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AERODERIVATIVES AND LARGE FRAME MACHINES ARE SEEING A SURGE IN ORDERS WITH 2012 EXPECTED TO BE ANOTHER UP YEAR
The U.S. had 5,700 MW of gas turbine (GT) orders last year, up 31% (expressed in total MW). Worldwide GT orders were up 54% for 2011 compared to the previous year. This stronger than expected rebound (Figure 1) does not mean the U.S. has recovered to anywhere near the levels reached over a decade ago. It is in the rest of the world that has almost returned to those levels. That adds up to 75,000 MW of GT orders last year, the second largest year ever (2000 was the highest).
U.S. combined cycles are now beginning to pull ahead of simple cycle applications. For many years, the split had remained constant at 50-50. However, the combined cycle fraction now exceeds 60%. Bigger frame, fast-start turbines are being harnessed in combined cycle mode so there is less fear in using large combined cycles for following load than there once was.
China’s almost 13,000 MW represents the first year that China’s GT orders have exceeded GT orders in U.S. (Figure 2). The reason: China is finally exploiting an abundance of gas in the Xinjiang Uygur Autonomous Region. A large pipeline utilizes GTs driving compressors to take that gas to Shanghai. As a result, the country is also building gasfired power plants, almost all of them combined cycle.
Another trend is a gradual shift in principal markets from Europe and North America to Asia. At 37% and 21% of global MW, Asia and the Middle East, respectively, are both ahead of the traditional Western markets in 2012. Over time, we are seeing a definite tilt in gas turbine orders towards developing countries (Figure 3).
Frame orders in North America amounted to 6,124 MW. GE won the lion’s share in 2011. However, Siemens and Mitsubishi continue to gain ground. The reason appears to be that they are better positioned at the moment to serve the needs of large customers by offering a more attractive dollars- per-kW proposition. As a result, GE is upsizing some of its large frame products.
About a quarter of 2011 orders in North America were for aeroderivatives; 21,000 MW was up a little in 2011, and most of these machines were destined to be utility peakers. Orders were strong from the LM 2500+, LM6000, LMS 100, Pratt & Whitney FT8 TwinPAC and Rolls-Royce Trent 60.
GE dominates the aero market. The LM6000 is by far the best selling aero turbine year in, year out; 44 units were ordered last year, up from 42 in 2010 . The largest LM6000 order was for 12 units utilized for mechanical drive at an LNG project in Australia. All together, there are now almost 1,100 LM6000s on order or in service, making it one of the most successful GTs ever built.
There is also growing interest in the LMS100, with eight orders in 2012. The U.S. is leading the way in the adoption of this turbine. Thirteen of GE’s newest aeroderivatives will be operating in Southern California by next year.
When one compares large frames to aeroderivatives worldwide, the former have 87% of the pie while aeros amass only 13%. This ratio has stayed fairly constant over the past five years but the pie has gotten bigger. The picture, however, is skewed due to frames being much larger in general. When one looks at the 18-to-65 MW segment in North America, aeroderivatives racked up 64% last year, up from 61%. While North America achieved 21% of aero orders and Latin America 26%, developing markets such as China, India and the rest of Asia mustered a combined 25%. These areas continue to demonstrate a preference for heavy frames and this bias changes slowly.
This more conservative outlook is reflected in aeroderivative sales in the rest of the world. Outside of the U.S., 48% of 2011 orders were for the LM2500, with only 22% for the larger and more recent LM6000. Pratt & Whitney’s FT8, and Rolls-Royce’s Trent and RB211 split the balance of the aero market. With a larger percentage of oil & gas customers in non-U.S regions, these users tend to prefer 25-to-30 MW machines explaining why the LM2500 and RB211 do so well.
Based on ongoing trends, natural gas holds 25% of the annual electricity generated in the U.S. today and that will rise to 30% within five years. In that time, coal will sink from 42% to 37%. We will also see a move towards natural gas fueled vehicles. When one examines cost per million BTUs, gas costs $2.30, while diesel oil is anywhere from $35.70 to $52.62. Look for the U.S. becoming a force in LNG exports, too.
In Europe, the recession appears to have hit harder than in North America so there is a slower rate of GT orders. But with Germany closing its nuclear plants, look for growing gas adoption in that continent.
And with coal under growing pressure and low natural gas prices, the GT outlook for the U.S. is strong. Asia’s torrid order rate for GTs, though, is not sustainable without major new supplies of gas. Overall, we expect U.S. orders to be up another 20% this year with worldwide orders up only 5%. That represents 80,000 MW of new orders globally in 2012 (Figure 4).
This information was supplied by Axford Turbine Consultants LLC, an independent consultancy based in Houston that specializes in gas turbine and steam turbine generation equipment. www.axfordconsulting.com