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Global power deals A comprehensive review

March 2012

GERMANY’S MUNICIPAL POWER

PROMISES SUSTAINABILITY

The positive view most Germans have of their municipal utilities could prove key to their country’s transition to a sustainable energy system.

FOREIGN INFLUENCE IN RUSSIA’S

NUCLEAR SECTOR

As construction of Russia’s new Baltic nuclear power plant gets underway, one foreign company and its technology are playing a central role.

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PennWell Global Energy Group, The Water Tower, Gunpowder Mill, Powdermill Lane, Waltham Abbey, Essex EN9 1BN, United Kingdom. Phone: +44 1992 656 600 Fax: +44 1992 656 700 www.peimagazine.comChief Editor Heather Johnstone [email protected] Deputy Editor Kelvin Ross [email protected] Associate Editor Nigel Blackaby [email protected] Production Editor Piers EvansAdvertisement Sales Manager Anthony Orfeo [email protected] Advertisement Sales Manager Asif Yusuf [email protected] Studio Manager Karl Weber [email protected] Design Michael Wickers Production Daniel Greene Group Publisher Ralph Boon Corporate Headquarters PennWell Corporation, 1421 S. Sheridan Road, Tulsa , OK 74112 USA Telephone: +1 918 835 3161 Fax: +1 918 831 9834 Sr. VP Audience Development and Book Publishing Gloria Adams Audience Development Manager Janet Orton Chairman Frank T. Lauinger President/CEO Robert F. BiolchiniCirculation and subscriber enquiries P.O. Box 3264, Northbrook, IL 60065-3264 USA Tel: +1 847 559 7501 Fax: +1 847 291 4816 E-mail: [email protected]

Power Engineering International, ISSN 1069-4994, is published eleven times a year by PennWell Global Energy Group, The Water Tower, Gunpowder Mill, Powdermill Lane, Waltham Abbey, Essex EN9 1BN, UK. Tel: +44 1992 656 600. Fax: +44 1992 656 700. ©Copyright 2011 by PennWell Corporation, 1421 S. Sheridan Rd., Tulsa, OK 74112, USA. All rights reserved. Subscriptions/circulation and reader enquiry of� ce: Power Engineering International, PO BOX 3264, Northbrook, IL. 60065-3264, U.S.A. Paid annual subscription rates: Worldwide $59 Digital Version. E.U. $170, United Kingdom $140. All other countries $210. Single or back copies: $26 for all regions.USA circulation only: Power Engineering International, “Periodicals POSTAGE PAID at Rahway NJ”. Subscription price is $210 Periodicals Postage Paid at Rahway NJ. Postmaster send address corrections to: Power Engineering International, C/O Mercury Airfreight International Ltd. 365 Blair Road, Avenel, NJ 07001.® “Power Engineering International” is a registered trademark of PennWell Corporation. POSTMASTER: Send address changes to Power Engineering International, PO BOX 3264, Northbrook, IL. 60065-3264. U.S.A.

32 5218

www.peimagazine.com

Global power deals A comprehensive review

March 2012

GERMANY’S MUNICIPAL POWER

PROMISES SUSTAINABILITY

The positive view most Germans have of their municipal utilities could prove key to their country’s transition to a sustainable energy system.

FOREIGN INFLUENCE IN RUSSIA’S

NUCLEAR SECTOR

As construction of Russia’s new Baltic nuclear power plant gets underway, one foreign company and its technology are playing a central role.

PennWell Global Energy Group, The Water Tower, Gunpowder Mill, Powdermill Lane, Waltham Abbey, Essex EN9 1BN, United Kingdom. Phone: +44 1992 656 600 Fax: +44 1992 656 700 www.peimagazine.comChief Editor Heather Johnstone [email protected] Deputy Editor Kelvin Ross [email protected] Associate Editor Nigel Blackaby [email protected] Production Editor Piers Evans Design Michael Wickers Production Daniel Greene Advertisement Sales Manager Anthony Orfeo [email protected] Advertisement Sales Manager Asif Yusuf [email protected] Studio Manager Karl Weber [email protected] Group Publisher Ralph Boon Corporate Headquarters PennWell Corporation, 1421 S. Sheridan Road, Tulsa , OK 74112 USA Telephone: +1 918 835 3161 Fax: +1 918 831 9834 Sr. VP Audience Development and Book Publishing Gloria Adams Audience Development Manager Linda Thomas Chairman Frank T. Lauinger President/CEO Robert F. BiolchiniCirculation and subscriber enquiries P.O. Box 3264, Northbrook, IL 60065-3264 USA Tel: +1 847 559 7501 Fax: +1 847 291 4816 E-mail: [email protected]

Power Engineering International, ISSN 1069-4994, is published eleven times a year by PennWell Global Energy Group, The Water Tower, Gunpowder Mill, Powdermill Lane, Waltham Abbey, Essex EN9 1BN, UK. Tel: +44 1992 656 600. Fax: +44 1992 656 700. ©Copyright 2012 by PennWell Corporation, 1421 S. Sheridan Rd., Tulsa, OK 74112, USA. All rights reserved. Subscriptions/circulation and reader enquiry of� ce: Power Engineering International, PO BOX 3264, Northbrook, IL. 60065-3264, U.S.A. Paid annual subscription rates: Worldwide $60 Digital Version. E.U. $173, No. America $214. United Kingdom $143. All other countries $214. Single or back copies: $26 for all regions.If you would like to have a recent article reprinted for an upcoming conference or for use as a marketing tool, contact Kelly Blieden, Reprints Senior Account Executive E-mail: [email protected] Tel: +1 800 382 0808 ext 142. USA circulation only: Power Engineering International, “Periodicals POSTAGE PAID at Rahway NJ”. Subscription price is $210 Periodicals Postage Paid at Rahway NJ. Postmaster send address corrections to: Power Engineering International, C/O Mercury Airfreight International Ltd. 365 Blair Road, Avenel, NJ 07001.® “Power Engineering International” is a registered trademark of PennWell Corporation. POSTMASTER: Send address changes to Power Engineering International, PO BOX 3264, Northbrook, IL. 60065-3264. U.S.A.Member American Business Press • Business Publications Audit3Printed in the United Kingsom GST No. 12681315

Power ReportGlobal power M&A deals 18The trends in mergers and acquisitions involving utilities are changing, with radically different fortunes affecting not just East and West, but also both sides of the Atlantic.

Features India’s coal supply challenges 26India’s desire to expand its coal � red power generation base is running up against fuel supply constraints from a state-dominated coal sector lacking investment and hampered by environmental regulations.

Sustainable power in Germany 32The positive attitude most Germans have for their municipal utilities – or stadtwerke – could prove key to their country’s transition to a sustainable energy supply.

Opinion: Europe’s power sector 36As POWER-GEN Europe celebrates its 20th anniversary, Nigel Blackaby, its conference director, considers the trends that have shaped the European power industry over the past two decades and how current developments might in� uence its evolution in the next 20 years.

Nuclear new build project 42 Alstom-Atomenergomash has signed a €875 million deal to supply and install the critical components for Kaliningrad’s new nuclear power plant. The � rm explains why this is a landmark contract both for it and Russia.

Q&A: Carlos Pone, ABB 48 With its generation capacity set to double and new T&D � nancing to hit $10 billion, Africa offers vast power potential. Carlos Pone, ABB’s manager in South Africa, tells PEi why he expects Africa to be one of his company’s outstanding growth regions.

Maintanance, repair and overhaul 52 The international market for power plant MRO (maintenance, repair and overhaul) is evolving fast, in response to global shifts in economic power and the development of national energy policies aimed at safeguarding the environment or enhancing energy security.

RegularsUpfront 2News Analysis 4 World News 8Diary Dates 58Genset Roundup 60Equipment Roundup 62

PwC’s recent Power Deals report reveals how the power sector’s global M&A activity is undergoing rapid changes (p.18)

C O N T E N T SVolume 20 • Issue 3 • March 2012

Power Engineering International®

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UP FRONT

2 www.peimagazine.com March 2012- PEi

This month � nally saw the completion of the long-running merger between Exelon Corporation, America’s biggest nuclear power operator, and Constellation Energy Group. In the

PricewaterhouseCooper’s (PwC) latest report that analyses merger and acquisition (M&A) activity in the global power utilities sector, this $11.2 billion deal ranked third largest. For our cover story, we pick out the key � ndings of PwC’s Power Deals report.

Traditionally, Europe and the US have been the dominant in� uence on M&A activity; this, at least for the latter, holds true. Last year, the value of North American deals more than doubled compared to 2010 to hit close to $108 billion, with US companies leading the charge. Europe, in contrast, saw the value of its M&A deals fall a massive 43 per cent, barely reaching $40 billion; similar to the values seen back in 2009 at the height of the credit crunch.

Undoubtedly the continuing crisis in the eurozone will complicate the dealmaking environment this year, and PwC believes that whether M&A activity picks up in Europe “will rest on the extent to which economic growth signals can provide the con� dence to support Eurozone strategies”.

The report also highlights the growing in� uence of Asia-Paci� c investors, in particular Chinese companies which are stepping up a gear in their ‘go abroad’ strategies. Another emerging trend highlighted in the report is the growing interest in rapidly developing power markets such as in Brazil.

Last year saw China’s Three Gorges acquire a sizable stake in Energias de Portugal, which has an extensive generation and distribution presence in Brazil, while German utility E.ON con� rmed it was taking 10 per cent in MPX Energia, Brazil’s leading power generation company.

Although PwC believes that the “underlying fundamentals” for a return to the deal value highs of 2006–07 remain in place, “con� dence in the wider economic outlook will be pivotal” to whether or not this is achieved this year. For a complete picture of the dealmaking that was conducted in the global power utilities sector last year and forecasts for 2012, please read Kelvin Ross’s comprehensive roundup on p.18.

Another country that appears to be actively looking outside its borders is Russia. This month, gas giant Gazprom announced it was planning to jointly invest in gas � red power plants in northwest Europe, with Danish utility Dong Energy, as part of an effort to move into new markets, while Inter RAO UES, one of Russia’s biggest power companies con� rmed it is seeking to acquire power plants in both Europe and

Turkey. It also recently signed a 25-year contract to supply close to100 billion kWh of electricity to China.

Russia’s trend of exploring new markets outside of its borders does beg the question why, when you consider the size of Russia and its desperate need for new generation capacity and the modernisation of its existing assets, much of which is close to collapse.

I have recently returned from our Russia Power Conference and Exhibition, which took place on 5–7 March in Moscow, and some of the potential reasons behind this shift were highlighted during the conference. It is well documented how Russia’s conventional electricity sector has transformed itself almost beyond recognition in recent years – from a state-owned entity into a liberalised industrial sector subject to market forces. Clearly this has created a lot of opportunities but equally as many challenges.

Topping the list of power generators’ concerns is the lack of power tariff reform and its impact on their potential return on investment. As prime minister, Vladimir Putin was reticent to address tariff reform, and now that he is once again president the power industry has little con� dence that he will address this highly divisive issue. Without a realistic tariff rise generators – both domestic and foreign – say investment in new capacity and, arguably more important, the modernisation of existing power assets, is uneconomical.

As Putin beds down in his ‘new, old’ role it is unclear at the moment whether the politicians and the Russian power industry can resolve this key issue and take a step closer to creating a modern, ef� cient and sustainable power system that be� ts the country.

US dominates global M&A, but who is waiting in the wings?

“Without a rise in the power tariff for

consumers many generators say it will not

be possible to build new capacity and

modernise Russia’s exisitng power assets”

Kind regards,

Heather Johnstone, PhDChief Editor

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It has been a year since the devastating

earthquake and subsequent tsunami in

Japan killed 16 000 people and caused the

catastrophic nuclear meltdown at Fukushima.

For an industry that – according to Yukiya

Amano, head of the International Atomic

Energy Agency (IAEA) – had become “a bit

complacent” before Fukushima, the disaster

was its worst nightmare come true.

Elmo Collins of the US Nuclear Regulatory

Commission (NRC) says that watching the

events unfold on television “felt like it happened

in our own back yard”.

The headline after-effects of Fukushima are

well known: Japan’s nuclear power sector

is crippled and the country is in the midst of

an energy crisis, while Germany, Italy and

Switzerland have essentially withdrawn from

nuclear power.

There have been numerous public opinion

polls about nuclear power since Fukushima,

and guess what: they all conclude something

different. Depending on which one you read,

sentiment is either anti-, pro-, or apathetic to

nuclear. Six months ago the Germans and,

understandably, the Japanese were the most

anti-atomic nations. Now, Germans are said

to be uneasy about the costs to their energy

bills that the nuclear pullout will cost them.

In fact sociologist and political scientist

Piet Sellke of Stuttgart University believes

that if Germany had held a referendum on

nuclear, the country would still have its reactor

programme in place.

Meanwhile, the French are also said to

be strongly anti-nuclear, yet believe the risk

management of EDF is so robust that they

would rather live with the devil they know than

opt for a radical change in energy policy.

So on a global scale, how much has

changed in the 12 months since Fukushima?

From a statistical point of view, the answer is

not much. On the day before the earthquake

last year, there were 442 operational reactors

in 30 countries, 65 in the process of being

built and another 158 in the pipeline.

As of the beginning of this March 2012,

there were 436 reactors operating in the same

30 countries, and 65 are still in construction.

Those European countries that were pro-

nuclear, such as the Czech Republic, the UK

and Poland, remain so, while China, India and

the Gulf States of the Middle East are pushing

ahead with ambitious atomic agendas.

What has changed is there is a far more

measured approach to nuclear, with a greater-

than-ever emphasis on safety.

Stress tests have been carried out on

reactors across the world and with the results

of these tests in Europe due in June, what

happens next will be decisive. In Brussels this

month, at a debate to mark the � rst anniversary

of Fukushima, British Conservative MEP Sajjad

Karim said the response to the tests should be

“sensible, proportionate and based on facts”,

warning that a hasty reaction could lead to

“negative consequences for safety and energy

security”.

The IAEA’s Amano says Fukushima was

“an important wake-up call” that triggered

a “nuclear safety renaissance”. He says the

disaster exposed weaknesses in Japan’s

nuclear industry, including inadequate

preparation and responses to an emergency:

weaknesses that could be traced back to a

nuclear regulatory body that “was not fully

independent from the promotional side”.

A regulatory review has been underway

in Japan and countries across the world, with

the effect that nuclear power generation is

probably safer now than it has ever been.

Collins of the NRC says that the battle for

nuclear safety “requires daily vigilance” and

that a lengthy period of time without a nuclear

incident should not be equated to a time of

prolonged peace, but instead was “a time of

increased risk”.

This mindset was what was missing pre-

Fukushima, but it is now front and centre of the

agendas of everyone in the industry.

The biggest challenge will centre on not

the new reactors, which will incorporate post-

Fukushima designs, but those aging plants of

more than 20 years’ old which account for

80 per cent of the global nuclear � eet.

These need to incorporate the safety features

of newer or future designs, especially if some

of them are to have an extended lifespan.

Peter Bradford, who previously worked

for the NRC and is a member of the China

Sustainable Energy Policy Council, says it

would be ideal if Fukushima could “steer

us away from prophecies and towards a

sensible assessment of market economics,

climate science and nuclear risks. Then nuclear

power would serve the public, not the other

way around.”

He may well get his wish. The new

regulatory and safety landscape of the

industry will put it in a strong position to take its

place in the energy policies of established and

emerging nuclear nations. While the last 12

months have seen the nuclear industry assume

a taking stock approach, the next year is likely

to be more decisive. By March 2013 we will

have a much clear idea of just what the true

after-effects of Fukushima will be.

ANALYSIS••• BY KELVIN ROSS •••

4 www.peimagazine.com March 2012 - PEi

A year on from Fukushima, what has changed?

While Germany has taken its historic withdrawal decision, the rest of the nuclear world paused, took stock…

and carried on. Yet an overhaul of regulatory and safety regimes means it is in better shape than ever.

Source: World Association of Nuclear Operators

PEi - Month 2008 www.peimagazine.com 7


INTERNATIONAL••• WORLD NEWS •••

8 Visit www.peimagazine.com for more news March 2012 - PEi

AES Corp, the � rst US power

producer to enter China, about

two decades ago, is looking to

sell all or some of its assets there,

because it cannot pass on higher coal

costs in a state-regulated industry.

Sources said Virginia-based AES,

which has a market value of around

$10.5bn, has recently hired an in-

vestment bank to start the process.

A sale or sales is said to be

potentially be worth $300-400m.

China’s sovereign wealth

fund China Investment Corp

acquired a 15 per cent stake

in AES for $1.6bn in 2009.

The likely exit, or scaling

down, underscores the challeng-

ing operating environment in

China’s power industry, where

coal � red power producers have

little control over electricity

prices, which are set by the state.

Chinese independent power

producers such as Huaneng Power

International Inc and Datang In-

ternational Power Generation,

which generate power but don’t

own grid assets, have seen a sharp

dip in their business in recent

years as coal prices have surged.

And the pro� t outlook re-

mains murky this year in the ab-

sence of a tariff regime that al-

lows power producers to pass

on fuel costs to consumers.

Asia: The Desertec Foundation

and the Japan Renewable Energy

Foundation have signed a pact to

co-operate on developing an Asian

Super Grid. The two non-pro� t

organisations announced that they

will work on a project that would

interconnect the grids of Japan,

Korea, China, Mongolia and Russia.

Bangladesh: The country’s cabinet

committee has rati� ed an agreement

with Russia signed in November for

a nuclear power plant. The 2000

MW facility will be Bangladesh’s � rst

nuclear facility.

Cameroon: In conjunction with

Joule Africa, Cameroon is to develop

a $1bn hydroelectric project. The

project will increase the country’s

installed power generation capacity

by about 40 per cent and would

have an installed capacity of more

than 450 MW.

Indonesia: Wärtsilä will supply a

new, gas fuelled power plant to

Indonesia. The plant is to be located

in Sei Gelam Jambi in Sumatra and

will be powered by 11, 20-cylinder

Wärtsilä 34SG generator sets

in V-con� guration, operating

on compressed natural gas and

providing an output of 110 MW.

Iraq: ABB has won a $60m contract

from Shell Gas Iraq to build a gas

power plant in the south of the

country. The Khor Al Zubair project is

part of an engineering, procurement

and construction contract to build

a 50 MW plant which will feed

electricity to the facilities of the

Basrah Gas Company.

Japan: The European Marine Energy

Centre in Scotland is to help Japan

develop its � rst marine energy

test centre. The Orkney-based

EMEC has signed a memorandum

of understanding with the Ocean

Energy Association of Japan.

Jordan: Russian company

AtomStroyExport has offered Jordan

a deal for four nuclear power

reactors. If all four are built, 4000

MW of generating capacity would

be added to the grid, more than

doubling Jordan’s current capacity.

Kuwait: Alstom has been selected

by the Kuwait Ministry of Electricity

and Water to provide a fully

integrated Smart Grid solution.

The project includes an upgrade

of a town district control centre’s

energy management system, a new

integrated distribution management

system and an asset management

system.

First US power producer to enter China now plans exit

European power grid operator TenneT

and Japan’s Mitsubishi Corp have

signed a letter of intent to join up for

two more offshore grid connections.

The connections, HelWin2

and DolWin2, are both located

in the German North Sea and are

of crucial importance for the in-

tegration of offshore wind farms

to the German onshore grid.

