Wind Energy Implications of the Alstom and GE Deal

This week European regulators signed off on the massive $13.4 billion deal between General Electric (GE) and France-based Alstom. The principal driver of the deal is GE’s acquisition of Alstom’s power generation business. The wind power aspect is small with regards to the broader deal, but it represents one of the more significant shake-ups in the wind sector in quite some time.

GE will fully acquire Alstom’s onshore wind business, taking over Alstom’s wind turbine assets, which currently are comprised of three turbine models: the ECO 100, 110, and 122, all of which are rated at 3 MW (and one 2.7 MW variant of the ECO 122). Tall hub heights at 119 meters and 139 meters are available for the ECO 122 turbine using hybrid concrete and steel designs. The turbines use DFIG high-speed geared drivetrains, the most common drivetrain design globally. This is also used by most of GE’s turbines, which is likely to open up some supply chain efficiencies post-acquisition.

Alstom’s offshore wind business will not be fully acquired by GE. Instead, a 50/50 offshore joint venture (JV) will be created between Alstom and GE. Alstom’s primary asset in this area is its 6 MW direct drive Haliade wind turbine. This is the turbine of choice for close to 1,500 MW of awarded French offshore wind tenders, which provides a very promising pipeline. The Haliade is also the turbine of choice for Deepwater Wind’s 30 MW Block Island wind project, the first offshore wind plant in the U.S., currently under construction off Rhode Island.

It is important to put the scale of the two wind businesses into perspective. In 2014, GE installed 4,624 MW of wind capacity while Alstom installed 286 MW, according to Navigant’s internal research. This put their annual global market shares at 3rd and 24th, respectively. So GE is not acquiring an enormous new wind business. GE’s wind division and its supply chain are optimized for its own wind business which is focused on the U.S. market, followed by Canada and Brazil. The acquisition will give GE a small market share increase in Europe where so far it has had limited success, mostly in Germany.

Brazil is one market where GE and Alstom have notable overlap. Based on Navigant’s figures for wind turbines installed in 2014 in Brazil, GE secured 22.2% market share while Alstom secured 13.5%. This is likely to be the first market where supply chain consolidations and efficiencies are enacted and the combined venture becomes a market leader.

One clear benefit to GE’s wind business is that the more market share GE can pick up in markets outside of the U.S., the better it can cushion the impacts of the tendency for the U.S. market to face on and off again wind policies, resulting in booms and busts.


GE is not active in offshore wind and has stated it is because of offshore wind’s high cost, risk, and reliance on subsidies. Expect that tune to change since entering into the JV is an implicit acceptance and de facto entry into offshore wind. 

Part of what has been behind GE’s reservations for offshore is a reluctance to compete in a capital intensive sector where it would face stiff competition exacerbated by brand loyalty to the European companies such as Siemens and Vestas. That Alstom’s offshore turbines are in this JV should continue to give the turbines an edge in France and in Europe more broadly.

The JV allows GE to enter the offshore wind sector without committing its own R&D to bring a commercialized turbine to market. GE will do exhaustive analysis of the Alstom turbines and their operational performance. If the turbines measure up, and there are markets for offshore wind, GE will likely discover a still cautious but newfound interest in the sector.

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Jesse Broehl is senior research analyst contributing to Navigant Research’s Smart Energy program, with a primary focus on global wind energy markets. For the past decade, Broehl has been a reporter, editor, researcher, and analyst exclusively within the renewable energy sector. In recent years, Broehl’s specific focus has been on the wind energy industry.

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