Retiring Coal-Fired Plants Increase Demand for Gas-fired Combustion Turbines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Siemens AG (NYSE:SI) (Munich, Germany) recently opened a new factory to manufacture natural gas-fired combustion turbines in Charlotte, North Carolina. The 50,000-square-foot facility is adjacent to an existing Siemens-owned factory that produces steam turbines and generators and will employ 1,800 additional employees. Siemens' justification for the new factory is the expectation of additional orders from natural gas-fired power plants in North America that are being built to replace the expected retirement of coal-fired power plants.

The Power Industry expects one-third of the nation's coal plants to close over the next 10 years. These plants will need to be replaced by other fossil fuels, nuclear power and renewable sources to meet consumers' growing demand for energy.

Greenville, South Carolina, is home to the largest combustion turbine manufacturing plant in North America. The plant, which is owned by General Electric Company (NYSE:GE) (Fairfield, Connecticut) employs more than 3,000 people. Mitsubishi Power Systems Americas Incorporated (Lake Mary, Florida) has a combustion turbine, steam turbine and generator repair and service center in Pooler, Georgia.

Industrial Info is showing additional demand for gas-fired combustion from increased construction of grassroot combined-cycle plants, combined-cycle conversions, combined-cycle modernizations and new natural gas-fired combustion turbine additions at existing power plants. More than 38,000 megawatts (MW) of new-build combustion turbines are expected to begin construction between January 2012 and December 2014, according to Industrial Info.

Historically, coal-fired power plants have been the cheapest way to generate electricity, but costs are expected to increase considerably to meet new emissions control requirements. More than 8,000 MW of coal-fired generating capacity has been retired in the U.S. since 2005, and power generation utilities have announced plans to retire as much as 20,000 MW of older coal-fired generation in 2011 alone, according to Shane Mullins, Industrial Info's vice president of product development.

Industrial Info's North American Combustion Turbine Generator Market Share Analysis provides critical market sizing and market segmentation intelligence on the currently installed base of about 5,000 combustion turbine units operating in the U.S. and Canada. For additional information, see October 25, 2011, press release - Assessing Multibillion-dollar Combustion Turbine (CT) Market with Industrial Info's New Online North American CT Market Share Analysis for Power Generation.

Air quality requirements from the U.S. Environmental Protection Agency are the main drivers of the need to replace existing coal-fired power plants with natural gas-fired generation. In addition, older coal-fired facilities are nearing the end of their service lives, and owners have decided it would be uneconomical to retrofit with emission controls, such as flue gas desulfurization scrubbers, electrostatic precipitators and baghouses, which would cost several hundred million dollars to install. Electric utilities have already begun to replace older coal-fired generation with newer, more efficient natural gas-fired power generation since low natural gas prices will remain for the foreseeable future.

Natural gas, once considered to be a bridge fuel from coal and oil to renewable power, is now being promoted as a part of the clean energy future. With U.S. natural gas reserves expected to last more than 100 years, combustion turbine power plants are an integral mix in this scenario.

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Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.