How GE India is making a bold bet on wind power and disrupting the renewable energy market through its technological innovations and a new business model.
Global firms that have been around for more than a century can be called many things though lean is certainly not one of them. And General Electric is no exception. But as times change, the U.S.-based behemoth once described as one of the “best managed industrial companies known to investors” by The Wall Street Journal in 1900 has been furiously cutting the flab to keep pace with leaner and meaner modern corporations. More than 125 years and many ups and downs after its founding, GE is now focussing on just a few sectors instead. Over the past few years, GE has spun off many of its businesses to get into shape, leaving it with four broad units: GE Aviation, which makes aircraft engines; GE Healthcare, which manufactures medical equipment; GE Power, a fossil-fuel business it has been in for over 100 years; and GE Renewable Energy, its bold bet on the next-generation energy source. It also holds stakes in full-stream oil and gas company Baker Hughes and railway equipment maker Wabtec, according to the conglomerate’s annual report for 2018.
GE certainly knows which way the wind is blowing. As it dramatically transforms itself, its laser-sharp focus on green energy isn’t just restricted to its global operations but also extends to India. At the centre of GE’s green energy strategy is the hybrid technology developed by wind energy researchers at the conglomerate’s John F. Welch Technology Center in Bengaluru. Though tasked with the job of redefining “what is possible in the future of power, aviation, renewables and healthcare”, the centre’s bragging rights are reserved for renewable energy. Here, some 5,300 technologists and engineers from different disciplines busy themselves solving some of the toughest energy problems faced by their customers. And as the world turns to renewable energy to combat climate change, GE India has installed 6,764 gigawatt hours of wind energy in the past five years.
Why is GE placing a premium on hybrid technology? It’s not just because of its potential to disrupt the renewable energy space, but also because it allows the organisation to create a new business division that can become a profit centre in the near future. “The future of renewables will not just be about extracting the maximum energy either from wind, solar, or hydroelectric projects, but also about using the potential of hybrid technology,” says 59-year-old Vishal Wanchoo, president and CEO of GE South Asia.
But what exactly is this hybrid technology? Wanchoo, an alumnus of IIT Delhi, says hybrid technology makes renewable power available 24×7 to a grid through different combinations—solar and wind, wind and hydro, hydro and solar, with storage if required—to be managed by intelligent control systems. It is a proprietary technology that has been patented by GE India and is touted to be the next big thing in the wind energy space. Hybrid technology could be a major driver for India’s green energy goals. Co-locating wind turbines and solar panels in a single plot where there is abundant sun and wind, using intelligent control systems to convert the alternating current of wind and the direct current of solar into common electrons to be evacuated through a single transmission line to the grid, is perhaps the best solution for India to meet its renewable power target of 175 gigawatt (GW) by 2022. “Since many parts of India are blessed with both wind and solar energy, the two energy sources can be made to complement each other,” says Danielle Merfeld, chief technology officer of GE Renewable Energy. The good news is that the share of renewables in total electricity supply jumped to 7.8% in FY18 from 5.5% a couple of years ago, according to a recent report on renewables by the Centre for Science and Environment.
As part of the Paris Agreement, India has committed that 40% of its power capacity would be based on non-fossil fuels, which includes wind energy.
Wanchoo says this technology is a game changer in terms of reducing the country’s carbon footprint and is ready to be exported to other nations which like India suffer from two limitations—low wind speeds and scarcity of land. Low wind speed nations are those with wind speeds of 6-7 metres a second through the year. In contrast, in Europe it is 10 m/s, while it is 8-9 m/s in most parts of the U.S.
With fossil fuels set to run out in the next 100 years, nations are betting big on green energy. At the Paris Agreement, India committed that 40% of its power capacity would be based on non-fossil fuel sources—which includes nuclear energy and hydropower—by 2030. No surprise then that the government’s subsidy for renewable energy has grown almost sixfold, from ₹2,608 crore in FY14 to ₹15,040 crore in FY17, according to an International Institute for Sustainable Development report on India’s fossil fuels and renewable energy.
