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GE Turbines Flying Like Hotcakes

GE Turbines Flying Like Hotcakes

GE Power Systems has not been able to keep its gas and steam turbines on the shelves, as Reliant Energy, Duke Energy North America and NRG Energy all recently signed long-term multi-turbine agreements.

GE billed the Duke purchase, worth $4 billion in generation equipment and services, as one of the largest commitments of its type in U.S. history.

The Duke agreements cover the purchase of 84 gas turbines, 17 steam turbines and long-term service agreements for up to 23 merchant power plants across the country. When completed, the power plants will produce more than 13 GW of power for the wholesale U.S. market. The units ordered represent enough electricity to power up to six million homes.

GE gas and steam turbines, with their associated auxiliary equipment, have been shipped to four Duke projects currently under construction. In addition, construction activities will begin on six more projects during the first half of 2000 with subsequent turbine and auxiliary equipment shipments to support summer peaking requirements in 2001 and 2002, respectively. The remaining equipment will be shipped from 2000 through 2002 with the intent of supporting the regional summer load growth in several U.S. markets. The service agreements will provide major maintenance and spare parts over a 12-year period from the date of installation on the Duke Energy North America projects.

But why sign such a large deal? "With the GE partnership we have again capitalized upon market timing. It is the same market philosophy that we bring to managing our generation portfolio," said James M. Donnell, president and CEO of Duke Energy North America.

In another deal, NRG Energy Inc., a wholly-owned subsidiary of Northern States Power Co. executed a memorandum of understanding with GE Power Systems to purchase 11 gas turbine generators and five steam turbine generators. The purchases will take place over the next five years and are valued at $500 million with an option to purchase additional units.

The 16 turbines have an equivalent generation output of 3,000 MW, which represents enough electricity to supply approximately 1.5 million homes. NRG Energy intends to install the turbines at its existing North American plant sites.

S&S Energy Products, a GE Power Systems business, was awarded a $280 million contract from Reliant Energy of Houston to provide 19 GE LM6000 gas turbine-generator sets, auxiliary and balance-of-plant equipment.

"The acquisition of GE's state-of-the-art aeroderivative gas turbines from S&S Energy Products provides us with unique capabilities to complete our power projects in the Midwest and offer our customers an in-service date as early as the summer of 2000," said Carolyn Marsh, vice president, Reliant Energy Power Generation.

Reliant Energy will operate the gas turbines in simple- cycle mode for peaking power. Some units will begin service this summer, with the remaining slated for operation next summer. Reliant plans to use eight of the units at a site in Shelby County, IL.

S&S Energy Products will fabricate and assemble the LM6000 gas turbine-generator packages in Houston. "To meet the tremendous increase in power needs throughout the United States, S&S Energy Products has experienced a significant rise in gas turbine demand," said Mark Axford, vice president of North American Sales for S&S Energy Products. "This is evidenced by the sale of 88 GE LM gas turbine- generator sets, including the 19 Reliant Energy units, in 1999." S&S Energy Products is headquartered in Houston.

GE is no stranger to mega-power generation supplies transactions. Last year, the company inked Entergy into a $1.9 billion, 24 turbine deal, and also forged an arrangement with Dominion Resources for a 10 turbine deal. Yet this effort is much larger than either of those previous endeavors. The commitments from Duke include 36 7FA advanced technology gas turbine-generators and up to 48 7EA gas turbine-generators, plus 17 steam turbines.

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