NEW YORK (AP) — General Electric Co. has received $1 billion in orders this year for turbines that burn natural gas to make electricity from customers in North America eager to take advantage of low natural gas prices.
Natural gas prices in North America have been low and steady in recent years as drillers have learned to unlock vast amounts of natural gas once thought inaccessible in shale formations throughout the U.S.
With low natural gas prices, utilities and industrial customers that need to generate electricity can do so at lower cost. Natural gas-fired power plants are also far cheaper, easier and faster to build than other major electricity sources such as coal and nuclear.
Natural gas traded just below $4 per thousand cubic feet Wednesday morning, and it has traded in a range of $3 to $6 in recent years. In the middle of the last decade natural gas prices were extremely volatile and spiked to as high as $14. Those unsteady and high prices discouraged utilities from adding much natural gas-fired capacity.
Now, after several years of low prices and increasing supplies, utilities are more comfortable with natural gas. Also, utilities are facing tightening emissions regulations that are forcing them to close older coal-fired plants. They are expected to replace coal with natural gas.
GE, based in Fairfield, Conn., also unveiled a new, relatively small natural gas turbine that can power up quickly and operate without water. Natural gas-fired electricity already requires less water than coal and nuclear, but most require some.
GE expects its new 50-megawatt turbine to attract businesses and small communities abroad. It made the announcement in Houston.
General Electric shares rose 2 cents to $15.43 in morning trading Wednesday.
Copyright 2011 The Associated Press