GE Vernova Taking $700 Million Charge as Blade Problem Spreads

(Bloomberg) -- GE Vernova Inc. is taking a $700 million charge after discovering that a flaw in its offshore wind turbines goes beyond a single blade.

The company announced Wednesday that it’s found problems in multiple blades it manufactured, in addition to the blade that fell apart at a wind farm under construction in Massachusetts in a high profile accident in July.  

The company and project developer Vineyard Wind will remove and replace some blades and strengthen others at the offshore project south of Nantucket. The charge comes from lost contracts after the incident, and the disclosure of problems with additional blades represents the latest setback for the nascent US offshore wind industry. 

A blade at the Vineyard Wind 1 project broke apart and washed onto Nantucket shores in July, shutting beaches and angering residents of the wealthy enclave. Construction was halted after the failure but the companies said they received approval Tuesday to install new blades once certain safety conditions are met, according to a statement. 

The blade failure at Vineyard was caused by the adhesive glue that holds the balsa wood and fiberglass together, GE Vernova Chief Executive Officer Scott Strazik said in an interview. “It really does come back to the bonding process in putting together the blades,” he said. After extensive quality checks, the company found manufacturing defects similar to the failed blade in a low-single digit percentage of its blades, Strazik added. 

Offshore wind has hit a number of obstacles in the US that have slowed or complicated development, including inflation, supply-chain issues and community opposition. And globally the rollout of wind turbines isn’t moving fast enough to meet climate goals to triple renewable power capacity by the end of the decade.

GE Vernova also experienced two blade failures at an offshore project in the UK and said in September that it may cut about 900 jobs globally as it moves to shrink its offshore wind business. The company reported third-quarter earnings on Wednesday. Vineyard Wind is jointly owned by Iberdrola SA subsidiary Avangrid Inc. and Copenhagen Infrastructure Partners.

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