General Electric Co. said it will join with Calpine Corp. to build a $500 million power plant that will be the first in North America to showcase GE's new gas-turbine system.
GE's energy group will finance, own and operate the 775-megawatt plant, expected to be one of the most efficient and cleanest gas-fired plants in the nation. Its two giant gas turbines, with the help of a smaller steam turbine, will be capable of powering 800,000 homes. Calpine, one of the largest power-plant operators in the nation, will market the electricity and share the marketing risk.
The companies are expected to announce the plant's location soon; Calpine, of San Jose, Calif., has sites permitted in California, which faces an energy crunch in coming years if new plants aren't built, making it a likely location. The plant is scheduled to start producing electricity in 2008.
GE Energy, which has invested about $1 billion in its newest technology, called the H system, is embarking on the project at a challenging time. Since 2002, power companies and utilities have canceled or delayed construction of gas-fueled plants as deregulated wholesale electricity markets crashed in the U.S.
Adding to market woes is the high price of natural gas and fears of possible shortages, which have forced utilities and power companies to consider fuels out of favor in recent years, including coal and nuclear.
Mark Little, GE Energy's vice president of energy products, said the market is going to need big power plants that can provide electricity around the clock. "When people need large chunks of power, this will become an option of choice because it is so efficient and the emissions will be great," he said.
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