General Electric Co. (GE) introduced a new line of gas-powered electrical turbines designed to run alongside renewable energy sources in markets from the U.S. to Saudi Arabia to Japan.
The turbines are designed to efficiently ramp up to provide electricity when the sun isn’t shining or the wind isn’t blowing and to burn less fuel when operating at less than peak capacity, GE said in a statement today. Chubu Electric Power Co. (9502), Saudi Electricity Co. (SECO) and Xcel Energy Inc. (XEL) are among customers placing almost $1.2 billion of orders for 19 of the new turbines, the company said.
GE is benefiting from Chief Executive Officer Jeffrey Immelt’s efforts to boost industrial earnings while shrinking its finance arm after $32 billion of credit losses in the financial crisis. The company, based in Fairfield, Connecticut, said earlier this week it created a new mining division as it bets on rising demand for commodities from copper to coal.
The new turbine line is for countries where power is transmitted at a frequency of 60 hertz. That includes the U.S., Canada, Brazil, Japan and Saudi Arabia. GE last year began selling versions of the equipment for use in places with 50 hertz electricity, such as Europe, China, Australia and Africa.
“If you have renewables now or your grid is adding more in the future, this is the best power plant to augment the intermittency of renewable energy sources,” Paul Browning, head of GE’s thermal energy business, said in an interview today at an event in San Francisco, where the turbines were unveiled.
GE, the world’s biggest maker of electrical generation equipment, said as part of the new line it will begin offering two turbines, one capable of generating 250 megawatts and one that can produce more than 300 megawatts of electricity.
Research and development costs for the two turbines totaled $500 million, plus an additional $170 million for a testing center at GE’s manufacturing facility in Greenville, South Carolina, the company said.
Forecasts for low natural gas prices and demand in places from Europe to California to Japan to diversify energy sources are driving companies like GE to provide turbines for wider purposes, Daniel Kammen, a professor of energy at the University of California, Berkeley, said at the event.
“The question isn’t when gas prices will rise, it’s how we crowd in the greenest sources and not crowd them out with the current phase of low gas prices,” Kammen said.
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