China Datang Group, one of China’s Big Five state-owned generators, is to gas turbines and associated generating equipment worth US$1 billion from General Electric (GE).
The sales agreement was signed as part of a broader set of deals signed by GE with several Chinese state businesses, including aeroplane engines, during the visit to Beijing by US President Donald Trump at the head of a large business delegation.
“The deal sets the stage for future joint projects and helps China with its initiative to generate cleaner and more efficient power,” GE said in a brief statement.
Datang has a generating capacity of more than 115,000 MW. It includes 17,000 MW of hydroelectricity systems and over 8,000 MW of wind farms, but the bulk of the capacity is fuelled by coal.
“GE will supply [Datang] with gas turbines, gas turbine components and steam turbine components as well as services and IIoT solutions for Chinese domestic projects,” the official China Daily said. They will form part of “China’s initiative to transition towards cleaner, more efficient and better-optimized power generation and consumption”.
IIoT stands for Industrial Internet of Things, referring to big data technology such as machine-to-machine communication and automation technologies.
The Chinese central government is pushing more of the countries big cities to switch from coal-fuelled power and heating to natural gas. The main thrust of this so far is to encourage conversion of coal-fuelled apartment block heating furnaces to gas.
Some city coal power plants are also being replaced with gas. However, there have been warnings that the pace of change is running ahead of adequate gas supply and infrastructure to meet demand this winter.
Consumption of natural gas between January-October grew more than twice as quickly as in 2016 and suppliers are struggling to meet demand, independent Chinese business website Caixin said on November 10 quoting a study by CNPC Economics and Technology Research Institute, part of China National Petroleum Corporation.
Suppliers were “under enormous pressure” to meet demand as plunging winter temperatures push consumption higher, the Institute said.