WTUI ‘steady as she goes’ through a ‘boom and bust’ gas-turbine market

March 2010 for Combined Cycle Journal

The mission of the Western Turbine Users always has been to conduct a user-controlled forum for owners of General Electric Co LM-series gas turbines. GE’s TF39 aircraft engine was adapted for non-flight duty in the 1960s and named the LM2500. Recall that “LM” stands for “land and marine.”

During the 1970s, GE sold its LM2500 “gas generators” to compressor manufacturers such as Dresser, Ingersoll-Rand, and Cooper Bessemer. These companies designed and built their own power turbines to match the speeds of their pipeline and process compressors. They then sold the complete turbine/compressor “package” to the customer. Selling gas generators to compressor packagers was a good niche business for GE.

GE’s Aircraft Engine Div wanted to grow the LM business by offering aeroderivative power generation units—like Pratt & Whitney’s FT4. But GE already had a Power Systems Div (Schenectady, NY) that sold heavy-duty frame gas turbines for power generation. Power Systems executives worried that a separate sales force selling LM engines would confuse the customer with competing GE products.

In 1978, Jack Welch, then a senior VP, settled the internal battle, deciding that the aircraft group could license a family of “package” builders to sell LM2500 generator sets. Companies such as Stewart & Stevenson, Ruston Gas Turbines, and IHI were signed up by GE as qualified packagers of gensets.

at CERAweek, most life was carbon-based

April 2007 for Power Magazine

Daniel Yergin, founder and CEO of Cambridge Energy Associates (CERA), is among the best at connecting the dots of the energy industry's past and turning them into a coherent picture of its future. Dr. Yergin's accomplishments include a Pulitzer Prize for The Prize: The Epic Quest for Oil, Money & Power, a book that was made into an eight-hour PBS documentary. When Yergin talks, people listen.

The theme that Yergin chose for CERA Week 2007 in Houston this February—"Strategies for a High Stakes World: Innovation, Investment, and the Future of Energy"—correctly cast today's energy business as a game with big financial risks and rewards. High and volatile gas and gasoline prices, concerns about global warming and the long-term adequacy and security of energy supplies, and the behind-the-scenes geopolitical maneuverings that shape today global energy environment have become front-page news.

The first two days of the conference were devoted to worldwide oil and gas supply and demand. The third day—Power Day, the one of most interest to readers of this magazine—began with a panel of utility CEOs discussing "The Next Big Ideas" for the electricity industry.

Focus on O&M

May 2008 for Power Magazine


Retail Competition

This “nuts and bolts” department doesn’t usually feature a conference report. But the one we’re including in this issue is about a unique conference: KEMA’s annual Executive Forum.

Change in the power generation industry is occurring at an unprecedented rate. POWER’s mission is to keep you apprised of the trends driving those changes, and events like KEMA’s conference tend to shed light on the big picture. For plant operators, the impact of today’s trends will be on tomorrow’s plant O&M practices.

Finding KEMA. Some readers may ask, “Who is KEMA?” KEMA is a big Netherlands-based consulting firm that provides technical and management services to the global energy industry. It was formed in 1927 as a testing laboratory, much like Underwriters Labs (UL) in the U.S. In fact, in Holland and many parts of Europe, there still exist appliances with a KEMA label certifying that they passed the company’s safety tests.

Later, KEMA started providing consulting services to European and Asian utilities. It opened shop in the U.S. during the 1970s. Today, with 700-plus consultants dedicated to the global power and natural gas industries, KEMA’s Retail Energy Markets advisory service is a leading source of business intelligence and market analysis to the competitive retail energy industry.

KEMA’s 19th annual Executive Forum brought to Dallas about 300 energy executives to discuss and debate the outlook for competitive retail electric markets. Currently, 20 states and the District of Columbia allow customer choice to some degree (Figure 1).


Competition Strengthens as Wholesale Power Prices Fall

June 2010 for Power Magazine

Since the collapse of Enron and the wholesale power markets, the vitality of competition in retail markets for electricity has waned in most regions of the U.S., with the exception of Texas. At KEMA’s 21st annual Executive Forum in late March, 300 attendees converged on Dallas to discuss and debate the dynamics and changes now facing residential and commercial customers in most regions of the U.S. and Canada. Founded in 1927, KEMA is a global provider of business and technical consulting, operational support, measurement and inspection, and testing and certification for the energy and utility industry. A summary of the many presentations follows.

During 2009 overall consumption of electricity in the U.S. fell by 4.2%, the largest one-year drop in 60 years. Concurrently, the average prices of natural gas (Figure 3) and wholesale electricity (Figure 4) followed suit and fell more than 50%. Business and residential customers alike are looking for a better deal on their electricity purchases, further invigorating an already competitive buyer’s market. Although Texas is still the largest competitive market, 2009 brought some significant changes in other competitive power markets across the U.S.

