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GE ‘bullish’ about coal-fired power

General Electric is to ramp up the development of its coal-fired power business.

The Wall Street Journal reports that the company is aiming to capitalise on the expertise provided by its recent acquisition of Alstom Power and the need to modernise coal-fired power plants worldwide.

The report in the Wall Street Journal, stated that the company is “bullish” about the fuel and intends to ramp up its involvement with it. GE, headed by CEO Jeff Immelt (right), will build coal plants in emerging markets hungry for coal, such as India and China, and ramp up GE Power’s business in upgrading existing coal plants in the U.S. and Europe.
Jeff Immelt
According to the WSJ the strategy is informed by a belief that coal will, despite the growth of renewables, continue to hold a substantial slice of the future energy market.

China, India and the U.S. are responsible for 70 per cent of all coal consumption in the world and the market is expected to remain healthy in the coming years with non-OECD countries picking up the slack in consumption in the Western economies.

Meanwhile the Alstom purchase takes on more significance, with that entity already possessing more than 20 per cent of the world’s installed steam turbine capacity and a lucrative technology and services business. It is also a supplier to the world’s seven largest fossil fuel plants.

Alstom is very strong in Asia and recently signed a contract worth €125 million with Bharat Heavy Electricals Ltd in India for a thermal power plant. Complementing Alstom’s expertise in the steam turbine business is GE’s 39 per cent share in the gas turbine business.

An identified area of growth for the company is the area of retrofitting coal plants with digital technology. According to GE, a single percentage point increase in the efficiency of a coal plant would translate into $20m in added value over the next 10 years and result in a 3 per cent reduction in carbon dioxide emissions.

According to a 2013 estimate by McIlvaine Company, the market for upgrading coal plants is worth $80bn over the next 10 years. Alstom’s expertise in this area will help the merged entity corner a substantial part of the business.