like, maybe we
should relax and change these things because this, they're still
moving forward. Could you see that changing?  Phil
Totaro: That is unlikely. But they're definitely, I mean, we
know how politics works, and this isn't exclusive to any, you know,
the current administration or any administration. They're gonna
take credit for the fact that the industry's gonna be on a tear
between now and July of next year. One, because they changed, um,
when the PTC phase out starts. But here's the, here's the real
trick, Joel, and that's something that everybody's missed. There,
the, the current rules, even though there's an executive order to
revise the rules for, uh, what constitutes the qualification for
startup construction, the current rules that have been in place
since 2013 still exist right now. So there's this huge gap in a
window where if you safe harbor today. [00:04:00]Before the
rules are changed, you can still, you still have four years from
the time you safe harbor to actually, um, utilizing those turbines
on the project that you safe harbor 'em forged. And keep in mind as
well, when the IRS rules change, they're not, it's not a light
switch, doesn't happen immediately. They make. Recommended changes
that then become final, that's likely to happen at the end of the
year. So there's a huge window now, and that's goes back to my
earlier comment, why everybody's been waiting on announcing their
turbine orders, but there's gonna be a huge deluge of, of orders
that are gonna happen between now and the end of this calendar
year. So, so Phil, let go,  Joel Saxum: go back to your,
with GE or conversation between you and Alan about GE having. The
equivalent of a lightning lane like you would at Disney pay a
couple dollars extra and you get to go to the front of the line.
Um, will there be a lightning lane from these OEMs because there's
only so much capacity, right? Will there be a lightning lane from
the OEMs to get things in the next year? [00:05:00] Wind
turbines.  Phil Totaro: Yeah. 'cause again, it, it's a
good question. The problem again is it's just whatever is already
in order books, I, it's, it's gonna be a big challenge. And, and
this is actually why it's like a really good op opportunity for
companies like Nordex to be honest. Um, because you know, if, if
Vestus and GE have full order books and you can't. Get them to
deliver you turbines fast enough where you're gonna be able to
qualify for, you know, safe harbor, uh, and qualify for PTC.
Whatever these changes are gonna end up being, um, you know, by
July of next year, everybody's gonna be racing to deliver
something. At that point or, and, and I mean, keep in mind that
when they change these, these PTC qualification rules at the IRS,
what they're likely to do is combine the safe harbor requirement
with the physical construction requirement so that you have to
be [00:06:00] doing both. Because right now it's an
either or. They're probably gonna make that an and and that's gonna
be the biggest change  Allen Hall: in Spanish energy,
giant iro. Has announced, hold on tight. A 5 billion euro share
sale, which, uh, the largest in Europe this year to fund massive
expansion in its power grid networks, particularly in two places
the United States and the United Kingdom. And the company will
focus on transmission and distribution infrastructure. With
regulated assets, uh, which are expected to more than triple. Uh,
so their growth is going to be big, but they have to fundraise a
little bit. And Phil is a little more, it's happening behind the
scenes, right? So ebaa, although they're issuing, uh, more shares
to raise about $5 billion, and it looks like there's a discount on
those shares, so you can, um, what it looked like to me, make a
couple of percentage points if you bought these shares.[00:07:00]
They're still looking at selling some assets to fundraise some more
because it looks like Berroa is going big time in
transmission.  Phil Totaro: Yes, so it was publicly
reported today as we record that they've hired a bank to look at,
uh, up to $4 billion, or I'm sorry, 4 billion euros worth of asset
sales in Mexico. Um, one because the Mexican market is kind of
going nowhere fast, even with the, uh, the change in their, uh,
political leadership. Um, but second. You know, as you mentioned,
Alan, they, they wanna be able to take this money, uh, from, you
know, asset sales from capital raise and plow it into transmission
assets, which, you know, they've basically. Pivoted their attitude.
It's not that they're going to necessarily stop doing, um, you
know, renewables project build out, but they definitely want to be
a bigger player in the [00:08:00] transmission space
because regardless of whatever power generation gets put on the
grid, it's gonna have to have more grid, uh, to accommodate the,
the increasing demand that we see globally. Is that the safest bet
in renewables, the transmission? Well, uh, yes, except if you're
grain belt express. Ouch.  Allen Hall: But if you know
you're gonna put on some sort of electric generation, be it gas, be
it nuclear, be it solar, be it wind, whatever, it's still gonna be
electricity and they're gonna still need to be able to deliver it.
That would make transmission the linchpin to all of it. That's what
we've been saying on the podcast for what, the last  Phil
Totaro: two years? A hundred percent. I mean. That's, that's
always been the case. And, and you know, I've even said this, I, I
believe Rosemary said it about, uh, Australia as well. What we've
seen in terms of capacity build out in renewable energy is that we
build where there's existing transmission and there's also been
kind of relatively [00:09:00] high sustained winds. So
for those familiar with it, it's like IEC class one kind of wind
sites. A lot of that. You know, those were the turbines that we
deployed, you know, 20, 25, 30 years ago. Uh, you know, back in, I
wanna say around 2011, we shifted down into Class two wind. So
something like, you know, eight or so meters per second. Now we're
at class three or Class S wind, where it's maybe six and a half to
seven meters per second. And now we're starting to repower the,