April 26, 2024

Green Column: Wind Farms Take Root Out at Sea

BREMEN, Germany — In a warehouse district on the outskirts of Bremen in northwestern Germany is a big, well-lighted work space dominated by the massive top section of a wind turbine called a nacelle.

It is here that Siemens, the German power systems giant, trains new employees and gives refresher courses on how to work safely on modern windmills that can rise 90 meters, or about 300 feet, and weigh more than 100 tons.

On a hot August day, employees wearing hard hats and protective clothing were squeezing in and out of the multi-ton module, practicing evacuating injured colleagues using pulleys and harnesses.

The training center, which pushes through around 2,500 people a year, is fully booked these days because Siemens is staffing up as it fills orders for building and operating offshore and onshore wind farms. The center, which now has eight trainers, plans to add an additional one this year and next year.

“We have to keep hiring,” said Ralph Knödler, a trainer, because the wind business is getting “bigger and bigger.”

Although onshore wind is a larger business, offshore is growing faster, and the contracts often come with long-term maintenance deals, creating a need to recruit new service workers from the ranks of landlubbers.

The turbines are formidably expensive and tricky to install and maintain, but countries blessed with ample sea breezes, like Britain and Germany, are coming to view them as a major part of their efforts to curb the emissions of carbon dioxide and other greenhouse gases that scientists say contribute to climate change.

“If you want to do wind on a big scale with power plants based on wind, you need to go offshore,” said Michael Hannibal, chief of Siemens’s offshore wind business.

“Power plants” are the important words here. Wind farms are no longer engineering experiments or small pilot schemes. They have grown very large, to the point where they are of the same scale as gas- or coal-fired power stations.

The world’s largest wind facility, called the London Array, which uses Siemens equipment and cost almost $3 billion, was recently inaugurated off Britain’s east coast. With 630 megawatts of capacity, it is comparable to or bigger than conventional generators.

Far larger projects, like one called East Anglia, which might be more than 10 times the size of the London Array, are under discussion for off the British coast.

Siemens figures there are about 3.3 gigawatts of offshore wind power connected to the grid in Europe. That is similar in size to a large contemporary nuclear power station. The company also expects the global market to grow 20 percent a year for the next few years, but that will depend on many factors, including costs and government support.

Offshore wind has advantages beyond the presence of sea breezes. The seabed is relatively cheap real estate, and much larger wind farms can be built there than on land. The vast expanses available at sea allow economies of scale that may bring down costs.

In addition, sea-based wind farms are less likely to set off aesthetic or environmental objections than land-based ones. Although there is worry that their fast-turning rotors may put seabirds at risk, particularly on foggy days, and grumbling that the big white pinwheels spoil views, they are being placed farther and farther out to sea to partly quell the complaints.

Siemens acquired a foothold in the industry by buying the Danish company Bonus Energy in 2004. Since then, it has been scaling up the turbines and trying to streamline their installation. The company is a global leader in the offshore business, with 1,200 turbines fully installed and another 1,200 on order, costing several million euros each. Major competitors include General Electric, Vestas and Chinese companies.

On an installation called Riffgat that Siemens is now finishing off Borkum, Germany, one of a chain of sandy islands that run along the German and Dutch coastlines, it managed to cut turbine installation times to 14 hours — no small feat for units that have rotor diameters of 120 meters and weigh 250 tons.

The key to cutting costs, Mr. Hannibal said, is to simplify the installation process and turn manufacturing of turbines into a cookie-cutter industrial process. The latest turbines are made of just a few components that are relatively easy to anchor to the sea bottom.

The offshore wind industry, which is also gaining ground in the United States, is also increasing its efficiency by building its own specialized ships for constructing and maintaining wind farms, rather than using less well-suited vessels from the oil industry or the merchant fleet.

Turbine suppliers are also figuring out ways to make them bigger so each unit generates more power. Siemens is now beginning to offer a six-megawatt turbine whose 154-meter diameter rotors are almost twice the wingspan of an Airbus A380 jumbo jet.