The projects have an invest-

ment volume of about $2.2bn and

an expected third-party equity

stake of around €340m ($443m).

Investment in Smart Grid cyber

security is expected to hit $14bn

by 2018 according to a new report.

But analysts at Pike Research

say that while utilities are planning

Smart Grid deployments at a greater

pace than ever before, “cyber security

is still way behind the attackers”.

“Cyber security remains a check-

the-box exercise for many utilities,

with spending limited to whatever is

needed to survive compliance audits,”

said Pike senior analyst Bob Lockhart.

But he added that more Smart

Grid technology companies are now

proactively seeking out security

vendors for assistance in building

cyber security into their products.

Qatar Electricity & Water Company

(QEWC) will continue its policy of

pursuing roles on power and water

projects outside of its home market.

Abdulsattar al-Rasheed, chief

executive of� cer of QEWC’s Ras

Abu Fontas power plant, said that

the company agreed that it was

necessary to look to opportuni-

ties abroad. “We have a stake in

a power plant in Jordan and also

one in Oman. Now we are com-

peting with Siemens in Dubai for

the Hassyan power plant,” he said.

Smart Grid cyber spend to hit $14bn

Saudi Electricity is looking for

companies to build and operate

a 1700 MW independent power

plant (IPP) running on fuel oil.

Expressions of interest in run-

ning the plant at Rabigh on

the west coast of the world’s

largest oil exporting country

will be submitted this month.

The Rabigh IPP2 plant is the

fourth of � ve planned IPPs that will

add a total of around 11 000 MW of

power generation capacity. The other

three are under construction and in-

clude the 1200 MW Rabigh IPP1.

SEC will buy electric-

ity from the new company

under a power purchase agreement.

Saudi Electric plans 1700 MW oil plant

Investment in US wind farms and

wind energy businesses tumbled

38 per cent last year to $9.7bn, as

the economic climate worsened

for wind-power companies, which

are � nding it increasingly dif-

� cult to attract venture backers.

According to data from

Bloomberg New Energy Finance,

venture capitalists have practically

left the sector altogether.

They invested only $177.6m

in wind startups last year,

down 71 per cent from the

year before, BNEF found.

Wind power is bucking a broader

trend for clean energy, which is

experiencing a surge of investment.

Venture backers pumped $4.29bn

into the green tech industry in 2011,

up 13 per cent from the previous

year, according to the National

Venture Capital Association.

A key factor is a glut of

turbine production, fuelled by

investments over the last half-

decade in the US, Europe, and

Asia, and not enough demand.

Global purchases of turbines

will fall 14 per cent this year from

2010 and stay within 2011 levels

for two years, BNEF estimates.

That is hurting the biggest makers

of turbines such as Denmark’s Vestas.

US wind market in dif� culty

Qatar targets overseas power projects

TenneT in wind power pact with Mitsubishi

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EUROPE••• WORLD NEWS •••

The German government has

drafted legislation to cut solar

power subsidies, a move slammed

by the renewables industry.

Carsten Koernig, head of the BSW

Solar industry group, said the plan

was “dangerous as it would destroy

investment security. We fear a rollback

in clean energy and climate policy at

a time when Germany wants to lead.”

Germany, the world’s largest

solar market, wants to halve the

annual number of installations after

incentives for the industry pushed

capacity past government targets.

The draft bill, to be debated

later this month, would

drastically cut solar subsidies and

eliminate them altogether for

the largest photovoltaic plants.


The European Commission is

to open talks with Russia and

Belarus in a bid to integrate

the Baltic States’ electricity

system with other parts of Europe.

Estonia, Latvia and Lithuania

are currently part of Russia’s

UPS IPS grid which was built

as part of the Soviet system.

While it is accepted that, in

the short term, Russia’s electricity

system is incompatible with that of

the rest of Europe – Russia has no

means of auctioning interconnector

capacity – the EC regards building

links to the Baltic ‘electricity

island’ as a key stepping stone to

wider European energy security.

It would like to see the three

Baltic states link with Finland,

Poland, Germany, Denmark and

Sweden and there are also plans

for a north-south interconnector

between the Baltic states and

central and southeastern Europe.

Meanwhile, work has

started on the Baltic nuclear

power plant in Kaliningrad.

Two units of the VVER-1200

design are due to be commissioned

in 2017 and 2018, respectively.

The plant will not only

supply power to the Kaliningrad

region, but will also provide

energy exports to the Baltic

states and northwest Europe.

Bulgaria: The European Bank for

Reconstruction and Development has

given a €10m loan to Bulgaria to help

it promote energy efficiency measures

across the country.

Austria: Chancellor Werner Faymann

believes the European Union will

this year face pressure to abandon

nuclear power. He said he expects

anti-nuclear petitions to start in

at least six EU states. Petitions that

attract at least 1 million signatures

can seek legislative proposals from

the European Commission.

Europe: Italy and the Nordic regions

are leading the way in smart meter

deployments, according to technology

company Sentec. Research from the

company shows the countries have an

installed smart meter capacity of 94

per cent and 70 per cent respectively.

Europe: European Energy

Commissioner Gunther Oettinger has

said that national elections are bad

news for energy policies. With voting

this year in France, Russia and the US,

Oettinger said that power generation

and elections are “not a good couple”,

because energy policies are “quite

complicated” for an electoral debate.

Poland: Poland vetoed a plan backed

by 26 other EU states to set targets

to reduce greenhouse gas emissions

beyond 2020. Poland was the only

country to vote against plans to cut

emissions by 40 per cent by 2030, 60

per cent by 2040, and 80 per cent

by 2050.

Russia: Gas giant Gazprom and

Danish energy company Dong Energy

are planning to invest in power plants

in north west Europe. Gazprom said

the two companies “agreed a plan of

action concerning existing gas � red

power plants and the construction of

a new, modern steam-gas plant.”

UK: A Green Investment Bank

will be based in Edinburgh with a

smaller of� ce in London. The bank,

announced in 2010, will have an

initial £1 billion budget to help fund

renewable projects in the UK.

UK: Horizon Nuclear Power is in the

“� nal stages” of selecting the design

for its proposed new nuclear power

station in Wales from the AP1000

from Westinghouse or the European

Pressurised Reactor from Areva.

UK: E.ON is to close its Kingsnorth

coal � red power station in March

2013. The 1940 MW plant will have

reached the end of its allocated

running hours under the EU’s Large

Combustion Plant Directive.

The largest biomass power station

in the world was shut down by

a � re which engulfed several

thousand tonnes of wood pellets.

The 750 MW plant at

Tilbury in the UK, run by RWE

npower, had only been fully

operational for a few weeks when

the � re broke out earlier this month.

Of the plant’s three units, one

is expected back online in April

while the other two, which were

directly affected by the � re, are not

expected to be operational until July.

EC in talks with Russia to free up Baltic electricity ‘island’

Polish utility Enea is considering a

joint venture with Poland’s largest

gas company gas PGNiG to build

a series of gas � red power plants.

Enea chairman Maciej Owczarek

said that the companies were

considering building “not one, but

several gas-� red power plants”.

Owczarek also said that Enea was

looking into shale gas opportunities

– Poland has the largest reserves

of shale gas in Europe and is the

EU’s most pro-shale advocate.

“It would be unreasonable

for Enea to remain completely

disengaged from shale gas,” he

said, but added: “We shouldn’t

rush with the decision.”

Enea targets gas joint venture deal

German fury at solar subsidy cuts plan

Scotland may extend the life of the

country’s two nuclear power plants —

Torness and Hunterston, which are

operated by EDF — to help the tran-

sition to producing all of its electric-

ity from renewable sources by 2020.

The Scottish government said

it still plans to phase out nuclear

power and rely on cleaner thermal

energy to reduce carbon emissions,

adding it was on track to meet

the target in eight years’ time.

“This does not preclude extending

the operating life of Scotland’s

existing nuclear stations to help

maintain security of supply over

the next decade,” it said. “Subject

to the relevant safety cases being

made, the government would not

oppose operating life extension

applications at these sites.”

Scotland’s nuclear policy

differs from that of the UK

government, which has agreed

to build more power stations as

part of its strategy of meeting EU

targets to cut carbon emissions.

EDF wants to extend the

operating life of Torness and

Hunterston by at least � ve years.

Scotland may extend nuclear plants to ease renewable switch

Ukraine has opened up its shale

gas reserves to exploration, a

move that could help reduce

its heavy dependence on increas-

ingly expensive gas imports from

its eastern neighbour Russia.

The Ukrainian government said

it would hold two tenders for rights

to explore for unconventional gas in

two vast areas, one in the east of the

country and the other in the west.

Ukraine is one of several European

countries eager to replicate

the shale gas boom in the US.

Ukraine green lights shale exploration

Fire shuts down world’s biggest biomass plant

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ASIA-PACIFIC••• WORLD NEWS •••


Several New Zealand renewable

power projects are scheduled

to begin construction this year.

Industrial Info is currently

tracking 25 New Zealand

renewable projects in the plan-

ning and engineering phase

that are scheduled to begin con-

struction from 2012 onwards.

The projects total more than

$4.87bn in investment value and

indicate that New Zea-

land is predominately invest-

ing in wind, geothermal and

hydro generation projects.

Hydropower currently accounts

for about 54 per cent of New Zea-

land’s generation capacity. How-

ever, looking forward, it is wind

energy projects that lead in terms

of number and project invest-

ment value. There are currently

13 wind farms in the planning and

engineering phase, totalling more

than $3.2bn, that are scheduled

to begin construction in 2012-13.

There are eight major hydro

projects scheduled to begin con-

struction that total about $1.3bn,

and four proposed geothermal en-

ergy projects that represent more

than $920m in investment value.

The largest renewable energy

project in New Zealand’s develop-

ment pipeline is Genesis Energy’s

600 MW Castle Hill Windfarm.

Australia: AGL Energy is to take

full control of Australia’s largest

coal plant, buying out Japan’s Tepco

and investment funds for A$448m

($480m). AGL already owns a one-

third stake in the Loy Yang A power

station and an attached coal mine.

Australia: The country’s coal

industry has called on the New

South Wales state government to

establish a clear strategy for power

generation that includes developing

low emissions technology to provide

certainty for industry investment

and long-term government planning.

China: US-based Duke Energy and

China’s Huaneng Group have signed

a three-year research co-operation

agreement on advanced coal and

carbon capture technologies for

Chinese power plants.

China: The government has

cancelled funding for an electricity

project in Sudan as it has lost

collateral for the loan, in the form of

oil supply, following the separation

of Sudan and South Sudan. Sudan’s

total oil resources have decreased

75 per cent after the separation with

oil-rich South Sudan.

India: Adani Enterprises has signed

� ve deals to supply a total of

4 million tonnes of imported coal

to NTPC, India’s country’s largest

power company. Adani will supply

NTPC’s 14 power stations across India

between this month and June 2012.

India: The government is set to

approve a plan to impose a 19 per

cent duty on power generation

imports to help local manufacturers

Bharat Heavy Electricals and Larsen

& Toubro compete for orders with

Chinese rivals.

Indonesia: Two new units have

been commissioned at Tanjung Jati

B coal � red power plant in Central

Java. Operated by PT PLN, Indonesia’s

state-owned utility, the units will

provide 1320 MW of capacity.

Korea: Hitachi and its consortium

partner Daelim Industrial have

received a $745.7 million order to

install two energy-ef� cient coal � red

facilities, with a generation capacity

of 1.05 million kilowatts each, at a

plant run by Korea Western Power.

Malaysia: Conglomerate Sime Darby

is considering buying the 1400

MW coal � red Jimah power plant

for more than $364m. The plant is

held under Jimah Energy Ventures

Holdings, whose majority 70 per cent

shareholder is Jimah Teknik.

New Zealand to spend $4.8bn on 25 renewables projects

An industry body for Japan’s

steelmakers, the nation’s biggest

electricity users, has urged the ear-

ly restart of nuclear power plants.

The Japan Iron and Steel

Federation fears that potential

power cuts and higher electricity

charges will further squeeze a sector

already reeling from the strong yen.

Big businesses have reacted

furiously to plans by Tokyo Electric

Power Co, or Tepco, to raise

charges, but had refrained from

calling for the restart of reactors,

wary of an angry response from

a public worried about nuclear

safety following the Fukushima

radiation crisis of year ago.

Japan steelmakers urge nuclear start

Indonesian state electricity utility

PT PLN will start operations of a new

mine-mouth coal-� red power plant

in South Kalimantan later this year.

This will be the country’s

third mine-mouth coal � red

power plant and is estimated

to cost IDR1.3trn ($143m).

PLN intends to build three other

mine-mouth plants in Sumatra at an

estimated cost of IDR26tn ($2.86bn).

The plants include South Sumatra

9, South Sumatra and Jambi

and are aiming to achieve a total

capacity of 7300 MW by 2020

in a bid to optimise coal usage.

Indonesia plans trio of mine-mouth power stations at a cost of $2.86bn

Alstom has clinched a $1.10bn

contract as part of a consortium

that will build a coal � red power

plant in Tanjung Bin, Malaysia,

its second sizable power plant deal

in the country in less than a year.

The contract is for a

supercritical coal � red plant.

These plants operate at a higher

temperature than regular coal plants,

which improves their ef� ciency.

The other consortium

members are Malaysian building

materials company Mudajaya and

construction � rm Shin Eversendai.

BP plans to withdraw from a venture

seeking Australian government funds

to build a solar power generation

project in the state of New South Wales.

“We’ve indicated that we wish

to leave the consortium and that

we won’t be part of the new bid

process,” said Jamie Jardine, a

Melbourne-based spokesman for BP.

BP, Fotowatio Renewable Ven-

tures and Paci� c Hydro Pty,

which won A$306.5m ($329m) in

Australian funds last year to build

the Moree solar farm, missed a

December � nancing deadline.

That prompted the government

to reopen the competition to other

bidders, including AGL Energy.

The solar industry faces

oversupply and price pres-

sures after Chinese competi-

tors increased production.

BP and its partners in the

proposed A$923 million solar

photovoltaic plant had failed to

sign power-supply agreements

needed to advance with the project.

The government has said the

Moree venture will still be eligible

to bid for the funds and show it is

BP quits Australian solar deal as � nancing deadline missed

Two 220 MW geothermal

power plants are to be built on

Sumatra Island in Indonesia by

GDF Suez and International

Power joint venture IPR-GDF.

The two companies, along with

project partners PT Supreme

Energy and Sumitomo Corporation,

today signed 30-year power purchase

agreements for the plants with PLN,

the state-owned utility of Indonesia.

IPR-GDF Suez Asia is one of

Indonesia’s leading power producers,

with 1280 MW of operating assets.

Two geothermal plants set for Sumatra

Alstom wins $1bn Malaysian contract

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AMERICAS••• WORLD NEWS •••


A federal appeals court has ruled

that the owners of the San Juan

Generating Station, a huge coal

� red power plant in New Mexico,

US must continue with plans to

install strong pollution controls.

Several Californian cities

purchase electricity from the plant.

The federal Environmental

Protection Agency ruled last year

that the plant was required to in-

stall strong “selective catalytic

reduction”, or SCR, equipment

to cut its yearly output of 16 000

tonnes of ozone, � ne particulate

matter and other pollutants in

order to meet federal standards.

The plant’s owner, energy com-

pany PNM, is appealing the EPA

ruling, and the company and New

Mexico Governor Susana Marti-

nez had motioned to delay the

implementation of those con-

trols until the appeal is decided.

But the US 10th Circuit

Court of Appeals denied the

motion in a ruling that ran

to only a couple of sentences.

The ruling came on the heels

of a Sierra Club report that found

that at the same time PNM was

� ghting the more costly pollu-

tion controls, it had dramatically

increased its rates and its pro� ts,

while not meeting state energy-

ef� ciency and renewables targets.

Argentina: Energy demand in

Argentina hit a new record when

it reached 396.4 GWh in February.

The previous record was 390.4 GWh,

which was reached on 21 January.

Brazil: The Ministry of Mines and

Energy has approved testing of units

1 and 2 at the Victor Baptista Adami

small-scale hydroelectric power

plant. Each unit has a capacity of

12.5 MW.

Brazil: GE plans to build a $35m wind

turbine assembly plant in Brazil.

The plant is due to be built during

the next 6 to 12 months. GE has

secured about one-� fth of the supply

contracts for Brazilian wind projects.

Canada: Algonquin Power has

announced a 25 year power purchase

agreement with SaskPower for a

177 MW wind farm. The $355m

project will be in Chaplin,

Saskatchewan, and is due to be

completed by 2016.

Canada: Mustus Energy is to work

with Lockheed Martin to build a 41.5

MW biomass power plant in Alberta,

Canada. The project, which is due to

start this Spring and be completed by

2013, will provide enough energy to

power over 30 000 Canadian homes.

Chile: The Chilean government

wants to add 8000 MW of electricity

to the national grid by 2020, while

guaranteeing “clean, secure and viable

energy” supply. President Sebastian

Pinera said without clean electricity

“Chile will not become a developed

country”.

Mexico: Mexican wind power

capacity is set to rise from 569 MW

to about 2000 MW by the end of

this year. By 2014 the generation

“will be over 2500 MW”, said

Leopoldo Rodríguez, president of the

Mexican Association of Wind Energy.

Investment in Mexico’s wind power

sector currently stands at $2bn.

US: First Solar Inc is to build a 26 MW

solar power plant for power producer

NRG Energy Inc in Arizona. The plant,

the Avra Valley solar project, will be

built by First Solar and use the US

company’s thin � lm panels mounted

on a tracker that tilts the panels to

follow the sun’s arc.

US: Tri-State has entered into a

20 year power purchase agreement

to buy electricity from the 67 MW

Colorado Highlands wind project. The

facility will be developed by Colorado

Highlands Wind, which is jointly

owned by Alliance Power and GE

Energy Financial Services.

US coal station mandated to install pollution controls

Brazil’s largest non-government

electricity generation and distribution

utilities, CPFL, is to buy Bons Ventos

Geradora de Energia, a Brazilian

wind-power company, for $620m.

Bons Ventos owns four

wind farms which have a

licensed capacity of 157.5 MW.

The wind farms are located in

Brazil’s northeastern coast state

of Ceara and have contracts with

Eletrobras, Brazil’s state-con-

trolled electricity utility holding

company, to supply power for 20 years.

US power company Dominion

Resources is proposing to spend $1bn

to build a natural-gas powered power

plant in South-Central Virginia.

The Virginia based power

company said it plans to seek

State Corporation Commission ap-

proval for the plant, planned for

Brunswick County, later this year.

The proposed plant, with an

estimated capacity of more than

1.3 GW, is targeted for completion

in summer 2016 and is expected

to produce enough electricity to

power more than 325 000 homes.

The output would replace elec-

tricity from two coal � red units that

are likely to be retired by 2016.

Dominion plans $1bn gas plant

Wartsila has signed an operation &

maintenance agreement for the new

380 MW Suape II power plant in Brazil.

The plant is the biggest ever

built by Finland’s Wartsila and is

equipped with 17 of the company’s

20-cylinder, 46F engines. It was

inaugurated at the end of last year.

The three-year O&M deal is with

domestic power � rm Energética

Suape II and a Wartsila team will

be permanently on site to operate

and maintain the facility, which

is an intermediate-load plant de-

signed to feed electricity to the

national grid when � uctuations in

the supply of hydropower create

a need for compensatory capacity.