Policy support for green energy has also come from the identification and assessment of potential sites through the National Institute of Wind Energy, waiver of interstate transmission charges, and customs duty exemption on certain components of wind electric generators. Recently, minister for power, new and renewable energy R.K. Singh asked the Reserve Bank of India to remove the priority sector lending limit for the renewable energy sector to encourage public sector banks to lend more. Having wind and solar at a single site also makes economic sense for developers because tariffs for renewables have been falling steadily, with wind energy prices touching ₹2.43 per kilowatt-hour (kWh) and solar ₹2.44 per kWh. It remains the cheapest source of energy in the country at less than ₹3 per kWh. “The idea is to ensure the capital cost of setting up the twin projects in a single location should be much lower than setting up separate units in different sites,” says GE South Asia chief technology officer Alok Nanda, who is also CEO of the Bengaluru technology centre. The success of hybrid technology, he argues, has already been proven in several studies and in a couple of pilot projects. “With falling battery prices, it will become the most-preferred option for developers,” says Nanda. ReNew Power chairman and managing director Sumant Sinha agrees. A lot of technological innovations in the past three years have allowed developers like him to generate far more power from the same wind speeds, Sinha says. “And once storage is in place, it really does not matter whether one is using solar or wind energy. But the problem with storage is that it is still very expensive… storage costs have to come down quite substantially for them to become economically usable,” he adds. Storage can either be in the form of a battery or pump storage. While lithium-ion batteries are common, pump storage is possible only in a few countries because it involves pushing stored water up a terrain using solar or wind energy and then releasing it at a time of lower energy generation so that it falls on the wind turbines and rotates them to generate electricity. As Gilan Sabatier, general manager, South Asia & ASEAN, GE Renewable Energy, says, “Storage is probably the last link between having renewables as a part of the energy mix and renewables being the whole of the mix.” Sabatier believes the war on cost has been won because the most expensive renewable power is available at less than ₹3 per unit compared to ₹4.10-₹5 per kWh for thermal power. But others are of the opinion that renewables will become a real game changer when the cost of generating renewable power becomes less than the running cost of thermal power.
Let’s get back to the challenge Nanda’s team faced to evacuate solar and wind energy via a single transmission line. “We developed a common inverter for wind and solar with creative power electronics and innovative model-based controls at turbine and farm level,” he explains.
Such has been the impact of this technology that a separate hybrid renewable division has been created within GE by merging the other verticals of solar, wind, transmission, and grid into a single unit. Running the hybrid plants will require leveraging strengths of all these different verticals, explains Wanchoo, who also has a master’s in computer engineering from the University of Southern California.
The biggest hurdle in commercialisation of hybrid technology is cost. Wanchoo says it isn’t fair to compare the tariffs for hybrid technology with the tariffs for wind or solar power. “A fair comparison should be with base load power or thermal energy, which averages between ₹4 and ₹5 per kWh,” he says.
But even the best hybridisation strategy won’t reduce the importance of continuous improvements in wind and solar energy technologies. And customisation of wind turbines for Indian conditions is already paying dividends. For instance, the plant load factor (PLF) or efficiency of these turbines has already gone up from 20% to 35% in the past three years. “The impact of increased PLF means a 40% cost reduction for developers,” says Sinha. ReNew Power has 4,500 megawatt (MW) of commissioned power, which Sinha wants to double in the next three years.
There are a few structural factors that constrain the growth of wind energy in India. First, there aren’t too many sites which have the required wind strength, and the best ones have already been taken. “Therefore, developers are unlikely to get 100 MW of wind energy from one site in the future,” says Sinha. Compounding the problem is the timely evacuation of power from these sites in the absence of adequate transmission lines and grid connectivity.
Second, the variability and volatility of wind energy is much higher than that of solar energy and therefore predicting the actual output is more difficult than for solar. For instance, the variability of wind energy between two consecutive years can be as much as 10% while that of solar is just 2-3%. “But the biggest challenge with wind energy is that wind speeds pick up the most during the monsoon season when demand is low and hence utilities such as distribution players may not be interested in picking up the extra load,” says Sinha.
Once storage is in place, it really does not matter whether one is using solar or wind energy. But the problem with storAge is that it is still very expensive . It is an incremental cos t. . .storage costs have to come down quite substantially for them to become economically usable.
Sumant Sinha, chairman and managing director of ReNew Power.
Here’s where GE steps in. To generate higher wind energy from the same site requires three things: increasing the size of the blade, raising the height of the towers on which the wind turbine rests, and modifying the control system that runs the turbines. Since power generation is directly proportional to the swept area of the blades, GE’s blade manufacturing facility, the Bengaluru-based LM Wind Power which it acquired in 2017, is busy manufacturing longer blades. Over the years, the blade length has increased from 40 m (generating 1.6 MW of wind power) to 65.4 m (2.5 MW). It is set to hit a size of more than 70 m, which will generate 5 MW of power. Similarly, the rotor diameter of the turbine—the wind catching area—has expanded from 82.5 m to around 145 m, depending on the length of the blade. Sabatier says the next generation of turbines will have a rotor diameter of around 150 m, “which will allow the blades to capture 20-25% more wind at any site”.
But manufacturing bigger blades comes with its own set of challenges. Transporting these can be a logistical nightmare. So LM Wind Power has come out with its patented technology of a “jointed” or split blade for lengths of more than 70 m. In these blades, the longer root—the lower end of the blade of nearly 60 m—and the short tip of 16 m are manufactured separately and are joined by a special pin on the site. This not only reduces the transportation cost—the two ends of the blade can be carried separately—but offers other benefits, like carting only the tip for repairs. “What the jointed blade allows you to do,” explains Sabatier, “is to mass-produce the root of the blade in massive factories in a few countries and customise the tip according to the local needs.” Mass-producing the root also cuts costs.
Customising the blade tip for local conditions or even for individual wind farms—depending on the exact position of the turbine in the farm—is important because it (the tip) generates all the energy and faces wind speeds of nearly 280 km per hour. So, the tip is protected by using specialised polymers or other chemicals, keeping in mind the weather conditions at the site. For example, in freezing temperatures, the tip can have a heating element to prevent accumulation of snow. The tip has to last for 25 years since most contracts are for that duration.
