It seeks to capitalise on the rising thirst to secure a cost-effective electricity supply to power the region’s rising economies
By RAHIMI YUNUS / Pic By AFIF ABD HALIM
General Electric Co (GE) is reinventing its power services business in South-East Asia, including Malaysia, as the US titan seeks to capitalise on the rising thirst to secure a cost-effective electricity supply to power the region’s rising economies.
The US-based GE, which has installed many of the region’s power plants, is also looking to replace old turbines which are nearing their life cycle or provide key upgrades to extend the application of these facilities.
The US firm, which acquired Alstom SA’s power and grid businesses in 2015, sees gas-powered turbines and power density being critical to the region’s demand for electricity despite talks about renewable energy (RE).
GE Power Services president and CEO Scott Strazik (picture) said much of the region’s electricity needs will be powered by gas as the grid becomes more complex and the needs for power density and higher efficiency become paramount.
“The power density is going to outweigh the operating cost of having wind turbines or solar panels in many parts of Asia. If there is a place for me to be optimistic about the future of gas, it’s often Asia,” Strazik told The Malaysian Reserve when met in Kuala Lumpur recently.
Strazik said the need for power density solution in the region makes it “very hard” for RE to get over the hurdle in the near term, and gas will remain superior to support intermittent wind and solar power.
“RE needs too much acre-age to produce a meaningful amount of power, and you cannot count on wind and solar every day,” he said.
As such, the American-based power services company believes that gas will dominate the power generation space at least for the next few decades.
“We are in the world that needs power dense, flexible solutions, ultimately to improve the overall economics. That is why we have shifted to the H technology for a start.
“As there are replacements, we feel that we have the right technology to support the grid. Power dense, efficient and fast ramping capability is important to offset the intermittency of RE.
“At the same time, we are recreating ourselves with the existing installed base and finding ways to keep those machines running by providing upgrades into the fleet. Those machines may be older, but still can run well,” he said.
Unlike other consumer products, generally, a power generating turbine can produce electricity for over 20 years, leaving manufacturers a tough task to seek new buyers.
Malaysia’s early independent power producers (IPPs), a programme to appoint private companies to produce electricity, was drawn up after the country’s 1992 major power blackout.
But many of these early IPPs are nearing the tail-end of their concessions and new plants are required to ensure the country’s power security.
Strazik said GE is already looking at how to position the US titan into Malaysia’s current and future power needs.
“When I look at Malaysia, I don’t think the challenges or plans in Malaysia are different from the rest of the world. We have 84 gas turbines here, which are going to change drastically in the next decade…20 to 30 assets of those will be retired and replaced by more powerful and efficient units to support the grid,” he said.
He said Malaysia’s total capacity is about 37GW and is expected to grow to 53GW over the next 10 years.
“Similar to what we have seen in other parts of the world, there is no better levelising factor than gas, as the capacity grows and the grid becomes more complex,” he said.
“In that growth, gas is projected to grow somewhere in between 6GW and 9GW, of which a lot of it will ultimately involve our machines, including the ones that we have already won in Track 4A and 4B, to be commissioned in the first half of the next decade,” he said.
Malaysia and the region are becoming a jewel as GE fights back to secure a place in the region’s power ecosystem.
“We have 22 HA orders now, all to be commissioned between now and the early 2020s. At least five orders are in Malaysia that produce more GW at a higher efficiency to replace 24 retiring units in the country,” he said.
GE is also banking other countries in the region, said Strazik, with Indonesia for the last three years has embarked on 35GW initiative as part of President Joko Widodo’s plan.
“At least 19GW has been decided and we got 4GW of that 19GW. In addition, they are also clearing back some other stuff,” he said.
Asia Pacific is a key region to GE’s power business, generating more than US$12 billion (RM46.93 billion) of orders to the US company.
GE has more than 7,500 gas turbines and aero units which 435 units installed were on Advanced Gas Path (AGP) upgrade technology across four GE gas turbine fleets in 39 countries.
The AGP solution is now expanded to cover the fifth of GE fleets, the GE 6B gas turbines, where installation of the first units on our 6B fleet will begin later this year.
GE said in markets like Asia, and countries like Malaysia, AGP offers efficiency and flexibility which are paramount, where more MW are needed across various load ranges and fuel mix.