NEWS RELEASE                                                                                                    DECEMBER 2013

Gas Turbine Expenditures to Exceed $106 Billion In 2014

Suppliers of gas turbine systems and components will generate revenues of $75 billion in 2014. Another $31 billion will be spent for operating and maintenance. This is the latest forecast in McIlvaine Gas Turbine and Combined Cycle Supplier Program.

The largest expenditure will be for the turbines. However, heat recovery is a growing portion of the total as more operators elect the combined cycle mode. Dry cooling is also becoming more popular. There is a higher capital cost associated with dry than with wet cooling even when the water treatment is taken into account.

This does not take into account revenues received from ongoing operation and maintenance. The cost of replacement air filters is significant. Replacement catalysts are another ongoing expense. Ammonia for NO_x reduction, polymers for water treatment and other chemicals for corrosion control and scaling prevention result in significant expenditures for chemicals.

The installed base is the equivalent of 1.4 million MW. Fixed O&M costs based on $13/kW/yr will be $18 billion. Variable O&M costs based on $3.60/mWh x 3,000 hrs average will be $13 billion. The total expenditure by utilities, gas and oil producers and other gas turbine operators will be $106 billion in 2014.

For more information on: Gas Turbine and Combined Cycle Supplier Program, click on: http://home.mcilvainecompany.com/index.php/markets/28-energy/610-59ei