Coal news and updates

The conglomerate—one of the world’s biggest suppliers of power-plant equipment—for years played down coal’s future as challenged by environmental and cost issues. Instead, it has promoted natural gas as the fuel of the future.

 

But a combination of factors—from GE’s push into far-flung global markets to a dire need for growth after the financial crisis—have triggered a change of heart. GE is bullish about coal again.

 

GE leaders say they can reap decades of profits from existing coal power plants, installing upgrades that will come in response to slowly tightening emissions rules and utilities’ desire to boost output. The company nearly doubled its fleet of large turbines in coal plants, to more than 1,500 world-wide, through its $10 billion acquisition of Alstom SA’s power business last year.

 

And executives say they are poised to build coal plants in developing economies, such as in India and across Southeast Asia, where demand for power is growing quickly and other sources of fuel are unavailable or too costly.

 

 

“We expect a quite-stable if not increasing amount of installations in coal,” said Andreas Lusch, the chief executive of GE’s steam-power-systems business, who came over to the company in the Alstom deal.

 

Even as natural gas and renewable energy chip away at coal’s leading market share, global electric production fueled by coal in 2040 is likely to be 23% higher than in 2012, the U.S. Energy Information Administration said this spring.

 

Two-thirds of the growth in coal-fired power generation would come from new units going online in India and China alone, even as coal use declines in the U.S. and Europe, the EIA said.

 

For years, GE assured investors that coal was on its way out and that they should focus on what the company called an “Age of Gas” powered by its heavy-duty gas turbines. In the mid-2000s, GE bet on a Bush-administration push for new nuclear-power plants that never materialized. And in 2005, the company launched a marketing campaign dubbed “ecomagination,” which promoted cleaner technologies such as natural-gas-fired turbines and higher-efficiency jet engines.

These days GE executives say they are simply following demand as millions of people in India and other markets gain access to dependable electricity, in some cases for the first time. “They are as hungry for energy as we were probably 40 or 50 years ago, and do not have this mind-set to say we want everything to be renewable,” Mr. Lusch said. “First they want power.”

 

Rivals are more skeptical. “Not to be cynical, but if I just spent $13 billion on buying Alstom I might be saying something similar,” said Randy Zwirn, chief of Siemens AG’s steam-power service business, referring to the deal’s original purchase price. “But we clearly see the majority of growth coming from number one, renewables, and number two, natural gas.”

 

GE Power is the conglomerate’s second-largest segment, after its jet-engine business, with $21.49 billion in revenue in 2015, or 20% of GE’s total industrial sales.

Source:WSJ