HE ASSOCIATED PRESS September 27, 2010, 1:08PM ET text size: TT
GE enters venture to make wind turbines in China
DETROIT
General Electric Co. said Monday it will team with Harbin Electric Machinery Co. to make electricity-generating wind turbines for Chinese customers.
The deal will help GE compete in China’s $13 billion wind-generated power market, which is the world’s largest and is expected to grow 500 percent by 2020, GE said in a statement.
China’s electricity demand is growing at 12 percent a year, and the government is supporting renewable energy policies, GE’s statement said. The support played an important role in GE’s decision to invest in the joint venture, it said.
GE will own 49 percent of the venture, while Harbin Electric Machinery will hold 51 percent. The new venture will make GE-designed wind turbines for near shore and offshore use in China, the statement said. Other terms of the deal were not disclosed.
Harbin Electric Machinery is a subsidiary of Harbin Power Equipment Co. The companies have been partners since 2004 on gas turbines in China. Harbin Electric was the first power equipment company in China in 1949, the statement said.
Shares of GE fell 16 cents, or 1 percent, to $16.50 in midday trading.
(china own 51% of all company doing business in china territory, )
General Electric Co. (GE) announced a joint venture with a subsidiary of Harbin Power Equipment Co. (1133.HK) to manufacture and supply wind turbines to its customers in China, as the industrial conglomerate looks to extend its reach in the nation’s $13 billion wind industry.
China, already the world’s largest wind turbine sales territory, is projected to see demand in that segment surge as the nation’s installed wind capacity is predicted to jump from last year’s level of 25 gigawatts to 150 gigawatts by 2020.
“This is an important investment in China for GE and one that will enable us to participate in the tremendous growth potential of the Chinese wind turbine segment,” said Jack Wen, president and chief executive of GE Energy China. GE has been active in China’s energy sector for nearly a century, supplying the country with 935 wind turbines.
The new company will manufacture GE-designed wind turbines for near-shore and offshore applications in China. Near-shore wind turbines are classified as wind turbines installed on land within three kilometers of the nearest shoreline, or lying on the water within 10 kilometers of the shore.
Under the joint venture, Harbin’s electric machinery division will own 51% of the company, with GE owning the rest. Meanwhile, Harbin will purchase a 49% interest in an existing GE Shenyang Wind factory, which will continue to manufacture land-based wind turbines.
China has said it wants renewable energy like wind to meet a higher percentage of its energy needs in the future, as it seeks to rein in emissions that have made its cities among the smoggiest on Earth. But experts have said the country’s transmission network currently can’t absorb the rate of growth in renewable-energy output.
GE’s announcement comes just days after Chief Executive Jeff Immelt warned that the lack of a comprehensive U.S. energy policy and its “stupid” current structure are causing America to fall behind in new energy fields. In sharply worded comments at an energy event in Washington, he praised China’s approach to energy and criticized what he called a stalled effort to revamp U.S. energy policy.
Immelt went on to say China is moving faster to develop clean technologies such as nuclear power, electric vehicles and wind power. He also said China has the right mix of a big local market, innovation in technology, a low-cost supply chain and government policy support. China’s State Grid utility, he said, is larger than nearly all U.S. utilities combined.