GE to Cease Building Coal-fired Power Stations
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- Sep 23, 2020 4:11 pm GMTSep 23, 2020 3:00 pm GMT
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One of the oldest manufacturers of electricity generating plants, General Electric's Steam Business subsidiary is to cease building them as soon as it can, according to the company. This will be seen throughout the utilities industry as a sign that coal-fired power plants are no longer economically viable to construct. One of the first companies listed on the Dow Jones, GE was incorporated in 1892 out of several of Thomas Edison's electric ventures, and Edison himself was one of its original board members.
GE’s Steam Power business will continue with existing projects as it plans to leave the market. This new direction may involve divesting assets, site closings, staff redundancies and possibly spinning off companies for sale to investors. The value of GE stocks fell by nearly eight per cent to $6.35 per share this week as the market reacted to this news.
As economies move towards decarbonization, coal-fired generation has lost traction in developed countries in the last few years, as they enact significant emissions-reduction targets. Hundreds of coal-fired plants are now being shut down in the U.S, although they continue to be built in the developing world.
In 2014 GE acquired the global power division of French engineering group Alstom. This signaled a move towards coal-fired and turbine power, but this has not proved to be a wise investment of $9.5 billion as countries are avoiding coal as far as can be practical. GE has announced that its Steam Power division will continue to deliver turbines to the nuclear market and service existing nuclear and coal power plants.
Russell Stokes, GE Senior Vice President and President & CEO of GE Power Portfolio said, “With the continued transformation of GE, we are focused on power generation businesses that have attractive economics and a growth trajectory.”