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GE Sees U.S. Wind Credit Muting Slump in Turbine Demand

The extension of a U.S. wind-power tax credit will temper a plunge in demand for turbines over the next two years, according to the chief of General Electric Co.’s renewable energy unit.

Installations in 2013 and 2014 may match the average annual levels that preceded a rush to finish projects by the end of 2012, when the credit was set to expire, GE Vice President Vic Abate said today. U.S. demand had been about 5,000 megawatts to 6,000 megawatts a year before that surge, he said.

“You could see that kind of average holding, with ’13 being a little under the average and ’14 being a little over,” Abate said in a telephone interview. Turbine installations totaled more than 13,000 megawatts last year, and “I don’t think we get there again,” he said.

Questions about the fate of the tax credit stalled wind-power projects for 2013 and beyond before its extension as part of the fiscal compromise between President Barack Obama and his opponents in Congress. Declining U.S. turbine orders this year will still damp profit, Fairfield, Connecticut-based GE said.

The production tax credit is 2.2 cents for every kilowatt-hour generated by wind-farm operators. Without an extension, installations were projected to decline to 1,500 megawatts this year, according to a Bloomberg New Energy Finance forecast.

GE is introducing new products designed to expand its business in markets from Germany to Australia, Abate said. The company unveiled a 2.5-megawatt turbine today for low wind speeds that uses battery storage to help smooth the flow of power to the electrical grid and relies on software that can help forecast wind conditions.

The machine will help GE benefit from surging installations in southern Germany, Stephan Reimelt, chief executive officer of the Energy Germany division, said last week in an interview in Berlin.

Abate said he expects demand for the new turbine, which has a 120-meter (394-foot) rotor and a tower as tall as 139 meters, will also be strong among Canadian and Scandinavian customers.

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