NEW YORK (Reuters) – Utilities will shut down at least 18 of General Electric Co's latest gas turbines ( GE.N ) for repairs to power plants from Taiwan to France, according to more than one dozen interviews with plant operators and industry experts.
A worker walks by a gas turbine under construction at the gas turbine production unit of the General Electric plant in Belfort, on 24 June 201
GE puts aside $ 480 million to repair its Model 9HA, 7HA and 9FB turbines while restructuring its energy business. The 126-year-old group refused to say how many were closed, or when it would replace the parts, if necessary, in 130 turbines like those produced.
Power plant operators in Japan, Taiwan, France and several US sites have closed – or plan to close – at least 18 of the 55 new HA model turbines that GE has shipped so far, utility data and French interviews with more than 20 industry experts including executives, plant operators, insurance specialists, engineers and consultants with direct knowledge of GE turbines.
In an interview, GE Chuck Nugent's CEO of gas energy systems minimized the importance of turbine shutdowns and French data, saying GE turbines are working "extremely well", despite the need for a "first maintenance" to repair the blades.
Considering all the power turbines it has in use, GE has "the most reliable fleet in the world – 99 percent, give or take, reliability," he added.
GE previously revealed that its equipment requiring blade repairs included four 7HA turbines in Texas that were closed after oxidation causing a blade to fail in one of them in September. Those turbines are included in the 18 being closed.
Photographs of the damaged turbine reviewed by Reuters show dozens of jagged and broken blades inside the massive machine, owned by Exelon Corp ( EXC.N ). The turbines are now operating after two months of repairs, Exelon said.
GE told Reuters that he identified the oxidation problem in 2015 and developed a solution before the failure in Texas. The correction uses a previous casting method used on other turbine models.
Three plant operators using GE equipment that are closing for blade repairs, Invenergy, Exelon and the Tennessee Valley Authority, told Reuters that GE was transparent and reactive in installing new warranty-free blades.
"Overall, we have been very pleased with GE's HA technology and performance," said Beth Conley, Invenergy spokesperson, who receives replacement blades for three new HA turbines in a Pennsylvania plant that is not It was still open.
Following the problems in Texas, the state utility Electricite de France ( EDF.PA ) closed its plant in the northern French city of Bouchain for a month starting from the end of September for the blade replacement. Bouchain was the first plant in the world to install GE's 9HA turbine.
Bouchain recorded 86 failures due to equipment failure, tests or other reasons from January 2017 to October 2018, five times the average for non-GE plants, according to data from the French RTE network operator analyzed by Reuters. Reuters has eliminated interruptions for scheduled maintenance.
The French data also show that GE's turbine plants were closed for repairs or tests, on average, more than double the non-GE gas plants in France with Alstom turbines, Siemens AG ( SIEGn.DE ) and Ansaldo Energia SpA. GE acquired the Alstom business in 2015.
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GE and EDF officials told Reuters that the data of the RTE network operator, an independent subsidiary of EDF, "are not wrong" but should not be used to evaluate turbine performance because some interruptions could be due to other equipment in the plants.
EDF said that there are no problem in Bouchain, which was inaugurated in 2016, and that frequent interruptions are not unusual for new installations during their break-in period. EDF has stated that Bouchain production is increasing and decreasing to meet peak electricity demand rather than constantly working. The other gas stations monitored by RTE can also be used for the peak and have been in operation for many years.
RTE, Siemens AG ( SIEGn.DE ), Ansaldo Energia SpA and Mitsubishi Hitachi Power Systems ( 7011.T ) declined to comment.
Reuters has not been able to obtain comparable data on the frequency with which GE's turbines have been closed for repairs to utilities around the world. The stops are activated when the utilities determine that a plant must undergo maintenance or testing, or when the equipment failure or other problems cause the plant to stop unexpectedly.
While GE plants still produce one-third of the world's electricity, GE has moved from first to third in new turbine orders by capacity, behind Mitsubishi and Siemens, according to a feedback in the first half from McCoy Power Reports, a widely viewed data source industry.
GE said it had booked seven orders of HA turbines in the first nine months of this year, half compared to the same period last year.
GE's HA turbines have been under particular pressure and its plant repair business is facing increasing competition. The success of GE's new turbines is growing in importance as it is reduced to concentrating on power plants, jet engines and wind turbines in a whirlwind of renovations. GE spent more than two decades developing the 400-tonne machines, but brought them to market after rivals Siemens and Mitsubishi were gaining market share, forcing GE to recover ground.
GE has slashed its competitors' prices by about 20 percent "to move from about 0 percent to about 45 percent of this turbine class by 2016," Morgan Stanley analysts said in a report on the issue. ;year.
Now the CEO Larry Culp is fighting to restore GE's debt and loss of liquidity after the company lost $ 22.8 billion last quarter, mainly from its power unit, and its rating fell to only three notches above the garbage. Culp is dividing the energy division, consolidating its power plant to cut costs and has appointed new leaders for this.
Demand for large gas turbines is at its lowest in the last 23 years, forcing GE and its rivals to struggle hard for fewer agreements, as service companies buy more wind and solar systems that have become competitive under the cost profile.
Scott Strazik, the new CEO of GE Gas Power, said in an interview that customers are satisfied with GE's response to the blade problem and that GE has no plans to change the way it handles customer problems or testing the turbines, noting the GE test facility is the largest and most complete in the world.
"HA is the best-selling gas turbine we have, and customers continue to have a strong desire for HA," said Strazik.
Other reports by Henning Gloystein in Singapore, Yuka Obayashi in Tokyo, Liz Hampton in Houston, Jessica Macy Yu in Taipei, Kate Duguid in New York, Geert De Clercq in Paris, Anastasia Lyrchikova in Moscow, Jane Chung in Seoul and Drazen Jorgic in Islamabad; Editing by Joe White and Edward Tobin