GE (NYSE: GE) announced the opening of GE Shenhua Gasification Technology Company Ltd., a 50-50 joint venture (JV) with Shenhua Group to advance the development and deployment of “cleaner coal” technology solutions in China.
The new company combines GE’s expertise in industrial gasification technologies with Shenhua’s expertise in coal gasification and coal-fired power generation. The JV will sell industrial gasification technology licenses in China, conduct research and development to improve cost and performance of commercial-scale gasification and Integrated Gasification Combined Cycle (IGCC) solutions and work to advance to distribution of commercial-scale IGCC.
Gasification is a technology that converts coal into a synthesis gas (or syngas) that can then be used to produce chemicals or other products. Gasification technology has become a critical tool in the expansion of the Chinese economy, allowing a wide variety of industrial products and fuels to be created from low-cost abundant coal resources. With more than 50 licensed facilities in China, GE’s gasification technology is one of the most widely deployed in the industry.
Shenhua is one of the world’s largest coal and energy companies, with integrated coal production, power generation, railway, port and shipping infrastructure. Shenhua also has a national role in the development of new coal-related technologies such as coal-to-liquids and carbon sequestration. The company established the first demonstration projects for direct coal liquefaction, coal-to-olefins (MTO) and coal-to-polypropylene (MTP), utilizing gasification technology. Through these efforts, the company has built significant expertise in the development of coal-to-chemicals facilities and in the operation of coal gasification systems over a range of technology configurations. Shenhua also has developed deep expertise in carbon utilization and management through CCS research and development.
”Both GE and Shenhua have worked together for years in China on important projects, including the Shenhua Baotou coal-to-olefins facility, which uses GE’s gasification technology. The collaboration will create a leading gasification technology business in China with significant local presence, focus, resources and expertise,” said Wang Xiaolin, deputy general manager of ShenhuaGroup.
“Coal plays an important role in the economies of both the U.S. and China, and gasification technology allows us to use this abundant and low-cost resource in a much cleaner way,” said Paul Browning, president and CEO of Thermal Products, GE Energy. “This joint venture is an evolution of the strong gasification business GE has in China today. Each business will contribute technology, operational and service expertise to create a comprehensive gasification and cleaner coal technology and service provider in China.”
China and the U.S. are the two biggest energy consumers in the world. With rising concerns about oil prices (now above USD $90 per barrel), energy security and global warming, the world's largest developed country along with the biggest developing country have much to learn from each other. Progress can be made by collaborating on technologies that improve efficiency, reduce harmful emissions and contribute to the development of a more diverse and secure energy future.
The collaboration between GE and Shenhua demonstrates increasing efforts in the United States and China on working together for cleaner energy solutions, with a focus on cleaner coal.
The new JV will further strengthen GE and Shenhua’s existing relationship. Jack Wen, GE Energy China CEO emphasizes, “This is not a market access in exchange for technology deal. Instead, this will be a two-way technology win, with both GE and Shenhua benefiting from each other’s expertise.” This means both sides will work together to generate new advanced gasification technology and business solutions, to better serve existing customers as well as explore new business opportunities.
GE, Shenhua open cleaner coal technology joint venture in China