Disconnect between wind projects awarded and executed, says GE Senior VP
American energy giant General Electric (GE) is increasing its footprint in India’s power sector by integrating its renewable and grid offerings. On March 1, GE, which got a foothold in the country after acquiring Alstom’s energy business globally in 2015, announced the integration of GE Grid Solutions and associated products and solutions with its renewable energy vertical.
In an exclusive interview, Jérôme Pécresse, senior vice-president, GE, and chief executive officer, GE Renewable Energy, said, “Within GE, the grid business has been put in the same one as renewable. It is now a $15-billion business globally, with 40,000 people. In India, we see most activity is in the renewable sector and also in transmission and distribution.”
GE will now strengthen the turnkey solution offering, which represents over 80 per cent of the Indian wind market.
On the need for the integration, Pécresse said, “That’s because most of our grid business is now driven by growth of renewable. With many Indian customers, we discussed renewable and grid together because most of the grid market is driven by renewable expansion. This means investment into the grid, in software, hardware to stabilise the grid, extend the grid with new transmission lines, and connect renewable to the grid. Due to that, when we do renewable projects now, particularly in the wind sector and also hydro, more often than not, we take the grid component in our scope.”
The limiting factor to renewable growth is very often the ability of electrical power connected to the grid. So in India, GE mostly takes the turnkey scope, where it builds the wind farm and also connect it to the grid. The company is currently developing a 300 MW wind project which was awarded under SECI Tranche III to ReNew Wind Energy (AP2) on a turnkey basis in Ghadsisa village in Gujarat’s Kutch region in partnership with KP Energy where GE is taking the risk on land as well. This project is of strategic importance to GE at the global level as this marks their foray into the turnkey segment.
Expressing concern about the Indian market, however, Pécresse said there was a disconnect in the wind sector between the volumes ordered through the auctions which are growing and the actual execution of the project. “To continue to attract capital in this market, it is critical that the lag between the auctions and the execution continues to decrease since this is a credibility issue for the industry in the country,” he said.
Attributing multiple reasons for the disconnect, he said people who win these auctions found it difficult to get the project financed and execute. Besides, there were issues of evacuation of wind energy and freeing up land for the projects. “It is important for the ability of the industry to continue to attract capital, the projects that have been ordered be executed as per normal condition as per normal timeline. We continue to plead the government, nationally and regionally, that project that wins the auction needs to happen,” he added.
In Gujarat, the government is giving preference for land to projects that they have awarded. “For our project, we have received part of the land, and working on the rest. That is the issue which the industry has to tackle for the credibility of the onshore wind industry in India.” Also, the company sees the market moving towards a combination of renewable sources wind, solar and hydro to provide more base-load capabilities. “When you think about hybrid, you think of not only building the turbines but software and controls that makes it work better that are capabilities within GE stand within the grid business.”
According to Pécresse, India was probably bit ahead of the global curve in hybrid because auction has already happened unlike other countries.
“In many countries, we are starting to pilot solutions and projects. But again, to make it work, the industry has to bring most competitive solutions on the equipment, controls and software side and the government has to set the right price reference,” he said. On the size of market that India offers, he said GE was looking at wind market of 6-8 GW and hydro of 2-3 GW a year. “When I say wind, I’m referring to onshore wind. At some stage, offshore wind will come. We are also looking at a significant market in transmission and distribution.”
The production would be from the Indian facilities. In GE Renewable Energy, there are more than 7,000 people in India, which is one-third of GE India’s total employees and out of its 40,000 employees in power globally. “So it is very meaningful place for us in terms of employment, and we keep growing our footprint in India.” The firm has two facilities producing wind blades in Bengaluru and Vadodara. It manufactures for onshore wind in Pune. Besides, there are six facilities in grid business with significant presence in south India, and also in Vadodara.
It has Indian suppliers for many critical components. “Our 2.5 and 2.7 MW turbines have been designed by teams in Bengaluru. All that product development for India is led and executed by the engineering team in Bengaluru. So, we design in India for India and we make in India for India.”
Source: business-standard
