Global Supplier Partnership Summit: Keynote Address by Philippe Piron | GE Vernova

Excellencies, distinguished guests. So a lot has been already said, but I'm going to try to summarize a little bit what we are doing at electrification within GE Vernova. What is exactly electrification? Electrification is a process that substitutes technology using fossil energy with technology that are fueled by electricity from the point of generation to the point of consumption. Encompassing power grids and power conversion systems. As we can see, what we are doing is systems that obviously evacuate the power from the fourth generation solutions, transmit it, distribute and as well converting it to different kind of energy for the final end use, allowing the decarbonization. So whatever it is about propulsion, thermal power to heat with the different furnaces or catalytic cracker, and on chemical energy when it comes to battery storage or eFuels, hydrogen, clean ammonia, clean methanol. Obviously we are benefiting from a very strong tailwind. Since 2022, the electrification segment has been growing systematically every year by more than 20%. Our current backlog is more than $20 billion. Whereas less than two years ago, it was less than $6 billion. It gives you a feeling about the speed and the necessity to have strong partner with us to continue this profitable growth, which is crucial for our future. We are benefiting from excellent tailwinds and big megatrend, growth driver obviously the integration of renewable but more globally, the decarbonization of the PNU and especially on the industrial decarb. And I would say as well, the fact that the grid in particular is essential to national security. The recent conflict has demonstrated that the grid is an element which is absolutely vital for any nation. Without transmission, distribution, electricity, no telecom systems, no water treatment, no command and control for the armies. So that is really a mission critical element that could help us for the future to see a continuous growth for the next not only five years, but probably 10 to 20 years. Grid stability and flexibility is as well an important driver. We have been seeing today and yesterday how grid stability is important to this Kingdom because as long as we increase the level of renewables in your power mix, the more unstable your grid becomes. And for that we are solutions obviously based on pure electronics or on rotating machines like synchronous condensers, or even on software solutions, in order to make it more resilient and more capable to sustain this diversity of energy source, whatever it is dispatchable source or more viable intermittent source of energy. Modernizing the grid and the grid is obviously something which is aging, all over the world is the last point, which is critical for us because actually, these supercycles, Scott and Mavi were mentioning is also something quite critical for the grid as in part of the grid that's been built in some countries 70 years ago, in other countries more recently, but still 30, 40 years ago, we are building a new grid for the future due to this expansion of the needs with as well to the necessity to continue to have a very modern and smart grid in order to manage these higher level of complexity. And finally, I would say digitization of the world is as when the last points for this growth we are experiencing. We are speaking a lot about AI and data centers, but globally all the IT telecom digitization of the world cannot work without the electricity. And that's another reason why the grid and the whole power to X power conversion system is so important because we are supporting this modernization of the world. If you have a look to this growth, as I was explaining, we are expecting at what is the addressable market and it's very modest views, to have a business to grow by a factor of two in terms of addressable market for GE Vernova from $75 billion for the segment, we are serving to $170 billion. When I'm listening to His Excellency this morning and yesterday to SEC is probably extremely understated. Remember yesterday we heard about $150 billion of investment which was declared by the SEC. What I'm hearing this morning, 400 new substation. That's totally huge only for this country. So it shows all the potential for all the suppliers and the partners we have all over the world, and in particular in this Kingdom, in order to fulfill the possibility to grasp excellent profitable growth opportunities. I will not develop too much the right side of this page. But just to give you an idea, we doubt the electrification, the 500 gigaton of CO2 to be reduced in order to reach net zero at worldwide level is not possible. Obviously, decarbonization for generation is a key element, but it represents 25% to 50% of this emission to be abated. After that, you need still to make an effort on energy efficiency. It represented 25% of the submission to be abated. And on this, all the power systems is really the power drive. All the software solutions, which is really optimizing the energy consumption is a key element. Electrifying the end use. I was speaking about the transformation we can see on the oil and gas industry going more on electrical LNG, going more on the electrification of oil and gas platforms but as well, we have the steel and the metal industry. Most of these industries in the world are considering electric arc furnaces, different kind of catalytic converter that would go through electricity. That's an interesting I would say outlet for our industry which shows how we are contributing. And finally, what I would call the heart to abate, emissions. And here it's all low carbon issues. If you look at hydrogen, green hydrogen, ammonia, methanol and obviously carbon capture and sequestration still nearly 50% of this emission to abate. So whatever we are going to need in 2050 net zero or before, all these different drivers are going to be crucial for the world and we and electrification contributing, at all levels to these targets. I would say my expectation regarding all partners and suppliers is definitely in line with the SQDC motto that we have at GE Vernova I will add first as well. Obviously, the necessity for partners to work together on engineer solution, we need a 'design to cost' approach that would make this revolution affordable. And for that we do not have all the solutions in our heads. It should be a co-construction we need to have with our partner and suppliers to find the right spot, the right definition of the product that make the things affordable. Quality is paramount for us. You understand that growing so fast we cannot afford to troubleshoot our suppliers every day. So quality product integrity, reliability is the number one focus for all the supply we're receiving. Because that's the key element to satisfy the end user and the customer. But as well to make sure that the growth is possible. On time delivery and even I would say, lead time reduction is a key competitive advantage. Today, we have been making a quite big breakthrough when it comes to the grid connectivity on the datacenters, and one of the most important key success factors for all the E class sellers, whether it is Google, Amazon, Meta was lead time. Lead time. How to accelerate this revolution. How to accelerate the energy transition, how to accelerate the connectivity. So as a partner, as a supplier, if we are really capable to reduce your lead time on a continuous basis year after year, that's a major advantage for us that we can leverage and then we can benefit to be even more competitive, to serve the needs of the country. Here in Saudi Arabia and more globally in the region or even at a worldwide level. Cost reduction, obviously. I was speaking about affordability. That's an element in this very, very bullish groove where sometimes we are not completely underlying, but it's becoming a topic more and more. If we want to continue to have this double digit growth for the next ten years, we need as well as suppliers, as OEM to be really responsible and to give the right level of cost competitiveness to ensure that the end user, and as well the consumers, will have the possibility to access to this revolution, that is the energy transition. And responsiveness, obviously. Timely and transparent communication. The way to communicate on bidding and response is the key elements. If you are ticking all the box on this different element, you are definitely an excellent suppliers for us and would like to work more with you because there is so much to do here in Saudi Arabia and the regions that I'm sure that there are really huge opportunities to share together. Thank you. Thank you so much, and thank you for your collaboration and looking forward to meeting you and working with you for the next ten years. Thanks a lot.