Why GE believes small is also beautiful1 April 2014
GE has brought together its distributed power offerings (including aeroderivatives and reciprocating engines) in a new business, recently launched in Jakarta.
James Varley reports
The old power industry structure of large centralised power plants run by large utility companies is showing signs of unravelling. In Europe, for example, both E.On and RWE, now see decentralised energy as a key part of their future development strategies, while in the developing world, with an estimated 1.3 billion people lacking access to reliable power, there are huge opportunities for distributed solutions.
Addressing the shift in the power business worldwide, GE has launched a new business, Distributed Power, bringing together three existing product lines, aeroderivative gas turbines, Jenbacher gas engines (acquired in 2003) and Waukesha reciprocating engines (acquired via the purchase of Dresser, which was completed in 2011).
GE is planning an investment of $1.4 billion over the next four years in the new business, the president and CEO of which is Lorraine Bolsinger. At the launch press conference in Jakarta on 25 February she explained that the bulk of the investment would go towards "refreshing" the LM6000 gas turbine offering, while other priority areas would be further development of the two-stage-turbocharged J920 gas engine (8.5-10 MW but capable of 48.7% efficiency), launch of a new 1.5 MW high speed diesel engine (scheduled to be available early 2016), enhancement of dual fuel (gas and diesel) capabilities, and improved maintenance concepts (including mining of data from the existing fleet).
A GE white paper released during the event, The rise of distributed power, notes that distributed power (meaning generating units of less than about 100 MW, typically less than 50 MW) has become increasingly popular in countries that are seeking more reliable, efficient energy options near the point of use -- on or off the grid. The report suggests that annual distributed power capacity additions will grow from 142 GW in 2012 (about 39% of the total) to 200 GW in 2020 and estimates that distributed power will grow 40% faster than global electricity demand between now and 2020.
GE also announced a number of distributed-generation-related agreements during the launch event in Indonesia (with its 17000 islands a promising market for distributed generation).
- Two MOU with Clean Power Indonesia and PLN for the development and deployment of integrated biomass gasification technology in Indonesia, using local bamboo and wood as fuel sources for reciprocating gas engines.
- Agreements with Navigat Energy Pte Ltd to provide 100 new Jenbacher gas engines (total installed capacity 330 MW) for deployment at independent power production sites in Indonesia and Thailand.
- A separate 10-year material stream agreement with Navigat under which it will provide preventive maintenance for the installed fleet of about 100 J620 gas engines in on-site power projects in Singapore, Indonesia and Thailand.
- An MOU for GE to supply Navigat with two J920 engines.
- An agreement between GE and Malaysian company Green & Smart Sdn Bhd (GNS) to develop waste-to-power systems using GNS plus GE technology combining anaerobic digesters with Jenbacher gas engines.
- An agreement between GE Oil & Gas, GE Distributed Power and PLN Enjiniring to develop an integrated "virtual pipeline" power generation pilot project in remote islands of Indonesia. The project will combine systems from GE Oil & Gas for compression/liquefaction, transport, storage and regasification of natural gas at small scale (requiring no pipeline infrastructure) with gas turbine and recip engines from GE Distributed Power.
Why a new business?
One of the benefits of the new Distributed Power venture is that it brings together three smaller businesses and achieves scale. There is "something good about scale" says Lorraine Bolsinger. For example, it attracts more attention in the higher echelons of GE and makes larger R&D investments possible. Also, we now have a "global commercial footprint", whereas before "we had three independent sales forces" each selling their own product lines. Now "we have a vast array of technologies" and "we are kind of technology agnostic." When speaking to potential customers, "we don't walk in with the view that this particular technology is the only solution. We walk in with a view that says you tell us what you need and we can help you figure out how to achieve it." Interestingly, the best solution might turn out to be a hybrid of gas turbine and reciprocating engine technology, a combination that the new business is well positioned to offer.
Part of the new Distributed Power initiative has included hiring of applications engineers around the world. They can go into an industrial facility and "chase a Btu all over the plant", says Bolsinger, getting a full understanding of customer heat loads, mechanical loads and electrical loads, and how best to meet them.
The services side also gains from the coalescing of three smaller separate operations into one large one, for example in the warehousing of spare parts.
A further benefit identified by Bolsinger is that teams formerly working in similar technology areas within each of the three previous businesses, for example combustion and control systems, are now "actually talking to each other", and single "centres of excellence" are being created.