GE to clean up with coal technology
A tenfold increase in sales is expected, writes Peter Marsh
June 20, 2006
theaustralian.news.com.au
GENERAL Electric, the US industrial goods company that is one of the world's biggest makers of electricity generation equipment, plans a tenfold increase in sales from a relatively novel "clean coal" power technology aimed at curbing environmentally harmful gas emissions.
The technology is based on converting coal into synthetic gas, which is then fed into gas turbines to produce electricity.
GE energy division head John Krenicki says he is aiming for annual sales of the company's coal-gasification systems to rise from less than $US500 million ($678 million) to $US4-$5billion over the next decade.
"This is a good objective to have and I think it's realistic," says Mr Krenicki. He also issues upbeat projections about likely worldwide demand for new power generation systems of all types in the near future.
GE thinks new installations of such equipment over the next five years will average some 150 gigawatts a year, which is 25 per cent higher than the estimates of Alstom, a French engineering company and one of the three leading global makers of power equipment along with GE and Siemens of Germany. In the past five years, power equipment orders have averaged about 120GW a year.
"We are seeing solid demand for power equipment around the world," Mr Krenicki says. He says new systems in the US, Europe, China and India will account for two-thirds of world demand in the next few years.
Installation of electricity generation systems - adding in service contracts for maintaining existing hardware - provides work for equipment suppliers estimated at $US100 billion a year. GE's energy division is one of the company's largest operations, with sales of $US17 billion a year.
Mr Krenicki says GE is particularly anxious to promote its coal gasification technology - which was acquired two years ago from US oil company Chevron - because it fits in with demand by power station operators to diversify fuel sources away from natural gas towards coal.
The latter was shunned for much of the 1990s due to concern about the environmental effects of burning coal in power stations, while gas - which has become available in many countries as a result of newly opened gas fields and associated pipelines - became increasingly the most popular fuel.
However, in the past two years, coal has been favoured by a growing number of power operators because of a greater range of technologies to treat coal to cut down on emissions of carbon dioxide, the main gas responsible for global warming, as well as other pollutants.
Gas has declined in popularity, one reason being escalating prices in some countries. According to GE, its coal gasification technology is relatively benign environmentally, featuring clean-up systems to get rid of unwanted pollutants, as well as having high levels of operating efficiency, which means carbon dioxide output is lower than in other types of power systems.
Another reason for GE to try to sell more coal-gasification systems is these turn coal into a fuel that can be fed straight into gas turbines the company sells, in a field in which it is the world's biggest supplier, some way ahead of Alstom and Siemens and also Mitsubishi Heavy Industries, GE's main Japanese rival in such equipment.
Other companies selling coal-gasification systems, sometimes in association with outside engineering contractors, include Shell, ConocoPhillips and Sasol, three energy companies anxious to diversify into coal-based technologies for producing energy.
Mr Krenicki says he remains confident about the opportunities for selling gas turbines around the world, in spite of the drop in their relative popularity.
Of the expected 150GW a year of demand "about half" could come from gas turbines. |