Wartsila in O&M deal for biggest plant

Apple has revealed ambi-

tious plans to build Ameri-

ca’s largest solar panel farm.

The � rm hopes to use renewable

energy to power a vast new data

centre in North Carolina using

the 100 acre array of panels.

The Maiden data centre helps power

Apple’s online operations, including

the iTunes store that delivers

music and apps to the � rm’s users.

“Our goal is to run the Maiden

facility with high percentage

renewable energy mix, and we

have major projects under way to

achieve this — including building

the nation’s largest end user-owned

solar array and building the largest

non-utility fuel cell installation

in the United States,” Apple said.

When completed, the 100-acre,

20 MW facility will supply 42 million

kWh of clean, renewable energy

annually. However, Apple’s site is

still dwarfed by the world’s largest

array, Golmud Solar Park in China,

which produces 200 MW of power.

The solar array was revealed as

part of a raft of green announcements

in Apple’s 2012 facilties report.

Apple set to build biggest US solar farm to run data centre

Spanish utility Iberdrola has

completed the construction of

the 304 MW Blue Creek wind

farm located in the Van Wert

and Paulding Counties of Ohio.

The wind farm employs 152 units

of Gamesa G90 turbines which

each have a capacity of 2 MW.

Iberdrola signed a power pur-

chase agreement with US com-

pany FirstEnergy Solutions in Fe-

burary last year for 100 MW of

the total output of the Blue Creek

project over the next 20 years.

Iberdrola � nishes 304 MW wind farm

CPFL pays $620m for Brazilian wind farm quartet

Delivering the

power you need.

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COMPANIES••• WORLD NEWS •••


Iraq’s cabinet has approved the

award of a $363m contract to

build a 1014 MW gas power

plant at Baiji in Salah al-Din

governorate to Egypt’s Orascom

Construction Industries (OCI).

“At present, we have received

cabinet approval, but have yet to

sign the � nal contract. We expect to

sign in the near future,” said OCI.

The gas � red power plant will

be constructed on an engineering,

procurement and construction

basis. Baiji is 180 kilometres

north of Baghdad and is home to

the country’s largest oil re� nery.

The facility will comprise six

169 MW turbines. The ministry

secured the turbines from

Germany’s Siemens and they are

not included in the construction

cost. The project is expected

to be completed in 21 months.

The power plant contract

has encouraged the Egyptian

company to bolster its presence in

Iraq. “We have decided to target

Iraq’s infrastructure development

programme, which has now become

a key focus for the group,” said OCI.

As part of this strategy, OCI

has established a permanent

branch in Baghdad to pursue other

major projects in the country,

speci� cally in power generation,

water, and large-scale oil and gas.

Babcock: The UK nuclear support

services company has opened an

of� ce in Lyon where it will work

with EDF’s nuclear decommissioning

and environmental division on the

dismantling of gas cooled graphite

reactors at Chinon and St Laurent.

E.ON: The UK’s Department of

Energy has approved plans from

E.ON for a 150 MW biomass power

station in Bristol. The plant will be

fuelled mainly by imported wood,

energy crops and local waste wood.

ExxonMobil: ExxonMobil is in talks

over drilling for shale gas in Turkey.

Turkey is said to have 15 trillion

cubic metres of shale gas and the

country’s state energy company

TPAO has held discussions with

ExxonMobil on exploration.

Exelon: Constellation Energy and

Exelon Corp have completed their

$11.2bn merger. The deal was

announced last year but it took

until 12 March for all the required

regulatory approvals to be granted.

The deal was the third-biggest of

2011 in the US.

CEZ: Czech Republic company CEZ

returned a better-than-expected

new pro� t for 2011 of CZK 40.8bn

($2.1bn). It said its priority for 2012

was securing extra units at Temelin

nuclear power plant.

Gamesa: Gamesa is to sell four

wind farms in the US to Canada’s

Algonquin Power & Utilities Corp for

$900m. The farms are Pocahontas

Prairie (80 MW) in Iowa; Sandy Ridge

(50 MW) in Pennsylvania; Senate

(150 MW) in Texas; and Minonk

(200 MW) in Illinois.

GE: GE is to overhaul an ageing

power station in Texas and turn it

into a combined cycle plant. When

the Marble Falls plant goes online,

due in 2014, it will be the � rst

such plant in the Electric Reliability

Council of Texas region that meets

the latest Environmental Protection

Agency greenhouse gas regulations.

RWE: The company said it had taken

a $1bn hit in 2011 from the German

government’s decision to withdraw

from nuclear power. The group’s

operating result dropped 24 per cent

to €5.8bn.

Wartsila: Finland’s Wartsila

will supply the engineering and

generating equipment for a

new power plant in Alaska. The

$106m order has been placed by

Alaksan utility Matanuska Electric

Association.

Egypt’s OCI gets approval for $363m Iraq gas power plant

India’s Tata Power has formed

an equal joint venture with

South African coal producer Exxaro

Resources to develop and operate

power projects in the African nation.

Tata Power will form the new

company, named Cennergi, through

its unit Khopoli Investments.

Cennergi will initially focus

on renewable energy in South

Africa and will later have projects

in Botswana and Namibia.

Exxaro chief executive Sipho Nkosi

said: “Cennergi has been created by

companies from developing nations

to serve developing nations. It

will play a key role in the African

electricity generation market.”

Tata in power deal for South Africa

SKF has secured a $52.25m

order from Danish wind tur-

bine manufacturer Vestas for the

delivery of main shaft solutions to

the Vestas V112-3MW turbine.

SKF president Tom John-

stone said: “Our knowledge and

experience in wind energy

enabled us to develop a unique

solution for this new turbine. Wind

energy is a key industry for the

SKF Group and we continue to in-

vest in this business by developing

new solutions to enable more cost-

effective wind energy generation.”

SKF provides solutions that

optimise the reliability and

performance of wind turbine designs.

SKF clinches $52m Vestas supply order

The Ashalim Sun PV consortium has

won a tender to build and operate a

30 MW solar photovoltaic power

plant in Israel’s southern Negev desert.

Ashalim Sun is a 50:50

joint venture between Clal Sun

and SunEdison, which is the

solar project development unit

of MEMC Electronic Materials.

The solar power plant, which will

begin to operate in the � rst half of

2015, will be one of the largest of its

kind in the world, the ministry said.

This plant will be built

besides two thermal solar plants

in Ashalim, which will each

provide 110 MW of power.

Together, the three plants will

account for 2 per cent of Israel’s

electricity generation and repre-

sent a milestone on the way to

Israel achieving its goal of 10 per

cent of electricity production from

renewable resources by 2020.

Ashalim Sun will operate the

plant for 27 years, after which the

government will take ownership.

Ashalim Sun offered a price

of 0.5365 shekels (US14 cents)

per kilowatt hour of electricity.

Ashalim Sun wins tender for Israeli desert solar project

ABB has signed a deal to partner with

Inocean to establish an engineering

services joint venture that specialises

in delivering offshore wind projects.

The new entity, ABB Inocean,

will be based in Gothenburg, Sweden.

ABB will own the majority

stake in the company, which

will undertake design, engineering

and project management activities.

The new organisation is

expected to strengthen ABB’s

expertise in the offshore wind

power integration business.

ABB in joint venture with Inocean

Doosan Heavy wins $1.3bn boiler order in India

Doosan Heavy Industries &

Construction has announced

$1.3bn of orders to build � ve

boilers for Indian power plants.

The 800 MW boilers will be

installed at NTPC facilities by 2016.

Three will be used at the Kudgi

power plant in Karnataka state in In-

dia’s southwest, and two in the Lara fa-

cility in Chhattisgarh, central India.

India is adding electricity

generating capacity to support

economic growth and may build

25 GW of plants a year until 2020.

The inhabitants of Würzburg, a vibrant city in Southern

Germany, have every reason to be proud of their modern-

ized CHP plant. State-of-the-art Siemens gas and steam

turbines help reduce its carbon emissions by an impressive

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A city full of energySiemens turbines contribute directly to increased quality of life

Solutions for combined heat and power plants



The landscape of mergers and acquisitions (M&A) within the global power utilities market is changing like never before.

And, for the � rst time, traditionally dominant regions are being outpaced by the world’s emerging markets.

These are the conclusions of analysts at PricewaterhouseCoopers (PwC) in their annual Power Deals report, which examines M&A trends over the past 12 months in the global power utilities market. The report covers deals involving power generation, transmission and distribution, natural gas transmission, distribution and storage, and energy retail. Renewable energy deals are excluded (they are featured in PwC’s publication Renewables

Deals). And, for the � rst time, the report looks at projections for the coming year.

Firstly, let’s look at the headline � gures. The worldwide total for M&A deals in the power sector was $174.4 billion, up 16 per cent year-on-year. Yet the number of deals was down 13 per cent from 670 in 2010 to 583 last year. This broke down as 468 electricity deals and 115 involving gas. Of the 583 total, 436 were domestic and 147 across borders.

A year ago, the value of deals had been heading towards the highs of 2006–07, the last peak of M&A activity before the credit crunch suddenly kicked in. But at the start of 2012 this bounce-back has stalled, with deal values currently near the credit crunch lows of 2009.

What has caused this? One of the major drivers is the crisis in the eurozone, which

PwC says will continue to cloud the deal environment this year. The uncertainties over the euro – with Greece’s debt crisis at their heart – caused M&A activity in the region to shudder to a halt as investors reassessed their options in the face of fears of recession and the worst-case scenario of a complete collapse of the currency.

European deals completed over 2011 totalled 142, a drop from the 190 of 2010. The value of these deals was $39.8 billion, a signi� cant fall from the 2010 � gure of $70.3 billion.

Yet the outlook for Europe is not so uniformly bleak: while deal value in 2011 was much lower than 2010, the number of deals is still considerable and PwC says that companies remain on the lookout for opportunities.

power

reportGLOBAL POWER M&A DEALS

Kelvin Ross, Deputy Editor

Mixed fortunes for power deal players

The worldwide total for merger and acquisition deals in the power sector in 2011 was $174.4 billion, up 16 per cent from 2010. But the number of deals dropped from 670 in 2010 to 583 last year.

The trends in merger & acquisitions involving power utilities is changing, with radically divergent trends

apparent not just for East and West, but also for the two sides of the Atlantic.

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power

report

EUROPE’S CRISIS SPURS DEALMAKING

A characteristic of European deals is the need for many utilities to shed assets in a bid to revive balance sheets that are mired in the red. The biggest European deal was E.ON’s sale of Central Networks to US company PPL Corporation for $6.5 billion, which was part of E.ON’s efforts to divest itself of assets worth €15 billion ($20 billion) by the end of next year. One of Europe’s biggest deals this year is likely to be E.ON’s sale of its gas transmission operation in Germany, Open Grid Europe.

Fellow German utility RWE wants to claw back €9 billion and a key stepping stone to this was the September sale of a 74.9 per cent stake in German electricity transmission system operator Amprion. Future deals to hit this target are likely to be the sale of its gas grid operator in the Czech Republic, Net4Gas, a stake in its Berlin water company Berlinwasser and parts – or all – of its Dea upstream gas and oil business.

Meanwhile in Sweden, Vattenfall drew up a consolidation blueprint with the ultimate aim of refocusing its business domestically and in Germany. This strategy got underway with the agreed sale of Nuon in Belgium to Italy’s Eni, and the sale of its Polish heat, electricity distribution and network services to PGNiG and Tauron. Vattenfall ended 2011 with a deal to sell its electricity and heating distribution assets in Finland to a Goldman Sachs/3i consortium for €1.54 billion. A further deal of note was the decision by France’s EDF to increase its stake in Italian company Edison to 78.95 per cent at a cost of $6.3 billion.

Looking to the year ahead, PwC predicts that, unsurprisingly, the eurozone crisis will continue to have an impact on M&A activity, although not inevitably in a negative way.

“It is unlikely to halt the divestment programmes of the major utility companies,” said the report.

“The underlying fundamentals for such deals remain strong. Companies need to continue to reposition their fuel and value chain mix and to seek out growth markets. They have big investment requirements and need to manage leverage. Debt markets remain constrained and, as RWE’s late 2011 share sale showed, the equity markets are likely to only provide a part answer. Raising capital from disposals remains an important priority and is likely to remain a strong feature of power deals in 2012.”

Indeed, PwC states that the eurozone crisis will “act as a spur for dealmaking”, pointing to potential sales of state-owned assets in Ireland and Italy, including the part-privatisation of Irish gas company Bord Gais.

PwC also spotlights European power grid operator TenneT as being a prime candidate for sell off. TenneT is struggling to cope with demands being placed on it by the state to link Germany’s many wind farms to the grid, a move which is critical since the Merkel government’s decision to withdraw from nuclear power.

For those companies looking to ease balance sheet woes, joint venture project and investment relationships are likely to � gure strongly in 2012. Last year RWE held talks with Gazprom about the possibility of the two � rms covering gas and coal � red plant in Germany, the Netherlands and the UK. This deal failed to come to fruition in 2011 but PwC states that it “remains a distinct possibility” for this year.

A further trend peculiar to Europe relates to energy prices, which PwC says have become “a hot issue as the cost of decarbonisation

PEi - March 2012 www.peimagazine.com 21


power


bites and the economic situation puts pressure on customer budgets”. PwC states that concerns about energy prices have created “a trilemma in the triangle that has to be balanced between affordability, sustainability and security of supply”. This is adding to the uncertainty faced by dealmakers and investors.

CHINA LOOKS ABROAD

But the European trend of companies and governments seeking to shed assets means opportunities for other acquisition-hungry regions of the world – and, in particular, China.

The most notable deal was China Three Gorges’ $3.5 billion bid for a 21.35 per

cent stake in Energias de Portugal (EDP) – a move PwC sees as “symptomatic of increased interest in expansion into overseas power markets by Chinese generating companies”.The EDP deal will give China Three Gorges a

foothold in the boom market of Brazil, a tactic mirrored by China’s State Grid Corporation’s bid for a 25 per cent stake in Portuguese power grid company REN. But expansion in the fast growing Brazilian market was an

“Concerns about energy

prices have created a

trilemma in the triangle

that has to be balanced

between affordability,

sustainability and security

of supply”

PwC believes that the crisis in the eurozone will “act as a spur for dealmaking”.

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power

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important focus for European companies as well. E.ON lost out to China Three Gorges for the EDP deal. But this disappointment was tempered when at the start of 2012 it entered into an agreement to take a 10 per cent stake in Brazil’s MPX Energia. This deal is expected to lead to major investment by both parties into new power generation capacity. Meanwhile, Spain’s Iberdrola bought Brazilian distribution company Elektro for $2.9 billion.

This year, Chinese companies’ appetite for western markets is expected not only to continue but to intensify at some considerable pace. And it is not just the Chinese who are pursuing this ‘go abroad’ strategy. Japan’s power sector may still be reeling from the Fukushima disaster a year ago, but the country’s dealmakers are working apace.

The second-largest Asia-Paci� c deal of 2011 was the $1.2 billion distress sale by Grif� n Energy of two coal � red power plants in Australia to Kansai Electric Power and Sumitomo Corporation. Marubeni Corporation clinched a 40 per cent stake in Queensland gas distribution network Allgas, and Itochu Corporation bought a 33 per cent share of Belgian electricity � rm T-Power.

Of course, the Japanese company most affected by last year’s earthquake and tsunami is Fukushima operator Tokyo Electric Power Company (Tepco), and on the M&A front its future is suitably cloudy. The company has already started asset sales and these are likely to accelerate this year.

The total number of deals transacted in the Asia-Paci� c region in 2011 was 156, just a 3 per cent drop on the 160 done a year earlier. The 2011 deal value was $14.1 billion, compared with $19.7 billion.

NORTH AMERICA STAYS BUOYANT

If there is a constant between the 2011 M&A activity and that of previous years, it is that the North American market remains buoyant. American deals dominated the top ten as US companies moved to gain scale. In the US, 117 M&A deals done last year, a 6 per cent increase of the 110 carried out in 2010. However, the value of these deals has rocketed 119 per cent, from $49 billion in 2010 to $107.5 billion.

The year started with the $25.8 billion merger between Duke Energy and Progress Energy and was followed by a strong � ow of other deals, including a proposed merger between Exelon and Constellation and two mega mergers in the gas pipeline sector. Indeed, it is the � rst time that all-US deals accounted for six out of the ten largest deals in the PwC report.

The Duke/Progress deal will create the largest utility group in the US, with around 7.1 million electricity customers and 57 GW of generating capacity from coal, oil, natural gas, nuclear and renewables. But the biggest deal in the US – or anywhere else in the world – was Kinder Morgan’s $37.9 billion purchase of the gas pipeline assets of El Paso. PwC notes that the gas supply glut in the US, caused by the expansion of shale and other forms of unconventional gas, “has changed the economics of power generation and gas transportation”.

“Low gas prices combined with lower power demand have put strains on power generation,” it states. “Many generation plants are under-utilised in a changed supply-demand and price environment. Sales of gas � red plant have added to smaller deal � ow. The changed gas environment has created opportunities for, but has also

For

more

info

rmation, ente

r 12 a

t p

ei.hotim

s.c

om


power


put strains on, gas pipeline operators. Pipeline

businesses deliver stable cash � ows, often high

yield, but the inter-regional differences that are

the basis of pipelines � ows have been altered

in a different supply and price environment.

“At the same time, more sources of supply

have required more pipeline investment. As a

result, greater spread and size is being sought

by companies.” The Kinder Morgan/El Paso

deal highlighted this trend, says PwC.

Over the next nine months, ‘buy

versus build’ will be the mantra for US

generation, according to PwC, as current

market conditions make this the more

economical option.


The top ten global M&A deals in the power utilities sector are dominated by activity in the US. The Duke/Progress merger - number two on the list - will create the largest utility group in the US.

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The quest for ‘scale and balance’ will also

continue among US power � rms. Last year saw

a rush of major deals as US companies sought

to strengthen balance sheets and rebalance

regulated versus non-regulated returns. These

deal imperatives, predicts PwC, will continue

into 2012. Scope remains for a continued � ow

of deals in the US, but its strength will depend on

state regulators. The big 2011 US deals are still

to get over the � nish line in terms of regulatory

clearance. “Companies will be looking closely

at the reaction of regulators before weighing up

their next moves,” states PwC.

Given that merger activity is now at the same

level as it was in 2008–09, it might be tempting

to draw some parallels between the � nancial

climates of the two times, but PwC cautions

against this. The credit crunch, it states, had

a “de� nite focus, centred around the Lehman

crash”. The current crisis, however, lacks an

equivalent “big event focus – a rear view mirror

event that can be seen as a turning point.

Instead there is ongoing material uncertainty.”

‘ROLLING UNCERTAINTY’ FOR 2012

It is this ‘rolling uncertainty’ that PwC says will

characterise deals throughout the next nine

months. Dealmakers are facing a perfect storm

of a fragmented liquidity landscape, uncertain

bank � nance and no end in sight for an easing

of debt issuance. And yet PwC considers the

credit-crunch advice of ‘if you don’t have to be

in the market, stay out of the market’ does not

apply in 2012.

