GE sees sharp growth in Italian renewables business

ROME (Reuters) - General Electric Co. expects its Italian wind power unit to grow roughly 30-40 percent annually while its smaller solar energy business in Italy is seen doubling next year, an Italian executive said.

GE Energy, which produces turbines for wind farms, will have supplied turbines for 262 megawatts (MW) of Italian installed wind power capacity by the end of 2009, and is expected to account for further capacity of about 100-120MW next year, the executive said.

"We expect our wind energy business in Italy to grow since the prospects for growth in the industry are excellent," Claudio Organtini, who oversees GE's Italian solar and wind power business, told Reuters at the Eolica Expo wind energy conference.

The industry had felt the pinch from the economic crisis in recent months, but its long-term outlook was bright, he said, citing industry forecasts that Italian wind power capacity will more than quadruple to 16,200 MW by 2020.

"There has been some slowdown (in the Italian wind power sector) because of the markets ... but I'd say there will be an upturn next year," he said.

GE's wind and solar energy business is its third-biggest in Europe behind Germany and Spain, and promises to be an area of strong growth in the future, even as attention on renewables shifts to Eastern European countries like Romania, he said.

GE's Italian solar power business, which supplies photovoltaic systems, accounts for installed capacity of 5-6MW and expects that to double in 2010, he said.

It could continue growing at that rate if current government incentives are maintained, he said.

"We're in talks for 6-10MW, so we think that in 2010 we will double our business," Organtini said. "It's a small business but we're taking it forward step by step."

The pace of growth in the Italian solar power industry depended on whether the government in 2010 sharply changes incentives offered to encourage investment, he said.

Still, investment costs in the Italian solar power industry have fallen 30-40 percent in the past few years, meaning that it could reach grid parity -- the price level at which photovoltaic power becomes competitive with traditionally generated power -- by 2010, Organtini said.

(Editing by Sue Thomas)