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Peter
Siemens, a major producer of power plants is closing down a factory in Eastern Germany which has been mainly producing gas turbines giving low demand for them as a reason. General Electric is also cutting 12000 jobs as demand for their gas turbines is low (not sure whether this is the only reason though).
How does the low demand by utilities for gas turbines fit into the narrative that demand for natural gas will only grow because it´s substituting coal and oil for generation of electricity?
Robert Rapier
Hi Peter,
I think the long-term trends will continue to favor more natural gas, but there was a shift back in the direction of coal this year due to higher natural gas prices and lower coal prices. I think the U.S. bailing out of the Clean Power Plan also slightly lowered the outlook for natural gas turbines. The gas turbine market continues to grow, though, so it may just be that GE is losing too much market share to competitors.
Stock Talk
Peter
Siemens, a major producer of power plants is closing down a factory in Eastern Germany which has been mainly producing gas turbines giving low demand for them as a reason. General Electric is also cutting 12000 jobs as demand for their gas turbines is low (not sure whether this is the only reason though).
How does the low demand by utilities for gas turbines fit into the narrative that demand for natural gas will only grow because it´s substituting coal and oil for generation of electricity?
Robert Rapier
Hi Peter,
I think the long-term trends will continue to favor more natural gas, but there was a shift back in the direction of coal this year due to higher natural gas prices and lower coal prices. I think the U.S. bailing out of the Clean Power Plan also slightly lowered the outlook for natural gas turbines. The gas turbine market continues to grow, though, so it may just be that GE is losing too much market share to competitors.
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