As the effects of the global financial crisis wane, General Electric’s Turkish unit revisits a plan to manufacture wind turbines in the country. ‘If the number of companies that need financing through export insurers falls, then we may dust off plans to make the equipment in Turkey,’ says Mete Maltepe, the chief of GE’s local energy unit
General Electric, which intends to expand its Turkish energy business as the government sells off power assets, may revive a plan developed before the 2008 global crisis to build wind turbines in the country.
Local unit General Elektrik may start manufacturing turbines and so-called nacelle casings, with half the output likely to be sold within Turkey as the government targets a 20-fold increase in wind capacity by 2020, said Mete Maltepe, the general manager of GE Energy Turkey.
Turkish companies have been going overseas to buy wind-generation equipment because they relied on export insurers such as Euler Hermes, the world’s largest insurer of trade credit, when financing was scarce. Generators will be more likely to be bought domestically as the global recovery takes hold and more loan facilities become available, Maltepe said.
“If the number of companies that need financing through export insurers such as Hermes falls, and we do expect it to change, then we may dust off plans to make the equipment in Turkey,” he said. “We are ready for that.”
GE will expand its energy business in Turkey and keep overall investment in the nation the same even after the sale of a stake in the country’s second largest bank, Kürşat Özkan, head of GE’s Turkish operations, said Oct. 1.
GE agreed to sell 18.6 percent of Garanti Bank to Spain’s Banco Bilbao Vizcaya Argentaria for $3.78 billion as part of a global effort to reduce its financial assets.
GE wants to generate “significant” business as Turkey increases wind power capacity to 20,000 megawatts by 2020 from less than 1,000 megawatts now, Maltepe said. Currently GE gets turbine wings and poles from Turkish producers. On average, 1 MW of power can supply electricity to as many as 300 households per year.
GE has provided about 8,000 megawatts, or 17 percent, of Turkey’s power capacity, mainly with gas and steam turbines and some wind turbines, Maltepe said. GE turbines account for about 30 percent of total generation, he said.
A planned government incentive of 5.5 euro cents per kilowatt-hour to wind power producers needs to be increased to at least 7.5 cents to justify investments, he said. The subsidy is awaiting parliamentary approval.
Wind turbine prices, which fell during the global economic crisis, have steadied and will start rising unless other, less-costly sources of renewable energy are developed, Maltepe said.
Investments in Turkey
GE Energy Financial Services bought half of Ankara-based Gama Enerji in 2007 and announced plans to invest at least $4 billion until 2015 to build 3,000 megawatts of power plants in Turkey and the Middle East. GE will invest in energy by itself or with a partner as Turkey expects to double its national power capacity to 90,000 megawatts in 10 years, said Özkan.
The company will seek to tap a market for the so-called smart grids that may be worth $2 billion after the government sells off electricity distribution assets, Maltepe said. The government will raise as much as $16 billion from the sale of 20 electricity grids, due to be completed by the end of this year, Energy Minister Taner Yıldız said Oct. 12.
“We don’t expect new operators of the grids to immediately start seeking smart grid systems as they will first have to deal with the existing network improvements,” Maltepe said. “We are already in talks with four or five companies on this but we expect the real interest in smart grids within two years.”
Smart grids use digital technology to optimize power use. Siemens and Areva are the main competitors in this market, Maltepe said.
GE’s energy unit may buy Turkish companies that make equipment for low- and medium-voltage transmission networks, Maltepe said. “We are looking around and in talks for this, but we don’t know when the talks will conclude.”
Reference: http://www.hurriyetdailynews.com/n.php?n=ge8217s-turkish-unit-eyes-producing-wind-turbines-2010-11-10
