GE Turbine Problems Hit Power Generation at 3 Pakistani Plants

Pakistan's Central Power Purchasing Agency's report shows that General Electric's 9HA-Class turbines produced only half of their capacity this August, according to Reuters. Power executives and government officials in the country said the GE turbines had operational issues like long outages and production delays.

GE Turbine Problems:

Bhikki Power Plant, Punjab, Pakistan

The GE turbine problems affected three key plants – Bhikki of Punjab government and Balloki and Haveli Bahadur Shah of the federal government – with a total capacity of 3,600MW that are considered crucial to end load shedding within the ruling PMLN's 5-year term ending middle of 2018.

Consequences For Pakistan:

Pakistan's government is failing to deliver on its promise to end load-shedding this year because of serious issues with GE's 9HA-Class turbine.

"It had terrible consequences because we lost a lot of power which would have come to the grid during the peak summer," Yousuf Naseem Khokhar, a top official in Pakistan's Energy Ministry's power division, told Reuters. "It is now up to General Electric to rise to the challenge and to take care of these issues ... before next summer starts," he said.

Pakistan is recognized as a major growth market for power turbine makers because its booming economy has a well-developed gas infrastructure. General Electric has lost a lot of credibility after its failure to deliver in Pakistan. The country awarded its most recent power contract to Siemens, after bidding by several companies, including GE.

Impact on GE Business:

General Electric claims its 9HA-Class turbines are highly efficient turbines which have secured place in the Guinness World Records of 2016, for the amount of electricity they have produced from natural gas at a power plant in Bouchain, France. The Bouchain plant has had 26 forced outages in the 15 months ending November, according to data published by operator Electricite de France (EDF).

JPMorgan analyst Stephen Tusa has warned GE's Pakistan problems could affect other plants around the world, where GE has already "sold" 30 units. GE dismissed criticism, saying the turbines were merely experiencing setup challenges. But the problem could be another setback in a year of plunging stock and "horrible" third-quarter results for the company whose stock has already suffered a major decline this year.

Summary: 

General Electric 9HA-Class gas turbines are not delivering the power Pakistan was counting on to end unscheduled power outages in the country.  These problems could hurt election prospects for Pakistan's ruling PMLN party if they are not fixed soon and the party fails to keep its promise to end electricity load-shedding.

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