“The real challenge is to enable field assembly and ensure the integrity of the joint so that it does not break under extreme conditions,” says Nanda, adding that effective inspection techniques using electromagnetic waves have been developed. Reducing the weight and the noise produced by these blades is as important as ensuring a fine balance between toughness and their high absorption rate. So, GE is adding carbon fibre and balsa wood to traditional glass fibre blades to reduce the weight, while also ensuring greater strength and flexibility. But they are expensive, and so, used sparingly. To reduce the noise made by the blades, the company turned to nature. Since the serrations on its wings help an owl swoop down on its prey silently, LM Wind Power made serrations on the edge of the blade to cut down on the noise while rotating.
With the levelised cost of electricity—or the cost of electricity delivered on the grid—becoming the most important criterion for utilities, companies have been forced to make changes in the towers too. As the blades get bigger and the machine head—a closed box that houses the shaft, gearbox, generator, and control system, and sits atop the tower and rotates with the blades—becomes heavier, there is a need for bigger towers. Adding more steel will add to the cost; so GE has been mixing it with concrete. Other innovations GE is working on are making the towers modular, adding lattices, and finding new composites.
The future of renewables will not just be about extracting the maximum energy either from wind, solar, or hydroelectric projects, but also about using the potential of hybrid technology.
Vishal Wanchoo, president and CEO of GE South Asia.
That’s not the only way to counter the need for bigger towers though. By pitching the blade at a certain angle, developers can optimise the turbine’s performance by balancing the energy captured and load distribution. “If you can ensure proper distribution of the load, then any increase in energy capture does not mean bigger or stronger towers,” Nanda says.
This breakthrough in control software from the Bengaluru centre has had the biggest impact in the country. ReNew Power, among other developers, is using this solution from GE India. Nanda says the “pitching-the-blade strategy” has been a game changer for GE in the wind energy space since it has the ability to change the dynamics of the system. An added benefit is that this innovation allows developers to remotely control the orientation or angle of the blades from their offices in order to capture the maximum amount of wind energy at any given time. The developers can “turn on” the turbine when winds gather a certain speed or shut them down when conditions turn rough, to protect them. While the above three innovations help generate higher wind energy from the same site, GE India’s other big innovation has been a change in the company’s business model. Instead of selling individual wind turbines like in the past, GE now delivers turnkey projects—the full array of products and services that are required in a wind farm. “Today 80% of our wind turbines are sold as part of the wind farm projects, where you have to deliver and assemble the turbine at the site after buying the components from the vendors, and ensure transmission of power to the grid,” says Frenchman Sabatier, whose mother is a Parsi from India. But despite this, in FY19, India added only 1,544 MW (1.5 GW) of wind energy capacity, which was lower than the 1.7 GW commissioned in FY18 and much below the 5.4-GW mark of FY17. “The disruption in wind energy was led by a shift to the tariff-based competitive bidding (TBCB) from feed-in-tariff (FIT), which would not only make wind more competitive versus solar, but also make the market sustainable at 4-5 GW per annum,” says Bharat Parekh, analyst at CLSA, a broking firm. While FIT works on the basis of long-term arrangements and fixed pricing depending on the cost, TBCB is all about competitive bidding in auctions. “It is this change in the bidding process that has not only resulted in some kind of disruption in the system, but has lowered the cost of wind energy,” adds Sinha.
We know that the eventual winner will be the one who can provide power to the utilities at the cheapest r ate through an embedded intelligent system. Therefore , we are building an application or a platform to capture all the information, and make intelligent decisions.
Alok Nanda, CTO, GE South Asia and CEO, John F. Welch Technology Center
I ask Sabatier why others like Pune-based Suzlon Energy, Denmark-based Vestas, and Spanish player Siemens Gamesa are ahead in terms of installation capacity, despite so many innovations. He promptly replies that it is only in the past two-three years that GE India has found the perfect combination of customised blades for Indian conditions, the right business model, and the right vendor ecosystem for localisation of products to keep costs down. And all the innovations have been developed in that time.
No wonder then that GE India remains confident not just about the future of wind energy in India, but also the prospects of the company. “India will become one of the top three renewable energy markets in the world and may even overtake the U.S. We are looking at 10 GW of renewable energy every year,” he says.
The differentiator, according to Nanda, will be the company that can create the most intelligent control systems that can gather data from various sources, including the meteorological department, inform the utilities about the wind or solar energy generation on that day, and advise them on the form of energy they should buy at any particular moment to keep electricity costs at the minimum. It will also be about counting electrons from various energy sources going into the grid and setting up the payment system. “We know that the eventual winner will be the one who can provide power to the utilities at the cheapest rate through an embedded intelligent system. Therefore, we are building an application or a platform to capture all the information from hybrid generation systems and make intelligent decisions,” he says. That could well be the answer to both India’s energy and carbon emission woes.