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

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