Please ensure Javascript is enabled for purposes of website accessibility

GE Is Betting on the Biggest Offshore Wind Turbine Ever

By Travis Hoium – Sep 28, 2019 at 12:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Offshore wind is a growth market GE needs to turn its energy business around.

Drive around middle America and you'll see wind farms of various sizes scattered across the country. One of the most common wind turbines you'll see is a model from General Electric (GE -1.31%) that's 1.5 megawatts (MW) with a 212-foot tower and 116-foot blades. In total, the wind turbine stands 328 feet, or nearly the length of a football field. But that's now being dwarfed by what GE is installing offshore. 

Now, GE is testing a 12 MW wind turbine that dwarfs the most common turbines we see today. And if it works as planned, the Haliade-X 12 MW will power millions of homes from miles off the coast of populated areas. 

Haliade-X wind turbines shown at an offshore wind farm.

Image source: GE.

Haliade-X's great hope

Standing 853 feet tall, with blades that each extend 351 feet, the Haliade-X 12 MW promises to be not only the biggest but also one of the most efficient wind turbines in the world. GE says a single turbine can power 16,000 homes and can operate at a 63% capacity factor, or produce its rated output 63% of the time. That would make it one of the most efficient wind turbines in the world -- well above the approximately 50% capacity factor for most wind turbines and around 20% for solar farms. 

One of the advantages the turbine has is that it's designed for offshore markets, where the wind blows more consistently. That allows for higher energy production and lowers the effective cost of electricity from each wind turbine. 

The exact cost of turbines isn't being released, but GE says it can generate electricity that's competitive with other power generation sources. And given the traction the product has with developers, they expect it to be cost effective

Wind is big business

The wind power business has been up and down globally depending on subsidies and the will of governments looking to expand energy projection. But wind energy has now reached a tipping point where it's less expensive than fossil fuels and should see consistent demand, especially if wind farms can be located near load centers like coastal cities. 

Dominion Energy (D -2.74%), for example, recently announced a plan for 2,600 MW of wind farms off the coast of Virginia by 2026. The company expects 220 wind turbines to be installed, so a 12 MW model is likely what they're expecting to use. 

Orsted's 120 MW Skipjack and 1,100 MW Ocean Wind projects off the coast of Maryland and New Jersey will use the Haliade-X. That's a big win in a market niche that GE has only dabbled in up to now. 

GE's step into uncharted waters

To date, Siemens Gamesa and MHI Vestas have dominated the offshore wind market, with GE relegated primarily to onshore status. The Haliade-X may change that and give the company a puncher's chance of gaining significant share in offshore wind, where there's still a lot of market potential. 

Most of the easy onshore locations near load centers have been developed, so wind's next step is going offshore. The opportunity will be worth tens of billions to the winners, and GE is finally in the game. 

Travis Hoium owns shares of General Electric. The Motley Fool recommends Dominion Energy, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$61.91 (-1.31%) $0.82
Siemens Aktiengesellschaft Stock Quote
Siemens Aktiengesellschaft
SIEGY
$48.95 (0.82%) $0.40
Dominion Resources, Inc. Stock Quote
Dominion Resources, Inc.
D
$69.11 (-2.74%) $-1.95
Vestas Wind Systems Stock Quote
Vestas Wind Systems
VWSY.F
$18.54 (2.67%) $0.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.