GE Wants Become Big Player in Offshore Wind, Eyes Adwen Takeover

Source: By Geert De Clercq, Reuters • Posted: Wednesday, May 4, 2016

PARIS — General Electric wants to become a major player in the offshore wind industry and is interested in buying the Areva-Gamesa offshore joint venture Adwen, GE’s new head of renewables said on Tuesday.

Following its takeover of the energy assets of French Alstom, GE in November 2015 created a global renewable energy business unit with sales of 9 billion euros ($10.42 billion), staff of 13,000, and its headquarters in France.

The resulting enlarged unit has built about 25 percent of the world’s installed base of hydropower and more than 20 percent of global onshore wind capacity, but has virtually no presence in the capital-intensive offshore business, which GE had always steered clear of.

“We have the ambition to become one of the three major players in the offshore wind market,” GE renewables head Jerome Pecresse told reporters in Paris on Tuesday.

He added it was too soon to discuss a market share target. Germany’s Siemens is European market leader for offshore wind with 63.5 percent of installed capacity end 2015, followed by MHI Vestas with 18.5 pct.

With the acquisition of Alstom, GE also acquired contracts to build 1,500 megawatts of offshore wind on the French coast for utility EDF, which are set to be built by 2019.

Areva-Gamesa joint venture Adwen also has contracts to build 1,500 MW of offshore wind on the French coast for utilities Engie and Iberdrola.

But Germany’s Siemens is negotiating a takeover of Gamesa and has no interest in acquiring Adwen, which is blocking the Siemens-Gamesa talks, sources have told Reuters.

Pecresse said that GE may be interested in buying Adwen, but that no talks had been held with the companies involved.

“We are in favour of a strong French offshore industry and a consolidation of the French players would contribute to that. We look at the evolution of Adwen’s capital with interest,” he said, adding that one big French offshore wind player would make more sense than two smaller ones.

Adwen accounted for 5.7 pct of the installed offshore wind base in Europe at the end of 2015, but came second in terms of installations with an 18.2 percent share of newbuild.

Industry specialists say that from a competition perspective, it would be difficult for Siemens to buy Adwen and that a third big player in offshore wind would boost competition and help lower prices in the industry.