GE SEES WIND BUBBLE BEFORE BUST

GE says wind business could 'run hot' ahead of PTC expiry; General Electric chief executive Jeff Immelt says the wind business "could run hot" this year ahead of the end of the production tax credit in the US.

Benjamin Romano, April 20, 2012 (ReCharge News)

”…[Jeff Immelt, CEO, GE said the] company took in new orders for 696 wind turbines in the first quarter, up 113% from the year-earlier period. Orders in GE's renewables business were worth $1.5bn, up 59%. Wind orders pricing declined 1.5%.

“Chief financial officer Keith Sherin called that level of orders ‘tremendous’…[and attributed it to the] production tax credits end by the end of the year…The executives did not comment on the US market in 2013, when the expiration of the production tax credit -- the wind industry's key incentive -- is likely to cause a precipitous decline in new installations.”

click to enlarge

”GE wind turbine shipments in the first quarter were up 67% to 611 units, contributing to renewables revenues of $1.5bn, up 30%. The sales price of renewables equipment shipped in the quarter was down 4%...Overall, GE took in $35.2bn in the quarter from continuing operations, down 8%, and recorded operating earnings of $3.6bn, up 1%. Operating earnings per share were $0.34, up 3% from the year-earlier period. Normalized for the impact of one-time financial items, earnings per share increased 17%.

“GE's bullish outlook for natural gas-fired turbine sales reflects the global trends for the wind industry's top competitor…[Immelt said people] everywhere in the world…are moving to gas…[and U.S. growth in electricity demand will…be served by gas…In the quarter, however, gas turbine orders were down to 23 from 27 a year earlier.”