Making The Case For Aeroderivatives

GE Power leadership will “double-down” in the aeroderivative market as it invests more than US$200 million in the segment over the next three years.

Most of the spending focuses on the company’s main service center in Houston, Texas, USA. The company is also spending money on product development, including the LM9000, which is being launched along with Baker Hughes GE, said Martin O’Neill, Aero/Gas Turbine Cross-Fleet Product Line leader for GE’s Power Service business.

The company sees opportunity for the aeroderivative business because of ongoing changes in the energy industry driven in great measure by the increase in alternative power. While that may seem counterintuitive, GE Power argues that, with renewable sources of power growing at double-digit rates, the need for reliable, flexible energy to back up renewables—namely, aeroderivative turbines—will increase as well.The importance GE puts on the market can be seen in “the investments we’re making in new technology, in new products and in services as we really double-down in this space, which we consider to be a growing segment…in a very interesting market,” O’Neill said.

“The renewables wave has gone outside the U.S. and as it has gone international it is beginning to get a tipping point,” said Aman Joshi, general manager for the company’s aeroderivative segment. “A lot of countries and utilities have begun to realize they need a real renewables integration strategy.”

The company points to a 2016 study by Technavio, which found the global aeroderivative gas turbine industry is expected to grow at an annual rate of nearly 5% between 2016 and 2020, and aeroderivative turbines are likely to become the go-to technology to provide balancing services for renewable energy.

“There is a logical consequence of adding more renewables—you need rapid power online quickly,” O’Neill said. “That is exactly the space in which aeroderivative power plays.”

The company expects a large number of fossil-fuel and nuclear power plants to be retired over the next 10 years while the demand for electricity will continue to climb. The company forecasts that 31 TWh of electricity will be produced in 2026, up from 24 TWh in 2015. The company said the share of electricity coming from gas will grow at about 2.4% annually.

That dynamic will cause mounting power imbalances that will force conventional generators to operate in a more flexible manner, ramping more frequently to balance intermittent renewables and provide grid-firming services, Joshi said. Given this crucial role in power infrastructure, downtime can be expensive, and it’s critically important that operators have plans in place to ensure continued operations and minimal lost time for maintenance and repairs. That’s where GE products come in, O’Neill said.

“That is actually an opportunity for gas there’s reason to be bullish about gas, both in the heavy-duty space and the aeroderivative space,” O’Neill said.

GE Power includes both aeroderivative and heavy-duty turbine families. The heavy-duty segment has been buffeted in recent weeks by reports that the company’s HA turbine—the flagship product of GE Power—had a failure that caused Exelon to shut down four of the turbines as a precaution. Along with that, both GE and its main competitor, Siemens, say they expect demand for heavy-duty turbines to remain weak at least until 2020.

“You see the news about all the challenges on the heavy-duty side, but we see tremendous tailwinds building up on the aeroderivative business driven by some of these underlying market dynamics that are playing out,” Joshi said.

“I don’t think that aero cannibalizes heavy duty’s space, I think that aero is complementing a growing renewables landscape and the heavy-duty, large blocks of power—200, 300, 500 MW gas turbines—are here to stay for the foreseeable future,” added O’Neill.

And aeroderivative technology is well-suited for supporting renewables because it can be ramped up and down relatively quickly, Joshi said. Going from cold steel to full load can take as few as five minutes with GE’s aeroderivatives, which, as the name implies, are based on airline jet engine technology.

“Our target is to see if we can get to a two-minute start,” Joshi said. “If we can get to a two-minute start—and I’m sure we can—and we pair it up with a battery and we’re now providing instant dispatch to our customers and that value (proposition) has incredible value for customers worldwide.”

The investment in Houston also will allow GE Power to broaden its Cross-Fleet solutions to repower gas turbines manufactured by competing OEMs, such as Siemens, Rolls Royce, Pratt & Whitney, Westinghouse and Mitsubishi, with GE’s aeroderivative technology. GE said that it’s already achieved more than US$15 million in backlog for Cross-Fleet repowers using GE aeroderivative technology.

“I’m very pleased that we’ve already inked agreements to advance the performance and serviceability of other OEM’s aeroderivative gas turbine fleets,” continued O’Neill. “We’ve performed repowering projects with aero gas turbines on Siemens, Rolls-Royce and Pratt & Whitney units in several countries, including Jamaica, Australia, the Netherlands, as well as on an offshore platform in the North Sea.”

GE said earlier this year the Cross-Fleet solutions for other heavy duty OEM gas turbines, including Siemens’ and Mitsubishi’s SGT-800 and 501F units, and US$200 million of orders backlog.

Investments in Houston include new IT infrastructure, tooling, training and some repairs and upgrades of the facilities, said Joe Hart, Fulfillment Operations Leader for the Aeroderivatives Repair business. The company will also add about 40 employees. Last year, the center applied over 340 000 staff-hours to support customers with a range of engine overhauls, module upgrades and repairs; supporting more than 470 plant operators in over 60 countries.

“In a changing market dynamic, to be quick, to be flexible, to respond—that is what service means to us,” O’Neill said.

O’Neill noted that, although the move to renewables was growing, there are other market forces that benefit aeroderivative technology.

“Renewables and grid firming are really an advanced market dynamic, where you’ve already got a lot of renewables,” O’Neill said. “In other parts of the world for aeroderivatives, like the Middle East, North Africa, Sub-Saharan Africa, Asia Pacific, Australia, especially mining, a lot of our TM2500 are being used for base loads In Europe, we have a lot of Cogen, CHP and they’re hammering those machines, they’re getting 6000 hours plus. We’ve got certain niche markets, like California, where the pricing premium specifically promotes rapid ramping and big blocks of power and that’s where the LMS100 does really well.

“That’s a really long answer but what I’m trying to portray here is regionally, there are different dynamics. The story isn’t renewable growth drives aero growth, the story is that’s some of the answer for North America, and Europe’s probably going to follow suit in the next decade and the rest of the world is going to continue to have needs. So if you sit in power services, that mix is pretty attractive.”

–By Jack Burke