Floundering Economy Eclipses Renewable, Carbon Plans

April 2009 for Power Magazine

Security was tight as oil ministers from the Middle East and CEOs from the largest oil and gas companies and electric utilities rolled into Texas in mid-February to present new ideas, defend agendas, and just mingle. More than 1,200 delegates from 55 countries heard more than 100 distinguished speakers discuss topics ranging from carbon abatement programs and the nuclear renaissance to utility-scale renewable technologies. Undeniably, the market downturn, tight money supply, and its effect on new plant construction was the central theme of the conference, even if the topic wasn’t formally placed on the agenda.

Risk and Reward

The theme for this year’s CERAWeek was "Risk and the Rebuilding of Confidence: Energy Strategies for a Turbulent Economy." The global recession was the uninvited 800-pound gorilla in the room that everyone pointed at and talked about. But no one had any idea how to ask it to leave. Regardless of one’s political stripe or environmental leanings, when money is tight, there can be no advance of any agenda. Utility senior manager uncertainty is the logical result of market and regulatory unpredictability, but now it is exacerbated by global competition for limited supplies of fuel and raw materials.

The first three days of the conference focused on worldwide supply and demand for oil and natural gas. Days four and five were dedicated to electric power, beginning with a keynote address by Fred Krupp, author of Earth, the Sequel: The Race to Reinvent Energy and Stop Global Warming.

Global Monitor

Dec 2006

Gulf Coast Power Association conference report

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Members of the Gulf Coast Power Association (GCPA) gathered in Austin, Texas, on October 4 and 5 for their annual meeting and a celebration of the group's 20th anniversary. Hatched as the Gulf Coast Cogeneration Association in 1984 with 12 engineers, GCCA admitted Cogen Technologies as its first corporate member. During the 1980s, the upstart cogenerators competed with the much larger investor-owned utilities. In the '90s, non-utility generators, independent power producers, and exempt wholesale generators were born with the creation of the wholesale market by the Energy Policy Act of 1992.

At the meeting, more than 350 attendees shared their assessments of the successes and failures of deregulation in the Electric Reliability Council of Texas (ERCOT) market. Most considered the Texas model a shining success that established the "truest" electricity market in North America. Addressing the theme of the meeting—"Building on Success: Adapting to the New Challenges in the Texas Electric Market"—almost all presenters called for three things: additional generation capacity, renewable energy, and demand response.

The guest speakers were considered the rock stars of deregulated power in Texas. Before a packed house over lunch, they shared what they"d learned in the recent past and gave their predictions for the future.

Energy: Building a New Future

May 2010 for Power Magazine

For the past 26 years, Cambridge Energy Research Associates (CERA) has hosted an annual CERAWeek conference in Houston that is renowned for high-profile attendees from around the world. During the week of March 8, security was tight as oil ministers from the Middle East and CEOs from the largest oil and gas companies and electric utilities rolled into Houston to exchange ideas and forecasts. More than 1,200 delegates from 55 countries attended to hear more than 100 distinguished speakers discuss a business that seems to have renewed optimism about the future.

The first three days of the conference were focused on worldwide supply and demand issues for oil and natural gas. Days four and five of the five-day conference were dedicated to electric power. Those days began with a discussion between Daniel Yergin, Pulitzer Prize – winning author of The Prize: the Epic Quest for Oil, Money and Power and chairman of IHS-Cambridge Energy Research Associates, which hosts the conference, and Nobuo Tanaka, executive director of the International Energy Agency.

China Leads Global Power Growth

The focus of the keynote discussion was Asia’s rebound from the global economic crisis in general, although China was the main focus. Unlike the U.S. and Western Europe, where demand for electricity is flat at best, China seems to be experiencing the strongest recovery from the worldwide economic downturn. China is now projecting a gross national product growth of 10% for 2010 with growth in electrical consumption of 10% during 2010 and 8% in 2011. During 2009, China ordered 45,000 MW of new steam turbine generation equipment, about 50% of all orders worldwide. Of these orders, approximately 26,000 MW were for coal-fired units and 16,000 MW for nuclear plants.

Recession Reduces Demand for Electricity

June 2009 for Power Magazine

The first quarter 2009 economic data confirm that the recession has slowed the demand for just about everything in the U.S., including energy. As in prior recessions, consumption of gasoline has fallen as households cut back on their discretionary road trips. Demand for jet fuel is down as businesses put limits on their travel budgets. Natural gas consumption has fallen as energy-intensive factories operate at reduced capacities.

If there is an unseen benefit hidden in the data, it’s that the prices for gasoline, jet fuel, and natural gas have also dropped far from their peak prices in 2008. In fact, natural gas futures dropped to a six-year low in late April; companies that were feeling good last year about their fixed-price gas contracts are out in the cold today.

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