General Electric Co. executive Steve Bolze is in charge of a huge range of the conglomerate's businesses, ranging from nuclear power to wind turbines to gas-powered engines. His purview, as president of GE Power & Water, even includes water technology such as purification and desalination. Mr. Bolze was in Toronto recently to talk about how cheap and plentiful natural gas is changing the power business, and how Canada is in the sweet spot for unconventional fuel.
How have low gas prices affected your power business?
Gas prices are going to remain at a lower point than anybody would have forecast four or five years ago. This is not a two-year cycle or a five-year cycle. We see this as a 30-year-plus cycle. We are going to invest accordingly. If I look at product development and technology advancement, gas turbines and compressors are really the biggest space in investment in GE.
How does Canada fit into that?
The macro trend in the world is centred around unconventional fuels and unconventional resources. What you have in Canada is the third-largest unconventional [fuel] resource on the planet. So people are watching. It is one of our fastest-growing regions and one where we have to apply more of a developing mindset in terms of how we invest and how we allocate resources.
One of our businesses is water technology and treatment [and] most challenging projects in the world are in Canada. Technology solutions which are world class are being adapted and prototyped and implemented here first. Canada is really at the epicentre of a lot of what is going on [in the power business]. That is why we are investing here.
What are the key technological advances in the gas turbine business?
One of them is around flexibility – the ability to make quick starts or turndowns to stay within emissions parameters. The second is focused on efficiency – we continue to push new levels of base load efficiency. The third big area of focus is on the combustion cycle, because you want fuel flexibility. There are different types or gradations of gas, and you want to [be able to handle] duel fuel or tri-fuel.
Is there a decrease in interest in renewables, with so much attention moving to gas?
The renewables that people talk about the most are wind and solar. Both continue to evolve in terms of efficiency as well as competitiveness [measured in] cents per kilowatt hour. Solar is still the farthest out in terms of its competitiveness [but] GE is investing in primary materials science to advance the technology.
In wind, there has been a lot of investment. The availability and reliability of the units have gotten much more competitive versus other options.
How do you see the global mix of energy generation evolving in the future?
You are always going to have a diversified grid, no matter where you are in the world. There will be renewables, gas, and in many places, hydro, coal and nuclear. Our business has always [sold] a diverse set of solutions. The slant of our investments is towards gas [along with] a long-term trend to renewables.
Is it a problem that government incentives for renewable power are so uncertain?
What the industry needs is long-term, predictable policy in renewables. Some areas of the world have that. Other areas of the world don't. Where you don't see it, you see ramps and pullbacks of investment. The U.S. is in that environment today. We run a global business, so as certain markets cycle down for a given year or two, we invest in different parts of the world. One of the things we have learned is that you have to invest through the cycles, otherwise you don't stay competitive.
Where are the technological advances coming with wind turbines?
One of the products we launched about 15-18 months ago was a 1.6-megawatt turbine with a 100-metre rotor. It is more than 20 per cent more valuable for the same wind regime, compared to competitive options. We put in over 1,200 of those units last year.
And GE just announced our new 2.5-megawatt machine which has a 120-metre rotor. It has batteries in it, which allows a customer to power through small periods of intermittent wind. That is a game changer, I think.
Is storage key for wind systems?
If you can get more long-term storage, that is huge. What people use today to levelize [power output] is gas power. But if you can move to longer-term storage, that is a big opportunity.
These new GE units also have a certain level of monitoring and sensing in them, which we can also retrofit to existing units. So if you have a wind park with 100 turbines, they can talk to each other. Units at the front of the park know what the wind speed is before the back of the park does. You can adjust for that, in the wind blades, and you can get 1 or 2 per cent more output for the park.
How important is distributed power, where electricity is generated close to where it is used?
One of the biggest themes in power generation in the world today is distributed power. [It is ideal for] areas that don't have grid capacity or grid connections. It is going into rural villages. It is going into remote sites for oil and gas applications. That whole space is going to continue to grow.
Is your nuclear business slowing?
Nuclear power still has a role to play. That is not going to change. Clearly the industry has looked at and applied lessons learned from what happened with [the disaster at the] Fukushima [nuclear power plant in Japan]. But there are still countries in the world that are building nuclear power today – China and the United States, for example. Our joint venture, GE Hitachi, is completing the construction of a power plant in Taiwan. The challenge for the nuclear industry is the capital cost, up front, associated with building a nuclear power plant. It is a big ticket.
Where are the key growth areas in water treatment at GE?
The biggest opportunities for water technology right now are in water reuse and advanced waste-water treatment. Some of the opportunities are in the oil sands area. Water solutions for SAGD [steam-assisted gravity drainage] applications are big.
Is desalination a big market for GE?
We have desalination technology. The big [question] is how to do it on a more efficient basis. There are some tough water issues to be resolved, for industrial applications, and that is where we are spending a lot of our dollars.
What is the most exciting technology you see in the power and water group at GE at the moment?
I'd say it is the integration of high-efficiency but flexible gas turbines, with wind power. They play together very well.
President and CEO, GE Power & Water
Born in Bethesda, Md.; 49 years old
Bachelor of science in electrical engineering from Duke University; MBA from the University of Michigan
Worked as a project manager at Westinghouse, and a management consultant at Corporate Decisions Inc.
Joined GE in 1993 as manager of mergers and acquisitions for the corporate business development unit.
Moved to GE Energy in 1995, then to GE Healthcare in 2002
Became vice-president of power generation in 2005, then president of power and water in 2008