While no one knows if things will be better or

worse in six months’ time, “in this environment,

perhaps paradoxically, a complete brake

on dealmaking makes less sense”. “If a deal

is highly strategic and mission critical, then

parties may feel it is worth doing if it can get

done. With the uncertainty over how long the

constraints will persist, it’s a brave bet to stay

out of the markets just in the hope that things

will improve.”

PwC concludes that 2011 saw the global

M&A deal landscape signi� cantly change. “In

the past, Europe and the US were the dominant

in� uence on deal activity,” it states. “Now two

other important in� uences are coming right to

the fore – the involvement of very active Asia-

Paci� c investors and the pace of growth markets

such as Brazil. We’re also seeing markets move

at different speeds and in different directions.

Growth in emerging markets is contrasting with

recession in Europe. These different speeds will

provide opportunities for buyers able to exploit

cross-continental value opportunities.”

The number and value of M&A deals in the North American rose last year, with US transactions dominating the global top ten mergers for 2011

The crisis in the eurozone was a key factor in European M&A deals falling signi� cantly both in value and in number

While the value of deals in the Asia-Paci� c fell dramatically, their number dipped only slightly from 2010’s � gures

South and Central America saw a signi� cant rise in both the value and number of deals

India’s coal supply challenges


Coal shortages experienced by generators last year are likely to be a sign of things to come as it becomes clear that domestic production cannot expand fast enough to meet the

huge additional demand from the rapid power expansion underway in India at the moment.

The shortfall is leaving many projects without secure domestic supplies, which is leading to cancellations, rising imports and attempts by project developers to capture supply by moving upstream into mine development at home and abroad.

Casualties to-date include companies like Reliance and Adani Power, both of which halted planned capacity expansion last year. Experts say up to $36 billion of investment is under question, representing around 35 GW, with developers worried that plants under construction across India may sit idle on completion because of a lack of affordable, reliable domestic coal.

Financiers and project developers had been piling into the sector as power demand ballooned alongside India’s rapid economic growth of recent years. But the uncertainty over coal supply has started to rattle � nancial backers, with the Reserve Bank of India suggesting

banks freeze lines of credit to what it described as a “distressed sector”.

The move followed months of warnings from � nancial analysts that systemic defaults loomed on coal plant loans, which could have a destabilising impact on the Indian banking sector due to high exposure.

IMPORTS ON THE RISE

The domestic shortage is drawing in imports, and in 2011 India overtook China as the world’s biggest coal importer, while it remains both the third-largest consumer and producer in the world after China and the US.

Of� cial � gures are not yet out but analysts estimate India imported about 81 million tonnes of steam coal for its power plants in 2011, up about 30 per cent on the year (see Figure 1).

Fortunately demand for imports from China fell last year, dampening upward pressure on international prices from India’s additional purchases. A further 40 million tonnes are expected to be cut from China’s import total this year as up to 200 million tonnes of extra

Coal shortage threatens India’s power expansion plansIndia’s desire to expand its coal � red power generation base is running up against fuel supply

constraints from a state-dominated coal sector lacking investment and hampered by environmental

regulations and labour disputes.

Jeremy Bowden

Coal is a mainstay of India’s electricity sector, but are domestic shortages and a growing reliance on imports threatening its power generation capacity development?



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domestic production is brought online – twice that added in 2011.Last year Indonesia was India’s largest supplier, providing an

estimated 64 million tonnes of steam coal. However, total Indian purchases were lower than many forecasts for the second half of the year because of slowing activity in its $1.7 trillion economy. KPMG estimates a domestic shortfall of 189 million tonnes a year by 2015, while the government expects imports of 194 million tonnes alongside production of 770 million in 2017.

The Indian government is now estimating a total gap between supply and demand of 142 million tonnes for the whole 2011–12 � scal year, against coking and steam imports expected at around 115 million tonnes – suggesting imports are not entirely making up for the shortfall. This represents a major constraint on economic growth, as well as power output. Import prices, which are variously put at 20-40 per cent above domestic levels, add expense thereby making power projects less competitive.

To reach a targeted average economic growth rate of 9 per cent per year for the next � ve years, the government acknowledges it must remove obstacles to domestic coal development.

In the meantime, Sriprakash Jaiswal, the minister of coal, has asked the Ministry of Power to freeze the capacity of con� rmed coal-based power projects at 63 450 MW for the next � ve years – against an original target of 96 178 MW by 2017.

The uncertainty means projects not included in that 65 450 MW are now being cancelled or postponed, according to the Central Electricity Authority. To help cope with the additional demand for coal from all these new plants – albeit reduced from earlier expectations by over 30 GW – the Prime Minister’s of� ce recently agreed that Coal India Limited (CIL) could peg minimum supply at 80 per cent of full deliveries for plants built after March 2009, along with 90 per cent to plants built earlier.

CIL’s chairman and managing director, Ms Zohra Chatterji said in February that the company was able to meet at least 80 per cent of these new plants’ demand without importing, and so it may not need to buy in the international market, which it appears reluctant to do.

However, Sanford C. Bernstein & Company said in a recent report that it believes CIL will have to boost imports on government orders and the threat of penalties should deliveries fall below 80 per cent. The additional costs of imports by CIL can then be spread evenly among end-users, with only a marginal impact on price. Buying the fuel from CIL also eliminates the � nancial risk to power producers of importing coal directly.

HEALTHY RESERVES

The problem is not one of reserves. India is continuing to expand its proven reserve base (see Figure 2) despite steadily increasing production, and at current production rates of around 600 million tonnes a year it has over 300 years’ worth of supply.

CIL claims it is new environmental regulations, above all, that are hindering output growth. In 2011, Dr Manmohan Singh, India’s prime minister, passed an order from the Ministry of Environment and Forests restricting new mines in areas covering about 40 per cent

of CIL’s reserves. The Ministry of Coal, however, has questioned the move’s legitimacy and is pushing for it to be reduced to cover just 10 per cent of reserves.

In addition, the new rules mean that about 218 mines started before 1994, and previously exempt from regulations, now require environmental clearance.

The Confederation of Indian Industry says it now takes an average of seven years to receive environment and forest approvals to start mining. Worried about such delays and unable to secure supplies from CIL, some Indian businesses have begun acquiring coal mines in Indonesia, Mozambique and South Africa, a trend many call India’s “coal rush”.

CIL too is attempting to acquire mines in South Africa, the United States and Australia, but with little success so far.

However, concerns are increasingly being voiced over security of imported supplies, especially with the Indonesian government proposing to restrict exports of certain coal grades – representing about 40 per cent of total exports – from January 2014 from mines including those owned by Indian companies.

Casualties of the new environmental regulations also include companies like Madanpur South Coal Company, which has already sunk over $600 million into expanding a power plant and steel factory in Chattisnagarh state in central India, but can no longer depend on an assured coal supply from nearby mines around which the project had been based.

In a ‘business as usual scenario’, CIL’s Chatterji said her company would meet its 464 million tonnes production target in 2012–13, rising to 556 million tonnes by 2016–17. But if all environmental clearances were obtained for upcoming projects the company could produce at least 615 million tonnes by then.

In response, the Ministry of Environment and Forests assured CIL in January that it would indeed fast-track mine approvals, particularly for capacity being added to operational mines, to ensure production can rise by at least 25 million tonnes per year.

CIL has also been attempting to move up its domestic coal prices nearer to international levels to boost investment and fund a substantial wage hike for its workers. But under pressure from power

120

Steam coal imports

Total imports

100

80

60

40

20

02008 2009 2010 2011

Figure 1: India’s imports of steam coal rose 30 per cent in 2011 Source: IEA, EIA



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producers the government reversed direct rises last year, forcing CIL to absorb the higher wage costs anyway. Instead CIL has upgraded and standardised its coal classi� cation system, which would have raised the price of coal by 25–40 per cent to prevailing international levels, but it has been forced to limit price increases to certain grades of coal.

Both coal and power industry groups are also opposing the proposed introduction of a 5 per cent import duty. They claim that levying such a tax will make it all but impossible for project developers to supply power pro� tably using imported coal – even when it is mixed with cheaper domestic supply – unless power prices are allowed to rise. A levy of Rs50 ($1.1) per tonne on domestic coal producers designed to fund renewable development was introduced last year.

India’s fuel shortages are further exacerbated by a lack of trucking and reliable railway networks to transport coal inland from ports. Thermal coal stocks at ports may be as much as 9 million tonnes, according to a February Citigroup report. Moreover, CIL’s biggest coal � elds are located in remote regions where Maoist rebels operate. The guerrillas are known to target business activities for extortion and to disrupt roads and railway lines used to transport coal. They are also suspected of involvement in coal theft.

COAL SECTOR REFORM

CIL claims to be the world’s biggest coal producer, and is responsible for more than 80 per cent of India’s total consumption. Last October, it raised Rs152 billion for the government through a 10 per cent initial public offering. And at the end of February CIL became India’s most highly valued company, overtaking Reliance Industries. However, the Indian government appears to be shying away from further bold market-oriented reforms of coal production, despite calls for the dismantling of CIL’s dominant position in order to attract private investment and stimulate output.

The government has, however, pushed forward with some demand-side reforms, including expanding the number of end-users entitled to buy coal directly from CIL, which critics claim could further increase demand while doing nothing for output. The authorities will also make public the reasons why some companies are granted or denied coal, make e-auctions of coal more systematic – CIL currently sells about 10 per cent of annual production through spot and forward e-auctions every year – and auction coal blocks only after all environmental clearances have been secured.

But these measures are not expected to solve the problem without further supply-side reforms to stimulate production, including the creation of a sales platform for CIL, the sale of surplus production from captive mines and allowing all approved end-users to import. The government has also put on hold a proposal to allow private mining � rms to bid for auctions of coal blocks, because it claims state ownership of coal resources is enshrined under the Coal Mines Nationalisation Act of 1973.

India’s Association of Power Producers says that the moves, as they stand, will make the situation worse, and hopes to persuade

the government to at least give power projects � rst priority in coal allocation and allow captive block owners to sell coal, although it backs the move to keep independent miners out of coal block auctions. It has also pushed the government to lobby Indonesia to reduce coal prices, but with little effect.

LAST YEAR’S COAL SHORTAGES

CIL was reported to have reduced supply to some new plants by up to 50 per cent in 2011, and at one point several domestic newspapers reported that 11 power projects with a combined capacity of 16 000 MW had only a day’s stock left, citing the Central Electricity Authority. But Prasenjit Pal, deputy general manager at India’s biggest generator, state-run NTPC Limited, puts last year’s problems down to labour disputes and practices, along with heavy rains.

“The main problem is CIL delivers in � ts and starts,” he said, explaining that in the run-up to 31 March each year CIL ramps up output to meet annual targets, which overloads the transportation system. In March, power plants stock up on coal in expectation of a slowing of deliveries in the following months, he added. “Everyone [at CIL] relaxes after the March annual target deadline; it’s a seasonal variation,” he said. “NTPC is not seeing any major shortages now… there have been bottlenecks but it is not a long-term problem… it’s more of a logistical problem,” he said.

For fuel supply agreements signed prior to 2009, 90 per cent supply was assured and in some cases 95 per cent has been delivered. This surplus could be made available to new plants. Pal added that this will not constrain power output at these established

India’s cool reserves (million tonnes) – as of 1 January 2012 Source: CIL

TYPE OF COAL PROVEN INDICATED INFERRED TOTAL

Prime coking 4614.35 698.71 0 5313.06Medium coking 12 572.52 12 001.32 1880.23 26 454.07Semi-coking 482.16 1003.29 221.68 1707.13Sub-total coking 17 669.03 13 703.32 2101.91 33 474.26Non-coking:- 95 738.76 12 368.44 31 488.11 250 895.31Tertiary coal 593.81 99.34 799.49* 1492.64Grand total 114 001.60 137471.10 34 389.51 285 862.21

280000

27500

270000

265000

260000

255000

250000

245000

240000

01 Jan 06 01 Jan 07 01 Jan 08 01 Jan 09 01 Jan 10

Reserves

Figure 2: Growth in India’s proven coal reserves (million tonnes), 2006-2010 Source: CIL

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plants because utilisation rates rarely exceed 90 per cent over the

long term because of maintenance and other variations in output.

He said NTPC had not delayed or suspended any capacity

expansion that had achieved � nancial clearance because of coal

shortages, and was not concerned over the coal minister’s reported

call to halt further projects. NTPC is the biggest power generator in

the country with capacity of about 34 000 MW, most of which is

coal-based. It has a very high capacity utilisation record, but had

to cut power production in autumn 2011 by 4000 MW because

of coal shortages. Pal said a record dip in production below peak

demand of 13 per cent in December happened for reasons unrelated

to coal supply.

Pal acknowledged independent power producers (IPPs) were still

facing supply issues, and that imports were on the rise. “Larger IPPs

are looking to secure fuel supply by acquiring mines for captive use...

some of the smaller ones are hard pressed,” he said, especially as

their � nancial backers were seeking secured coal supplies. He said

international prices averaged about 20 per cent above domestic

levels, leaving proposed projects without domestic supply commitment

at a major disadvantage.

THE MASSIVE CHALLENGE OF INDIA’S DEVELOPMENT

This � nancial year, CIL’s � rst quarter and third quarter pro� ts were

up 54 per cent and 64 per cent on year respectively, with output

recovering to 110 million tonnes in Q3 from 93 million tonnes in Q2,

which was hit by heavy monsoon rains. The additional pro� ts should

help increase investment in new mines and equipment, provided

environmental obstacles can be overcome.

Overall CIL reported a 2.7 per cent drop in production to

approximately 291 million tonnes in the nine months to 31 December

2011, although surging � nancial year-end production now means

CIL’s government-set production target of 440 million tonnes is

expected to be achieved. The production target for � nancial year

2012–13 is to rise by 5.5 per cent to 464 million tonnes.

The minister of coal said at a press conference in January that

it was not possible to increase coal output overnight, but that CIL

was doing its best. He added that he had asked CIL to deliver all

remaining pithead stocks to help meet customer needs, and is pushing

for a rapid modernisation and restructuring of the company.

Coal dominates the power sectors of both the world’s developing

giants – India and China. Even with a strong central government,

and single-minded drive for production growth, China has found

that producing and delivering suf� cient coal to keep pace with

unprecedented jumps in demand for energy has been dif� cult. India’s

cumbersome democracy, with all its checks and balances attempting

to accommodate a range of interests – not least environmental

concerns, is � nding it all but impossible, despite healthy reserves.

The face-off between environmentalists and developers is and

will be a key battleground for Indian policymakers for some time

to come, and the government faces a massive challenge as it

attempts to guide this emerging economy through its current rapid

development phase.

Sustainable power in Germany

In Germany, the sale and distribution of power is characterised by

the involvement of many municipal � rms, or stadtwerke. The 1400

members of their umbrella organisation – the Berlin-based Verband

kommunaler Unternehmen (VKU) – sold 55 per cent of electricity used

in Germany last year and 68 per cent of the natural gas. Stadtwerke

also delivered 70 per cent of drinking water and 50 per cent of direct

heating services.

The trust that Germans place in these companies is underscored by

a recent poll, which found 81 per cent of respondents had positive

feelings about their ‘own’ municipal energy company. In stark contrast,

large companies and politicians scored only 26 per cent and 14 per

cent, respectively. Energy customers appreciate stadtwerke for offering

direct contact with them and common ownership. About 70 per cent

of the poll’s respondents felt that privatising them would be a bad idea.

Many stadtwerke own generation facilities and the capacity of these

plants – currently only about a tenth of Germany’s total – is set to double

by 2020. About 3.5 GW is under construction and another 5 GW is

already under planning.

In line with Germany’s ambitious clean energy goals,

renewable energy will fuel about a third of the capacity under

construction. Cogeneration of heat and power already makes up

63 per cent of the stadtwerke power portfolio. Although Germany

currently lags its neighbours Denmark and the Netherlands by generating

only an eighth of its electricity through cogeneration, the country aims to

double its combined heat and power (CHP) capacity by 2020.

THE POTENTIAL FOR MUNICIPAL CLEAN ENERGY

Many experts expect stadtwerke to play a growing role in a shift from

fossil fuels and nuclear power towards renewables. Stadtwerke can

help build up renewable capacity such as photovoltaic (PV) panels and

optimise its output via smart local control systems.

It is already clear that digesters and incinerators for biomass, farm

residuals and household waste operate best at a municipal scale.

Municipalities have the necessary experience and can accommodate

quantities and diversity of materials that digesters at individual farms are

often too small to handle without subsidies.

Municipal-scale digester systems are also large enough to achieve

levels of ef� ciency and reliability beyond the smaller units typically

installed at farms. In addition, stadtwerke often have district heating

distribution systems that can transport heat released during electricity

production to customers.

Municipal power utilities could further contribute to transforming

Germany’s power sector through installing charge points to help

electrify transport. Their cogeneration systems are also well suited to

compensating variable output from PV systems and wind turbines. In

addition, as stadtwerke are public owned they can make the necessary

long-term investments.

CHALLENGES TO EXPANDING MUNICIPAL POWER SUPPLY

Yet stadtwerke – while well quali� ed for a larger role in energy supply

– face inevitable challenges in the shift from fossil fuels to renewable


Municipal � rms embrace cleaner power

The positive attitude most Germans have for their municipal utilities – or stadtwerke – could prove

key to their country’s transition to a sustainable energy supply.

Dr Jacob Klimstra

Storing hot water in large tanks is a cheap way for stadtwerke to decouple heat and power generation from CHP plants Source: EVN



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feedstocks. This transition is already creating problems for the German

electricity transmission system. In some periods, � uctuating renewable

sources sometimes produce hardly any electricity, leaving conventional

and nuclear power plants to meet the bulk of electricity needs. But during

periods of high wind and strong sunshine, output from wind turbines and

roof-mounted PV systems creates congestion in the transmission grid.

Large German central power plants, with output controlled by the

transmission system operators (TSOs), are often no longer the main

producers of electricity. Yet these big power plants have to maintain the

balance between electricity production and consumption to safeguard

the 50 Hz frequency.

To compensate for a decline in their frequency control capacity, TSOs

are now seeking direct access to stadtwerke distributed generators to

manage their output. If stadtwerke lose full control over their generating

units, these plants are likely to run for fewer hours and to provide a lower

return on investment. Uncertainty over local power plants’ operating

hours clearly makes a further expansion of stadtwerke power capacity

less attractive.

Users of the electricity transmission system normally pay a fee to the

TSOs. Municipal cogeneration systems are currently exempt, as they

are designed to deliver electricity to local customers without using high-

voltage transmission lines. But German TSOs now want to levy this fee

on all grid-connected equipment and legislation to impose this is in

preparation. Local generators will also be expected to act like large

central generators during contingencies such as short circuits and power

plant failures.

CLEARING THE WAY FOR STADTWERKE

German engineering ingenuity is likely to overcome these challenges.

Stadtwerke are already installing large hot water reservoirs to decouple

their CHP systems’ electricity generation and heat production. Storing

heat in large water tanks is relatively cheap and very effective. Electricity

can thus be produced at high cogeneration ef� ciency when renewable

energy output and demand for heat are both low.

