ISLAMABAD: General Electric’s flagship gas turbines ran into
problems in Pakistan earlier this year, leading to delays and lengthy
outages at three newly built power stations, according to several senior
Pakistani officials and power executives.
GE has said
there were teething problems. But the questions over one of its most
important products suggest another setback for the company in a year in
which its shares have plunged and third-quarter results were called
“horrible” by new Chief Executive John Flannery.
There
is no evidence that GE’s 9HA-Class turbines have fundamental design
flaws. But so far the Pakistani plants, which began running this year,
are producing power at levels well below their capacity and the problem
was acute in the crucial summer months, when temperatures in the country
frequently exceed 40 degrees Celsius.
Data from the
Central Power Purchasing Agency showed the Bhikki, Haveli and Balloki
plants jointly generated only a half of their current maximum capacity
in August. A month later all three plants showed improved output but
remained well below capacity. Reuters was unable to review more recent
data.
“It had terrible consequences because we lost a
lot of power which would have come to the grid during the peak summer,”
said Yousaf Naseem Khokhar, the top civil servant in the Energy
Ministry’s power division.
In a statement sent to
Reuters, GE said “every commercial HA site today is demonstrating
exceptional performance levels for both output and efficiency”.
On
the issues in Pakistan, GE said: “We’ve encountered and communicated
openly about launch challenges and readily resolved issues during this
time.”
The 9HA-class gas turbines, the GE power
division’s newest and most prestigious product, entered the Guinness
World Records last year for efficiency, based on the amount of
electricity generated from natural gas at the power plant in Bouchain,
France, where it was first put into commercial operation in June last
year.
Tough year
Pakistan, desperate for
additional electricity to avoid crippling blackouts, teamed up with GE
to build the power stations at Bhikki, Haveli and Balloki at breakneck
speed.
GE won the contracts to supply Pakistan with six
turbines for the three power plants in 2015, based on the lowest priced
deal per megawatt of capacity.
The first problem was the
deliveries were delayed by up to three months and missed some of the
summer months this year, several Pakistani officials said. They said
they were told the delays happened because a part of the turbine needed
further testing.
The plan was to fire up the turbines in
simple cycle mode - delivering around 800 MW per power plant - in the
spring of 2017 and then to upgrade to 1,200 MW combined cycle output
after the summer.
The delays infuriated Islamabad,
because getting additional power during the summer was a crucial factor
ahead of 2018 parliamentary elections.
One of the two
turbines at the Bhikki power plant was delayed by about a month. At the
Balloki and Haveli plants, the turbines were delayed by about three
months, two senior Pakistani officials aware of the situation said.
Then,
in early May, a combustion seal leak was detected at one of the
turbines at the Bhikki plant. To fix this, and to apply the same remedy
to the five other turbines, GE airlifted all the units to France for
repairs.
In July, Prime Minister Shahid Khaqan Abbasi,
who was then the petroleum minister said that GE spared no expense to
fix the problems.
Turbine damage
But that
meant one Bhikki turbine was offline for about 40 days and the other
for about 50 days. The other two plants had not begun operations at the
time, but came online in July and August.
In a third
setback, one of the turbines at the Haveli plant was badly damaged
during a power outage three weeks after it was inaugurated in July, the
Pakistani officials said.
At such times, batteries and a generator act as back-ups to ensure a pump continues to push lube oil into the turbine.
“Both
didn’t work,” said one of the officials, adding the diesel generator
had no fuel. The turbine crashed, with damage estimated at $33 million,
and although it was refitted with a new rotor by GE, it is still to
resume operations.
The power station is being built by
China’s SEPCOIII Electric Power Construction Corporation. SEPCOIII did
not return queries for comment.
In September, Pakistan awarded its most recent power contract to Siemens, after bidding by several companies, including GE.
Stephen
Tusa, an analyst at JP Morgan in New York, wrote in a recent note that
although GE has assured investors that the Pakistan problems have been
resolved, they could re-emerge in other plants around the world.
“The
risk is that if these issues are not remedied, GE has already ‘sold’
another 30 units, some of which are at higher output ratings,” he wrote.
“Remedies would have to be applied up the curve,
something we view as a challenge, especially as senior management tries
to cut costs aggressively. Stay tuned.”
