Rising Demand for Turbines May Hinder Power Projects

Gov. Gray Davis’ efforts to meet the state’s future energy demands by encouraging the construction of new power plants may be hampered by a scarcity of turbines, a key plant component.

Because of a growing number of planned power plant projects throughout the nation and the world, manufacturers are struggling to meet a dramatic increase in orders for turbine engines, and some have significantly lengthened normal delivery times.

The world’s second-largest manufacturer of turbines, Siemens Westinghouse Power Corp. of Orlando, Fla., recently stretched delivery on its power plant turbines from one year to two.

The increased lead time is not expected to delay the 14 plant proposals under review by California regulators. The operators of those plants have already secured turbines, they say.

But beyond those, the tight market for the engines may hamper plans for eight power plants for which permit applications are expected to be filed in California in the next year, industry officials said. Efforts to retool older plants may also be delayed, they added.

“The gas turbine issue is a very significant problem,� said Jan Smutny-Jones, executive director of the Independent Energy Producers Assn., a trade group of power generators. “Most turbines produced in the next two or three years are already purchased.�

Burbank, for example, is scrambling to buy a turbine for a proposed 250-megawatt natural gas-powered plant to replace a World War II-vintage steam plant on Magnolia Boulevard near the Golden State Freeway. (One megawatt is enough power to supply about 1,000 typical homes.)

Fred Fletcher, Burbank’s assistant general manager for power, said the city has contacted major turbine manufactures as well as power companies that already have turbines on order. But the city has yet to make an order.

Fletcher conceded that the waiting period is long, but he said city officials are not yet panicking.

“We are aware of the availability of turbines,� he said.

Ron Walter, senior vice president of Calpine Corp., a San Jose firm that operates 50 power plants nationwide and has 23 under construction, said the delays in getting turbines may pose a hurdle in meeting future power needs.

“Anyone that begins the process of building a power plant today cannot get equipment until late 2003,� he said. “This turbine lead time creates a significant barrier to entry in the market.�

In a natural gas-powered plant, a turbine operates like a giant jet engine that spins a generator to produce electricity. A steam turbine spins because of the force of high-pressure steam that is superheated by natural gas, coal or diesel.

Manufacturers said demand for turbines has more than doubled in the last two years, as power plant builders rush to take advantage of deregulated markets in California and other states, higher demand for electricity from the economic boom and increasing use of energy-guzzling computers and other electronic devices.

In response to demand, some operators said, turbine prices have shot up 20%. Turbine manufacturers declined to confirm such an increase.

In his most recent State of the State speech, Davis suggested that California set aside state land for power plants, provide low-interest loans to build power plants and possibly establish a California power authority.

Davis has not said how many more power plants are needed to meet future energy demands, but Smutny-Jones suggested that California needs 15,000 more megawatts of power over the next few years--or the amount produced by 30 medium-sized power plants.

Among the eight California power projects expected to apply for permits in the next year are three backed by energy conglomerate Enron Corp., one each in Long Beach and in Kern and Placer counties.

A spokesman for the Houston company declined to say whether it has secured turbines for those projects.

Enron spokesman Eric Thode would say only that “there may be a time issue on when they might be available.�

In addition to the turbines needed for new power plants, industry officials say the owners of outdated and idle coal and diesel power plants will need to order turbines to retool and bring their plants online. Nearly 60% of the state’s power plants are at least 30 years old, Smutny-Jones said.

Turbine demand has been a boon for the manufacturers of power plant components.

GE Power Systems of Schenectady, N.Y., the world’s largest manufacturer of turbines for power plants, nearly tripled annual production between 1997 and last year, from 65 to 180, representatives said. That helped produce a 65% increase in earnings last year.

This year, the division of General Electric Co. expects to boost output to 270 turbines.

Company representatives said they have been able to meet turbine orders without significant delays by improving productivity in their manufacturing plants.

“Whether it continues at this unprecedented rate is a question on everybody’s mind,� spokesman Jeff Ignaszak said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

How a Turbine Engine Works

1. The compressor pulls air through the engine where spinning blades compress it.

2. Gas and high-pressure air mix and are ignited in the combustion chamber.

3. The hot gas rotates the turbine blades, turning the drive shaft that spins a generator, creating electricity.

Sources: University of Southern California, Marshall Brain’s How Stuff Works