Fear that reduced running hours could cut investment returns on

stadtwerke equipment could be relieved by establishing compensation

mechanisms for such back-up facilities. Rapid back-up generators for

Renewables

Combined heat and power

Conventional

Power capacity German stadwerke:

10165 MW (2010)

The electricity generation capacity of the German stadtwerke sector in 2010

A biogas plant with two 1.2 MW units run by a German municipal authority Source: MWM



renewable energy sources have a legitimate claim to remuneration and

are likely to be a permanent feature of the power system; solutions such

as batteries are not expected to cover electricity needs by charging in

summer and discharging in darker seasons, so natural gas and biogas

remain by far the best long-term energy storage solution. Gas � red

equipment also offers outstanding agility for stabilising electricity systems.

Customers have been shown to greatly value the stadtwerke model

for providing heat and electricity. Stadtwerke can ensure long-term

strategy for a reliable, ef� cient, environment-friendly, affordable and

accountable energy supply. It is to be hoped that national policymakers

will understand and appreciate the bene� ts of the stadtwerke concept

and facilitate its further expansion.

Jacob Klimstra will chair a session on the future of stadtwerke power provision

on 14 June 2012 at POWER-GEN Europe in Cologne, Germany.

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The interior of a German biogas plant Source: MWM

“Customers have been shown to greatly value the stadtwerke model for providing heat and

power. Stadtwerke can ensure long-term strategy for a reliable, ef� cient, environment-friendly, affordable and accountable energy supply”

Opinion: Europe’s power sector


Signi� cant transformation has epitomised the power industry over

the past two decades. As the sector strives to balance the needs

of consumers, governments and the environment, few could

have predicted the shape of the current energy mix and even fewer

would have thought we would still be so reliant on fossil fuels. Looking

back, industry commentators agree the most signi� cant trend has been

the industry’s shift from being largely state-owned, centrally controlled

and dominated by large integrated companies to that of a liberalised

environment.

The deregulation that began in the early nineties, led primarily

by the UK and Norway, has since spread throughout Europe. Some

would suggest this has led to lower prices for the consumer and

the introduction of ef� ciencies into the marketplace. Others would

argue that energy costs for end-users have actually risen in real

terms, that there continues to be a lack of true competition, and that

wider market uncertainty still hampers long-term investment in plant

and infrastructure.

Certainly further deregulation, the ‘green agenda’, the integration

of renewables into the electricity system, plus new uses of electricity

such as electric vehicles, bring fresh challenges, but they also create

exciting new opportunities, as do increasingly rapid advances in plant,

storage and Smart Grid technologies. As always, huge questions

remain over the future of nuclear energy and other fossil fuels that have

an impact on the environment.

The choices we make about

these technologies and the

way in which we manage the

whole electricity infrastructure,

potentially impacts the global

economy and our way of life.

MARKET LIBERALISATION

The unbundling of generation,

transmission, distribution

and supply (retail), as well

as the creation of energy

trading markets have

driven ef� ciencies into the

marketplace, primarily

in respect of technology

ef� ciencies and lower

wholesale prices via energy trading. Speci� cally, combined-cycle gas

turbine generation has continued to blossom, with major advances in

both ef� ciency and size.

Gas turbine technology provides a means of constructing power

plants in a relatively short time and at much lower cost, with a lower

The European power industry continues its revolutionAs POWER-GEN Europe celebrates its 20th anniversary, Nigel Blackaby, its conference director,

considers the trends that have shaped the European power industry over the past two decades and

how current developments might in� uence its evolution in the next 20 years.

European Union’s climate goals heavily rely on the successful commercialisation of CCS technology Source: Doosan Power Systems

Nigel Blackaby, conference director, POWER-GEN Europe

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environmental impact and increased ef� ciency of fuel conversion

into electricity. At the same time, the change in the marketplace and

introduction of competition have accelerated its adoption, since new

investors look for propositions with shorter lead times, greater certainty

of outcomes and easier permitting.

This boost was critical in redressing the effects that the stagnation

in power consumption of the late 1980s and resulting over-capacities

had in directing investment away from infrastructure towards mergers

and acquisitions. Indeed, many utilities delayed investment in new

plant until the impact of liberalisation became clear and a number

of equipment manufacturers suffered as a result. That said, investment

decisions continue to be clouded by a myriad of factors today.

INVESTMENT DECISIONS

In unbundled markets, companies must consider their investments

carefully because every plant has a technical life of 40–50 years,

meaning there is always the risk of a competitor emerging with a better

technology. The climate debate has added to this uncertainty, with the

landmark Kyoto agreement of 1997 and the European Union’s (EU)

20-20-20 targets established in 2007–08 driving a major and long-

lasting shift in focus to addressing concerns around carbon dioxide

(CO2) and other greenhouse gas (GHG) emissions.

Carbon reduction and renewable energy legislation has been

enacted in the majority of European countries, prompting an increase

in the number of wood and biomass burning plants, as well as greater

interest in carbon capture and storage (CCS) technology. The major

players have programmes to develop green energy production and

have accepted they must now build power plants on the basis of clean

power. The utilities are increasingly recognising renewables, especially

wind and solar, as being the way forward.

However, regulatory boundaries continue to change in respect of

GHG emission restrictions, emission limits and carbon pricing; the

cost and availability of fuels; and the opposing positions being taken

on the development of nuclear since Fukushima. Some would argue

that nuclear has not been a realistic alternative since the disasters at

Harrisburg (Three Mile Island) in the US and Chernobyl in the Ukraine,

that coal is cheap but dirty and that despite gas turbines (and combined-

cycle) having developed to high ef� ciency and capacity, the historical

rise in the cost of oil, and as a consequence gas, has countered these

bene� ts to some degree.

Likewise, although shale gas is having a major impact on lowering

gas prices and ensuring security of supply, especially in the US, it

is facing signi� cant opposition in Europe because of concerns

surrounding the environmental impact of ‘fracking’. It is argued that

if shale gas projects were properly executed, there would be minimal

impact, making development of standards a priority and work has

already been started in the US by the Environmental Protection Agency.

THE EVOLVING ENERGY MIX

Moving forward, the industry must look much more closely at the

energy mix, because each type of fuel resource will have its place and

there will no doubt be other technologies emerging. Wave and tidal

power, for example, could be complementary, as will energy storage

via improved battery technology and pumped hydro. Both storage

and conversion of whatever the end product might be will be hugely

important because renewables, such as wind and solar, introduce

an increasing amount of non-synchronous energy into the electricity

system. This creates operational issues in the form of frequency stability,

voltage stability and provision of reserve.

Several pumped storage plants are being constructed in countries

such as Switzerland, Germany and Austria, for example, while most

countries are looking at how to address the need for large-scale

storage. In a fully sustainable world, natural gas and biogas will offer

the most economical solution for peaking power, covering contingency

demand and for bridging seasonal differences. For the time being,

there is a suf� cient supply of natural gas to act as a buffer.

There is also the issue of expanding the grid and deploying new

transmission lines to accommodate renewables, especially offshore

renewables, such as wind, which are traditionally located some

distance from the load centres. Obtaining the necessary permits and

public acceptance is currently proving dif� cult.

Similarly, doubts persist as to whether CCS is a realistic option,

given public opposition to transporting CO2 via pipeline and storing

it underground. Using excess energy from solar or wind to transform

CO2 into methane could provide a viable alternative. Meanwhile, � ue

gas cleaning and other emission reduction technologies will remain an

important aspect of the clean energy mix.

BUILDING A FLEXIBLE AND SUSTAINABLE SYSTEM

Another key development will be the Smart Grid, which is currently

undergoing a tremendous amount of development work, and will be

extremely important to the operation of electricity systems in the future.

There will also be parallel development of wind, solar and wave, as

well as geothermal and storage. Of course, the � nancial crisis of the

past three or four years has meant not just a slowdown in electricity

demand, but has led to a reduced appetite for investment in renewables.

Nevertheless, the long-term outlook for renewables is good and there is

optimism that the EU’s 2020 renewables target can be met.

For some countries with hydropower, wind and solar energy, a

decarbonised power industry is entirely possible. But for others, such as

the UK, Germany and the Netherlands, it remains a much more distant

prospect. That does not mean the industry cannot reduce the use of fossil

fuel to a large extent. Natural gas will be required as a buffer for times

when there is little wind or solar energy available, while development

of coal � red plants incorporating CCS will need to advance if the

industry is to able to utilise the large reserves of coal that remain in an

“Further deregulation, the ‘green agenda’, the integration of renewables into the power system, plus new uses of electricity, such as electric vehicles, bring fresh challenges, but

also create exciting opportunities”

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CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress, as well as corporate

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© 2012 Caterpillar. All Rights Reserved.

WE BOTH HAVE A REPUTATION

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environmentally acceptable way. However, this technology is taking

longer to bring to market than originally envisaged.

In essence, what is needed is system � exibility in terms of both

fuels and outputs. This means that alongside the rapid expansion of

renewable power generation, gas � red power plants will be essential

in meeting demand for power by delivering the necessary level of

system � exibility and the ability to respond rapidly to changes in

demand. This can be achieved using modern gas fuelled equipment

such as fast-responding, fuel-ef� cient gas engines, together with

combined-cycle gas turbine plants. Cleaner thermal power plants will

be used to handle baseload demand. There is also likely to be major

investment in high voltage grids over the next 10–15 years as European

nations move towards a single integrated system that is much better

connected and enables cross-border transmission of electricity.

Given the scale of the challenges and complexities faced, against a

backdrop of greater demand for energy from emerging markets and a

gradual rise in economic activity globally, it is more important than ever

that all stakeholders pull together to � nd a solution to delivering a secure,

sustainable and least-cost electricity system. This will mean increasing the

ef� ciency of renewables, as well as the ef� ciency of coal and gas � red

plants, retro� tting where possible and replacing where necessary. This

also means maintaining plant � red by brown coal for baseload, while

migrating towards gas � red power plant for medium load.

Ultimately, all investments in the European power sector are long-term

and will feed through to the consumer. Therefore clarity regarding long-

term strategies of regulators together with improved transparency for

consumers must be achieved. Moreover, both government and industry

must re-evaluate the challenge of better communicating the need for

technology development in general – including nuclear, shale gas,

CCS and coal – to gain public acceptance of the necessity of these

technologies, alongside renewables, as being key to sustaining our way

of life and preserving the planet.

ABOUT POWER-GEN EUROPE 2012

Now in its 20th year, POWER-GEN Europe, which is co-located with

Renewable Energy World Europe and Nuclear Power Europe, offers

the largest and most comprehensive conference and exhibition for the

European electricity and power technology sectors.

The combination of conferences and exhibitions across the entire

spectrum of power generation is unique and is serving the vital move

towards integrating the traditional fossil fuel and fast-growing renewable

generation sectors. The show is being held from the 12 to 14 June 2012,

and is taking place at KoelnMesse, Cologne, Germany.

For more information, please visit the POWER-GEN Europe website at

www.powergeneurope.com. The UK’s Ferrybridge pilot carbon capture plant Source: Doosan Power Systems

“Given the scale of the challenges and complexities faced, it is more important than

ever that all stakeholders pull together to � nd a solution to delivering a secure, sustainable and

least-cost electricity system”

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Nuclear new build project


The Baltic nuclear power plant being built in the Russian exclave of Kaliningrad, located between Poland and Lithuania, is based on Russia’s new generation of VVER pressurised water reactors and

will comprise two identical units with individual generating capacities of 1200 MW.

The recent award of the contract for the conventional turbine island marks an important milestone for the project. Apart from featuring the new generation of Russian reactors, the project represents the � rst nuclear power plant project in Russia to involve the participation of foreign suppliers for its critical components. The conventional island will be built by Alstom-Atomenergomash (AAEM), a joint venture established in 2007 between Alstom and OAO Atomenergomash, part of Russia’s state-owned Rosatom Group.

Under a €875 million ($1.15 billion) contract signed this February, AAEM will supply and install the major equipment, including Alstom’s Arabelle™ steam turbines, generators, condensers, moisture separator

reheaters, low-pressure and high-pressure feed water heaters, feed water tanks and various other auxiliary equipment. This is the joint venture’s � rst large order and the share of equipment to be manufactured in Russia will exceed 50 per cent in accordance with the Arabelle turbine production localisation programme for nuclear power plants based on Russian reactor designs. In the future, this share is expected to exceed 70 per cent.

Under a separate contract, AAEM will deliver conceptual and basic design studies of the turbine island, turbine hall layout studies, process studies and steam and water loop studies to its customer OJSC NIAEP, the general contractor of the project, and again part of the Rosatom Group.

The Baltic nuclear project has two main goals: to provide a reliable supply of electricity to the Russian enclave of Kaliningrad and to offset the lack of electricity in neighbouring nations by exporting power to those countries.

Last month Alstom-Atomenergomash signed a €875 million deal to supply and install the critical

components for the Baltic nuclear power plant in Russia. The company’s Philippe Anglaret and

Olivier Mandement explain why this is a landmark contract, both for Alstom and Russia

Olga Gassan-zade & Kristian Tangen, Point Carbon

Baltic project marks milestone in Russian nuclear power sector

Machining of the rotor of the Arabelle steam turbine, which is now designed to work with the new generation of large-scale nuclear reactors



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HALF-SPEED TURBINE TECHNOLOGY THE NATURAL CHOICE

In a nuclear power plant, the reactor unit size in general dictates

the choice of the turbine technology. With full-speed steam

turbine technology reaching its limits at around 1000 MW,

half-speed technology is clearly the dominant technology for above

1000 MW. At 1200 MW, half-speed technology can be used

ef� ciently under a large range of reactor and site conditions. The

decision to move to the new reactor unit size under AES-2006 (VVER-

1200) therefore made steam turbines based on half-speed technology

the natural choice for the Baltic nuclear power station.

Half-speed technology is the only technology that can ef� ciently

handle the very large quantity of relatively ‘cold’, wet and low-pressure

steam produced by large nuclear reactors. The lower stress levels

achieved with steam turbines that use half-speed technology ensure high

reliability and longevity over long periods. Half-speed technology also

allows the use of longer last-stage blades (LSB) offering large exhaust

areas, which is a key parameter to achieve the best performances in

relatively cold areas.

Consequently, around 85 per cent of all nuclear power plants with

a power output above 900 MW are equipped with half-speed steam

turbines; and all nuclear power plants with a power output greater or

equal to 1200 MW are equipped with half-speed turbines.

AAEM was established to equip the turbine islands of nuclear power

plants constructed in Russia under the Federal Target Programme with

half-speed turbines based on Alstom’s Arabelle technology.

The Arabelle steam turbine is widely acknowledged as the best

half-speed turbine on the market. It offers outstanding power output (from

1000 MW to 1900 MW), ef� ciency and reliability, using a speci� c

architecture and welded-rotor technology developed by Alstom. A fully

validated and advanced Arabelle design provides proven reliability

and performance for the new generation of reactors.

Previous generations of steam turbines for nuclear plants feature one

double-� ow high-pressure (HP) cylinder in which the main inlet steam

� ow is divided into two symmetrical � ows. After expansion, the steam is

led to the moisture separator reheaters (MSRs), where it is � rst dried and

then superheated by a derivation of the main steam. Superheated steam

is then fed to each of the four or six low-pressure (LP) � ows (with two or

three LP modules respectively, depending on back-pressure conditions)

for � nal expansion down to the condenser pressure.

ARABELLE’S UNIQUE IP SECTION

In an Arabelle turbine, the steam expands in a single-� ow HP path

and is then divided to feed the two MSRs. The two superheated

steam � ows are again joined and expanded in a single � ow

intermediate-pressure (IP) section. This IP section is unique, and

Arabelle is currently the only saturated steam turbine for nuclear

plants with an IP expansion not integrated in the LP modules. The

� nal split, to feed two or three double-� ow LP cylinders, is done at

a relatively low-pressure level – around three times lower than in the

earlier generation of nuclear steam turbines.

In order to reduce overall turbine length, the HP and IP expansions

have been regrouped in a combined HP/IP cylinder, similar to those

sometimes used in fossil � red applications except for their much larger

size. A saturated steam nuclear steam turbine will accommodate an

inlet volume � ow roughly � ve times greater than a fossil � red unit

of the same nameplate rating because of the combination of much

lower steam inlet pressure and temperature.

The most striking feature of the Arabelle technology is an

architecture that makes the best use of the high-ef� ciency single-

� ow steam expansion. The single-� ow arrangement ensures higher

ef� ciency because of the reduction of secondary losses that develop

at the root and at the tip of the steam path blades.

With this unique arrangement, the single-� ow steam expansion is

maintained typically from the inlet pressure of 60 bars to 70 bars

down to approximately 3 bars. Sixty per cent of the delivered power

Turbine speed 1500 rpm

Steam inlet pressure 68 bar(a)

No. of turbine casings 3 (1 combined HP/IP + 2 LPs)

Generator 4 poles, H2 and H

2O cooled

Moisture separator reheater 2-stages reheat

Condenser 2 pressure levels (double vacuum)

Number of feed-water heating stages 7 (4 LPs + 1 deaerator + 2 HPs)

Reactor thermal power 3212 MWth

Extraction to district heating network 300 MWth

“Aerodynamics has also been optimised and the last stages bene� t from the 3D pro� les developed

by advanced calculations and now made possible by modern manufacturing techniques. In

particular, the last two diaphragms feature bowed pro� les and not the straight pro� les used in the

previous generation of machines”

Half-speed turbine technology is the dominant technology for ratings of over 1000 MW

Table 1: Technical data



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output comes from this single-� ow steam expansion performed with

the best ef� ciency. The overall gain in ef� ciency permitted by the

single � ow architecture as compared to the former architecture is

estimated to be at least 1 per cent.

The Alstom turbine’s last-stage blades (LSB) for the Baltic nuclear

application have a length of 1430 mm. This type of LSB provides

an exhaust area well suited to the steam mass � ow provided by

the reactor and to the ultimate heat sink conditions found at site. Its

design, with an integral snubber for reliable operation and a � r-tree

root attachment for easier access during inspection, is well adapted

to the long inspection intervals targeted by the present generation of

nuclear power plants.

Thanks to the � rm vibration control provided by the snubber

connection, this type of blade has the bene� t of weighing less than

free-standing blades of the same length. With these relatively light

blades it is possible to de� ne a bearing structure able to withstand

the postulated inbalance created by a LSB failure.

Its aerodynamics have also been optimised and the last stages

bene� t from the 3D pro� les developed by advanced calculations

and now made possible by modern manufacturing techniques. In

particular, the last two diaphragms feature bowed pro� les and not

the straight pro� les used in the previous generation of machines.

Welded rotor technology is another key feature of Alstom’s steam

turbines and gas turbines. For very large rotors, it permits the best

control of the material inner properties. Because of the reduced stress

levels in welded rotors compared to shrunk-on disks rotor design,

steel with lower yield strength can be selected for better resistance to

stress corrosion cracking while maintaining the required properties

for the disks supporting the last stage blades.

ACHIEVING OVERALL CYCLE EFFICIENCY

While the steam turbine design is important to achieve high overall

cycle ef� ciency, all elements of the steam and water cycle need to be

analysed and the ef� ciency losses minimised.

In most of the older operating units, heating steam is taken from the

live steam and the steam reheat is achieved in a single-stage reheater.

With modern units, however, the thermodynamic cycle is improved by

the addition in the MSR of an extra heating stage, fed from a HP cylinder

steam path extraction point. Final reheat temperature is kept the same

using only half the live steam � ow used for the single-stage reheater.

