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mechanical
engineering power
2003

Bubble Buster
This is no dot-com phenomenon; the market for gas turbines
is as firm as ever.
By Lee S. Langston
The 64-year history of the gas turbine industry
is a story marked by growth and change. Its products have come to dominate
aviation propulsion and, more recently, electrical power generation. Some
of these changes were discussed at the February conference, "Gas
Turbines for a National Energy Infrastructure", sponsored by ASME's
International Gas Turbine Institute and the U.S. Department of Energy
in Arlington, Va.
The tenor of the talks, however, was in contrast to the industry's
history. During the conference, the decade-long upsurge in electric power
gas turbine ordersand the more recent downturnwas a dominant
topic, and the word "bubble" was used in some discussions
to describe it. A bubble, of course, describes something that lacks firmness,
solidity, or reality. In its worse sense, it can be applied to a delusive
commercial or financial scheme, such as the recent dot-com hysteria.
But there is no gas turbine bubble. The market is, instead, rock-solid,
with demonstrated long-term growth, subject to temporary divergences from
an overall upward trend.
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To support this "anti-bubble" view, consider the history
of worldwide gas turbine production for the past 13 years. Forecast International
of Newtown, Conn., provided the estimates of value of gas turbine production
(in 2003 U.S. dollars) for 1990 through 2002. The research company considers
production value to be a more accurate and timely indicator of gas turbine
demand than are estimates of original equipment manufacturers'
sales.
Forecast International breaks down the total into two subcategories: aviation,
comprising jet engines, turboprop engines, and auxiliary power units,
or APUs; and non-aviation, combining land-based gas turbines (used for
electric power generation, mechanical drive, and vehicular power) and
marine gas turbines. Together, the value of production in those two categories
has fluctuated over the last 13 years, with a low of $22 billion in 1996
and a peak of $48 billion in the banner year of 2001. To put these figures
in perspective, the total sales in 2000 for General Motors was $161.3
billion, while for Boeing it was $56.2 billion.
The subcategories, though, tell different stories. The value of aviation
was highest in 1990, nearly $22 billion, reflecting airlines' major
purchases of aircraft in the late 1980s. Thereafter, aviation gas turbine
value of production ranged from $13 billion to $21 billion between 1991
and 2002, accounting for the major share of the total until the last two
years.
In 2002, for instance, the value of aviation gas turbine production ($17.2
billion) was 4 percent lower than it was in 2001 and represented just
45 percent of the total. At $14.4 billion, the civil aviation market amounted
to about 82 percent of the 2002 aviation value of production, with military
gas turbine production accounting for the remaining $2.8 billion. The
4 percent decrease from 2001 is a reflection of reduction in orders for
new airplanes by the world's airlines because of depressed air
travel following terrorist attacks on Sept. 11, 2001, and the general
economic downturn in the world's economies since the booming 1990s.
But while the aviation market has suffered setbacks, the value of production
for the non-aviation market gives a picture of dramatic growth. This has
been brought about by the major adaptation of gas turbines by the world's
electric utilities, and power producers serving the new deregulated electricity
markets in the United States, the U.K., and elsewhere.
From its beginning in 1939, jet engines (thrust power) had dominated the
gas turbine marketplace. That domination ended in 2001 when non-aviation
gas turbine (shaft power) value of production surged ahead of the aviation
sector. For the first time, the non-aviation value ($30.4 billion) accounted
for some 63 percent of the total market.
Last year, however, the non-aviation value of production dropped 30 percent,
to $21.3 billion. Mechanical drive gas turbines (designed to drive natural
gas pipeline compressors) made up $1 billion of the non-aviation market,
marine gas turbines that power cruise ships were valued at $400 million,
and electric power gas turbines accounted for the remaining $19.9 billion.
Almost the entire 30 percent drop from 2001 occurred because of the decrease
in production of electric power gas turbines in 2002.
At the IGTI/DOE February conference, the plummet in the electric power
gas turbine market was the subject of considerable discussion. Most of
the attendees zeroed in on three factors. Obviously, the first was the
Enron effect: The capital investment community has developed a lack of
trust in the electric power business since the sudden failure and bankruptcy
of Enron, a major electric power trader. It probably will take some time
before the investment community funds power plant projects again.
