GE recently restructured its renewable-power unit—a change made by new CEO Larry Culp. The unit now includes renewable assets such as wind, as well as the company’s grid-power-transmission business.
To be sure, not all is fixed at GE Power. Gains in renewable power are offset by losses in fossil-fuel power generation. Coal-power generation is declining, but industry fundamentals in natural-gas-fired power generation are better. Liquefied natural gas, or LNG, is growing around the world, pushing down global natural-gas prices, which is a tailwind for gas-based generating capacity. “I think [LNG] is certainly a dynamic, and it’s a positive contributor, as is the way countries around the world are trying to meet their energy demands,” Culp said at a September investor conference.” When we step back, right, we know [GE Power isn’t] going to keep pace with renewables. Fortunately, we’ve got a good position on the wind side.”
GE’s renewable power unit isn’t profitable right now, generating an operating loss of $184 million in the second quarter. That, however, is an improvement from the $269 million loss a year earlier. Offshore wind isn’t profitable right now, either, according to CFO Miller. That can change as orders are converted to sales with deals like Dogger agreement. The global offshore wind market is projected to grow to 120 gigawatts by 2030—six times higher than in 2017.
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