STRATEGIC IMPLEMENTATION

GE Renewable Energy

Group 2, Division H
Arpan Daswal H011 Delvin Devakumar H015 Oindrila Dhar H017

Yajur Gulati H019 Himani Kakkad H026 Apoorva Somani H058

Introduction & History
● Founder is Thomas Edison
● One of the biggest conglomerate on the planet
● Currently operates in the following divisions –
○ Aviation
○ Renewable Energy
○ Power
○ Healthcare

● GE Renewable Energy recently spun off by

combining its grid solution and hybrid renewable
energy portfolio
Industry Overview
1 Total Market for Renewable Energy in 2017 was $230 billion and it was expected to
decline slightly by 0.7% in 2018

According to the capacity, renewable power generation capacity was expected to rise by
2
13.3% in 2018 led by Solar PV and Wind Power

3 Solar is expected to have highest growth in terms of capacity in 2018 at 21.9% and have
36% of share of total capacity in 2018

By the end of 2018, Asia is forecast to be the leading region for all renewable power
4
generation technologies

Wind market is expected to increase at a CAGR of 12% until 2025 which will lead to
5
OEM collaborations and M&A activities are also expected
Industry Overview - Trends
❏ Rise in Solar Capacity across the world

Region Annual Capacity Annual Capacity

Addition (GW) 2017 Addition (GW) 2018

Asia 73.9 57.76

North America 12.05 10.81 At the end of 2017, renewable power generation capacity
touched 1,164.7 GW. Wind power still accounted for the
Latin America 4.06 5.64
largest share, with an installed capacity of 539.1 GW, but is
expected to be surpassed by solar PV in 2018. Global
Europe 8.14 10.77
installed capacity is expected to more than double by 2025
Africa and Middle East 3.62 4.55
to reach 2,748.0 GW

❏ The China Effect - China established itself as Global Leader in renewable power generation. Due to
changes in Solar Policy with removal of FiT’s in China, annual production is expected to decline slightly
❏ New Players in Market - Entrance of number of players from Oil & Gas, Mobility, and ICT sectors so as
to make maximum of industry transformation
What is the Strategy?
2018 2019F 2020F

Revenues $9.5B Strong Down

Segment Margin 3.0 % Contracting Flat to Expanding

Free Cash Flow $0.5B Down & Negative Better but Negative

2019 2020

● Handle YoY drags from Alstom JVs and
legacy projects, US / China Tariff War and
Customer Settlements
● Variable Cost Reduction by delayering of
the work force
● Expect on – shore wind volume to decline in
the US after strong PTC deliveries
● Invest in new wind projects
● Integrate Grid, Solar & Storage and achieve
synergies
● Legacy Alstom Hydro project run off by
2020
 COMPETITIVE POSITIONING

Intensity of Competitive PORTER’S 5 FORCES Threat of Substitutes

Rivalry Switching
Competitive
Financial muscle Cost
of competitors
Rivalry 5
5 5 4
4 4 3
3 3 2
2 Bargaining 2 Bargaining
1 1
Number of Relatively new Power of… 1 Power of… 0
players
0 players 0
Now
Cost efficient
Renewable
sources
Threat of Threat of Sources
Competitor size
New… Substitutes
Bargaining Power of
Bargaining Power of Buyers Threat of New Entrants Suppliers
Low
switching Niche
Cost of
cost segment
5 generation 5
4 5 4
3 4 3
2 3 2
Established 2
1 High Regulation 1
0 players 1
0 0
Various Limited
Price High order
other number of
sensitivity value
alternatives Technologicial High capital players
Barriers investment Source – IBEF Renewable Energy
 COMPETITOR ANALYSIS
Vestas
Overview
Strengths
•Vestas Wind Systems is a Danish manufacturer,
seller, installer, and servicer of wind turbines • It has both technology and solutions that
provide a lower Cost of Energy
•It is currently the largest wind turbine company • Operates in emerging wind energy segment
in the world and employs more than 24,800 which has high potential in near future
people globally • Best in class R&D department
The company is said to have installed 59,000 • Unique business model with proactive and
turbines on behalf of customers in more than 70 customer-centric approach to Partnership
countries across six continents
Competitors Opportunities
• GE Energy
• World markets moving towards green energy
• Siemens Gamesa like wind power
• Enercon • Produce clean pollution free energy and hence
• Nordex supported by many non-profit organizations
• Goldwind • Growth of Smart grid infrastructure
• Additional regulation will increase the demand
for companies in the renewables industry
SWOT&C
Weaknesses
 High turnover rate and limited global
penetration
 Small share in high potential markets
 High dependence on US markets
 Management needs to be able to adapts to
technological changes in the industry
immediately
Threats
• Wind energy is still perceived as expensive. Loss
of government subsidies could drive up prices
• Intense competition from other firms in
renewable energy segment
• Changes in rules and regulations of different
countries
• Rising bargaining power of customers
 Pain Points
Limited Availability of •Implementation by all countries not sustainable
Rare Metals •Resource available in a handful of countries Demand of
Cash Crunch Renewable
•Reduced from $500 per megawatt hour to $50 Resources
Cost to Produce Electricity •Still a high price and needs to be reduced • Each division can • High demand in
only use its profits Europe, China and
for any investments USA
Land Allocation •Competition with high value alternatives
• Demand still very
low in other
Government Regulation & countries
•Uncertain regulations
Policies
Future
● The renewable energy market for wind power was $148.0 billion in 2017 and is expected to reach $251.8
billion by 2025, registering a CAGR of 6.7% from 2018 to 2025
● The U.S. renewable energy market for wind power was $12.8 billion in 2017 and is estimated to reach
$21.8 billion by 2025, at a CAGR of 6.8% during the forecast period.
● The India renewable energy market for wind power is estimated to reach $7.3 billion by 2025 at a CAGR
of 7.6%

COMPARATIVE SHARE ANALYSIS OF RENEWABLE ENERGY MARKET FOR

WIND POWER, BY COUNTRY, 2017 & 2025 (%)
 Demand and Forecast of the Wind Energy Sector
Window Turbine Rotor Blade Market:
Size and Demand Forecast (USD Bn) Solar and Wind Energy
25 22.26 Consumption in TWh, Global
19.37 20.02
20 16.95 17.65 1500
14.89
15 13.23 13.2
1000
10
5
500
0
2017 2018 2019 2020 2021 2022 2023 2024
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Wind Energy Consumption
Solar Energy Consumption
Demand and Forecast of the Wind Energy Sector

Unit 2016 2017 2018 2019 2020F

Percentage of Total
Non – Hydropower
45.37 45.41 43.41 42.39 41.62
Renewable
Generation
% YoY 22.36 20.8 12.36 12.01 10.07
TWh 308.06 372.14 418.12 468.35 515.52
Thank You!!