This replacement of main steam by partly expanded HP steam improves

cycle ef� ciency by 0.3 to 0.6 per cent depending on cycle conditions.

MSR terminal temperature difference and pressure drop have a direct

impact on unit ef� ciency.

The feedwater heaters con� guration has also been optimised. The

steam turbine will be adapted to the reactor by selecting the pressure

of the HP extraction feeding the last HP heater to match the desired

reactor feed water temperature. Experience shows that for Arabelle

units, the steam is best extracted after the HP fourth stage and that

the desired feedwater temperature can be reached by simple steam

path adaptation.

To raise the feedwater temperature to this level, a series of regenerative

feedwater heaters using extraction steam from the turbine will be used.

The recommended con� guration includes seven extraction levels with

four LP heaters, one deaerator and two HP heaters, i.e. one heater more

than in previous generations. In addition, forward recovery pumping of

condensates from the LP heaters is used to increase the plant net output.

All those improvements have a measurable impact on the plant power

output, so any additional cost will be recovered.

Arabelle steam turbine’s international footprint – successfully commissioned at China’s 2160 MW Ling Ao nuclear power plant



In order to meet the speci� c requirements of the Baltic project, the

steam turbine will be designed to accommodate the steam needs

of a nearby district heating network. The Arabelle original turbine

architecture, with distinct HP and IP steam paths, is particularly well

suited to extract relatively large amounts of steam at two distinct

pressure levels: at around 10 bars (the steam extraction is then located

at the HP steam path exhaust) and at around 3 bars (corresponding to

the pressure level at the IP steam path exhaust).

In the particular case of the Baltic project, up to 300 MWth will

be extracted from the steam turbine to feed a district heating heat

exchanger located in the plant.

The half-speed Arabelle turbine technology is currently the most

powerful on the market, capable of delivering up to 1900 MW and

offering excellent resistance to corrosion and stress corrosion cracking,

together with a long service life – 60 years, extended inspection

intervals and facilitated maintenance.

SERVING THE RUSSIAN AND INTERNATIONAL MARKETPLACE

Arabelle turbines are now part of a growing list of units installed around

the world. Russia aims to triple its share of nuclear power in its energy

mix (currently at 11 per cent), replace older plants and export new

ones, and the Baltic nuclear project is part of that strategy. The current

timetable aims to bring the � rst unit onstream in 2016 and the second

in 2018.

In late 2008, AAEM conducted a feasibility study to design the

turbine-generator package for Russia’s Seversk nuclear power station

in the Tomsk region of Western Siberia. It was originally slated for

completion by 2015 and 2017 but was deferred, partly because of a

fall in power demand caused by the global recession.

In May 2011, AAEM received a €3 million engineering contract

– the VVER-TOI technical project – to develop the design of a turbine

hall incorporating the Arabelle turbine and associated equipment with

the latest generation of VVER reactors called VVER TOI (technological,

optimised, innovative design).

This valuable experience positions Alstom as an important partner

ready to serve the Russian market, as well as the international

market, with a 1000–1900 MW turbine technology that is unique in

the marketplace.

Philippe Anglaret is vice-president of Business Development Nuclear

and Olivier Mandement is director of Product Promotion Nuclear at

Alstom-Atomenergomash


Customized special control valves

For the energy producing and consuming industry

WELLAND & TUXHORN AG

A R M A T U R E N - U N D M A S C H I N E N F A B R I K

Gütersloher Straße 257 | D-33649 Bielefeld | Tel. +49 (0)521 9418-0 | Fax. +49 (0)521 9418-170, -156 | www.welland-tuxhorn.de | [email protected]

• HP-, IP- and LP-

turbine–bypass–systems

• turbine emergency stop valves

• turbine control valves

• steam conditioning valves

• feedwater control valves

• minimum flow control valves

• cooling water injection valves

• boiler start up valves

• boiler blow down valves

• desuperheater valves

• hydraulic actuating systems

THE AMERICAN SOCIETY

OF MECHANICAL ENGINEERS


Q&A

PEi: In your role heading up ABB’s business activities across sub-Saharan (Southern and East) Africa, what is driving your company’s particular interest in the region at this time?

CP: We want to be in Africa for many reasons, but here are just a few headline facts: Africa is forecast to have GDP growth at a rate twice that of the rest of the world, it has 30 per cent of the world’s mineral resources, it has a fast growing population and currently 600 million people still have no access to electricity. We are seeing a steep increase in population growth and in GDP growth across the region.

PEi: What extent of this growth do you see being in the electricity sector?

CP: Figures produced by the Energy Information Agency predict power generation capacity doubling by 2035 across Africa. Rehabilitation will see investment of $4 billion by 2015, new transmission and distribution (T&D) about $10 billion and new power generation $12.5 billion over the same period. When it comes to access to electricity, the average is around 15–17.5 per cent and even less if you just take sub-Saharan Africa.

PEi: What are some of the key factors driving this growth?

CP: The mining and minerals industry, as well as the oil & gas sector are looking at massive growth in the coming years. Capital expenditure in these sectors is expected to be $35 billion up to 2015 and these industries rely for the most part on electricity from the grid. Without grid connection, these projects are not viable. ABB is involved in building infrastructure to enable power to reach these mines, for example.

PEi: What is ABB’s strategy in approaching business in this region?

CP: Our intention is to work from our existing hubs in Egypt and South Africa to focus on the ten countries where we see the best potential in power infrastructure, usually driven by investment in oil & gas. These countries are Angola, Cameroon, Democratic Republic of Congo (DRC), Kenya, Mozambique, Nigeria, Ghana, Senegal, Tanzania and Ivory Coast. Of course we are in other African countries as well, including projects in Namibia and Botswana in recent years, but the ten countries mentioned above are where we see the best prospect of investment.

With electricity generation capacity predicted to double and new T&D � nancing to hit $10 billion,

Africa offers vast power potential. Carlos Poñe, ABB’s manager in South Africa, tells PEi how he has

picked his ‘top ten’ countries for investment and why he expects Africa to be one of his company’s

outstanding growth region.

Out of Africa comes unlimited opportunities

Poñe expects to see a number of private investors moving into solar in the region, and a signi� cant solar capacity being added over the next 20 years

Carlos Poñe, ABB’s Africa country manager


Q&A



Q&A

PEI: How do you plan to operate out of these two hubs?

CP: We have established a strong foundation in Egypt and South Africa from where we can service the two African sub-regions (Southern and Central). We have local production and engineering centres, providing resources to neighbouring countries which we can supplement with high-tech imports from our European operations and cost-competitive technology from India and China.

PEi: How does Africa compare to other parts of the world in terms of business opportunities?

CP: If you take Africa, excluding the Maghreb, we have achieved orders of around $1 billion a year. Going forward, we expect ABB in Africa to produce growth faster than the ABB Group as a whole. By 2015–2016 we would target to double the annual order intake from present levels.

PEi: What do you see as the main challenges to this vision of business opportunities?

CP: Outside of the two hub countries, I believe the two main challenges will be � nancing and skills. The projects we are working on are often complex long-distance transmission lines using sophisticated technology and local utilities currently rely on international consultants to bridge the knowledge gap.

PEi: To what extent is energy ef� ciency an issue in Africa?

CP: In South Africa, for example, Eskom has a big drive for energy ef� ciency and last year they placed a big � rst phase order with us to replace or upgrade most of the motors and variable speed drives in their power system. Motors and machines are areas where utilities can really make a lot of ef� ciency savings. Also, big industrial customers who use a lot of electricity will be looking at ways to improve ef� ciency and reduce carbon emissions either by reducing power consumption or to produce more with the same amount of electricity.

PEi: Just referring now to South Africa, what prospects do you see for independent power producers (IPPs)?

CP: The question for IPPs up until now has been a lack of clarity in policy but this is likely to be resolved fully soon. The department of energy recently received 53 expressions of interest for renewable energy project bids, representing a potential capacity of more than 2000 MW – so we see a huge interest. There is also interest from big customers planning independent power projects in conventional power generation, either building their own or seeking outside investors. Sasol has bought a number of gas turbines and is producing power using its own gas, whereas Anglo American is working with investors to invest in power for their own mines. On a smaller scale we also see the sugar industry interested in ethanol plants.

PEi: Do you see any issue with access to the grid for IPPs?

CP: The government will produce its policy document on this early this year, and then it will be up to them and the regulator to make sure investors in the power sector are comfortable with the rules for grid access. Although Eskom owns all the transmission and distribution assets, the government is its principal shareholder so the decision will be out of its hands.

PEi: How do you foresee the prospects for meaningful amounts of wind and solar power generation across Africa?

CP: If you exclude the Maghreb, few African countries have enough wind resources to sustain big investments, whether it is onshore or offshore. In South Africa you do not have long periods with wind and the coastal depths make offshore more challenging. In solar however, South Africa is already planning a 1500 MW development near Upington and that is just the beginning. In addition to this, you will see a number of private investors coming into solar and I can see signi� cant solar power capacity being added over the next 20 years. We see good prospects for CSP [concentrating solar power] in the region and have experience in Spain and Germany we can point customers to.

PEi: Where else can South Africa expect to get its power from?

CP: There is a huge debate about nuclear. I would not rule out South Africa adding another 8000–10 000 MW of nuclear power in the next 20 years or so as it seeks to maintain its position as the powerhouse of the region. It has no more hydroelectric resources to exploit so any hydropower would need to be imported from neighbouring countries, but South Africa has been asking itself the question as to how reliant it wants to be on other, potentially unstable countries? Either way, South Africa needs to build the capacity equivalent to a new Eskom in the next 20 years.

PEi: How do you see ABB contributing to this growth?

CP: There are huge opportunities in Africa. ABB is really making a difference here. We are linked with the big steps that Africa is taking, for example the HVDC link we built in the DRC, and are currently upgrading, was the � rst one in Africa. The � rst HVDC Light project in Namibia was executed by ABB, we have done two small solar projects for Eskom and the � rst big mine in Mozambique was electri� ed, with the DCS from ABB, so we are everywhere there is big investment.

“Africa is forecast to have GDP growth at a rate twice that of the rest of the world, it has

30 per cent of the world’s mineral resources, it has a fast growing population and 600 million

people still have no access to electricity”

© 2011 CRS Holdings, Inc. All rights reserved.

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Maintenance, repair & overhaul


Shifting opportunities in the global MRO marketThe international market for power plant MRO (maintenance, repair and overhaul) is evolving fast, in

response to global shifts in economic power and the development of national energy policies aimed

at safeguarding the environment or enhancing energy security.

The abbreviation MRO can cover multiple support services.

From preventive, predictive and corrective measures, to asset

management software, shutdown management, reverse

engineering and damage analysis, keeping a plant up-and-running

requires specialists in a multitude of techniques. In challenging

applications, for instance, Tyco’s MRO services can also cover

development, testing and manufacture of bespoke or custom-made new

valves to meet the most exacting requirements.

But across an international market that differs wildly from territory to

territory – in line with local regulations and preferences, the maturity

of the market, and the services available – the No.1 priority for MRO

remains safety. Even where cost may play a role in other decisions, the

primary deciding factor in selecting maintenance and repair suppliers

remains experience and reputation rather than cost, both for equipment

and servicing.

If Europe’s economic dif� culties continue, they could open up a

greater share for lower cost suppliers. Yet even in Greece, Italy and

Spain – where the situation is worst – cost-analysis decisions have

mainly affected OEMs, although service suppliers must prove their

value in these markets to stay a� oat.

The service industry remains stable in the face of such economic

challenges for one key reason: saving money now can cost money

later. Condition monitoring, in-line repairs and servicing documentation

can all help prevent costly breakdowns with long periods of downtime

– as well as potentially dangerous operating conditions.

A NEW LANDSCAPE FOR GERMANY

Certain territories have withstood the Eurozone’s challenges more

effectively. The MRO market in Central Europe – including the

Netherlands, Belgium, Austria and Switzerland – remains stable.

Shutdowns and servicing are well established, with legislation enforcing

regular maintenance, especially in the nuclear industry.

In Germany, however, the MRO landscape has changed

considerably. With all its nuclear plants now scheduled for shutdown

over the next decade, some analysts see a risk of energy shortages

during periods of high demand.

Eight plants, representing 8 GW – or 8 per cent of Germany’s energy

generation1 – were shut immediately after the Fukushima incident. Prior

to these closures, about 17 per cent of its energy was provided by

nuclear power, a gap that will need to be � lled.

Moving to renewables quicker than anticipated calls for expertise

in design, engineering and maintenance. Shutdown times will need

to be minimised as there is unlikely to be a reasonable energy surplus

for some time. In 2011, renewable energy accounted for about 20

per cent of Germany’s energy production2. This � gure will need to

Peter Weissenfels, Tyco Valves & Controls, Germany

Fossil fuels are expected to supply a diminishing fraction of global power Source: Tyco



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increase to account for the loss in nuclear. In the meantime, Germany

will switch from being an energy exporter to an energy importer,

looking to nuclear power from neighbours such as the Czech Republic

and France.

This rapidly changing energy landscape brings a paradigm shift for

MRO suppliers. Germany’s feed-in tariffs and aggressive renewable

energy targets – 35 per cent of energy generated by 20203 – means

the solar photovoltaic market, onshore and offshore wind, biomass and

geothermal power are all likely to grow.

MRO suppliers will have to adjust their offering to meet these market

demands and ensure reliable plants in the future. Signi� cant policy

changes over recent months have led many operators to schedule

only small-scale shutdowns as they wait and watch until the industry

settles down. For the short term, though, the MRO market will be

largely unchanged – although Germany’s nuclear plants are closed

or closing, they still require regular maintenance throughout the

decommissioning period.

POWER IN THE UK

A recent report suggested that up to 90 per cent of the UK’s energy

needs could be met with renewable sources by 20304. By summer

2011, the UK had the world’s eighth-largest capacity in wind energy,

of 5.7 GW5. But conventional power sources remain strong, despite

investment in wind energy and research into tidal stations around

Britain. Consumers in the UK are wary of nuclear power, and the

The nuclear sector now places greater focus on regular maintenance Source: Tyco


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planning process required in setting up new plants re� ects this. In general, the UK’s power market represents potential for growth in conventional power.

THE MARKET IN EMERGING ECONOMIES

Outside the European Union, the power industry is growing � ercely to meet the needs of developing economies, such as those of the BRIC territories: Brazil, Russia, India and China. In Russia and Korea, the nuclear industry has potential for growth, and Tyco is watching these markets with interest. With new power plants in different stages of development in Russia, Ukraine, China, Korea, Czech Republic and France, the service industry looks set to expand.

In emerging territories, cost plays a larger role. Currently, many plants carry out their own servicing and repair. Outsourcing MRO is less common, as the in� uence of the stringent standards evident in the European and North American industries slowly grows in emerging markets. For example, plants in Asia are increasingly looking for higher levels of training and experience from their engineers. China still builds, on average, one conventional coal � red station each week, providing great market potential for MRO suppliers, ensuring that the speed with which the industry is growing does not mean quality or safety-compromised plants.

CASE STUDY: ELECTRABEL DOEL POWER STATION, BELGIUM

Tyco Valves & Controls completed a €1.5 million ($2 million) service contract in November 2011, encompassing a major shutdown service package at Electrabel’s Doel nuclear power station, near Antwerp in Belgium. SABO and Sempell – two of Tyco’s specialist service brands – together completed shutdowns at all four Doel sites, including the 1000 MW Doel 3 and 4.

SABO and Sempell collaborated to provide streamlined, ef� cient and consistent service with a single point of contact, and to ensure an optimal number of engineers were available on site at all times. This approach minimised downtime and allowed the plants to restart as quickly as possible. The four Doel sites provide around 30 per cent of Belgium’s energy demand, so ef� ciency of service was a key requirement. The length of shutdown for each plant was about two-to-three weeks, with up to 40 highly quali� ed service technicians working on the project around the clock, managing the shutdowns from start to � nish.

As with all nuclear projects, MRO services require thorough documentation to enforce strict guidelines. This documentation was provided as part of the service package. The sites were visited six weeks before commencing the shutdown to scope the project and create an inventory of spare parts needed before work began.


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This collaboration between SABO and Sempell is an example of

how a company such as Tyco can deliver a comprehensive service

package using its expertise in service and the power industry.

Shutdowns at the Doel plant are large-scale projects and require

ef� cient service to keep downtime to a minimum. A smooth, ef� cient

shutdown was a key priority for the on-site engineers.

SABO is a leader in maintenance services for power, oil & gas

and petrochemical environments and has been a preferred supplier

for Electrabel for more than 15 years. This is the � rst time that SABO

and Sempell have collaborated, combining expertise gained from

decades of experience operating in the power sector. Both brands

met Electrabel’s requirements for international certi� cation, including

EMAS (Environmental Management and Audit Scheme) and ISO

14001.

The Electrabel contract is likely to reach €2 million this year, with

major shutdowns required every two years and more minor shutdowns

annually. The � nal site, Doel 1, was shutdown in November, and

required 32 service technicians on site 24 hours a day.

A NEW FOCUS ON NUCLEAR MAINTENANCE

The recently increased scrutiny on regular maintenance operations

has not troubled experienced MRO suppliers that already exceed

standard industry regulations and guidelines. In the nuclear industry,

plants undergo exhaustive maintenance and shutdowns every two

years to maintain the necessary high standards of safety when

working with nuclear fuel.

Recent questions over the future of nuclear, for instance, have

not affected Tyco’s commitment to the industry or its investment in

innovation and quality programmes. With 50 years of experience in

the nuclear sector, the power generation industry is a critical segment

of the Tyco Flow Control business. Through commitment to all areas

of the power industry, including manufacturing and production as

well as maintenance, repair and service support, Tyco aims to meet

the needs of a changing and evolving industry.

IS THE FUTURE RENEWABLE?

The solar market in South Europe – in particular, in Portugal and

Spain – continues to grow. As solar technology develops, power

stations are seeing higher temperatures and pressures requiring more

demanding valves. Molten salt stations require high temperatures

and pressures, and can be corrosive on valves and pipelines.

Concentrated solar power (CSP) plants can reach temperatures

exceeding 500 °C when sunlight is re� ected effectively off the giant

surrounding mirrors.


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Improving SERVICE

Improving STANDARDS

Hydratight’s expertise in the complex and

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• World leader in maintaining plant productivity

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• Tools available for sale or rental

Find out more at

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Storage of solar power has long been one of the challenges in

making it a viable energy source. In Spain, a landmark in CSP

technology was achieved in 2011, with a plant that keeps generating

electricity even after dark. The cooling of the molten salt overnight

generates power in a steam form, and can keep providing power for

up to 15 hours after the sun sets.

Breakthroughs such as this demonstrate the achievements that can be

reached and point to a viable future with renewable energy sources.

With its heavy investment and testing in solar power, Spain is currently

the only country on target to meet Europe’s 20 per cent desired cut in

CO2 emissions by 2020.

MRO is yet to become established in the � edging renewables

sector. Power plants are so new that accepted guidelines on how

often maintenance is required are still to be determined. But, as

technology develops and renewable power becomes more ef� cient,

it is likely that renewables will gradually become more of a focus for the

MRO industry. Regular summits now share knowledge, best practice

and technological advances within the industry as businesses and

suppliers at all stages of the chain collaborate and progress together.