But the downturn in the economy, fears of terrorism and uncertainty about
the war in Iraq, and the hangover from the dot-com investment bubble (a
true bubble) of the late 1990s had a hand in the decline. And then there
was the after effect of a buying spree in the late 1990s. In recent years,
North America had been the biggest market for electric power projects.
The rapid buildup in gas turbine power plants increased the electrical
power reserve margin from lows of about 15 percent in 1999 to about 28
percent in 2002. It may take some time to work off that extra capacity.
American writer and lexicographer Ambrose Bierce defined the future as
"that period of time in which our affairs prosper, our friends
are true, and our happiness is assured." Is the future of the gas
turbine market as rosy as Bierce's tongue-in-cheek definition?
Here are some points to consider.
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| The Joint Strike Fighter is designed
to hover on engine power, then zoom off at supersonic speed. Separate
versions are currently being developed for the U.S. Air Force, Navy,
and Marines. |
Although not generally recognized by the public or by many politicians,
the gas turbine is at the heart of a revolutionary energy conversion device
called the combined-cycle power plant. Exhaust heat from a gas turbine
driving an electrical generator is used to make steam to power a turbine,
which drives another generator. The result is an energy conversion device
that almost doubles thermal efficiency figures for power plants.
At the February IGTI/DOE meeting, John Rice, president and CEO of GE Power
Systems, expressed confidence that GE's new, just-installed 480
MW combined-cycle H unit at Baglan Bay, Wales, will reach the magic 60
percent thermal efficiency figure during operations later this year.
Around the world, combined-cycle plants are regularly operating at efficiencies
well above 50 percent, with a capital cost in the range of about $600
per kilowatt. (Regular steam plants are $1,200 to $1,600 per kilowatt
and nuclear plants cost $1,500 to $3,000 per kilowatt.) Recently, there
has been a great deal of attention focused on fuel cells and their high
thermal or thermodynamic efficiencies, often quoted in the 50 to 70 percent
range. But when the need to produce mostly pure hydrogen from a hydrocarbon
fuel is included, overall thermal efficiencies can drop to about 30 percent
for a 200 kW unit, with capital cost of as much as $5,000 per kilowatt.
Fuel cells have been around since the 1830s and have successfully competed
in niche markets, such as the U.S. space program. But it's a bit
of a stretch to see them competing with gas turbine combined-cycle power
plants in the megawatt rangeon the basis of either capital cost
or overall efficiencyin the foreseeable future.
A key factor in the success of gas turbine electrical power generation
has been the use of natural gas as a fuel. Natural gas, composed mostly
of methane, CH4, has been called the "prince of fuels,"
having the highest heating value and being environmentally the most benign
(that is, producing the lowest level of CO2) among the hydrocarbon fuels.
The relatively low long-term price of natural gas and its ready availability
through pipelines and from LNG plants and tankers have helped drive the
market for gas turbine power plants.
Concerns have been raised in some quarters about the future availability
of natural gas, and its effect on the gas turbine market. First of all,
at present only about 15 to 20 percent of the world's power plants
use natural gas. Proven reserves of natural gas currently exceed those
of oil on an equivalent energy basis, and the rate of discovery of new
gas fields exceeds that of oil. Pipelines to transport additional supplies
of natural gas will be needed, but the free market is capable of taking
care of this challenge. David Franus of Forecast International reported
at the IGTI/DOE conference that of the 56,600 miles of new pipelines now
under construction worldwide, 43,000 miles are natural gas projects.
And gas turbines are not limited to gas pumped from underground reservoirs.
Research and development efforts on supplements to natural gas as a fuel
have investigated coal gasification and the newly proposed hydrogen-fuel
economy. Electric power gas turbines can be made to run just fine on gasified
coal. Early in their development, gas turbines were actually fueled by
hydrogen to avoid combustion instability problems, by taking advantage
of hydrogen's exceptionally high flame speed. Thus, a hydrogen
economy (which sounds a little like the "fusion economy"
proposed back in the 1950s) could provide fuel for gas turbines as well
as for fuel cells.
