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United States

Good year for GE but future lies outside US

UNITED STATES: General Electric (GE), America's largest manufacturer of wind turbines, expects its global wind revenues to jump to $7.5 billion this year because of record installations in the US. That is up from average annual sales of $4.5 billion in recent years, said Vic Abate, GE's vice-president of renewables, during a press event at the American Wind Energy Association's Windpower 2012 conference in June.

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The company's order book is a sign of the times, with the US market facing a severe contraction in 2013 because of policy uncertainty. For the past two years, GE has sold fewer than half of its wind turbines in the US, said Abate. "Even if there is a one-year extension of the production tax credit (PTC), next year's volume will be substantially less," said Abate. "The first half of 2013 is quite full for us - it's just not full in the US."

Globally, GE said it has sold or has orders for 1.8GW - or $3.6 billion - of its cutting-edge low-wind 1.6-100 model until the end of 2012. More than 1,500 of the turbines will be installed by 2013 in the US, Canada, Brazil and Turkey, said GE. The turbine was introduced a year ago.

All turbine manufacturers are adjusting to cope with the imminent downturn in the US (see page 37). Total wind project installations in the US could reach a record 9GW to 11GW this year, say analysts. But next year, this could drop to some 3GW even if the PTC is extended late this year, said Amy Grace, a wind analyst at Bloomberg New Energy Finance. According to IHS Emerging Energy Research, if the PTC is axed the US market could see just over 2GW installed in 2013.

Selling across borders

To take up the upcoming excess capacity in US manufacturing capacity, turbines will be exported, particularly to the rest of the Americas. "People will be looking to pick up that slack (in US manufacturing capacity)," said Matt DaPrato, an analyst at IHS EER. It is not worth building turbine assembly plants in most individual countries in Central or South America if there is only limited local demand, he added. The US's manufacturing capacity is 14GW a year, according to IHS EER.

Grace agreed that exports to the rest of the Americas will happen, although she said the destination is less likely to be Brazil because of smaller profit margins there and the Brazil Development Bank's tight local content rules. The involvement of the Export-Import Bank of the United States (Ex-Im Bank), the official export credit agency of the US federal government, will be especially helpful for encouraging exports, she suggested. In 2011, the Ex-Im Bank supported Gamesa's deal to export 102MW of wind turbines to Honduras.

At Windpower 2012, executives from Siemens Energy and Gamesa also spoke of their plans to export turbines from the US. Gamesa will use its US manufacturing base for diversifying into other parts of the Americas, said David Flitterman, chairman of Gamesa in North America. Mark Albenze, CEO of wind operations in the Americas for Siemens, said that although the company expected "some volume" in the US in 2013, it would be exporting from the US to countries such as Canada and Chile.

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