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GE Offshore Wind to Post $1 Billion in Losses // Wind and Solar Performance in North America Q3 // Power Hungry AI

Welcome to Grid Brief! Here’s what we’re looking at today: GE’s brutal offshore wind losses, North American wind and solar performance in Q3, AI’s appetite for power, and more.

GE Offshore Wind to Post $1 Billion in Losses

General Electric’s offshore wind division is set to post $1 billion in losses.

“Offshore Wind remains difficult this year with losses of roughly $1 billion,” Chief Executive Officer Larry Culp said on Tuesday. Culp added that he expects similar losses next year, but with a better cash performance.

Culp’s announcement comes as the wind industry reels from sustained headwinds—supply chain snags, materials costs, component price increases, and higher interest rates. Project delays plus decreases in demand for offshore wind are expected.

According to Bloomberg, GE plans to spin off its renewable energy arm into GE Vernova next year.

Wind and Solar Performance in North America Q3

How have wind and solar performed in North America overall in Q3? S&P Global just released a report looking into that very question. (All images can be found in said report).

“Sixteen of the top 20 holders of North American solar capacity experienced above-average radiation levels in the third quarter, likely resulting in a boost to solar earnings on higher photovoltaic generation output,” reports SPG.

The southern regions of the United States experienced significant increases in solar radiation, with Texas leading the way with a nearly 9% rise above the average. Conversely, the northeastern states, notably New England, saw solar radiation levels drop by mid-to-high single digits from the norm. Despite this, the Northeast only contributes 3.2% of the total US large-scale solar capacity.

What about wind?

“Below-average wind speeds continued throughout most of the North American continent in the third quarter of 2023. While quarterly negative deviations from the norm were not as dramatic as the second quarter, the majority of US and Canadian territories remained stuck with below-normal winds,” reports SPG. But Texas, California, and New Mexico rebounded between July and September due to breezes above the 20-year average.

In the third quarter, top wind energy companies saw wind speeds slightly below average, with deviations of 1.0% below the norm. This marked an improvement from the second quarter when deviations were much higher at 7.1% below average. NextEra Energy Inc., a leading wind energy provider, experienced wind speeds 1.0% below their 20-year average.

The calmer winds in the Midwestern US and Canada were partly balanced by higher-than-normal winds in their Texas and New Mexico projects.

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Power Hungry AI

AI is exploding onto the scene, but it’s gobbling up energy as it grows.

“According to Sreedhar Sistu, vice president of artificial intelligence for Schneider Electric, excluding China, AI represents 4.3 GW of global power demand today, a figure that could grow almost five-fold by 2028,” reports Oilprice.com. “Running AI tasks typically requires more powerful hardware than traditional computing tasks. According to a study by Alex De Vries, PhD candidate at the VU Amsterdam School of Business and Economics, AI consumes 85-134 terawatt-hours (TWh) of electricity each year, or about as much as the energy consumption of the Netherlands.”

AI servers needs lot of power, too. One AI server farm requires the equivalent of several American households.

Conversation Starters

  • China’s renewable energy roll out can’t keep pace with energy demand. “China is investing heavily in renewable generation to curb greenhouse gas emissions as well as reduce dependence on imported oil and gas. So far, however, renewable generation is not growing fast enough to meet growth in consumption, let alone reduce the need for coal,” reports Reuters. “The country has added 226 GW of extra generating capacity in 2023, led by an enormous increase in solar (129 GW) with much smaller increases in thermal (39 GW), wind (33 GW) and hydro (8 GW). But thermal plants have generated far more hours on average (3,344 hours) than hydro (2,367 hours), wind turbines (1,665) and solar farms (1,017 hours), according to data from the National Energy Administration.”

  • Ukraine offers natural gas storage to Europe. “Naftogaz, the Ukrainian state-owned oil and gas firm, is making 10 billion cubic meters (bcm) of natural gas storage available to Europe ‘right now’, the company’s CEO told EURACTIV,” reports Euractiv. “In Brussels, Ukrainian and EU officials took stock of the 2022-23 winter heating season – the first without full Russian gas deliveries – and started making preparations for next winter. As part of the talks, Kyiv said it could make its gas storage capacity available to Europe ahead of the next heating season.”

  • Shell is cutting low-carbon jobs. “Shell will cut at least 15% of the workforce at its low-carbon solutions division and scale back its hydrogen business as part of CEO Wael Sawan's drive to boost profits, it said on Wednesday. The staff cuts and organizational changes come after Sawan, who took the helm in January, vowed to revamp Shell's strategy to focus on higher-margin projects, steady oil output and grow natural gas production,” reports Reuters. “Shell will cut 200 jobs in 2024 and has placed another 130 positions under review as part of a drive to reduce the headcount in the unit, which numbers around 1,300 employees.”

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