Power-Gen: Siemens president counting on displacement orders to fuel dereg boom

OGJ Online

ORLANDO, Fla., Nov. 14, 2000à‚–Deregulation and expansion are driving the gas turbine market today, but displacement orders could help keep the boom going, says Randy H. Zwirn, president and chief executive of Siemens Westinghouse Power Corp.

Speaking Tuesday at the opening session of Power-Gen International, Zwirn said the company estimates there is a potential for displacing about 225 GW of old inefficient gas and oil-fired boilers in the 800 GW U.S. market. He estimated the displacement market could represent about 25 GW of new orders a year on a normalized basis.

That’s down from about 40-50 GW a year in the existing boom. Much of the new capacity on order is destined to supply peak capacity between now and 2002.

“Clearly, we see forward commitments where generators don’t necessarily have sites,” Zwirn said. Nonetheless, of the 350 units on back order at Siemens Westinghouse, only a handful have been canceled in the past 6 months, Zwirn said, and these slots were quickly taken by other customers.

Displacement represents a good potential market because operators are about to learn that when all the new generation goes online, the difference in economic dispatch will be only a few mils, resulting in what Zwirn termed “trench warfare” among combined cycle gas-fired units.

Zwirn predicted combined cycle plants will displace intermediate base load units during the next seven years. He said the effect will begin to be evident in the Electric Reliability Council of Texas (ERCOT) where many new units are now under construction.

Looking ahead, Zwirn said, coal is likely to continue to play a significant role as a U.S. power plant fuel, but much will depend on “political events.” Politicians and others must ask if the country is willing to put all its eggs in one basket, namely natural gas, he said.

Prices of clean coal technology will come down and coal in the ground will be viewed as an asset that will be used, he said.

Despite concerns about gas supply, the U.S. will produce the necessary gas to serve the market, predicted Harvey J. Padewer, group president, Duke Energy Services, a unit of Duke Energy Corp.

“We believe price signals will drive the rig count,” he said, in addition to rising LNG imports which will be sold on the spot market easing the supply situation. But the market must adapt to serving power plants’ hourly needs, Padewer said.

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Power-Gen 2000
The first day of the conference drew about 13,000 people à‚– about 2,000 more than the first day of the conference last year, according to Power-Gen conference management. Ultimately, officials expect as many as 17,000 total.

With 57 tracks, three Mega-Sessions, technical training courses, an array of networking opportunities, and a giant exhibit floor, Power-Gen International 2000 provides an unmatched industry event. Little wonder that the show will draw professionals from 75 countries to Orlando, Florida, Nov. 14-16. Read more now and watch this page for daily updates.

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