Still, costs remain stubbornly high. Mr. Hannibal figures that the power to be produced by new German offshore wind projects will cost 130 to 140 euros, or $175 to $185, per megawatt hour, which is about triple the wholesale power price. Locating turbines farther offshore also adds expense by increasing the time to reach them to bring maintenance workers and replacement equipment.

Like the oil industry, offshore wind operators are turning to solutions like floating hotels and helicopters, but these do not come cheap.

Mr. Hannibal said that costs are coming down at the rate of 40 percent per decade, but he concedes that the industry still has much to do to become competitive. The high costs mean that there is little incentive to build these plants without hefty subsidies.

“We are fooling ourselves if we depend on subsidies,” he said. “We know we need to bring costs down.”

Article source: http://www.nytimes.com/2013/08/22/business/energy-environment/wind-farms-take-root-out-at-sea.html?partner=rss&emc=rss

G.E. Posts 16% Rise in Quarterly Profit

G.E., the nation’s largest industrial corporation, reported net income of $3.5 billion, or 34 cents a share, a 16 percent increase from the year-earlier quarter, when earnings were $3 billion, or 29 cents a share.

On an operating basis, income was $4.1 billion, or 39 cents a share. Excluding gains from the sale of its remaining stake in the media company NBCUniversal to Comcast, G.E. posted a 13 percent increase in operating income, to $3.6 billion, or 35 cents a share. That figure matched the average estimate of securities analysts, as compiled by Thomson Reuters.

Revenue in the first quarter was $35 billion, flat compared with figures in the period a year earlier. Over all, G.E.’s revenue came in ahead of Wall Street’s forecast of $34.5 billion. But that total included proceeds from the NBCUniversal sale and slightly higher revenue this year from G.E.’s big finance division, GE Capital.

Revenue from the industrial business, whose products range from jet engines to medical imaging equipment, declined 6 percent, to $22.7 billion. The main shortfall came in its power and water unit, particularly from lower sales of generators for electrical power plants and wind turbines. As investment subsidies are phased out, wind turbine sales have fallen. With the weak economic conditions, especially in Europe, the demand for electrical power is down, meaning fewer power generators sold, upgraded and serviced.

The power and water unit’s revenue fell 26 percent from a year ago, to $4.8 billion, or $1.7 billion less than in the year-ago quarter. Without the power and water unit, G.E.’s industrial business would have grown slightly.

“This is a power and water story,” Keith S. Sherin, G.E.’s chief financial officer, said in a conference call with analysts.

Still, G.E. managed to pull out a steady financial performance, helped by higher profits in its aviation and transportation units and by GE Capital.

But weak industrial demand, analysts say, will be a challenge in the first half of this year for the big companies in the sector including Siemens, Honeywell and United Technologies.

“We’re in a decelerating global environment that will mean slow growth at best,” said Steven Winoker, an analyst for Sanford C. Bernstein Company.

In a morning conference call, Jeffrey R. Immelt, G.E.’s chief executive, called the quarterly performance “mixed.” The first half of 2013, Mr. Immelt said, was expected to be the most challenging, with demand likely to pick up in the second half.

Industrial orders were strong in some businesses, with orders for oil and gas equipment up 24 percent and commercial aviation orders rose 47 percent.

The rising industrial orders, Mr. Immelt said, should “position us well for the second half.”

But Europe, where industrial revenue fell 17 percent, may continue to be a drag on the industrial business. “Europe was tougher than we expected,” Mr. Immelt said, adding later, “We’re not counting on things getting better.”

To maintain profits in spite of the weakness in industrial sales, G.E. plans to cut costs by $1 billion this year. And the company, Mr. Immelt said, remained committed to spending $18 billion during the year on dividend payments and to buy back its own shares.

Article source: http://www.nytimes.com/2013/04/20/business/ge-posts-16-rise-in-quarterly-profit.html?partner=rss&emc=rss