GE’s renewable energy division was the company’s only core industrial business segment to report year-over-order and revenue growth, according to first quarter earnings released Tuesday.
On an orders basis, GE’s renewable energy division is closing in on the industrial conglomerate’s power segment, which includes gas, coal, steam and nuclear. Renewable energy orders were up 15% year over year while power division orders were down 12%.
In the first quarter, GE Renewable Energy secured the biggest onshore wind project in its history — a planned 531 turbine, 1485 MW facility in Oklahoma. And in the offshore wind market, robust market trends are likely to persist, according to GE Chief Financial Officer Carolina Dybeck Happe.
GE Renewable Energy’s $234 million first-quarter loss marked a significant improvement from last year’s $327 million first-quarter loss. In addition, the renewable division stood out as the company’s only core business to report order and revenue growth compared to the same quarter in 2020.
“Clearly, we have a new administration that’s doing a lot of good things, medium to long term [that will] help fuel our renewables business and the growth there,” Larry Culp, GE’s Chairman and CEO said during the Q&A segment of the company's Tuesday earnings call with media and analysts. GE’s renewables and power businesses sit at the heart of the energy transition, he noted.
Renewable energy division orders grew by double digits in onshore wind, offshore wind and grid solutions during the first quarter, and because of a large high-voltage direct current (HVDC) system order, GE Renewable Energy’s grid solutions unit led last quarter’s orders advance**.
In the first quarter, GE Renewable Energy orders rose 15% to $3.5 billion, compared with the same quarter last year.
“The order book, as it often is, is backloaded in onshore and offshore,” Culp said. Clarity around the new administration’s funding programs and policies will have a real impact on orders and in turn down payments in GE’s renewables division, he added.
GE Renewable Energy’s revenues were also up last quarter, coming in at $3.248 billion or about 2% above Q1 2020. By comparison, GE’s power division’s first quarter revenues, which came in at $3.6 billion, were down 12% against the same quarter last year.
In renewables, GE has held the number one position in North America onshore wind for the last two years, Culp pointed out, noting that this is the fastest-growing source of new power generation capacity.
“We’ve had some major wins across the portfolio,” he added. In the first quarter, GE Renewable Energy was selected to supply more than 530 turbines to North Central Wind Energy Facilities in Oklahoma, marking the largest onshore wind project in GE’s history.
However, GE Renewable Energy is expecting the U.S. onshore wind market to decrease slightly this year, while robust growth continues abroad, Dybeck Happe said during yesterday’s call. In offshore wind, the current strong market trends are expected to continue through the decade, she added.
At GE Renewable Energy, high equipment revenue growth offset a significant decline in services last quarter. In onshore wind, equipment deliveries were higher, with more than 760 units delivered, but services were down because the company didn’t deliver any repower upgrades, Dybeck Happe said. Excluding repower work, digital services were up significantly, she added.
In offshore wind, the company’s first quarter revenue growth was driven by continued execution on the EDF 6 MW PBG project in Saint-Nazaire, France. Revenues for the company’s grid unit declined last quarter, due to deal selectivity and commercial execution, Dybeck Happe said.