News Renewable Energy

Committed to onshore wind business in India: Scott Strazik, GE Vernova’s chief executive


In 2021, General Electric decided to split its businesses into GE Healthcare, GE Aerospace and a third unit, GE Vernova, that houses its renewable energy, power and digital businesses. Scott Strazik, GE Vernova’s chief executive, tells Kalpana Pathak that while the company continues to see opportunities in the Indian market, onshore wind is likely going to play the most material role in the near term. Edited excerpts:

What are GE Vernova’s plans for India?

Well, India by default, with the size of the electricity demand growth that’s going to take place, is a great market for us. But then by default, our biggest businesses are probably going to be most material for India too. So, our two businesses — gas power and onshore wind — are both applications that have incredible opportunities in India. When you include our blade manufacturing capability here, we’re committed to the onshore wind business, and India, and serving this market to a very large degree. We’ve added 2.5 gigawatts of onshore wind over the last three years, and we’re committed to doing substantially more over the next decade.

How much would that be?

Well, let’s see. The government has a commitment of 15 gigawatts a year. But that’s going to be hard to accomplish. And we want to support the government. Beyond that, I think gas is important. When you think about gas, it’s also a gas turbine with hydrogen-burning capability. This is an area we’ve been investing in as a company for 20 years. We have over 8 million hours of operating experience with our gas turbines blending with hydrogen or hydrogen-like fuels. That’s going to be critical for India. And as the hydrogen economy and the hydrogen supply become more economical and available, we think that’s going to be an incredible opportunity for us to serve the country in different ways.

How much does the Indian market contribute to GE’s overall business?

I think it’s straightforward. I mean, the business is $33 billion to $35 billion of annual revenue. We don’t really go country by country. But India today is a reasonably small proportion of that annual revenue. Now at the same time, there are real growth opportunities here, and with the investments we’ve made and the teams that we have in the country, we’re often optimistic about the opportunities in India going forward and it’s a country we’re committed to.

How much has GE Vernova invested in India so far?

I think about it more from the perspective that we have a handful of engineering and technical footprints here. We have about a dozen manufacturing facilities. So, we have a material presence here and proportionally when you think about the fact that we have about 80,000 employees and 10,000 of them are here. This is an incredibly strategic country for us to position ourselves for the future of India but also for India to serve the world. I think about my people as my investments.

Which are the segments in India where you see the fastest growth going forward?

In the near term, I do think it’ll be wind. I think we’re very encouraged with our position in onshore wind and our ability to serve this market. We continue to see opportunities in the other segments. I mean gas matters. We will continue to service our steam fleet which is a material part of the energy mix in India for a very long time, and the grid matters as well, so all are going to be material parts of the future. But I think onshore wind is likely going to play the most material end-market role in the near term.

With GE Vernova’s spin-off in April 2024, what kind of profitability roadmap do you see for the company?

Today we have our traditional power businesses, and then our renewables businesses, and those are our two reportable financial segments. Power is very profitable businesses with high free cash flow conversion, that, to a large extent, are being offset by our renewables businesses that have been unprofitable and have been consuming cash. What we see today is a substantial improvement in the profitability of our renewables businesses in 2023. And then a real inflection point in 2024, that takes our Vernova businesses in totality back to being a collective set of businesses that are profitable, with a reasonable free cash flow.


Source link