GE Power’s turbine issue
Russell Stokes, the president and CEO of General Electric’s (GE) Power unit, published an article on LinkedIn on September 19. He confirmed that the company discovered an oxidation issue with a single blade component in its advanced gas turbines installed at Exelon’s (EXC) Texas power plant.
Russell Stokes said, “More recently, we identified an issue that we expect to impact our HA units. It involves an oxidation issue that affects the lifespan of a single blade component. Obviously, this was a frustrating development, for us, as well as for our customers. But we have identified a fix and have been working proactively with HA operators to address impacted turbines.”
What happened at Exelon?
General Electric’s 7HA gas turbine commissioned at Exelon’s (EXC) Colorado Bend plant in Texas experienced an oxidation issue a few weeks ago. The issue forced the unit to shut down. The oxidation problem compelled Exelon to idle three more electric power units. On September 21, General Electric stated that discovering the oxidation issue with a single blade component will likely impact some of its gas turbine models.
The oxidation, which weakens metal turbines blades, could have a negative impact on 75 units of General Electric’s 9FB turbines along with a few of the 51 HA-class turbines shipped by General Electric. PKN ORLEN is GE Power’s customer in Poland. PKN ORLEN issued a press release on September 20 stating that it won’t reopen its power unit until March 2019. The power unit is being examined by GE Power’s team, which indicates the severity of the issue. The issue could have a negative impact on GE Power’s future prospects.
General Electric’s comments
General Electric maintained that 9FB turbines account for less than one percent of its worldwide gas turbine fleet. The markets sank into pessimism on September 21 and September 24, which punished the stock. The problem has also impacted the HA product line, which is a fast-selling product at GE Power. So far, General Electric has received 82 orders for 7HA turbines worldwide and 51 have been delivered. The product line is instrumental in the core growth of GE Power’s Power Systems business.
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Next, we’ll discuss GE Power’s second-quarter results.