Power sees gains, renewables still down at GE
By Jack Burke24 January 2023
Company sold 101 gas turbines in 2022, up from 62 in ’21
GE’s power division saw double-digit growth in the fourth quarter, largely driven by aeroderivative momentum at gas power, the company said in its earnings report.
GE’s power division saw orders of US$5.4 billion in the quarter, an increase of 26% over the same period in 2021, the company announced. The company cited both an increase in unit sales as well as growth in services for the increase. Overall, revenue was up 8% year-on-year. The company’s power segment profit of US$1.2 billion marked 69% growth year over year.
“We’ve significantly improved power, as demonstrated by our continued profit and cash growth,” said H. Lawrence Culp, GE Chairman and CEO and GE Aerospace CEO. “ We’re well positioned for continued services growth with our expanded HA fleet. To date, we’ve now shipped 110 HAs, with roughly 80 units COD, providing a reliable source of cash growth in the future as our highest utilization assets in the fleet.”
In early 2024, GE plans to spin off its portfolio of energy businesses—including renewable energy—into GE Vernova. Currently, the power and renewable energy divisions are run separately.
The company’s renewable business reported losses of US$2.2 billion in 2022, driven in some part by inflation and supply chain issues, the company said.
“Looking ahead, GE is positioned to drive growth, profit, and cash, and our outlook reflects our confidence in our businesses,” Culp said. “In GE Vernova, power is delivering with gas power stable, and renewable energy is taking action to drive operational improvements as it also begins to benefit from external catalysts like the Inflation Reduction Act. As a result, we expect high single-digit revenue growth and strong free cash flow generation in 2023 for GE. We are making good progress on our plans to launch these independent, investment-grade, industry-leaders that will unlock greater value for our customers and shareholders.”
Culp noted some headwinds going into 2024, including the continued challenge of inflation. But he noted some encouraging signs in the market and the company predicts growth in 2024.
“We’re looking at just about everything we can,” Culp said. “With respect to Vernova, we look at utilization in gas and wind, we can see what’s happening in real-time
. Even in Europe, we’ve been encouraged by the utilization of the gas fleet. That said, we don’t want to suggest that we’re immune. With 60% of revenue now in services tied to those real-time dynamics, we’re watching carefully, but we wouldn’t be guiding a high single-digit topline number this year if we weren’t confident that our positioning, both with the aerospace recovery and the energy transition, sets ups up to do well here in ’23.”