Europe’s carbon dioxide (CO2) targets can only be met through

exploring new technologies; and feed-in tariffs continue to stimulate

interest and investment.

For the foreseeable future, renewable energy sources are unlikely

to overtake nuclear and conventional power plants as Europe’s

primary source of energy generation. But events move quickly. In line

with demanding CO2 targets, stimulus packages and feed-in tariffs,

more than €150 billion was invested in renewable energy projects

in 20106. Ongoing support in maintenance and repair services will

ensure ef� ciency in power generation, and that investments in new

technologies deliver results in the long term.

REFERENCES

1. Financial Times, Berlin bets big on renewable energy, 8 June 2011

2. CEPEX seminar, The future of nuclear power in a post-Fukushima

world, 19 October 2011

3. Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit

Gesetz zur Neuregelung des Rechtsrahmens für die Förderung der

Stromerzeugung aus erneuerbaren Energien, August 2011

4. WWF, Positive Energy: how renewable energy can transform the

UK by 2030, 25 October 2011

5. World Wind Energy Association (WWEA) Half-year Report 2011,

July 2011

6. Bloomberg New Energy Finance Global Trends In Renewable

Energy Investment, 2011

DIARY DATES


April

The 5th Asian Conference on Power and Energy Systems2nd – 4th AprilPhuket, Thailandwww.iasted.org/conferences/home-768.html

New Zealand Wind Energy Conference2nd – 4th AprilHamilton, New Zealandhttp://windenergy.org.nz

Indo-Power 20124th – 6th AprilJakarta, Indonesiawww.indo-power.com

Renewable Energy Conference11th – 12th AprilHalifax, Canadawww.energyevent.ca

EWEA 201216th – 19th AprilCopenhagen, Denmarkhttp://events.ewea.org/annual2012

Smart Electricity World Asia16th – 19th AprilSingaporewww.terrapinn.com

Power & Electricity World Asia16th – 20th AprilSingaporewww.terrapinn.com

The Utility Show Asia16th – 20th AprilSingaporewww.terrapinn.com

International Conference on Smart Grids18th – 21st AprilPorto, Portugalhttp://www.smartgreens.org

HydroVision India19th – 21st AprilNew Delhi, Indiawww.hydropowerindia.com

POWER-GEN India & Central Asia19th – 21st AprilNew Delhi, Indiawww.power-genindia.com

Renewable Energy World India19th – 21st AprilNew Dehli, Indiawww.renewableenergyworldindia.com

Annual Asia Gas Congress 201219th – 20th AprilBeijing, Chinawww.cdmc.org

Nuclear Fuel Cycle Conference 23rd – 25th AprilManchester, UKwww.icheme.org

May

International Solar Conference11th MayBudapest, Hungaryhttp://renexpo-budapest.com

Power & Energy Africa 201215th – 17th MayBali, Indonesiahttp://expogr.com/kenyaenergy

Renewable Energy Forum10th – 12th MayNairobi, Kenyahttp://ases.org

World Congress on Water, Climate & Energy 201213th – 18th MayDublin, Irelandwww.iwa-wcedublin.org

GeoPower Mexico15th MayMexico City, Mexicowww.greenpowerconferences.com

Solar Power Mexico15th – 16th MayMexico City, Mexicowww.greenpowerconferences.com/solarmexico

Biogas Poland15th – 16th MayWarsaw, Polandwww.greenpowerconferences.com

Clean Power Asia15th – 17th MayBali, Indonesiawww.cleanpower-asia.com

All Energy 201223rd – 25th MayAberdeen, UKwww.all-energy.co.uk

June

EURELECTRIC Annual Convention & Conference4th – 5th JuneMalta, Greecewww2.eurelectric.org

Asia Clean Energy Forum4th – 8th JuneManila, Philippineswww.asiacleanenergyforum.org

Windpower 20123rd – 6th JuneAtlanta, GA, USAwww.windpowerexpo.org

ASME Turbo Expo11th – 15th JuneCopenhagen, Denmarkwww.asmeconferences.org

Intersolar Europe11th – 15th JuneMunich, Germanywww.intersolar.de

POWER-GEN Europe12th – 14th JuneCologne, Germanywww.powergeneurope.com

Renewable Energy World Europe12th – 14th JuneCologne, Germanywww.renewableenergyworld-europe.com

Nuclear Power Europe12th – 14th JuneCologne, Germanywww.nuclearpower-europe.com

Inter Solar Europe13th – 15th JuneMunich, Germanyhttp://conference.intersolar.de

World Clean Coal Week, India Focus14th – 15th JuneNew Delhi, Indiawww.solarplaza.com

World CSP Asia Forum 201218th – 21st JuneBeijing, Chinahttp://www.cspasia.org

Offshore Wind Risk Summit 201219th – 20th JuneHamburg, Germanywww.windenergyupdate.com

20th European Biomass Conference & Exhibition18th – 20th JuneMilan, Italywww.conference-biomass.com

Power and Energy Systems25th – 27th JuneNaples, Italywww.iasted.org

Global Wind Power Finance and Investment Congress26th – 27th JuneLondon, UKwww.greenpowerconferences.com

Ocean Energy 201226th – 27th JuneBrussels, Belgiumwww.greenpowerconferences.com

July

Smart Electricity World Australia2nd – 4th JulyMelbourne, Australiawww.terrapinn.com

The Utility Show Australasia2nd – 4th JulyMelbourne, Australiawww.terrapinn.com


DIARY DATES

UK-Pakistan Coal Conference 20123rd – 5th JulyLeeds, UKhttp://store.leeds.ac.uk

HydroVision International17th – 20th JulyLouisville, KY, USAwww.hydroevent.com

International Conference on Smart Grid Systems24th – 26th JulyKuala Lumpur, Malaysiawww.icsgs.org

August

COAL-GEN15th – 17th AugustLouisville, KY, USAwww.coal-gen.com

September

The Energy Event11th – 12th SeptemberBirmingham, UKwww.theenergyevent.com

HUSUM WindEnergy18th – 22nd SeptemberHusum, Germanywww.husumwindenergy.com

27th EU PVSEC24th – 28th SeptemberFrankfurt, Germanywww.photovoltaic-conference.com

DistribuTECH Brasil25th – 27th SeptemberRio de Janeiro, Brazilwww.distributechbrasil.com

HydroVision Brasil25th – 27th SeptemberRio de Janeiro, Brazilwww.hydrovisionbrasil.com

RENEXPO27th – 30th SeptemberAugsburg, Germanywww.renexpo.de

October

POWER-GEN Asia3rd – 5th OctoberBangkok, Thailandwww.powergenasia.com

Renewable Energy World Asia3rd – 5th OctoberBangkok, Thailandwww.renewableenergyworld-asia.com

VGB Congress Power Plants 201210th – 12th OctoberMannheim, Germanywww.vgb.org

Queensland Power & Gas22nd – 23rd OctoberBrisbane, Australiawww.terrapin.com

POWERCON 201223rd – 26th OctoberAuckland, New Zealandwww.ieee.org

Renewable UK 201230th October – 1 NovemberGlasgow, UKwww.renewable-uk.com/events/annual-conference/

November

POWER-GEN Africa6th – 8th NovemberJohannesburg, Republic of South Africawww.powergenafrica.com

International Symposium on Biomass and Waste 12th – 15th NovemberVenice, Italy www.venicesymposium.it


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Mr.Mr. He Hendendersorson,n,, , phophophophone:ne:nene +4+4+4+4+4449 49 49 449 49 49 4181181181181811 212121 216-16-16 16 144444 4 · m· m· ailailil: p: phenhenderderrsonsosonn@er@ c-o-onlinline.de

To meet tourism demand in the

autonomous region of Tibet, the

Chinese government is launching

a project to build a new airport for

which Himoinsa has supplied three

generators suited to the high altitude

and extreme climatic conditions.

Himoinsa supplied three

generators: two 3-phase, 50 Hz,

1060 kVA generators and one 50 Hz,

1900 kVA generator, incorporating

Mitsubishi engines and Stamford

alternators, a Deep Sea controller,

battery charger, battery and cable

system, preheating water jacket, oil

pump, antifreeze and oil.

The generators are capable of

starting up within seven seconds of a

power failure and of providing more

than 250 hours of continuous energy

The new air� eld – also part of the

national plan to increase economic

investment in the area – is 4500

meters above sea level, in one of the

most inaccessible areas in the world.

The construction and expansion of

Xigaze Airport is one of the largest

projects of China´s Civil Aviation

Administration, and is regarded as

part of National Plan 11 that the

government has implemented to boost

the economy. The airport has received

an investment of 484 million Yuan and

its construction has been under way

for the last two years.

But the project faces the challenge

of having a stable power source

to provide a reliable and secure

electricity supply in this inaccessible

area. The altitude at which the

facilities are located is the single

most dif� cult factor hindering the

construction and supply of power.

Weather conditions are also

extremely harsh, with winter

temperatures averaging 6.3 °C during

the day, and about -20°C at night.

There is also a wide � uctuation in

temperature and potential rainfall of

422.2mm.

To achieve an optimal energy

supply, the project required installation

of generators for the emergency

supply of electricity, mainly for airport

lighting, terminal building construction

and the headquarters building.

The airport environment required

generators that could be quickly

and easily started in adverse

weather conditions; heavy-duty

equipment with low energy loss at

high altitudes, capable of providing a

fast and ef� cient power supply. The

characteristics of the airport made it

necessary to have high power supply

reliability with guaranteed 24-hour

operation and 99% availability,

ensuring the supply of electricity

under extreme weather conditions

Himoinsa has supplied a product

that meets project requirements and

is also capable of working under

extreme conditions with the quality

typical of the brand. Himoinsa´s

equipment has obtained a certi� cate

of Quality Inspection and Supervision

of Machinery at high altitudes above

sea level, as well as an inspection

report issued by the Center for

Quality Inspection and Supervision

of machinery at high altitude above

sea level.

India’s Su-Kam Power Systems and

the USA’s Kohler Power Systems are

introducing a range of diesel and gas

generator sets. The companies have

entered into a supply, distribution

marketing pact and have come up

with a Hybrid Solution (Inverter &

Genset) concept.

The unique features of the Hybrid

Concept are: more customisation

options and a lower carbon footprint;

priority-based load sharing between

inverter & DG sets; highly ef� cient and

effective under critical power situation.

The smallest genset in its category

comes with no external exhaust and

forms an ideal power backup solution.

The USP of the product is the graphic

user interface which regularly updates

the user on the voltage, frequency and

current being supplied to the load. It

also prevents blackouts by regularly

updating the user on the fuel level,

engine temperature, battery voltage,

engine oil pressure.

The � rst products being launched in

the generators range is the

5 KVA diesel and 14 KW gas gensets.

Su-Kam, a leader in power back

systems in India with presence in

70 countries worldwide, provides an

extensive range of power back-up

solutions such as Inverters, UPS

systems, Generators and Solar

Solutions. Su-Kam has played an

in� uential role in consolidating and

upgrading the inverter industry from

the unorganised sector to organised

sector, thereby adding immense value

to the power industry as a whole.

Cosworth has been contracted by

Rolls-Royce Distributed Generation

Systems to demonstrate the potential

of its market-leading heavy fuel

engine technology.

The companies have entered into

a research and development agree-

ment to further the development of

Cosworth’s super lightweight engine

technology for Rolls-Royce portable

and mobile power systems. Systems

will be targeted at land defence

applications that need smaller, lighter

weight solutions than are currently

available.

Unlike lightweight heavy fuel

engines offered by other suppli-

ers, Cosworth’s engines use true

compression ignition, which delivers

unbeatable fuel ef� ciency, the ability

to run on a wide range of heavy fuels

such as diesel, JP5 and JP8 with

varying cetane and octane ratings,

and low maintenance.

Ryan Hood, business unit leader

at Cosworth, said: “Cosworth is fully

committed to a long-term relation-

ship with Rolls-Royce.

“The current focus is on a 2kW

ultra lightweight generator. The intent

is to develop an affordable volume

production engine that is around 70%

less mass than currently available

engines, with a better fuel consump-

tion rate.”

Cosworth Group was founded

in 1958. With headquarters in

Northampton, UK, the company

employs 350 staff across Europe, the

USA and India.

Himoinsa supplies gensets to new airport in Tibet

Su-Kam and Kohler launch diesel and gas gensets

Cosworth and Rolls-Royce work on 2 kW generator

60 www.peimagazine.com

GensetRoundup

PEi - March 2012

GensetRoundup

www.peimagazine.com 61PEi - March 2012

GE’s � exible, ef� cient, trailer-

mounted TM2500+ aeroderivative

gas turbine recently received

ecomagination quali� cation for

its ability to help power cities and

industries during environmental,

economic and emergency power

challenges.

GE’s TM2500+ joins the FlexAero

LM6000-PH, LM6000-PCe, LM6000-

PF and LMS100 among GE’s growing

list of ecomagination-quali� ed

products.

When compared with the previous

version, the TM2500, it provides

customers with faster, more � exible

distributed power generation by

combining high ef� ciency, better fuel

gas consumption and fuel � exibility,

coupled with lower emissions in both

the 50 and 60 Hz segments.

The TM2500+ is a workhorse in

the global aeroderivative mobile � eet.

With a GE Aviation CF6-6 engine at

its core, the TM2500+ resides on two

trailers and can provide up to 31 MW

of power generation in days due to its

unique roll-on, roll-off capabilities for

air, ship or road transportation. It is

the portable version of the LM2500+

aeroderivative gas turbine, which has

been the backbone of the global � eet

since it was unveiled in 1969.

“GE’s legacy of innovation and

American ingenuity is showcased in

the TM2500+,” said Darryl Wilson,

president and chief executive of

aeroderivative gas turbines for GE

Power & Water.

“Our engineers took the successful

TM2500 and drove lean, innovative

processes to make it even better to

meet the needs for fast, emergency

or mobile power.”

GE’s two-trailer design was

enhanced to include the LM2500+

engine, allowing for higher megawatt

output and ef� ciency performance.

The TM2500+ offers multi-fuel

� exibility operating on either natural

gas or liquid distillate fuels and is

easily converted from 50 Hz to 60 Hz.

It can reach full power in less than 10

minutes and is capable of achieving

nitrous oxide (NOx) emissions down

to 25 ppm with water injection.

GE’s TM2500+ aeroderivative

gas turbine operating on natural gas

at ISO baseload conditions has an

ef� ciency of 37 per cent at 60 Hz

and 35 per cent at 50 Hz with water

injection for NOx control.

To earn ecomagination

quali� cation, a product is evaluated

for its ability to signi� cantly and

measurably improve the customer’s

environmental and operating

performance.

Green Order, a consulting � rm,

helps verify the rigorous, multi-

tiered quali� cation process to

ensure accuracy and thorough

documentation of technological

performance.

At 60 Hz and when compared

to GE’s TM2500 aeroderivative gas

turbine operating at ISO baseload

conditions, the TM2500+ emits

approximately 5700 fewer metric

tonnes of carbon dioxide (CO2) per

year at 30 MW of output, equivalent

to the annual CO2 emissions of

approximately 1120 cars on US

roads.

After two years of constant

development, the new version of the

TCG 2032 (the largest MWM genset)

was launched in January 2012.

Optimized spark plugs and turbo-

charger technology have resulted in

electrical ef� ciency of up to 44.2 per

cent with an output of 3333 to

4300 kWe (in the V12 and V16 cyl-

inder versions). Thanks to excellent

operational experience, the period of

operation up to the major overhaul

has been increased from 64 000

hours to 80 000 hours.

After the successful launch of

the TCG 2020K in April 2010, MWM

extended its product range in the

autumn of the same year to include

the TCG 2020K1 system, which

delivers up to 1,000 kWe. This new

genset with electrical ef� ciency of

up to 40% can be operated with

natural gas under many different

environmental conditions. It combines

low operating and maintenance costs

with the dynamic load response

capabilities and robustness of the

tried and tested TCG 2020K series.

Customers are thus guaranteed an

excellent price-performance ratio

and a shorter amortization period.

Furthermore, nano-coated intercoolers

also improve operational safety when

the intake air is of poor quality.

MWM recently launched an

improved TCG 2016 C which can also

be used with biogas. It is available

for both 50 and 60 Hz. The TCG

2016 C series is available in the V8,

V12 and V16 versions. Systematic

optimization of the ignition and the

TEM (Total Electronic Management)

control system guarantee improved

load balancing over all the cylinders.

The anti-knocking controller has also

undergone further improvement. The

combination of optimized throttle

valves, a new actuator for the gas

mixer and a nano-coated intercooler

ensures that the genset lasts even

longer and is even less sensitive to

external in� uences.

Thanks to these improvement

measures, the new genset achieves

a maximum ef� ciency of 42.8% with

biogas.

GE’s TM2500+ joins ecomagination product portfolio

MWM introduces a new version of its TCG 2032

EquipmentRoundup


Metso has strengthened its offering for

customers in oil and gas and power

by acquiring South Korean globe valve

technology and service company

Valstone Control.

The acquisition enables Metso to

expand its offering for the oil and gas

and power industries with globe valve

technology that plays a key role in

most critical processes with extreme

pressures and temperatures.

Valstone is a privately owned globe

valve and service specialist company.

It has an established customer base in

Korean engineering, procurement and

construction (EPC) companies and in

domestic South Korean petrochemical

and power generation industries, said

Metso.

Valstone’s globe valves add to

Metso’s current wide portfolio of

control valves, making Metso one of

the strongest control valve suppliers,

said the company.

Metso has ambitious targets

to develop its valve business and

services. This acquisition has been

preceded by a series of investments in

its global offering and presence, also

testifying to Metso’s commitment to

growth, said the � rm.

Last year, Metso opened a new

valve technology center in Finland.

In 2010 Metso, opened a new valve

facility in Shanghai, China, and the

� rm is currently expanding its valve

production premises in the US as well

as building a new supply and service

center in Vadodara, India. Additionally,

Metso has high-class industrial valve

facilities in Brazil and Germany.

“This is a strong message for our

customers globally. We are in the

business with a long-term strategy to

continuously improve our technology

offering and services to bene� t our

customers who are facing increasing

operating pressures and demand for

more advanced applications,’’ said

Markku Simula, president of Metso

Automation’s Flow Control

business line.

The acquisition of Valstone is

intended to strengthen Metso’s position

in the Asia-Paci� c market area, which

the company sees as one of the main

growth areas for its valve technologies

and services. In particular, the

agreement provides Metso with a key

position to further improve its presence

in the domestic South Korean market.

With a combined technology offering,

Metso can now offer South Korean

customers a more comprehensive

product offering and services.

Moreover, Metso further plans to

develop partnerships with leading

South Korean engineering, procurement

and construction companies. The

region’s EPC companies have gained

a strong market share in recent years,

especially in the growing Middle East

market, by winning contracts from

major global customers.

“It is a clear bene� t for us that

we are now close to South Korean

and other EPCs in the region. They

are important partners, and we can

offer them technology that is known

and proven for them. This improves

our position signi� cantly when these

companies choose key suppliers for

new projects,” added Simula.

Meggitt Sensing Systems, a Meggitt

group division, has introduced the

Endevco model EM46BE, a combined

1/4” free-� eld pressure microphone

and iTEDS-enabled preampli� er

set (per IEEE 1451.4), designed

for general purpose and larger

channel count precision acoustic

measurements within a variety of

applications.

