General Electric Company (NYSE:GE) Power has won an order for two 9F.05 gas turbines for the State Power Investment Corporation’s (SPIC) Langfang gas combined-cycle power plant project (Langfang). As GE Power’s business partner in the region, HE will provide the steam turbines, generators and other auxiliary systems for the project. Upon completion, Langfang will generate approximately 800 megawatts (MW) of power using the latest cogeneration (CHP) technology.
“With the upgrade and transformation of the local economy and the coordinated development for the Beijing-Tianjin-Hebei region, Langfang’s requirement for cleaner and more efficient energy has been increasing,” said Li Mingyu, general manager of Langfang. “With class leading efficiency, lower operating cost, best steam to power ratio for CHP application, high local content, execution & servicing, GE’s 9F.05 gas turbine is able to meet our requirement and sharpen our competitiveness in the power generation segment. We look forward to working closely with HE and GE Power in the future.”
Located in the Anci Economic Development Zone of Langfang City in Hebei Province, Langfang will provide a steady stream of cleaner and more modernized energy. It will help the Bejing-Tianjin-Hebei region to strike the appropriate balance between local economic development and environmental protection. Langfang is expected to be commissioned in 2019 and will be connect to the Beijing-Tianjin-Tangshan grid shortly afterwards. When complete, Langfang is expected to reach 60 percent efficiency in combined-cycle operation, with reliability of 99.8 percent and availability of 95.1 percent.
“We’re proud to work with HE to support China’s forward-thinking energy goals,” said Joe Mastrangelo, president & CEO of GE’s Gas Power Systems. “By applying our global knowledge of CHP applications and delivering our most advanced F-class gas turbines together with HE’s innovative technology, we will deliver more reliable, efficient and environmentally-friendly power generation in China than ever before.”
“We are ready to provide the high quality equipment and serive to Langfang, and together with the owner, we will build this project as the example project of 9F,” said Wu Weizhang, President of Harbin Electric Co., Ltd.
With more than 400 units installed globally and more than 18 million combined operating hours, the 9F is one of GE’s most popular gas turbines worldwide. The 9F.05 is especially effective when combined with HE’s steam turbine, 330H gas turbine generator and steam turbine generator being used in Langfang. This combination of technologies can ultimately bring lower costs and higher profitability to SPIC thanks to a more efficient plant design.
GE Power has invested in evolutionary improvements for the 9F.05 to make it a perfect fit for China. With the growth of renewable energy, China’s northern region requires excellent flexibility and part-load efficiency in power plants to maintain grid stability. The 9F.05’s enhanced flexibility and advanced compressor design meet the region’s needs for flexibility and efficiency, and Langfang’s development as a CHP power plant can maximize seasonal changes profitably, providing both power and heating needs for the region. For perspective, a single CHP plant of Langfang’s size could see savings reach RMB 6 million annually (based on 3,000 operating hours) while still meeting China’s advancing emissions requirements.
For over 30 years, GE Power has provided to the Chinese energy industry with more than 200 gas turbines, 180 steam turbines, 300 gas engines, and over 40 licenses for gasification tech services. GE Power offers a complete portfolio of power solutions in China for Chinese customers, understanding their needs and providing the most flexible solutions to maximize customer value. GE Power is committed to supporting China’s clean energy initiative and helping China reshape a more balanced energy mix for sustainable development.
On the ratings front, GE stock has been the subject of a number of recent research reports. In a report released today, J.P. Morgan analyst Stephen Tusa maintained a Sell rating on GE, with a price target of $16, which implies a downside of 14% from current levels. Separately, on January 4, Tigress Financial’s Ivan Feinseth reiterated a Hold rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Stephen Tusa and Ivan Feinseth have a yearly average return of 8.2% and 17.8% respectively. Tusa has a success rate of 73% and is ranked #851 out of 4754 analysts, while Feinseth has a success rate of 72% and is ranked #134.
Overall, 4 research analysts have rated the stock with a Sell rating, 8 research analysts have assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $21.42 which is 15.5% above where the stock closed on Friday.