GE joins XD to gain grid foothold

General Electric Co said on Wednesday that it has formed a partnership with China XD Electric Ltd, a move that will give the United States-based conglomerate a foothold in China's vast electricity infrastructure market.

The deal was initially announced last May, and it has since gone through regulatory approvals in China.

Through a private placement, GE took 15 percent of the shares of XD Electric, one of China's largest manufacturers of electricity transmission and distribution equipment. Another component of the partnership includes the formation of a joint venture to offer Chinese customers GE's localized grid-automation equipment and services.

The deal will combine GE's grid-automation capabilities and global energy presence with XD Electric's comprehensive portfolio of high-voltage power equipment to provide total solutions for T&D customers.

The partnership will give GE access to equipment such as large transformers and breakers that transform and switch power within the grid, Zhang Xianguo, general manager in GE high-voltage equipment global product line, said.

The partnership will also provide a gateway for XD Electric to access the global market and expand its product portfolio, especially in grid-automation equipment and technology, Zhang said.

The partnership shows GE's ambition to expand the share of its profits derived from industrial businesses, while pursuing expansion in emerging markets such as China.

According to Zhang, much of the transmission and distribution growth is expected to continue to take place in China, which has invested heavily over the past decade in grid technology and infrastructure. China represents about one-quarter of the grid industry's $100 billion forecast global expansion.

The deal will help double sales of power transmission products and services in GE's digital energy business to $4 billion annually in the next decade, Bloomberg News reported.

Zhao Xi, an industry analyst with Hongyuan Securities Co Ltd, said the deal would give XD Electric an advantage in bids for grid work. Increasingly, State Grid Corp of China is seeking comprehensive solutions providers for high-voltage power equipment and grid-automation capability, Zhao said.

zhengyangpeng@chinadaily.com.cn