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However, this positive development for gas was mitigated by several negatives. A key negative development was the lack of availability (both perceived and actual) of natural gas. Gas became an uneconomical and unpopular fuel during these years, virtually shutting down utility orders of gas power plants. The flat period of Figure 14 is consistent with Figure 9, which showed how gas prices increased dramatically during the same period as a result of shortages and the US gas deregulation process which occurred from 1978-1985. In addition to these high prices, the supply of natural gas was underestimated during this period, leading many to believe that it was an unreliable fuel. Finally, the 1978 Fuel Use Act barred most utility companies from using natural gas in any new plants. Manufacturers, utilities, governments, and other potential R&D sponsors all commensurately lost interest. However, development efforts continued for the sake of international power generation and aircraft engine markets. With the help of advances in computer engineering tools (including those developed for aerospace purposes and in technology transfers from other markets) companies made incremental improvements in materials and cooling technologies, but the gas turbine market was essentially flat during this period. Market interest in gas turbines surged in the late 1980s and 1990s when gas availability increased and gas prices dropped, and additional gas reserves had been discovered. These discoveries allowed power planners to assume that natural gas would be available for the entire life span of any gas turbines that they chose to order. The Fuel Use Act was rescinded in 1987, allowing utilities a free hand in ordering new gas turbines. Electricity restructuring and changing market conditions were also key to the resurgence of combustion turbines. Uncertainty and impending competition led both utility and non-utility power producers to seek fast, low-capital projects such as gas turbines and high-efficiency projects such as combined-cycle turbines so that they could earn appreciable rates of return. Passage of the 1992 Energy Policy Act buttressed the deregulatory atmosphere in the US by allowing retail competition between electric generators. As competition was introduced internationally, the power generation industry continued to pursue development of low-risk, fast- starting gas turbines. The gas turbine manufacturing industry was waiting for these other drivers to meet with their own developments. When environmental concerns, gas availability, and electric restructuring merged to create an atmosphere favorable for gas turbine deployment, manufacturers were ready to jump back into industrial turbine development. Gas turbines were primed to fill the power generation gap; technological improvements such as steam injection and advanced computer design codes had improved gas and combined cycle turbine during the earlier demand slump. The rapid rise in gas turbine popularity led to major rededication to gas turbine R&D. Brown Boveri, which had shut down its own gas turbine business in the mid 1980s, merged with Asea to become ABB and immediately began a brand new development program. Westinghouse had also reduced its combustion turbine development efforts dramatically and closed down its domestic large gas turbine manufacturing facilities, transferring its production to MHI.54 It almost left the gas turbine 54 WJ Watson, “The ‘Success’ of the Combined Cycle Gas Turbine” Opportunities and Advances in International Power Generation, University of Durham Conference Publication, March 18-20, 1996, London: Institution of Electrical Engineers, 1996. p. 89. 34PDF Image | Energy RD Performance: Gas Turbine Case Study
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