GE Boosts Capacity to Construct More Wind Turbines

By Nicholas Comfort

Oct. 1 (Bloomberg) -- General Electric Co., the world's biggest maker of power generation equipment, is adding capacity to build wind turbines as demand for alternative energy rises even as the global economy weakens.

Wind energy is in a ``build-out phase'' as governments across the globe seek to cut carbon dioxide emissions, Victor Abate, who runs the renewable-power units of GE Energy, said by phone today. He spoke from Salzbergen, Germany, where the company has begun manufacturing a new, larger class of wind turbine.

European countries including Germany currently reward CO2- free electricity generation and charge power plants that emit the gas blamed for global warming. German Foreign Minister Frank-Walter Steinmeier said yesterday in Berlin that resolving turmoil on financial markets may take precedence over initiatives to curb carbon-dioxide emissions.

``Regardless of short-term swings in the economic climate, the need for climate-friendly energy is expanding,'' Abate said in an interview. ``Wind is becoming mainstream, a real piece of the mix,'' of energy generation sources.

The 2.5xl model turbines built at the Salzbergen plant are targeting the European market, as they make use of limited space by generating more power per unit than older models, Mete Maltepe, GE Energy's Global Wind Sales leader, said on the same call.

Turbine Orders

The company will spend over $100 million adding capacity at the German factory it took over when it bought its wind unit from Enron Corp. in 2002, Maltepe said. GE has received turbine orders totalling over 1 gigawatt of capacity for the model built in Salzbergen, he added.

That site will be the ``workhorse'' for the continent, supplying turbines to developers in countries stretching from Turkey to Belgium, Maltepe said. About 85 percent of projects planned for Europe will be able to buy the wind mills they need from GE, he added.

The company has won a contract to supply 12 of the 2.5xl model turbines it will now build in Germany to an Italian wind farm that is scheduled to begin operations by June next year, according to an e-mailed statement.

A manufacturing base closer to its European clients will help the Fairfield, Connecticut-based company save on transport costs, Abate said. About 20 percent of the cost of building a turbine is linked to where it's built, he said, declining to say how much GE stands to save.

Production levels at the German plant will be ``ramped up'' during the next two years, he said.

GE has a total of seven wind turbine factories across the globe, including countries such as Spain and China, Abate said.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net