CompanyGraph
GE Vernova Inc.
GEV · NYSE Arca · United States
Manufactures gas turbines and then locks in 25 years of replacement parts revenue through blade specifications no one else can legally match.
GE Vernova sells gas turbines and then earns most of its money servicing them for the next 25 years, because every turbine it installs locks the customer into buying replacement parts exclusively from GE Vernova. That lock-in works through the blades at the center of each turbine: they are grown one grain at a time from a nickel-based superalloy in a vacuum furnace at above 1600°C over a minimum 72-hour cycle, and the exact grain structure and alloy composition are unique to each turbine model, meaning any blade sourced elsewhere voids the performance guarantee embedded in the service contract — and a turbine sitting idle costs a utility roughly $1 million a day, so the warranty risk is not one utilities take. All of that aftermarket revenue flows back through just two casting facilities, in Greenville and Belfort, whose furnace count sets a hard ceiling on how many blade sets can be produced in a given month regardless of how much money GE Vernova is willing to spend. The risk to the whole structure is that if carbon regulations push utilities to retire gas plants early, each decommissioned turbine permanently closes one of those 25-year revenue streams, and no amount of new casting capacity can bring it back.
How does this company make money?
When a utility orders a new turbine, the company collects milestone payments spread across the multi-year manufacturing period before the turbine is even delivered. Once the turbine is running, long-term service agreements generate steady recurring revenue at each scheduled maintenance interval over the life of the contract. When something breaks unexpectedly, the company sells replacement parts at premium prices because the utility has no other compliant source and cannot afford the downtime.
What makes this company hard to replace?
A utility that signed a 15-to-25-year long-term service agreement with performance guarantees cannot simply walk away without losing those guarantees. The turbine's control systems are wired into the customer's own SCADA network, and switching to a different provider requires extensive recertification of that integration. On top of that, getting a new turbine model approved by regulators in any given region can take two to three years — so even a utility that wanted to switch faces years of effort before a replacement could legally operate.
What limits this company?
Each vacuum furnace at Greenville and Belfort takes a minimum of 72 hours to complete one blade-casting cycle, and each cycle produces only a fixed number of blade sets. No amount of money speeds that process up. Total blade output is capped entirely by how many furnaces exist at those two sites — not by customer demand or willingness to invest.
What does this company depend on?
The company cannot operate without aerospace-grade suppliers delivering specialized nickel-based superalloy ingots, Rolls-Royce bearing technology supplied under licensing agreements, IEEE grid code certifications approved for each regional market, heavy-lift transport capability capable of moving 300-ton turbine assemblies, and natural gas pipeline infrastructure already in place at customer sites.
Who depends on this company?
Regional grid operators rely on the company's peaking turbines to prevent rolling blackouts during summer demand spikes — if those turbines failed, the grid could not cover peak load. Industrial facilities running captive power plants would have to shut production lines without turbine availability. In emerging markets, utilities use these gas turbines as their main source of power, and a grid failure there would cut electricity access for millions of people.
How does this company scale?
Software controls and digital monitoring systems can be pushed remotely across all 7,000 turbines at almost no added cost, so that side of the business grows cheaply. Manufacturing does not scale that way — building new facilities with the specialized vacuum furnaces, clean rooms, and precision assembly bays needed to cast blades takes 18 to 24 months per site, so production capacity grows slowly no matter how much money is available.
What external forces can significantly affect this company?
European Union carbon pricing makes operating gas-fired power plants more expensive, which can slow new turbine orders and accelerate early retirements. U.S. export controls on dual-use turbine technology block sales to certain countries entirely. Natural gas price swings in regional markets change whether customer projects pencil out financially, which affects both new equipment sales and how hard existing turbines are run.
Where is this company structurally vulnerable?
If European Union carbon pricing mechanisms or U.S. renewable energy mandates push utilities to retire gas plants early, turbines get decommissioned before their 25-year service contracts run out. Each one that goes offline permanently erases an aftermarket revenue stream. New casting capacity or service investment cannot recover money from a turbine that no longer runs.