The Scene
The wind-power downturn is hitting all corners, from countries selling concessions — Denmark just had an auction with zero bids — while European oil majors Shell and BP are pulling back on the technology and Ørsted, the world’s biggest offshore wind company, is struggling too.
Among those also hit: GE Vernova, one of the world’s biggest manufacturers of wind turbines. Its CEO Scott Strazik told a small group of reporters in New York City this week that while other parts of his company’s business are having to push orders back because of demand — he can “manage” and “adjust” to President-elect Donald Trump’s expected tariffs — the wind business is struggling.
The View From Scott Strazik
This conversation has been lightly edited for speed and clarity.
Liz Hoffman: You’ve got the Trump administration coming in, a big deal. How would tariffs impact your business in China and your supply chain?
Scott Strazik: Our 133-year history as a US-based company is a real advantage. We really have a lot of our core operations inside the US. We make most of our gas turbines in Greenville, South Carolina. Our nuclear business is based in Wilmington, North Carolina. Over the last few years, we’ve invested in much more wind capacity, including in upstate New York. So we have a US footprint to leverage here. We buy materials, of course, from all over the world, including China, Mexico, and Canada, all places that are in the [tariffs] dialog. Those three countries are approximately 5% of our buy. So we can manage and we can adjust.
You decided to build a wind turbine plant in upstate New York instead of in China or Europe specifically because of the Inflation Reduction Act. Do you still feel good about that?
Schenectady also has a lot of symbolism in it, considering that’s really where General Electric started, and we’ve been adding a number of union jobs to support [onshore] wind growth. It’s the largest onshore wind turbine available in the US. But the orders are a little bit soft. In gas and grid, we’re pushing orders out to 2028, 2029. In wind, the orders remain humble.
If Trump is serious about ramping up oil and gas drilling, does that make wind less competitive?
Gas is already fairly inexpensive in the US, so it going lower probably isn’t that much of an impact. It can have a larger impact outside the US, because the cost of LNG being shipped to the UK or Japan is high, and that’s where other renewable energy sources can be more competitive. If you believed in a flat demand environment, that could have an impact on renewables. But I don’t believe in a flat demand cycle. I believe in a growing cycle that is going to still need renewables.
We’ve seen corporate sustainability targets getting lowered or deemphasized a bit. So customers who are buying clean energy, not because it’s cheapest, but because they said they would, have you seen any changes there?
I don’t at all get ‘we don’t care about this anymore.’ Their total demand is going up, so even if the proportion of wind and solar is going down, it doesn’t mean that nominal numbers are going down. That said, clearly within our business today, there are many more leading indicators of growth in gas than in wind. In offshore wind, we haven’t booked a new order in 37 months. We’re not going to chase orders if the economics aren’t there.
On a different note, you’re a CEO doing a public-facing event today in New York, a few blocks from where UnitedHealth executive Brian Thompson was killed last week. Did you think about canceling?
You start just by thinking about Brian’s family, the team, with just such sympathy. We have to navigate safety for our employees all over the world, and in more complicated places, generally speaking, than midtown Manhattan. I’m very fortunate. We have a security team that does a very good job and has done a very good job for a long time. So I wouldn’t say things are materially different today than yesterday. But where we have real safety risks, in parts of the world we operate that desperately need electrons — I think about that every day.