The expectation of reciprocity is fair: Jerome Pecresse, CEO, GE Renewable Energy
In an interview with ET, GE Renewable Energy CEO Jerome Pecresse said reciprocity was a fair idea. He also spoke about GE’s renewable energy business in India and said the worldwide trend of auctioning projects. Excerpts: Why is GE India’s market share in the country’s wind turbine business fairly low, well behind Spain’s Gamesa as well as Indian companies like Suzlon and Inox Wind? We have been less active than others in project development. Taking up projects at an initial stage and bringing them to development wasn’t part of GE’s strategy. But we are now investing in project development. We will continue to introduce new turbines for the Indian market. Last year was better than the year before. This year will be better than both previous years. We have a threepronged strategy — we will continue project development adapted to Indian business, we will invest more in project development, and we will leverage what we call the ‘GE store’ of hightech products.
Are there any plans to increase renewable energy investment at the Pune plant? The GE Pune facility is a great facility across GE businesses. We call it a multimodal factory, which means it is a world class facility, where we manufacture systems and components for wind turbines, for the transportation business, for the oil on and gas business and so forth. It is a worldclass facility and can be scaled whenever required to serve the Indian market. There are no constraints. After the LM Wind Power acquisition, GE employs a total of 18,500 people in India. The local capabilities we have are very strong. We have engineering strengths that are unique. Of our components, the systems, the sourcing that we do, a very high percentage is localised. We have a commitment to operate and grow local capabilities.
How do you see the future of wind energy in India?
I think overall it is an attractive market. There was 5 GW of growth of wind capacity last year. There are government and regulatory policies supporting it. The auction system is continuing to reduce tariffs, which is happening everywhere in the world. Most markets wind energy. We will see the adoption of wind energy in more states. There is need for integration with the grid as more renewable capacity gets added — more stability in the
grid is required. GE is also working on windsolar (hybrid) solutions. India’s power, coal, renewable energy and mines minister minister Piyush Goyal
has said countries which do not allow Indian companies to bid for energy projects in their territory will not be permitted to bid in India. How do you react to that?
The expectation of reciprocity is fair. There needs to be the right balance between encouraging domestic industry and maintaining global competitiveness. Having trade barriers is not fair. How does that square with US President Donald Trump’s policy of protecting US business and his ambivalence about climate change? I would not want to comment directly on the policies of the Trump administration. But people want less CO2 emissions. They also want renewable energy because renewable energy costs have come down. GE supports the US’s stand at COP21(the 2015 climate conference in Paris). People want renewable energy. The impact of policy on renewable energy is becoming more and more limited all over the world and that applies to the US as well.
The share of renewable energy all the over the world is going to increase. There are going to be other questions: what will be the share of wind, what will be the share of solar. What will be the share of gas and coal will be another question. I think that is going to be driven by economics. India has much more wind than solar power so far — but now the market is moving towards solar. Solar costs have come down. Wind costs have also come down, but still there is enough in the value chain. We make money, our competitors make money, our suppliers make money; our customers make money. So it is not only about cost coming down, but how sustainable it is. We are not big players in solar so far but have only scratched the surface. We keep asking ourselves whether we should go deeper into solar.
What are your future plans for India?
shore wind energy, leveraging our blade capacity, building our project development capability – these are our priorities. We are watching what is happening with offshore wind as well. The hydel energy market in India has very little activity at present. But with this government we will think hydel projects will be restarted. We hope they will because we are into the hydel business and we think it should be part of our mix. What have been GE Energy Financial Services (GE EFS) recent activities in the Indian renewable energy space? It had invested in Greenko and Welspun Renewables, but that was some time ago… GE EFS has made several significant investments in wind projects in India and also in some solar projects over the last few years. This has enabled the GE capital business to commit to the Indian market as well as support the wind business. GE EFS has invested more than $200 million in several projects across wind and solar in India.
Source:ET
