The U.S. wind energy sector needs “another level of market momentum” that includes policy certainty for GE Vernova Inc. to invest in growth, the company’s CEO told an investment bank gathering May 28.
Speaking at the Bernstein 41st Annual Strategic Decisions Conference, Scott Strazik said customers are being careful because of a high level of uncertainty around what will or won’t be included in the final version of tax-focused legislation now being debated in Washington, D.C.
“I don’t think the market is accepting the bill as it is right now so we’re not seeing that order activity,” Strazik said. “Depending on the incentive structure, it may lead to renegotiations […] And that, in the medium term, could lead to even more market softness.”
GE Vernova’s wind unit recorded a first-quarter EBITDA loss of $146 million on revenue of $1.85 billion, with both of those numbers being an improvement from early 2024. (That’s despite the decision by Strazik and his team to wind down their money-losing offshore book of business.) But “a dynamic U.S. policy environment” hurt new business early this year: Customer orders fell 43% from the same period a year ago and Strazik in late April told analysts executives “remain cautious on the timing of an onshore order inflection in North America.”
Across GE Vernova, which spun out of the former General Electric Co. holding company in the spring of last year, teams have been cutting costs both on factory floors and in back offices. Given the weak wind market, there’s extra urgency in that part of the company and Strazik said he’s happy with the improvements being generated to align GE Vernova’s supply with customers’ demand.
Or good-enough profitability—even though the wind division is on track to produce high-single-digit EBITDA margins while delivering almost 2,000 turbines this year, four years after not making money while shipping 4,000 turbines. Growing the bottom line, Strazik said, will require a big step up in North American market activity from the 6 gigawatts to 9 gigawatts that is being installed annually.
“Many people think that number needs to be 15-plus gigawatts,” he said. “You get to 15 gigawatts of the industry in North America and our investors are going to really, really like our wind business.”
Pointing to the much greater volume of turbines it was shipping a few years ago, Strazik added that GE Vernova already has the capacity to ramp its output “if the market comes.”
Shares of GE Vernova (Ticker: GEV) rose nearly 3% to about $485 on a down day for the broader markets thanks to Strazik’s talk at the Bernstein conference. They have now rallied more than 80% over the past two months, growing the company’s market capitalization to $132 billion.
