GE and Caithness Energy Business Deal

General Electric Co. is nearing a deal with Caithness Energy with a potential value of more than $1 billion to supply equipment for multiple power plants in the U.S.

GE would provide as many as six of its new H-class gas turbines, along with steam turbines and other equipment, the companies announced Wednesday. The pact, covering plants to be developed in 2017 and 2018, is expected to become final by the end of this month.

A deal would be a boon for GE as Chief Executive Officer Jeffrey Immelt reorients it around industries such as energy, aviation and oil. The Boston-based company shed most of its finance and consumer operations while bulking up equipment manufacturing through agreements including the $10 billion acquisition of Alstom SA’s power division.

The so-called HA turbine, a Winnebago-sized unit that is the company’s most efficient, is crucial to GE Power as global population growth drives demand for electricity. GE committed $2 billion to develop the product and help maintain its position as the world’s leading supplier of gas turbines. The manufacturer accounted for about 39 percent of the world market in 2016, followed by competitors Siemens AG and Mitsubishi Hitachi Power Systems Ltd., according to data from McCoy Power Reports.

GE has received orders for 58 HA turbines, not including the six under consideration in the Caithness deal.

Top Customer

Under the agreement being discussed, GE would provide equipment generating as much as 3 gigawatts of electricity, or enough to power about 2.5 million U.S. homes. Orders for the turbines and associated service agreements are expected to be recorded by GE in the next 24 months.

Caithness is poised to become the top customer for the HA turbine, following a 2015 agreement to buy two units for a Pennsylvania plant. That facility, known as Caithness Moxie Freedom, is under development and will go online next year.

Separately, GE signed a pair of agreements with Gas Natural Fenosa valued at $130 million to service equipment in Mexico, including gas turbines manufactured by Siemens and Mitsubishi Hitachi. GE gained the ability to maintain and repair competitors’ products through the Alstom acquisition.

Leaders of GE’s power and renewable-energy businesses are meeting with investors Wednesday in New York to detail the operations.

GE Engineered Equipment Package (EEP) at Pennsylvania CC Power Plant

GE announced an order for a single shaft engineered equipment package (EEP), with a high-efficiency 7HA.02 gas turbine at its heart, to power the Ares EIF’s Birdsboro Power combined-cycle power plant in Birdsboro, Pennsylvania, USA.

With the help of GE’s latest power generation technology and financing from GE Capital, Birdsboro Power is expected to produce 488 MW upon commercial operation in 2019.

“We are pleased to bring this new plant online, which will help continue the shift to cleaner, more cost-effective power in the PJM region,” said Mark Voccola, a partner in Ares EIF, within the Ares Private Equity Group. “The abundance of low-cost natural gas in Pennsylvania means GE’s large, high-efficiency 7HA.02 technology is a great fit, supporting the region’s increased use of natural gas for power generation.”

The 7HA.02 incorporates a 14-stage advanced compressor with 3D aerodynamic foils with superfinish, three stages of variable stator vanes and field-replaceable blades.

“As the largest digital-industrial company, GE is uniquely positioned to bring a complete package of cutting-edge products and solutions to our customers,” said Joe Mastrangelo, president & CEO, GE Gas Power Systems.  “We’re able to provide critical financing to complete this project and deliver the world’s most efficient combined-cycle technology so that Birdsboro can provide more reliable, flexible and efficient power for the people of Pennsylvania.”

In addition to the equipment order, GE, through GE Capital’s Energy Financial Services, co-lead arranged senior secured credit facilities with CIT Bank and Investec, which will be used to support construction and operations of the plant.

The Birdsboro Power project was developed by EmberClear Corp., and the order includes one 7HA.02 gas turbine, one D650 steam turbine, one heat recovery steam generator (HRSG), plant controls and additional equipment. The gas turbine will be manufactured in Greenville, South Carolina, USA, and the steam turbine in Schenectady, New York. The turbines will operate in single-shaft combined-cycle configurations, providing the flexibility required to add highly-efficient, reliable power to the grid as needed.

This project marks GE’s 21st HA unit booked in the U.S. The HA is GE’s largest and most efficient gas turbine. GE’s Power Services has also signed a multi-year services agreement for continued maintenance of the facility’s power generation equipment.