ORLANDO, Fla.--(BUSINESS WIRE)--Nov. 30, 2004--Calpine Corporation, a North American power company, has signed a letter of intent with GE Energy for the joint construction of the world's first power plant based on the 60-hertz version of GE's most advanced gasturbine technology, the H System(TM). The announcement was made today at Power-Gen International 2004.
The H System is the most efficient, gas turbine combined-cycledesign available to the power industry, providing superior fuel economy and environmental performance.
The new facility will be based on two GE 107H combined-cycle systems, which will provide a total plant output of more than 775 megawatts or enough power for nearly 800,000 U.S. homes. The new plant is expected to enter commercial operation in the spring of 2008. The project site has yet to be announced.
GE will purchase the project development rights from Calpine and will finance, own and operate the facility. Calpine's Energy Services group will market electricity from the facility under a long-term marketing arrangement with GE. Under the agreement, Calpine will sell the power through a variety of long, intermediate and short-term contracts. Calpine will have an option to purchase the plant and become the sole owner and operator of the facility, following an extended period of GE ownership.
GE's H System is the world's first combined-cycle system designed with the capability to reach 60% thermal efficiency, a milestone for the global power industry. The first 50-hertz H System, a 109H combined-cycle unit, entered operation in September 2003 at the Baglan Bay Power Station in Wales, and has compiled more than 5,000 hours of successful operation.
We are very pleased to work with Calpine for the North American launch of our H System, said John Rice, president and CEO of GE Energy. Following the successful commercial debut of our H technology at Baglan Bay, we are confident that this project will be the next major milestone for the power industry. Additionally, Calpine provides a proven track record in development, construction and power marketing, enabling this important project to proceed expeditiously. This project combines GE Energy's leadership in power generation technology and manufacturing with Calpine's fully integrated energy expertise, stated Calpine Chairman, CEO and President Peter Cartwright.
This project will showcase tomorrow's technology today - more power with less fuel consumption and fewer emissions, resulting in affordable and reliable energy with maximum environmental accountability.
Because of its high efficiency and advanced combustion technology, the H System offers significant benefits in environmental performance. For every unit of electricity produced, the H System uses less fuel and produces fewer greenhouse gases and other emissions compared to other large gas turbine combined-cycle systems.
Today's most efficient combined-cycle systems operate in the 57-58% efficiency range; the H System moves beyond that point by offering a system that is capable of 60% while also providing a platform for continued evolutionary improvements in the combined-cycle efficiency. With a combined-cycle system, exhaust from a gas turbine is converted to steam to power a steam turbine, producing additional power without an increase in fuel.
Fuel efficiency translates into lower cost of producing electricity and lower emissions. With the higher efficiency of the H System, fuel savings alone could reach $8 million per year and well over $100 million over the life of a large, H System combined-cycle power plant.
Developed by GE as part of the U.S. Department of Energy's Advanced Turbine System program, the H System features an innovative closed-loop steam cooling system that enables the higher firing temperatures required for increased efficiency. In addition to the steam cooling system, GE engineers designed key components of the H turbine with advanced, single-crystal materials to withstand higher temperatures over a long service life. Much of the H design, however, is based on turbine technology proven in millions of hours of commercial operation worldwide.
Calpine will retain development responsibility for the new facility and Calpine Power Services, a subsidiary of Calpine Corporation, will provide program management services for the construction effort. Once the plant is operational, Calpine will provide support in integrating the operations of the station with the requirements of the local energy markets.
The H System for the Calpine project will be provided under a previously announced agreement between GE and Toshiba. GE, which has responsibility for overall plant design and the H System, will design and manufacture the two Frame 7H gas turbines in its Greenville, S.C. gas turbine plant, and will supply the integrated control systems for the power plant. Toshiba will manufacture the GE-designed compressors along with Toshiba-designed generators and steam turbines. Shipment of the equipment is expected to begin in March of 2006.
About GE Energy
E Energy (gepower.com) is one of the world's leading suppliers of power generation and energy delivery technology, with 2003 revenues of nearly $18.5 billion. Based in Atlanta, Georgia, GE Energy providesequipment, service and management solutions across the power generation, oil and gas, transmission and distribution, distributed power and energy rental industries.
About Calpine
Calpine Corporation, celebrating its 20th year in power, is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. The company, founded in 1984, is listed on the S&P 500 and was named Fortune's 2004 Most Admired Energy Company. Calpine is publicly traded on the New York Stock Exchange under the symbol
CPN. For more information, visit www.calpine.com.
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