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GE Joins Suzlon, Acciona in Bet on Slow-Wind Turbine Sales

General Electric Co., Acciona SA, and Suzlon Energy Ltd. this week began selling wind turbines that generate power in more gentle breezes, aiming the product at largely undeveloped markets such as the U.S. southeast.

Manufacturers have been making towers taller, blades longer and lighter, and turbines more reliable since demand for wind energy in the U.S. dropped about 50 percent last year to 4,900 megawatts. The slump prompted Fairfield, Connecticut-based GE, which has the largest share of the U.S. market, to improve its design and attract customers in new markets.

“Since the financial crisis we’ve doubled research and development to get past a challenging market,” Vic Abate, head of GE’s renewable energy unit, said in an interview yesterday at the American Wind Energy Conference in Anaheim, California. “Projects that couldn’t work economically before now can.”

The push to improve turbine output and reduce the cost of energy may also help U.S. manufacturers compete against lower-priced wind products from new entrants in China, said Amy Grace, a New York-based analyst at Bloomberg New Energy Finance.

“It’s a shift from turbine prices, which have been falling with increased competition, to the cost of energy over its lifetime,” Grace said in an interview. “Improving the efficiency by 1 percent can yield more profit over the life of a turbine more than offering a $100,000 discount on the price.”

Suzlon, India’s biggest wind-turbine maker, has lost 8.2 percent in the stock market this year. In comparison Alcobendas, Spain-based Acciona and General Electric, whose products and services are more diversified, have gained 37 percent and 4.4 percent, respectively.

More Power

GE expects to sell 60 to 100 of the new 1.6-megawatt turbines this year, which have a 47 percent longer sweep that generates up to 19 percent more power annually, Abate said. GE’s turbines on average have a 98 percent availability, meaning that when the wind blows, they are almost always producing power.

Acciona and Suzlon have also improved their turbines to lower lifetime costs and reach new areas in the U.S. market. To win customers for its newest turbines, Suzlon yesterday said it would finance installation of two of them in the Texas panhandle this August.

“These turbines are significantly better than what we were offering in the past,” said John O’Halloran, Suzlon’s technology president, said in an interview. “Areas with strong winds have become saturated, and even medium wind locations are becoming harder to find and develop.”

Class One

The best wind resources, rated “class one” by the International Electrotechnical Commission, have average annual speeds of 10 meters (33 feet) per second at the height of a typical tower. These areas include coastlines and parts of the U.S. plains states. The easiest sites for building wind farms, with flat terrain and proximity to high-voltage wires, have been built, leaving lesser resources for new development.

The slower-wind class two and class three regions, which make up most of the rest of the U.S. and Europe, can be profitable for developers because of the recent technology improvements.

“We designed a distinct turbine for class 2 and we’ve seen a huge interest in the past 30 days,” said Scott Baron, global product line director at Acciona. “It will open up new markets as the more mature markets see the benefits.”

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