In a major development GE has secured USD 1.0 Billion of project financing for the first independent combined cycle power plant in Sharjah, UAE. GE is working with co developers GE Energy Financial Services (GE EFS), Sumitomo Corporation of Japan, Sharjah Asset Management (SAM), the investment arm of the Government of Sharjah, and Shikoku Electric Power Company for development of power plant project. The secured financing is from leading private financial institutions of Japan, with the Japan Bank for International Cooperation (JBIC), and Japan’s export credit agency (ECA) under the insurance cover provided by government of Japan.
The financing provided by Japan financial institutions is a part of ‘Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth’ (QI-ESG), an initiative by government of Japan to promote infrastructure development projects that are expected to contribute to the global environmental protection. The current initiative was launched in summer of 2018 by the Japanese government.
The project is a 1.8 GW power project which will be operated by Hamriyah Independent Power Company in Sharjah, UAE. The project has a total of three power generation blocks. The first of the three power blocks are expected to come online by 2021. The overall project is expected to reach its full commercial operations by 2023 and will be selling its generated power to Sharjah Electricity & Water Authority (SEWA) under a 25 year power purchase agreement (PPA). The co developers of the power project have also formed an equity consortium with SAM and Shikoku Electric Power Company. The consortium will construct, own, and operate the combined cycle power project which has three combined cycle blocks.
Together with this project, now GE has been a part of the Gulf Cooperation Council’s (GCC’s) power sector for more than 80 years and its power products and technologies generate almost 60% of the Sharjah’s electricity. The gas turbines provided by GE are largest and most efficient heavy duty gas turbines globally available today.
Table 1. Key Global Combined Cycle Power Plant Projects
Source: MarketsandMarkets™ analysis
Overview of reliable and proven combined cycle power plant technology
The basic functioning of combined cycle power plant uses both gas and steam turbine in tandem to produce up to 50% more electricity from a same fuel by a traditional simple cycle plant. The waste heat produced from gas turbine is send to a steam turbine which to produce extra power. Thus, captured waste heat increases the efficiency of the power plant.
Table 2. Efficiency comparison with other power generation technologies:
Source: MarketsandMarkets™ analysis
The common type of combined cycle power plant utilizes a gas turbine with steam turbines as gas turbine have low efficiency in a simple cycle operation. To achieve desired power different configurations can be applied to a combined cycle gas turbine (CCGT) plant.
- 1×1 configuration, one GT/HRSG train supply to one steam turbine.
- 2×1 configuration, two GT/HRSG trains supply to one steam turbine.
- 3×1 configuration, three GT/HRSG trains supply to one steam turbine.
- 4×1 configuration, four GT/HRSG trains supply to one steam turbine.
As per the configurations steam turbines are sized to the numbers and capacities. HRSG is basically a heat exchanger or a series of heat exchangers to produce steam.
MarketsandMarkets™ View Point:
Ajay Talyan – Analyst : Energy and Power, at MarketsandMarkets™, shares his Point of View as mentioned below:
Companies such as GE, Siemens, Mitsubishi Hitachi Power Systems, and Kawasaki Heavy Industries among others have a reliable portfolio of heavy duty gas turbines ranging from 34 MW up to 580 MW. The heavy duty gas turbines are efficient, fast, clean, mobile, and reliable power generation technology apt for combined heat and power (CHP) and industrial power generation.
Heavy duty gas turbines come with multiple benefits.
- Cost effective conversion of fuel to electricity
- Efficiency levels up to 60%
- Reduced emissions
- Provide overall efficiency of CHP systems more than 80%
- Provide electricity and heat generation locally
Combined Cycle Power Plant with heavy duty gas turbine offers an effective solution for power generation where natural gas fuel is readily available, and it can also as highly efficient solution for district heating requirements.
According to BP Statistical Review of World Energy 2018, US, Canada, Norway, Russia Federation, Iran, Qatar, Saudi Arabia, Australia, and China are the major gas producing countries. These gas producing countries can use their own gas to produce power by using combined cycle power plant technology. While US, Canada, Germany, UK, Russia Federation, Iran, Saudi Arabia, UAE, China, Japan, and Thailand are the major gas consuming countries. As natural gas is the main fuel of a Combined Cycle Power Plant these countries can come up with policies to promote higher use of Combined Cycle Power Plant generated power in their overall electricity demand. In regions of low cold temperature such as Europe and North America, Combined Cycle Power Plant can act an effective way to fulfill heat demand during high demand periods in winter and in periods at the beginning of the summer for large network ranging above 800 MW. Also, according to Energy roadmap 2050 of Europe the EU has set up goal to cut greenhouse gas emissions by 80–95% by 2050. To achieve the greenhouse emission cut goals many European counties must look for alternative sources of clean fuels power generation such as natural gas to reduce emissions. Thus, Combined Cycle Power Plant can play effective role in district heating in countries such as Iceland, Denmark, Sweden, Finland, Estonia, Latvia, Lithuania, Poland, and Russia Federation.
Table 3: LCOE calculation for individual district heat technologies
Source: MarketsandMarkets™ analysis
Heavy duty gas turbines are well suited for harsh environments such as remote locations in deserts, and cold weather countries. Countries such as China, India, Japan, and Thailand can contribute to the demand of heavy duty gas turbine market for energy generation in Asia Pacific due to the increase in demand for electricity and power generation for the purpose of developing smart cities in these countries. North America is an emerging market for heavy duty gas turbines as U.S government has plans to redevelop and refurbish its old power generation infrastructural plans. In Europe, demand for heavy duty gas turbines are anticipated to increase in Nordic countries due to the increase in district heating.
In accordance with this development, renewed focus is on the combined cycle power plants, on which MarketsandMarkets™ has already done a deep dive study, dedicated to gas turbines market. The global gas turbines market is projected to reach USD 20.66 Billion by 2022, from an estimated value of USD 17.5 Billion in 2017, at a CAGR of 3.4%. The market for Heavy duty (Frame) was estimated to be USD 13.0 billion in 2017 and is projected to reach USD 15.4 billion by 2022, at a CAGR of 3.5% during the forecast period, while Combined Cycle technology was estimated to be USD 13.8 billion in 2017, and projected to reach USD 16.3 billion, at a CAGR of 3.4%.
GE has grasped the opportunity arising both from the power demand and available clean fuel source of natural gas in Middle East region. GE was able to source project financing from public and private sector as done for the combined cycle project due to higher focus on clean energy. Thus GE demonstrates Middle East region’s attractiveness for foreign investment and the company’s ability to connect global capital to significant power infrastructure projects. Combined Cycle Power Plant presents a reliable, cost effective, clean, and sustainable power for exiting and future power infrastructure projects. The power project also acts as an important mile stone as its helps Sharjah Electricity & Water Authority (SEWA) to reduce carbon dioxide emissions by up to four million tons per year, compared to current levels which is equal to taking away one million cars off the UAE’s roads. The agreement further boots the long term relationship of GE and Sharjah Electricity & Water Authority (SEWA). Other companies can look at the deal as an opportunity to implement the clean technology in the Middle East, Asia Pacific, Europe, and Africa region for utility electricity generation and district heating with relatively easy available financing option as is showcased by GE.