Steve Bolze, CEO of GE Power and Water, tells UME why the Middle East remains a key region
Steve Bolze strides confidently into the plush surroundings of the Royal Mirage Hotel in Dubai, stretches out a big hand and gives me a huge, beaming smile. “Nice to meet you,” he says sincerely, looking every inch a candidate for the US Presidency.
I get 30 minutes with the CEO of GE Power and Water before he joins the ‘Townhall with Steve Bolze’, a sort of meet and greet with the company’s local employees. He was in Paris the previous week attending the UN Climate Summit following a few days spent planning the integration activities with Alstom.
GE won a tug of war with Siemens for the French company earlier this year, agreeing a takeover deal worth EUR 12.35bn ($15.7bn) that is expected to close next year. So what was behind the move?
“It’s a company we obviously know well,” Bolze says. “They were a gas turbine packager for us for many years and then we purchased it in 1999 so we have a lot of Alstom employees already in GE.
“Why did we do this? It’s because, number one, they have a lot of installed base of power generation in the world. That installed base needs to be serviced on an ongoing basis with customers and, between the two of us, we can bring new technologies to upgrade and make those assets perform better.
“Also, they are big in some places that we’re not as big,” he adds. “They obviously have a big hydro business and GE is not in hydro. They’re big in T&D, as are we, but in different areas. They’re broader in steam coal plants than GE has been and in gas they have a broader scope.
“So those areas can help us provide better solutions for our customers. The deal is not closed, we’re in the process of going through that right now and should complete in the second half of next year.”
The topic of upgrading existing power plants is one that Bolze is very keen to discuss. The interview takes place just as the POWER-GEN Middle East conference and exhibition is going on in Abu Dhabi, and the company is showcasing its latest “game changing” turbine.
“There’s installed capacity here today that needs to be upgraded and the number one way to get more power or more efficiency is to upgrade what currently exists,” he says.
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The future of large scale power
A recent report by the Swiss bank, UBS claimed that advances in solar and battery technology would lead to end users generating their own power within the next two decades. Such a scenario would surely have huge implications for large scale power generation because, the report said, retiring power stations would not need to be replaced.
GE is one of the largest manufacturers of turbines for power stations in the world. But Bolze doesn’t appear unduly fazed by the potential threat.
“When you look at the growth need for power, the world needs pretty much 50% more electrical power generation over the next 20 years,” he says. “Solar will have a role to play in that but our view is very strongly that it’s one of many different solutions that are required.
“Why is that? Because each country has a different set of natural resources to produce power. Some have better light resources, gas resources, coal resources, hydro resources, etc. The cost of solar as a source of generation has come down by close to 80% in the last six years. So it’s coming now.
“But the issue is that, as a source of baseload power generation, it’s still expensive versus thermal fossil sources and it’s also more intermittent. So it’s going to play a big role but it’s not going to be the only source.
“A lot of people talk about solar, particularly for distributed power generation. I think you’re going to see more people use solar in their home but they’re also going to use the grid as their source of power and, again, that solar source is more expensive than baseload power today, so it’s definitely a mix we’re going to see.”
The need to upgrade
This is the third time Bolze has visited the Middle East this year, so it remains a very important region for the company.
“Some of our customers here in the Middle East are absolutely our longest standing customers,” he says. “We have 1,200 turbines in the region and 6,000 employees so we’ve been here a while and there’s a lot going on for us here.”
We return to the topic of upgrading existing turbines with the company’s latest high efficiency technology, including the new 9EMax.
“People want to upgrade and the 9EMax allows customers to get more efficiency or output out of a class of machine that they know very well and there’s many of them all over the region,” says Bolze. “They’re more productive and have less downtime. That’s what people want, they want reliability.
“There’s plenty of opportunities to upgrade if you think about those 1,200 turbines we have in the region, plus the others that are out there.
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“Most GE equipment that exists in the world today works better than the day it left the factory. Why is that? Because it’s 15-20 years old and it’s been upgraded over time so it’s more efficient, it has higher output and longer outage intervals so it’s more reliable, more efficient and provides more sustainable power.”
While upgrading is clearly a big area for GE, new generation also offers plenty of opportunities. The largest market is, of course, Saudi Arabia which has seen steady annual load growth of 8-9% and where GE has longstanding investments.
Other parts of the GCC like Qatar, with the FIFA World Cup in 2022 and Dubai, which is looking to move forward with projects as the Expo 2020 approaches, also offer fertile ground for the company. However Bolze tips Egypt, where there are “tremendous power needs” as being another area of huge potential.
While Alstom’s strength in coal technology was clearly part of the attraction for GE, Bolze doesn’t see any great potential for the resource in the Middle East, despite plans for two ‘clean’ coal power plants.
“Coal is still close to 30% of new power generation in the world. When you look at the GCC/Middle East, there will be some projects in that area but based on the resources in the region, there’s more gas and oil availability,” he says.
“You’re going to see more solar projects and you’re going to see more big thermal projects with some solar on site, like a project we just signed about a month ago in Saudi Arabia. That’ll be a combined cycle power plant with some solar. You’ll see more of those.
“This is still one of the most exciting growth regions in the world for power,” he adds.
“The innovation that’s happening here in power and water is a showcase for the world.”
- 50% The additional power needed worldwide compared to today’s level
- 8-9% Annual load growth in Saudi Arabia, the largest market in the Middle East