Show notes
The Uptime hosts review GE Vernova's Q2 financials, noting strong gas turbine orders and delays in onshore wind. They discuss PTC impacts on future turbine orders and Iberdrola's €5 billion share sale for power grid expansions. An update on Vineyard Wind highlights ongoing blade issues and legal complexities. The wind farm of the week is the Nobles Two Wind Farm in Minnesota. Register for the next SkySpecs Webinar!
Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard's StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes' YouTube channel here. Have a question we can answer on the show? Email us!
You are listening to the Uptime Wind Energy Podcast brought to you by build turbines.com. Learn, train, and be a part of the Clean Energy Revolution. Visit build turbines.com today. Now, here's your host. Alan Hall, Joel Saxon, Phil Ro, and Rosemary Barnes.
Allen Hall: Welcome back to the Uptime Wind Energy Podcast. I'm Alan Hall from the Queen City, Charlotte, North Carolina, and I got Phil Totaro in Santa Barbara, Cali, and Joel is back in the Lone Star state of Texas near Austin.
And. Uh, Q2 results came out from GE Renova. In fact, they had a little webinar this morning to discuss it. Uh, a lot of different aspects to ge. Renova, as we all know, nuclear sort of high voltage, little tiny bit transmission, but, uh, wind of course gas turbines. So they are definitely setting the course for [00:01:00] a gas turbine world.
And Phil, how, how far out are orders for their gas turbine products?
Phil Totaro: The last I heard talking to somebody from GE who said it was 2031 at this point, um, although things can be accelerated depending on if you're willing to pay a bit of a premium, they can, uh, you know, move you up in the queue, so to speak.
Um, but it's, uh, you know, it's a pretty, uh, far off thing. Um, and unfortunately. You know, it looks like GE hasn't announced a lot of new orders for onshore wind, but nobody has in the United States. Everybody was waiting in Q1 and Q2 to see what the outcome of the production tax credit, uh, changes were gonna be.
Now that we have definitive, you know, legislation on that. Um, it's going to actually trigger a lot of safe harbor orders, uh, assuming that companies can actually deliver turbines. [00:02:00] Um, because in order to safe harbor, you actually have to physically receive and store, um, something equivalent to 5% of the CapEx cost of the project.
So that has to happen now before. Uh, July, 2026. And because of that, uh, I think you're actually gonna see a lot of companies that had been holding off on placing their turbine supply orders. Uh, all of those are gonna start getting announced in Q3 and Q4, so it's gonna be like a monster quarter. Uh, that's gonna more than make up for any shortcomings from, uh, from this past quarter.
Joel Saxum: This is a, I'm, I'm dreaming here. Uh, could you see that this thing is, this legislation, the way it sits right now, all of a sudden all these orders come in and people are buying turbines to safe harbor them. And it's just making that, that renewable industry economy just churn for a year. And then it comes down to it.
And like that is taking notice of by the administration, taking notice of like, Hey, actually there is demand for this renewable [00:03:00] energy. There is a ton of jobs happening here. There's all kinds of people trucking, there's all kinds of people delivering. And then like, maybe we should relax and change these things because this, they're still moving forward.
Could you see that changing?
Phil Totaro: That is unlikely. But they're definitely, I mean, we know how politics works, and this isn't exclusive to any, you know, the current administration or any administration. They're gonna take credit for the fact that the industry's gonna be on a tear between now and July of next year.
One, because they changed, um, when the PTC phase out starts. But here's the, here's the real trick, Joel, and that's something that everybody's missed. There, the, the current rules, even though there's an executive order to revise the rules for, uh, what constitutes the qualification for startup construction, the current rules that have been in place since 2013 still exist right now.
So there's this huge gap in a window where if you safe harbor today. [00:04:00]Before the rules are changed, you can still, you still have four years from the time you safe harbor to actually, um, utilizing those turbines on the project that you safe harbor 'em forged. And keep in mind as well, when the IRS rules change, they're not, it's not a light switch, doesn't happen immediately.
