Vestas and GE are dominating the US market even stronger now and consequently bag the massive SunZia wind project

On December 27, 2023, Vestas announced a massive 1.1 GW (242 turbines) order from Pattern Energy for their 3.5 GW SunZia project in New Mexico. Yesterday, January 9, 2024, GE Vernova announced a 674 turbines order from Pattern Energy for the remaining 2.4 GW of the project.

With more than 900 turbines, the SunZia project is the biggest wind project outside China and can represent around 10% of the US onshore wind installations in 2025 and 2026, contingent to the final installation schedule and US market development.

The deal is also somewhat illustrative of what is happening in the US onshore wind market. The market takes off (again) fueled by the IRA, (to-be) workhorse machines win the deals, and the market is largely split between GE Vernova and Vestas.

IRA - local production is key to win.

Both players benefit from their production facilities in the US to an extent from a local supply chain unlocking additional tax credits for themselves and the project. Vestas will supply the nacelles and blades from their facilities relatively close by in Colorado (Brighton and Windsor) - logistically spot on for the SunZia project (500 miles distance). GE Vernova has its production further away in Florida and the blades will come from the LM Wind Power facility in North Dakota (both around 2.5x the Vestas distance).

Competitive US product = high capacity factor + standardized product + proven technology.

The GE 3.6-154 has a very low rated power (193 W/m2), which translates into a high capacity factor for the turbine, which again is key for US projects. The machine is new and workhorse-like quality and reliability has still to be proven. Vestas is banking on the 163m rotor version of their extremely optimized 4 MW platform, probably the best onshore turbine developed so far. Vestas has installed 19 GW of the 150m rotor version of the 4MW platform as of September 2023.

GE and Vestas “duopoly” in the US market

Customs regulations effectively ban Chinese OEMs from the US market, Nordex and SGRE are focusing on Europe. In addition, SGRE has stopped selling their 4.X platform because of their quality issues; their latest US product, the SG 4.4-164, falls into this category. Enercon is not active in the US. GE Vernova is heavily focusing on the US market and targeting a 70% US backlog for the start of 2024 and Vestas is extremely well positioned from a product and supply chain perspective.