Energy: Supply-Side Manufacturers Benefit

Feb. 17, 2006

GE, ABB capitalize on new technology, global demand.

While it's not likely that more than 100 new power plants in the United States would mean lower prices for manufacturers that are major consumers of energy, an upsurge in power plant construction does stand to benefit such firms as General Electric Co. and ABB Ltd., the North American unit of Zurich-based ABB Group., which make such gear as turbines, generators, transformers and controls.

Although GE's interest in coal-fired plants has traditionally been as a supplier of steam turbines and generators and more recently as a provider of pollution monitoring and other services, "what is more exciting is 'clean coal' and our gasification technology," relates David Slump, chief marketing officer for Atlanta-based GE Energy. (Clean coal is technology that burns coal more efficiently and produces fewer emissions.) "There are more than a hundred [new power plants being considered] and we are working down the list [to see] which are applicable to clean coal," he says. "We're creating the market opportunity; we're telling the world about clean coal."

See Also...

New Plants,
Old Problems

Actually GE Energy is doing more than that. For example, in alliance with Bechtel Corp., an engineering and construction firm, GE is a single source supplier of a 630-megawatt IGCC (Integrated Gasification Combined Cycle) plant that combines power generation and coal gasification technologies to produce electricity from such low-cost feedstocks as coal, heavy oils and pet coke.

With natural gas prices high and coal making a resurgence as a power-plant fuel, "all" the architect and engineering firms "are talking to us about equipment for new power plants," reports Brian Small, ABB's Philadelphia-based vice president of power-plant sales. ABB supplies transformers, breakers, switchgear and a variety of controls -- but not generators or turbines.

Facts And Projections

The natural gas share of electricity generation is projected to increase from 18% in 2004 to 22% around 2020, then fall to 17% in 2030.

Sources: Energy Information Administration, DOE

That new interest promises to last. During the next 20 years Small estimates power demand in North America will increase by 30%. The United States currently generates 1 gigawatt -- 1 million megawatts -- of power. "That means if we are going to grow at 30%, we're going to have to add 300,000 megawatts of power even if we do not lose any of the existing plants, which we will lose."

Rising demand for new power plants is not limited to the United States. Indeed, projected demand for electricity elsewhere in the world over the next 10 years is four times what it is in the United States, says GE Energy's Slumps. China and India, where hundreds of millions of people still don't have electricity, are unmistakably places where demand for power is high.

Readers' Comments

Without the use of dams, hydro energy can be very cost effective if multiple small generating systems were installed along the many rivers that are in the United States and in Canada. Thousands of megawatts could be generated from many units that could service small communities and provide a reserve for the larger communities.

F. Merchant
Tonawanda, NY

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.