They make. Recommended changes that then become final, that's likely to happen at the end of the year. So there's a huge window now, and that's goes back to my earlier comment, why everybody's been waiting on announcing their turbine orders, but there's gonna be a huge deluge of, of orders that are gonna happen between now and the end of this calendar year.
So, so Phil, let go,
Joel Saxum: go back to your, with GE or conversation between you and Alan about GE having. The equivalent of a lightning lane like you would at Disney pay a couple dollars extra and you get to go to the front of the line. Um, will there be a lightning lane from these OEMs because there's only so much capacity, right?
Will there be a lightning lane from the OEMs to get things in the next year? [00:05:00] Wind turbines.
Phil Totaro: Yeah. 'cause again, it, it's a good question. The problem again is it's just whatever is already in order books, I, it's, it's gonna be a big challenge. And, and this is actually why it's like a really good op opportunity for companies like Nordex to be honest.
Um, because you know, if, if Vestus and GE have full order books and you can't. Get them to deliver you turbines fast enough where you're gonna be able to qualify for, you know, safe harbor, uh, and qualify for PTC. Whatever these changes are gonna end up being, um, you know, by July of next year, everybody's gonna be racing to deliver something.
At that point or, and, and I mean, keep in mind that when they change these, these PTC qualification rules at the IRS, what they're likely to do is combine the safe harbor requirement with the physical construction requirement so that you have to be [00:06:00] doing both. Because right now it's an either or. They're probably gonna make that an and and that's gonna be the biggest change
Allen Hall: in Spanish energy, giant iro.
Has announced, hold on tight. A 5 billion euro share sale, which, uh, the largest in Europe this year to fund massive expansion in its power grid networks, particularly in two places the United States and the United Kingdom. And the company will focus on transmission and distribution infrastructure. With regulated assets, uh, which are expected to more than triple.
Uh, so their growth is going to be big, but they have to fundraise a little bit. And Phil is a little more, it's happening behind the scenes, right? So ebaa, although they're issuing, uh, more shares to raise about $5 billion, and it looks like there's a discount on those shares, so you can, um, what it looked like to me, make a couple of percentage points if you bought these shares.[00:07:00]
They're still looking at selling some assets to fundraise some more because it looks like Berroa is going big time in transmission.
Phil Totaro: Yes, so it was publicly reported today as we record that they've hired a bank to look at, uh, up to $4 billion, or I'm sorry, 4 billion euros worth of asset sales in Mexico.
Um, one because the Mexican market is kind of going nowhere fast, even with the, uh, the change in their, uh, political leadership. Um, but second. You know, as you mentioned, Alan, they, they wanna be able to take this money, uh, from, you know, asset sales from capital raise and plow it into transmission assets, which, you know, they've basically.
Pivoted their attitude. It's not that they're going to necessarily stop doing, um, you know, renewables project build out, but they definitely want to be a bigger player in the [00:08:00] transmission space because regardless of whatever power generation gets put on the grid, it's gonna have to have more grid, uh, to accommodate the, the increasing demand that we see globally.
Is that the safest bet in renewables, the transmission? Well, uh, yes, except if you're grain belt express. Ouch.
Allen Hall: But if you know you're gonna put on some sort of electric generation, be it gas, be it nuclear, be it solar, be it wind, whatever, it's still gonna be electricity and they're gonna still need to be able to deliver it.
That would make transmission the linchpin to all of it. That's what we've been saying on the podcast for what, the last
Phil Totaro: two years? A hundred percent. I mean. That's, that's always been the case. And, and you know, I've even said this, I, I believe Rosemary said it about, uh, Australia as well. What we've seen in terms of capacity build out in renewable energy is that we build where there's existing transmission and there's also been kind of relatively [00:09:00] high sustained winds.
So for those familiar with it, it's like IEC class one kind of wind sites. A lot of that. You know, those were the turbines that we deployed, you know, 20, 25, 30 years ago. Uh, you know, back in, I wanna say around 2011, we shifted down into Class two wind. So something like, you know, eight or so meters per second.
Now we're at class three or Class S wind, where it's maybe six and a half to seven meters per second. And now we're starting to repower the,