General Electric Co., the world’s second-biggest maker of wind turbines, formed a joint venture with China’s Harbin Power Equipment Co. to make and supply equipment in the world’s biggest market.
The $13 billion wind market will expand sixfold to 150 gigawatts by 2020, the Fairfield, Connecticut-based company said today in a statement. The new venture joins GE, whose power-generation equipment supplies a third of the world’s electricity, with Harbin Power’s subsidiary, Harbin Electric Machinery Co.
GE Chief Executive Officer Jeffrey Immelt is expanding partnerships in China in areas such as aviation, health care and energy. He has pointed to the country as one with a consistent energy policy that allows rapid clean-energy development. The venture will make equipment for projects that include onshore and offshore developments using direct-drive, or gearless, technology. GE has targeted the same market in Europe.
“China has been growing exceptionally fast,” said Victor Abate, who oversees renewable-energy businesses at GE Energy. “In a $13 billion market, this really gives us a partner to become one of the premier players.”
The venture will concentrate on the Chinese market, the world’s biggest, Abate said. “There are several formidable Chinese players now and this positions us well to be one of the top tier,” he said.
China will own 51 percent of the venture valued at 186 million renminbi ($27.8 million), and GE will own 49 percent valued at 179 million renminbi ($26.8 million), according to a statement filed with the Hong Kong stock exchange today.
The business announced today expands Harbin Power’s relationship with GE. Harbin Power has teamed with the U.S. company to provide heavy-duty gas turbines since 2004, Gong Jing Kun, chairman of Harbin Electric, said in the statement.
GE is the world’s biggest maker of power-generation equipment and is No. 2 in wind turbines behind Randers, Denmark- based Vestas Wind Systems A/S. Wind provided about $6 billion of GE Energy Infrastructure’s $37 billion and the parent company’s $156.8 billion in total revenue last year.
GE is also the world’s biggest maker of jet engines, medical-imaging equipment and locomotives, and gets about $6 billion of sales from China, Immelt told investors in April.