GE Selected to Reduce Emissions, Boost Efficiency at Beijing Power Plant

Soon after being chosen as the site for the 2008 Olympics™, China began building the infrastructure to power the games. The cornerstone of the $40 billion plan was the Taiyanggong Thermal Power Station, capable of powering about 780,000 homes while having some of the lowest emissions of any power plant in the country.

 The 780-megawatt natural gas-fired plant in Beijing was the first step in an effort to improve electricity generation facilities and reduce greenhouse gas emissions across the country. In Beijing alone, the government embarked on a $20 billion program to improve the city’s environmental quality.

Less than a decade after Taiyanggong came online, China has taken the first steps to reduce the operational costs and environmental impact of existing plants. It selected GE (NYSE: GE) Power Generation Services to upgrade and rebuild two gas turbines at the Taiyanggong plant. The project will result in combustion systems that are simpler and more flexible in terms of fuel used to generate electricity. In addition, the agreement calls for GE to provide maintenance through 2025, a first-of-its-kind service model that sets an example for Chinese utilities looking to reduce their operational costs and environmental impact of existing power plants.

Having electrified much of the country by the turn of the century, China now is working to make its power infrastructure cleaner and more efficient.

While it has worked to address air quality issues, a report by the Global Commission on the Economy and Climate found that air quality issues are impacting the Chinese economy. China is increasing its use of natural gas units such as Taiyanggong as a means to help reduce greenhouse gas emissions. Now, the improvements at the Beijing plant, if replicated at other facilities around the country, could give an additional boost to China’s efforts to improve air quality. At the same time, it also could lower electricity costs for consumers and businesses that, in turn, could provide a boost to the Chinese economy.

Signs of these improvements will be evident even to casual observers. For example, once GE’s upgrades are complete, the Taiyanggong station should have no visible emissions when it starts up.

“This is an important project for us because upgrading our plant’s combustion system can help reduce the plant’s emissions, thus helping to protect the environment,” said Mr. Cao Mansheng, director, Taiyanggong Thermal Power Station. “Signing this CSA with GE makes strategic sense because it can help ensure the reliable, efficient operation of our facility over a longer period of time, helping us to lower our operating costs as well as overall emissions.”

The GE upgrades also can improve financial returns for operators while increasing overall operating efficiency and lower fuel costs. GE’s maintenance oversight may enable plants to extend maintenance intervals, reducing downtime. As a result, plants should have increased operating hours that will boost revenue.

“We see this as an innovative service model to deliver technology enhancements in China as operators seek to overcome their fuel-flexibility challenges and improve the environmental performance of their fleets,” said Yang Dan, vice president for GE Power Generation Products and Services—China.

Under the terms of the agreement signed in December, GE is to deliver parts for the upgrades by the end of the year, with the work completed on both turbines by early 2017.