WHAT'S NEW
Currently, the industry's most advanced gas turbine under development
is the jet engine for the Lockheed Martin F135 Joint Strike Fighter. A
$4.8 billion contract was awarded to Pratt & Whitney in 2001 to develop
the JSF engine, which will power the fighter aircraft in all its variants
conventional takeoff for the Air Force, carrier missions for the Navy,
and short takeoff/vertical landing for the Marines. The aircraft will
be able to hover solely on engine power, using a separate clutched Rolls-Royce-designed
lift fan module, and then go into supersonic flight, reaching speeds greater
than Mach 1.5. Because of its unique characteristics, the JSF jet engine
will have the highest thrust-to-weight ratio in the industry. The envelope
is being pushed on this engine, and there will be technological developments
from which the rest of the gas turbine industry, aviation and non-aviation
alike, will benefit.
As the electric power gas turbine market grew in the 1990s, major OEMs
introduced an F-class (200 MW range) gas turbine to the market. Many features,
such as advanced turbine cooling, were taken from jet engine technology,
but the new designs were not always subject to aviation-style testing
programs to eliminate problems before going into service.
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| The Cunard Line's Queen Mary 2,
more than a quarter-mile long, will be the largest cruise ship running
gas turbines when it sets sail later this year. |
Gas turbine users, buyers, insurers, and financiers report problems with
some new machines. Some of the problems are ones the industry solved decades
ago, such as rotor vibrations and inadequate through-bolt assembly procedures.
Others might have been solved before going to market: combustion parts
that fail during operation, for instance, causing damage to downstream
gas path turbine parts. At the February meeting, Sal Della Villa of Strategic
Power Systems in Charlotte, N.C., reported that scheduled outages of the
F-class machines were the biggest factor in reducing power plant availability.
In response to the industry-wide F-class problems, John Rice of General
Electric, the largest of the OEMs, said that the company will not market
its next-generation gas turbine, the H-class, until the fleet leader unit
(the one installed in Wales) has been fully tested. Both Siemens Westinghouse
and General Electric use Rankine cycle steam to cool hot section gas turbine
parts in the H-class, so there will be at least one new system to be tested
before operation.
MICROTURBINES EMERGE
Very small gas turbines, called microturbines, continue to emerge in the
market as a viable energy option for distributed electrical power and
cogeneration. These small gas turbinesranging from 30 to 400 kWare
typically fueled by natural gas. Microturbines are geared toward solving
on-site energy demands, such as supplying electrical power and heat for
a McDonald's fast food restaurant. Several thousand of these units (priced
from $850 to $1,500 per kilowatt) have been sold and installed in the
last two years by Capstone, Elliott Energy Systems, and Bowman Power Systems,
among others. Some advocates of microturbines compare their future status
in the electrical power industry to that of the PC in a computer industry
once dominated by mainframe systems. Time and the marketplace will sort
this all out.
Marine gas turbines represent a small but growing market. The cruise ship
industry is making more and more use of gas turbines to power its substantial
hotel electrical loads (which can be similar to those of a small city),
as well as to provide electricity for electric propulsion motors driving
the ship. The Cunard's new Queen Mary 2, a 1,632-foot-long cruise ship
now under construction, will be the largest cruise ship afloat using gas
turbine power.
Gas turbines running in a closed cycle may come to be used in a new, commercially
promising configuration, one that uses nuclear fuel as the source of input
energy rather than jet fuel or natural gas. In the 1980s, a new design
was developed in Germany for an inherently safe nuclear reactor: Nuclear
fuel is dispersed in graphite spheres (or "pebbles"), each about
the size of a tennis ball, designed in such a way as to contain radioactivity
while producing heat. Helium is heated as it passes through as many as
400,000 radioactive pebbles, and is used to drive an energy conversion
device.
Since 1993, the South African Utility ESKOM, has been investigating this
reactor designwhich it calls the Pebble Bed Modular Reactorto
power a closed-cycle gas turbine. The PBMR power plant involves the design
of a three-shaft, closed-loop recuperative intercooled gas turbine using
electromagnetic bearings. A group led by Pieter Rousseau of Potchefstroon
University in South Africa is now continuing research on this concept.
Currently, design studies and testing show that a 100 to 200 MW PBMR plant
could have 40 percent thermal efficiency at a capital cost of about $1,300/kW.
Clearly, this is a new gas turbine technology worth watching.
Lee S. Langston, a professor of mechanical engineering
at the University of Connecticut in Storrs, is the editor of ASME's Journal
of Engineering for Gas Turbines and Power.
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