This article first appeared in The Edge Malaysia Weekly on July 9, 2018 - July 15, 2018

THE electrification rate is one of the gauges of how advanced and modern a country is. Within Asean, Malaysia has a high electrification rate of 97% to 99%, compared with Myanmar’s and Cambodia’s 60%.

US industrial conglomerate General Electric Co (GE) has been a partner in the country’s energy sector development since the Seventies, witnessing its great strides in building power infrastructure over the past five decades.

According to the McCoy Gas Turbine Database, GE, Siemens and Mitsubishi-Hitachi Power System, have been the gas turbine market share leaders over the past decade.

In fact, GE helps its customers — including national utility firms and independent power producers — generate more than one-third of the world’s electricity. Its technology has equipped 90% of power transmission utilities worldwide, with 40% of the world’s energy managed by its software.

However, given its near 100% electricity access rate today, does Malaysia still offer good potential growth for GE? Or is this a saturated market for the global energy giant?

According to Guy DeLeonardo, the general manager of GE Power’s gas power systems business, the group sees its role in the country’s power generation sector in two areas — new and existing power plants.

“We want to be the single trusted provider to build, manage and maintain our customers’ gas power generation assets,” he tells The Edge in an interview during a media tour in Greenville, South Carolina, the US.

Greenville is the home of GE’s HA, the world’s largest, most efficient and advanced heavy-duty gas turbine that debuted in 2016.

To date, GE — with the world’s largest base of installed gas turbines — has won orders to deliver five units of 9HA gas turbines for Track 4A in Pasir Gudang, Johor, and Track 4B in Alor Gajah, Melaka, which will be commissioned in the first half of 2020.

The first two units will be installed at the 1,440mw combined-cycle power plant (CCPP) in Pasir Gudang, while another three units will be placed at the 2,242mw CCPP in Alor Gajah.

“In total, that is 3.5gw of combined-cycle power. I think it [potential growth] is not just about the readily available electrification rate. The reserve margin and economic growth also drive the increased need for industrialisation and electrification,” DeLeonardo says.

He goes on to say that in the newbuild segment, GE is already working with power plant owners like Southern Power Generation Sdn Bhd, which runs the Pasir Gudang plant, as well as Edra Energy Sdn Bhd, which operates the Alor Gajah plant.

“Our record-breaking HA gas turbines will achieve more than 61% efficiency in Malaysia — the highest in the market. In ideal conditions with lower ambient temperatures, it is capable of achieving 63.08% — the highest in the world,” DeLeonardo says.

New Guinness record

GE has secured a new Guinness world record for the efficiency of one of its gas turbines in Japan. Its equipment at Chubu Electric Power’s 1,188mw Nishi-Nagoya plant converted 63.08% of its fuel energy into electricity, earning it the title of world’s most efficient CCPP.

In layman’s terms, efficiency is the amount of energy that can be extracted from a fuel. It has become the benchmark of the power industry with other original equipment manufacturers (OEMs) constantly competing to develop plants with the highest efficiency.

Higher efficiency means extracting more energy from the same amount of fuel consumed, making every kilowatt-hour (kWh) cheaper to produce. It also means lower carbon emissions, and that less fuel is utilised to produce every kWh.

Globally, the HA has achieved more than 130,000 operating hours and is the fastest growing fleet of gas turbines in the world, with 76 units ordered by more than 25 customers in more than 15 countries.

While there is still potential to develop more capacity, DeLeonardo believes there would be more market opportunities in replacing ageing assets in existing power plants.

“We have been in Malaysia for more than 40 years. Think about the technology that we had in the Seventies, all the old gas turbines, cross fleet solutions and OEMs. As Malaysia moves forward, with economic growth and electricity growth will come the need to modernise the fleet,” he says.

Generally, a gas turbine can produce electricity for over 20 years, or up to 30 years with upgrades to extend its life.

Scott L Strazik, president and CEO of GE’s Power Services business, is of the view that in the existing plants segment, the group is uniquely positioned to help its customers to run their plants in the most efficient and profitable way.

“Our purpose is simple — to be the world’s best power generation services provider, collaborating with our customers to deliver the right mix of solutions to meet their needs, remain competitive and win in a dynamic marketplace,” he says.

Strazik says that an old plant that is approaching its end of life is likely using technology that is 20 years old. As for a CCGT power plant, the difference in efficiency could be between 10 and 12 percentage points. That difference is huge.

“For a 1,000mw CCGT power plant, that difference in efficiency could improve the heat rate by 1,232 british thermal units (btu)/kWh to 6,824 btu/kWh. This translates into US$47 million in savings each year based on the current gas price of US$7.73 per million btu, assuming an utilisation rate of 85%,” he highlights.

Coal versus gas

Like it or not, coal is still preferred over gas as a source of energy in many developing countries. Even though the carbon dioxide (CO2) and pollutant emissions from coal are higher, its cost of generating power is lower.

In Malaysia, the share of natural gas and liquefied natural gas (LNG) in the power generation mix is 48%, slightly lower than coal’s share of 51%. The remaining 1% to 2% is from renewable energy such as solar and hydro.

DeLeonardo stresses that GE will continue to provide all power generation options in Malaysia, in order to maintain a balanced energy mix to meet the country’s energy and environmental needs.

“It is not about one fuel source over another. Malaysia has a half gas and half coal segment. Coal is cheaper but it has got higher emissions than gas. With any movement from the regulatory side, just naturally from the environmental perspective, that shift would want to go to gas,” he says.

DeLeonardo, however, acknowledges that in any developing country, power is expected to be well-distributed and cheap.

“The first problem that a country sees is to simply have power. As it develops, it sees the environmental impact. It is always that way. The World Bank’s priority is to solve poverty, so its stance on emissions is secondary to solving the need for power first,” he says. “But my real point is, Malaysia has a 50:50 mix already, your country has the generating assets. There is flexibility there for a shift.”

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