The $150 billion-a-year company, whose power plants generate about one-fourth of the world's electricity, today announced a new natural-gas power plant that it says is more efficient and flexible than any other in the market.
By phone from Paris, where the announcement was made, Steve Bolze, president of GE Power & Water, told me: "This is about transforming the industry over the next five or 10 years."
GE says it invested more than $500 million in the new plant development. It will be manufactured in France and sold first in Europe and Asia, and then later in the United States.
One key selling point of the new plant is its unprecedented flexibility: It can ramp up and down rapidly and thus be easily combined with wind and solar power plants that generate electricity intermittently.
It's also efficient enough to work as a generator of baseload power, Bolze said. A GE Web page describes the plant and its operation.
The new GE plant, dubbed the FlexEfficiency 50, is rated at 510 megawatts and offers fuel efficiency greater than 61%. Competing plants burn natural gas at efficiency rates of 57% or 58%, Bolze said, and he explained that each percentage point of improved efficiency saves a utility about $2 million a year. Capital costs are projected to be somewhere "north of $450 million," he said.
What this tells you is that, all other things being equal, natural gas has become the fuel of choice for the global electricity business. Wind and solar power can't compete with cheap gas without government mandates, subsidies, or a price on carbon. Nuclear is expensive and is deemed riskier than ever, for better or worse, after Fukushima. Coal is low-cost but dirty and, as a result, politically unpopular in Western Europe and the United States.
Speaking last week at a conference, GE's CEO, Jeff Immelt, said, "It appears like we're entering into a natural-gas cycle."
GE didn't announce any customers for the plants. The businesses that comprise GE Energy -- GE Power & Water, GE Energy Services, and GE Oil & Gas -- employ about 90,000 people and generated $38 billion in revenues last year. GE is continuing to invest in wind and solar power, the company said.
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Marc Gunther is a contributing editor at Fortune magazine, a senior writer at Greenbiz.com, and a blogger at www.marcgunther.com.
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