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Analysis - GE expects business expansion across Europe

EUROPE: After focusing for the last five years on the booming US market, GE Wind is again turning its attention to Germany and Europe at large.

GE Salzbergen: European facilities could cope with an increase in production
GE Salzbergen: European facilities could cope with an increase in production

By the end of 2009, the company had 18GW of wind power across the globe, around 14GW in the US and 4GW in Europe.

In Germany, one of Europe's most mature wind markets, the company installed just 11MW of the total 1.7GW installed in the country in 2008, followed by 22MW of the total 1.9GWin 2009. "It's no coincidence that a German-speaker was chosen to take the post of general manager of GE's Renewable Energy business in Europe at the beginning of 2009," says Stephan Ritter, the current holder of the post. Ritter is based at Salzbergen, where GE has an assembly works for its 2.5MW machine.

GE will announce a new version of its 2.5MW machine within the next three months and is expanding its turbine service business. Yet it will not be easy to move into the German market, where Germany-based Enercon accounted for 60% of new installations in 2009.

Although GE refuses to reveal its targets for installations in Europe in the coming years, its Salzbergen assembly works for 2.5MW machines currently runs just one shift of workers a day, with an output capacity of about 700 machines or 1.75GW a year. If staffing was increased to three shifts a day, the facility could produce at least 5.25GW annually. Brake, the small German port used by GE to ship a proportion of the company's turbine nacelles can cope with any increase in production after port company J Muller Terminals upgraded handling capacity in recent years. Turbine deliveries within Europe, north of the Alps, are transported by road.

Ritter says that turbine sales will be boosted, in part, by an expected business expansion from GE Energy's project developer GDSI, with branches in the UK, Italy and eastern Europe.

And GE Wind is already well placed in Turkey and Romania, Ritter adds, with about 160MW of wind capacity installed in Turkey. The first phase of a 350MW project for Czech energy utility CEZ in the Dobrogea province in Romania will be completed in the third quarter of 2010. The second phase, with 110 2.5MW turbines, is to be completed in 2011, he says.

Looking ahead at the next two to three years for GE Wind as a whole, Ritter does not expect the expansion rates seen before the economic and global crisis began, but still anticipates moderate growth. GE Wind revenue increased from $1.3 billion in 2003 to $2.2 billion in 2005, $4.7 billion in 2007 and $6.1 billion in 2009.

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