When Jérôme Pécresse says he’s in a growth industry, he’s not just talking about business, though that of course is number one for the CEO of GE Renewable Energy. “Renewable energy is mainstream … a major part of power generation everywhere in the world,” Paris-based Pécresse told the Clean Energy Summit in Sydney on July 18.
The technology to produce that power is also having a growth spurt. “There’s only one way rotor size is going, and that is bigger rotors,” says Pécresse of wind turbines. “And towers are getting higher and higher.”
Brains as well as brawn are driving greater energy production: the data derived from thousands of sensors across GE’s fleet of 30,000 turbines worldwide is being subjected to ever-deeper, real-time analysis to find ways to optimise the performance of every single machine.
“The next frontier for renewables is leveraging the full power of digital in the operation of a wind farm,” says Pécresse. “Also, adding storage as an integrated part of what we do … selling wind farms with our own storage capabilities.”
Australia, he told GE Reports, is in GE’s top three markets for wind globally. “Our wind market is getting more and more global,” says Pécresse, adding that when he took over two years ago. “two-thirds of the orders were in the US; this quarter, 70% of the orders were outside the US.”
There is one aspect of renewables that’s reducing rapidly: price. “Market forces have brought down the cost of wind energy everywhere around the world,” says Pecresse. “So if a country retires coal, the economic rational decision is to move to wind or solar.”
Unsurprisingly, the Finkel Report, including a proposed new Clean Energy Target (CET), was the hot topic of the Clean Energy Summit. Equally predictable, perhaps, is that the boss of GE Renewable Energy believes the global uptake of green power is simply an unstoppable force.
“There is a lot of capital chasing renewable projects across the world … this capital will come to Australia if there is the right political signal,” he says. Policy certainty is essential to “provide confidence to the financial community that the government is promoting growth of renewables, and that the regulatory framework is not going to change in six months or one year. Financial investors need stability, and the Clean Energy Target provides this kind of stability.”
At the Clean Energy Summit, Pécresse joined Andy Vesey, CEO of AGL, and Frank Calabria, CEO of Origin, for a panel discussion on what’s needed to ensure the success of the rapidly changing Australian energy sector. Both of the local big-utility bosses echoed the visitor’s sentiments on policy certainty being critical to unlock investment, and urged bipartisan support for all 50 of Finkel’s recommendations.
“Both sides of politics supported the appointment of the Chief Scientist to come up with a package,” said Calabria. “The combination of that package of 50 recommendations is something that industry sees can create a roadmap of better certainty and we support it.”
AGL’s Vesey told the summit: “We have to get clarity around policy to take advantage of these trends in technology. I have absolute faith that we can sort the technology challenge … the bigger challenge is get those policy settings right.”
Calabria warned that as well as delaying investment, a lack of policy certainty during the transition from old to new power generation means that the electricity market “will become more volatile”, and that lack of adequate long-term planning leads to “reliability, security and affordability shocks.”
The panel touched on a topic that Pecresse later told GE Reports needs more focus: “How do you better integrate renewables into the grid… We never talk enough on these panels about the consequence of higher renewable penetration on the grid.”
He explains that solving the intermittency of renewable generation “is a mixed hardware and software issue”, that is both strengthening the grid and improving the software that controls it. “The correct software allows us to forecast when renewables, at what amount and with which parameters [are feeding into the grid]. And it’s also about anticipating the storage needs that goes with renewables.”
On storage, the other hot topic of the summit, Pécresse says GE has the “best pumped-hydro technology in the world”, which makes the company well-positioned with Prime Minister Malcolm Turnbull’s Snowy Mountains Scheme 2.0 proposal (GE generators still operate inside the original hydro scheme), for which a feasibility study is due in December.
“Pumped hydro is used in many markets in the world for storage,” says Pécresse, pointing to Portugal and Israel as two prime examples. “We expect to have a big revival of pumped storage in Australia. It allows us to store a huge amount of energy … and you can inject power to the grid with a time lag of only a few minutes. So in any market that has a closed grid with a lot of intermittent renewables, pumped-storage is a very efficient way to store energy and match the peak of production and the peak of consumption. It is proven technology, and it’s technology where GE Hydro has played for a long time.”
With all of GE’s development in renewables, Pécresse says the GE Store—collaboration between several business divisions on projects—is vital. Australia, he says, “is a great living example of the GE Store … with Renewable Energy, GGO [Global Growth and Operations] and EFS [Energy Financial Services] there is very strong team-work and we get things done.”
Around the world, the GE Store plays into technology development, with GE’s Global Research Centres working on the R&D for next-generation turbines. In the here and now, the GE Store ensures that, “all of the components of the turbines that it makes sense to produce at GE, we produce at GE,” explains Pécresse, adding that the acquisition of LM Wind Power earlier this year means that GE now produces its own turbine blades. As well, “we are working very closely with GE Power Conversion, for our turbine generators, inverters and inductors, and with our GE Grid colleagues on substations, which are sometimes part of our scope on wind projects.”
In the world of renewable energy, “scope creep” is a plus.