More than 130 years ago, General Electric Co. got its start in Schenectady, New York, after Thomas Edison set up his early operations there. Over the decades, amid big changes in the industry, the company closed plants, and its sprawling campus of 45,000 workers plummeted to less than 4,000.
Still, despite rising costs and a myriad of macroeconomic challenges, GE and New York state are pushing ahead with proposed projects.
GE’s spinoff company GE Vernova pledged to invest more than $50 million and hire 200 workers with the help of federal and state initiatives to bolster wind energy back in May. In November, GE said it completed the first 6.1-158 onshore wind turbine at the manufacturing line in Schenectady, calling it America’s “largest onshore turbine ever to be produced in the U.S.”
And on Oct. 24, New York Gov. Kathy Hochul announced the state’s “largest ever” investment in renewable energy, pledging funds for three new offshore wind and 22 land-based renewable energy projects with a total capacity of 6.4 gigawatts of clean energy. These will power an estimated 12% of New York’s electricity needs. Among the projects is a new manufacturing assembly line in Schenectady for GE’s onshore wind business, where the company will assemble components for its turbines.
While these contracts are still subject to negotiation, the announcement comes at a promising moment in the history of wind energy development in the U.S., following a number of high-profile setbacks.
The initiative is part of a broader buildup of the country’s onshore wind capacity, which is enjoying a boom fueled by government subsidies and corporate demand driven by stricter environmental standards.
The Inflation Reduction Act extended the production tax credit for wind energy projects until at least 2032, which has boosted the renewable energy market, and the wind sector in particular, creating demand for clean energy and strengthening the nation’s energy security, according to lawmakers and wind energy market analysts.
The tax credit became a permanent subsidy in the first 10 years of an energy project, and a growing number of energy asset owners such as NextEra Energy Resources and Berkshire Hathaway Energy have reconfigured their capacity in order to take advantage of the government subsidies and maximize their profits, according to data compiled by IntelStor.
“Historically these tax credits have been one driver of renewable growth,” said Richard Bowers, an economist at the U.S. Energy Information Administration specializing in renewable energy, noting that these tax credits historically were renewed on a year-to-year basis prior to the Inflation Reduction Act. “In 2012, the tax credits were not renewed, and you can see the dip in annual capacity additions in 2013 largely due to this.”
In 2022, the wind energy industry received $3.6 billion in government subsidies and support — 19% of the funding allocated to all renewables — according to the latest data available from the EIA. Almost all of this support was in the form of tax rebates or tax credits.
The subsidies were designed to help the United States catch up with other nations that have been building up their renewable capabilities more aggressively, especially China.
While the U.S. is making ambitious strides, and North America as a whole is leading in terms of new installations globally, it still ranks third in existing onshore wind capacity. China tops the world in onshore wind turbine nacelle assembly, with 82 gigawatts of annual capacity, followed by Europe with 21.6 gigawatts of annual assembly capacity. The U.S. has 13.6 gigawatts, followed by India and Latin America, according to the latest data from Global Wind Energy Council.
GE’s Roadmap
Earlier, New York pledged $300 million to GE Vernova’s development of offshore wind component manufacturing facilities. GE plans to spin off its GE Vernova unit into a stand-alone public company in the second quarter of this year, according to a company announcement at the last earnings call with analysts and investors.
Back in March, GE announced a $117 million investment in GE Vernova, underscoring its own commitment to clean energy initiatives and national sustainability goals.
GE Vernova workers are among the 3,000 GE U.S. employees who are represented by the International Union of Electrical Workers — Communications Workers of America, which just signed a two-year contract extension with GE in April. IUE-CWA representatives did not reply to a request for comment.
In a bid to bolster the U.S. clean energy industry, GE Vernova said in May that it will invest $50 million to establish a new wind turbine manufacturing line in New York. This initiative will contribute to the country’s green economy and create around 200 new manufacturing jobs.
GE’s latest statement in November reasserted commitment for the new facility to recruit 200 workers, including “skilled union operators.”
The state of New York will provide up to $2.5 million for the project through Empire State Development’s Excelsior Jobs Program.
At the time of the project’s announcement in May, U.S. Sen. Chuck Schumer (D-N.Y.) emphasized the broader implications of this latest investment and its significance to the state of New York.
“This major $50 million investment is more than just boosting our clean energy industry,” he said in a statement. “It is bringing critical manufacturing back to America, all while helping the Capital Region reach new heights.”
The $2.5 million in tax credits from the Excelsior Jobs Program mentioned in GE’s May announcement is “performance-based” and is contingent on GE successfully creating 155 jobs in 2024 and five jobs in 2025, according to Kristin Devoe, senior director of communications at Empire State Development, New York’s economic development agency.
The $2.5 million will be allocated over a period of 10 years, based on GE’s maintaining the job numbers and $23.6 million in capital expenses.
New York’s Long-Term Commitment to Wind Energy
Twelve days before Hochul’s announcement, the New York State Public Service Commission rejected requests to increase contract prices for four offshore wind projects, with a combined total capacity of about 4.2 gigawatts.
“I think the timing of the announcement was deliberate; it’s clearly aimed at sending the signal that New York is still committed to the offshore wind industry,” said Fred Zalcman, director of the New York Offshore Wind Alliance. “And the scale of the commitment sends a signal to the marketplace that New York’s serious about bringing offshore wind and achieving its statutory targets.”
Despite ongoing political and economic challenges to the burgeoning industry, New York and other states are signaling their support for the offshore wind energy market and fostering growth of a more mature onshore wind energy segment.
“The states are really doubling down on offshore wind,” Zalcman said. After the New York commission denied relief to early projects, the governor quickly came out with a 10-point plan that included three awards for projects that totaled more than 4 gigawatts, he added.
These commitments aren’t enough to reassure everyone of the state’s support for wind projects. Some projects have already been canceled, likely leading to delays in coming online and onboarding hundreds of renewable jobs that developers have pledged.
The world’s biggest wind energy developer, Denmark’s Orsted, said on Oct. 31 that it canceled two large wind projects off the coast of New Jersey, writing off $4 billion and calling the U.S. the “most painful part of their portfolio.”
Orsted’s projects were the latest to be scrapped as developers grapple with macroeconomic headwinds, supply chain issues and higher interest rates. The Danish developer also failed to secure sufficient tax credits in the U.S. to greenlight the projects, Fortune reported.
For the states, luring renewable energy projects is also about creating jobs. With the latest hiccups, delays in doing so are unavoidable, according to industry analysts.
“Developers have made financial commitments to workforce development. These states themselves worked with local community colleges and other community-based organizations and, of course, organized labor itself as a big training component,” Zalcman said, adding that such efforts will be “somewhat delayed now.”
Still, despite delays and bureaucratic obstacles, industry advocates see wind energy as an essential component of meeting national climate goals.
“There’s just not another resource that provides a comparable scale of generation and capacity factor — unlike, for example, solar that is more intermittent and depends on the sun shining, these turbines are pretty constantly delivering power to the grid,” Zalcman said. “So we just won’t be able to meet our climate targets without offshore wind, full stop.”