The Endevco® model EM46BE

comes in a preassembled, pre-

calibrated kit, consisting of the model

EM40BE ¼” prepolarized free-� eld

microphone and the model EM26CB

¼” ISOTRON® preampli� er with

Microdot coaxial connector, both

constructed of stainless steel for high

durability.

Units are assembled in a

clean room environment to avoid

contamination of the contacts and are

calibrated together to form a reliable

acoustic measurement system. These

combined units are fully repairable.

With a frequency response from

10 Hz to 40 kHz (±1 dB) and a wide

dynamic range of 40 dBA to 160 dB (re.

20 μPa), the Endevco model EM46BE

is designed according to guidelines

set forth by IEC 61094 Class 1, the

highest industry standards for precision

acoustic product reliability.

Incorporation of iTEDS technology

allows for the microphone and

preampli� er to be recognised by any

smart-transducer compatible input

module. When connected, the analyser

will derive data such as microphone

type, serial number and sensitivity,

which can be read by the application

software for simpli� ed test setups.

Silicon Designs has announced the

global market introduction of its new

model 2445 series, a family of single-

ended low-noise analogue MEMS

capacitive accelerometer modules,

designed to support a variety of low-

to-medium frequency

triaxial measurement

requirements.

The rugged

design of the model

2445 features three

orthogonally mounted

low-noise MEMS

capacitive sensing

elements, packaged in a nitrogen-

damped, epoxy sealed lightweight

aluminum housing, � nished with a

±5V single ended output.

The outputs are referenced to

external ground. Units are available

with individual standard measurement

ranges from ±2 g to ±400 g, with all

designed for reliable operation over

a temperature range of -55 °C to

+125 °C.

Non-standard units with enhanced

measure-

ment and

temperature

ranges,

as well as

alternative

housings

and outputs,

are available

upon request.

The model 2445 features

a six-wire connection with an

instrumentation ampli� er on each

axis, for higher drive capability and

low-impedance output.

Meggitt launches iTEDS enabled microphone and preampli� er

Silicon Designs launches triaxial MEMS capacitive accelerometers

Metso enters globe valve business by acquiring South Korean technology and service company Valstone Control

Conference & Exhibition

6 - 8 November 2012Sandton Convention Centre

Johannesburg, Republic of South Africa

www.powergenafrica.com

GLOBAL TECHNOLOGY FORLOCAL SOLUTIONS

Owned and Produced by: Co-Located with: Presented by:

About POWER-GEN Africa

The inaugural POWER-GEN Africa event will provide comprehensive coverage of the power needs, resources, and issues facing the electricity industries across Sub-Saharan Africa.

Global attention is being paid to Africa’s power requirements as the continent continues to experience rapid growth and development, driving the need for more widespread and reliable electricity.

With POWER-GEN Africa’s conference and exhibition focusing on all aspects of the power industry and bringing together the world’s leading power equipment suppliers with those developing power infrastructure in this dynamic region of the world, this is a new event you cannot afford to miss.

Invitation to Exhibit

If your company supplies products or services to the power generation and transmission and distribution industries in Africa, then POWER-GEN Africa is essential to reaching the key industry professionals and decision makers.

A three day event, POWER-GEN Africa serves the industry’s information and networking needs with a dedicated trade show �oor featuring the prime movers in the power industry.

For further information on exhibiting and sponsorship, please contact:

Leon StoneT: +44 (0) 1992 656 671E: [email protected]

FOR FURTHER INFORMATION PLEASE VISIT WWW.POWERGENAFRICA.COM


EquipmentRoundup


Setra Systems has announced the

global market introduction of the Model

730, a compact, low-cost variable

capacitance (capacitive) vacuum

manometer.

Available in full-scale pressure

ranges from 10 Torr to 1000 Torr,

the Model 730 offers 0 to 5 VDC or 0

to 10 VDC output that is both linear

with pressure and independent of

gas composition. Its standard ±0.5%

percent of reading accuracy, with

option for optimization to ±0.25%,

ensures a wide dynamic range,

along with negligible temperature

coef� cients across its 0 to +50°C

compensated range, making units

relatively insensitive to thermal

transients and environmental changes.

Temperature coef� cients of ±0.25% of

reading/+50°C on zero; and ±1.35% of

reading/+50°C on span are standard.

Units operate from a standard 12

to 30 VDC power source and can be

con� gured with a 9- or 15-pin D-sub

or 5-pin terminal strip electrical

connection, all with ‘plug-and-play’

industry standard pin-outs. A variety

of vacuum � ttings and interconnecting

cables are also available.

Design of the Setra Systems Model

730 employs a welded, all Inconel

wetted parts sensor for compatibility

with virtually all process chemistries.

Suzlon Group has announced a new

turbine in the 1.5 MW range focused

on harnessing Class III, low-wind

sites. The new turbine is speci� cally

designed to deliver high ef� ciency

and cost effective power generation

even at low wind speeds, therefore

increasing the size of the market and

making wind power projects even

more � nancially competitive than

they are today, said the company.

The S8X is designed for the Indian

market, where most potential lies

in medium-to-low wind sites. This

turbine is designed with advanced

rotors, with diameters of 86.5 and

89 metres, and a tower height

of 90 metres, which will bring

improvements in energy yields of

between 15 to 20 per cent over the

current S82 – 1.5 MW offering in low

wind conditions. Additionally, the S8X

is designed speci� cally to operate in

high temperatures, and to meet the

current and future grid requirements

in India.

This turbine is an evolution of

the proven S82 – 1.5 MW platform,

with about 2400 MW in installations

consistently delivering 97 per cent

plus availability (uptime). The new

design also incorporates several

key features from the S9X suite of

turbines, helping to achieve higher

reliability, improved power output,

higher safety and improved lightening

protection. Like the S9X, the new

turbine offers an improved pitch and

yaw system, hub assembly, main

frame and other key components,

ensuring easier maintenance, greater

reliability and higher uptime.

Emerson Process Management is

automating two new 1000 MW,

ultra-supercritical, power-generating

units at the Jiangsu Xinhai power

plant with its OvationTM expert

control system. The new units are

the � rst 1000 MW units to be built

by Jiangsu Guoxin Investment Group,

which owns and operates the plant

in Lianyungang city, near the East

China Sea in the Jiangsu province.

By using ultra-supercritical

technologies – which offer both

higher ef� ciency and lower

emissions than traditional coal-

based electricity generation –

Jiangsu Guoxin Investment Group

is supporting economic growth in

Eastern China in an environmentally

responsible way.

Emerson’s Ovation technology has

been selected for 40 of 64

1000 MW ultra-supercritical units in

China. The system’s ability to more

tightly control operations is essential

for achieving and maintaining ultra-

supercritical unit ef� ciency.

Because it was the company’s

� rst experience constructing and

operating 1000 MW units, Jiangsu

Guoxin Investment Group’s leaders

and experts wanted to be sure

they selected a supplier with a

successful track record automating

these types of plants. Emerson

offered a proven, state-of-the-art

control solution backed by superior

technical expertise that was just

what the company was looking for,

which is prompting Jiangsu Guoxin

Investment Group’s interest in

collaborating with Emerson on future

energy projects.

Dating back to 1941, Jiangsu

Xinhai is one of the oldest operating

power plants in China. The facility

currently has a generating capacity

of 660 MW (2 X 330 MW). The new

units, Units 5 and 6, will replace two

old, less-ef� cient 220 MW units that

have been decommissioned. Unit

5 is slated to go into commercial

operation during fall 2012; Unit 6

is scheduled to come online the

following year.

Emerson will supply a total of

66 Ovation controllers and 16

workstations. Ovation technology

will monitor and control boilers

and turbines supplied by Shanghai

Electric Group. The Ovation system

will also perform data acquisition,

as well as manage each unit’s � ue

gas desulphurisation (FGD) system,

modulating control system, sequence

control system, electrical control

system, furnace safety supervisory

system, feed-water turbine control

system and balance-of-plant

processes. In all, Ovation will manage

28 000 I/O points. In addition to

Ovation, Emerson will also supply

nearly 1000 Rosemount differential

pressure, level and � ow transmitters.

“Industry leaders like Jiangsu

Guoxin Investment Group understand

the importance of choosing the right

automation for ultra-supercritical

and supercritical power plants,” said

Bob Yeager, president of Emerson

Process Management’s Power &

Water Solutions.

Setra Systems Variable Capacitance Vacuum Manometer

Suzlon launches S8X 1.5 MW low-wind turbine for India

Emerson automates two 1000 MW USC units in eastern China

19-21 APRIL 2012, PRAGATI MAIDAN, NEW DELHI, INDIA

SWITCHING ON INDIA’S POWER FUTURE

Flagship Media Sponsors Supporting Organisation

Event Organisers

®

�

JOIN INDIA’S WORLD-CLASS POWER EVENT

POWER-GEN India & Central Asia together with Renewable Energy World India and HydroVision India is the region’s premier power event that features a world-class conference programme, with discussions about topical issues, recent developments and dynamic exhibition �oor showcasing the very latest products and equipment serving the conventional, renewable and hydro power sectors all under one roof.

Major Attractions

67 78��7��7��7�� 7��7 �� 7��7��7 the globe

67 ��7��7�� 7�� 7 ��7��7�7��7 � ��

67 ��7��7�� 7�� 7��7��7�� 7

67 ��7��7��7��7��7��7��

67 7��7��7�� 7��7��7�� 7� �7in�uential players

67 7 ��7�7!��7��7��7��7�� 7�� 7��7 product developments

67 7��7��7�7��7��7�� 7�� 7��7the region

Event Highlights:

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7 7 $7%�&7�7'�� 7(��7%�� 7�7��

7 7 $7%�&7��7��7(��7%�� 7�7 �

– Mr. Girish B Pradhan, Secretary, Ministry of New & Renewable Energy

– Representatives from Alstom, National Hydroelectric Power Corporation, National Thermal Power Corporation and Bharat Heavy Electricals Limited

67 7)��7*��7��7+� �� #7How Can India Balance Supply and Demand?

67 7 ��7(� �� #7Minimizing Conventional Power Emissions, Plant Refurbishment & Modernization, Hydro Power Technologies and Integrating India’s Renewables

Be part of the region’s leading power event and exchange ideas, knowledge and experiences.

Register before 23 March 2012 and save up to 10% with the Early Bird Discount.

Exhibition EnquiriesKelvin MarlowExhibit Sales ManagerT +44 (0) 1992 656 610,7-..7/�07811�72327��47��5��&��

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POWER-GEN India & Central Asia Renewable Energy World India and HydroVision India

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Amanda KevanExhibit Sales ManagerT +44 (0) 1992 656 645,7-..7/�07811�72327��47��5��&��


EquipmentRoundup


Meggitt Sensing Systems, a Meggitt

group division, has introduced

the Endevco model 256 series, a

family of miniature piezoelectric

accelerometers with integral

electronics, designed for modal

and structural analysis and general

vibration measurements on smaller

structures and objects, as well as

HALT/HASS/ESS; shaker testing;

package integrity testing; wind

turbine vibration measurements;

satellite ground testing; medical

device testing; vehicle modal and

structural analysis; and automotive

component durability testing.

The model 256 series is offered

in choice of adhesive (256) or thread

mounted (256HX) versions, with

available sensitivities of

10 mV/g (±500 g range) and 100

mV/g (±50 g range), both with

milli-g resolution, said Meggitt

Sensing Systems.

These products’ lightweight

(3.5 gm) design effectively

minimises mass loading, according

to its maker. The accelerometers

incorporate the use of Meggitt’s

own proprietary piezoelectric crystal

sensing element, operating in

annular shear mode, which provides

highly stable output sensitivity over

time, excellent frequency response

and low base strain, for exceptional

thermal transient stability, said

Meggitt.

In addition, this series uses a built-

in low noise microelectronic ampli� er

which transmits its low-impedance

voltage output through the same two-

conductor cable that supplies required

constant current power. A dielectric

layer isolates case ground from the

mounting surface. The hermetically

sealed top connector and welded

housing provide long-term reliability,

even in harsh, corrosive or higher

humidity conditions.

Supplied with the Endevco model

256 series is mounting wax and

the model 3061A-120, a 10-foot

cable assembly with temperature

rating to +177 °C (+350 °F),

featuring a male 10-32 miniature

coax connector at one end and a

male BNC at the other. Optional

accessories, sold separately,

include the Endevco model 133

three-channel piezoelectric signal

conditioner; the model 2775B

signal conditioner; the model 2793

16-channel signal conditioner; the

model 4416B low-noise battery

powered signal conditioner; the

model 4999 16-channel low-pass

� lter signal conditioner; the model

6634C vibration ampli� er; and

the model 4990a (Oasis) modular

rack-mounted signal conditioner.

All Endevco accelerometers are

accompanied by a comprehensive

� ve-year product warranty.

Belden’s new OpenBAT range from

Hirschmann is the � rst modular system

to enable industry-standard WLAN ac-

cess points and clients to be con� gured

via the internet. This range, compris-

ing the BAT-R (IP20) and BAT-F (IP67)

series, supports the IEEE 802.11n

transmission standard, which facilitates

data speeds of up to 450Mbps in both

the 5GHz and the 2.4GHz bands.

Both series are based on entirely

new hardware and also have a

powerful HiLCOS operating system with

extensive management, security and

quality of service functions plus layer

3 IP routing. The number of wireless

modules and Ethernet LAN ports can

be con� gured individually, as can the

power delivery concept.

This also applies to the over a

dozen certi� cates that qualify these

access points and clients for use

in, for example, the power supply

industry, the gas and oil sector or rail

transportation. They can be used to

set up fast and stable infrastructure

and meshed networks plus wireless

distribution systems (WDS) or

point-to-point connections. Several

thousand different designs can be

con� gured using these OpenBAT

devices. The range thus allows

tailored solutions with an optimal

price-performance ratio.

For applications in the energy sector,

angle measurement frequently

involves exacting requirements in

terms of safety, con� ned installation

space, maximum measurement

accuracy and high price sensitivity.

To meet such demanding

applications, Contelec has launched

the high-precision Vert-X 16

industrial rotary encoder. At just

16 mm diameter, the rotary encoder

features fastening tabs reinforced by

metal sleeves to ensure reliable and

sturdy attachment.

With axial output leads, the rotary

encoder is convincing with 12 to 14

bit resolution, ±0.3% linearity of the

measuring range, programmable

angles and an IP65 protection rate.

Another attractive feature is the long

service life, speci� ed at over 50

million movements.

The compact Vert-X 16 angle

gauge is also extremely � exible, and

is available in redundant versions

as well as variable wave amplitudes

and lengths.

It is optionally available with

interfaces including ratiometric

and PWM signal outputs. A digital

SPI interface can be integrated to

provide a direct digital output of the

absolute angle values in

14-bit resolution.

Belden presents OpenBAT series from its Hirschmann range

Contelec launches compact rotary Vert-X 16 encoder

Meggitt introduces 256 series of Endevco miniature accelerometers

Owned & Produced By: Presented By: Supported By:

ORANGE COUNTY CONVENTION CENTER :: ORLANDO, FL :: WWW.POWER-GEN.COM

[ SAVE THE DATE ] DECEMBER 11-13, 2012

INFINITE

POWERPOWER-GEN International is the industry leader in providing comprehensive coverage of the trends, technologies and

issues facing the generation sector. As the need to operate more ef� ciently and cost effectively becomes increasingly

important, no other event bridges challenges with solutions like POWER-GEN International.

More than 1,200 companies from all sectors of the industry exhibit each year to bene� t from the exposure to 20,000

attendees. Displaying a wide variety of products and services, POWER-GEN International represents a horizontal look at

the industry with key emphasis on new solutions and innovations for the future.


EquipmentRoundup


Yokogawa has extended the

communication capabilities of the

ROTAMASS 3 Coriolis � owmeter

series by adding a Modbus interface.

Modbus communications via an RS-

485 connection will be available

in both Modbus RTU

and ASCII transmission

modes.

The fast and

simple Modbus

communication

at up to

57 kbit/s

enables access

to all relevant process

measurements including

– but not limited to – mass/

� ow, density and temperature,

according to Yokogawa. All

measurement variables are included

as readable address registers.

Compared to other � eld

communication protocols like

FOUNDATION Fieldbus or Pro� bus,

the Modbus protocol involves no

costly changes to the conventional

4-20 mA wiring, allowing a point-

to-point or multi-drop network to be

realised with minimal effort, said

Yokogawa.

In addition to the Modbus

communication, the standard

I/O interfaces such

as 4-20 mA,

pulse/frequency

and status in/out

are still available

for control and/or

monitoring purposes.

For easy con� guration

of meter measurements and

settings, a free ROTAMASS Modbus

communication tool will be delivered

with each ROTAMASS. This software

tool is equipped with different

functions, clearly shown in an

explorer view, said Yokogawa.

Morgan Thermal Ceramics

announces the availability of its

BTU-Block Board product line. Part

of a family of microporous insulation,

BTU-Block materials are designed

for use as back up insulation for high

temperature applications in Non-

Ferrous metals, steel processing,

chemical processing, power

generation, passive � re protection, as

well as commercial appliances and

heaters.

BTU-Block insulation provides

ultra-low thermal properties

throughout the entire temperature

range and when used as a part of

an insulation lining, reduces energy

waste, temperature variability,

insulation thickness and cold face

temperature.

BTU-Block insulation uses an

optimised blend of raw materials to

produce an insulation material with

a uniquely low thermal conductivity.

Unlike traditional � bre or ceramic-

based insulation, microporous

insulation is based on ultra-� ne

particles of fumed silica, metal

oxides, and reinforcement � bres.

These particles and � bres create

a structure that limits air convection,

heat conduction and radiation

transmission.

“In high temperature

manufacturing processes, heat

loss through the insulation lining

represents wasted energy and

increased manufacturing costs,”

said Allen Reisinger, Morgan Thermal

Ceramics’ product manager for

microporous insulation.

“Using BTU-Block materials as

part of the insulation package will

help to retain more energy and lower

overall operating costs.”

BTU-Block materials are up to

four times more ef� cient than other

traditional insulation, so designers

can reduce overall insulation lining

thickness without sacri� cing thermal

performance, according to Morgan

Thermal Ceramics.

Such a reduction allows � exibility

in the lining design, increases

capacity and lowers operational

costs. In addition, using BTU-Block

materials in an insulation lining

helps lower the system’s cold face

temperature, which will minimise

metal fatigue, eliminate hot spots,

reduce shell operating temperatures

and increase operational safety.

Yokogawa adds Modbus interface to ROTAMASS 3 Coriolis � owmeter

Morgan Thermal Ceramics launches BTU-Block insulation materials

The Therma Differential Thermometer

is a two channel digital thermometer

that allows the user to use two type K

thermocouple probes simultaneously,

said its maker, the UK’s Electronic

Temperature Instruments (ETI).

The display can be switched

to show either probe T1 or T2

temperature or the temperature

difference between the two probes

(T1 minus T2). This thermometer is

ideal for setting up � ow and return

boiler temperatures, balancing

central heating systems, and

checking and recalibrating room

thermostats.

The Therma Differential

thermometer measures temperature

over the range of -100 up to

299.9 °C with a 0.1 °C resolution or

300 to1372 °C with a 1 °C resolution.

The thermometer features a custom,

LCD display with °C/°F, T1, T2,

diff, hold, open circuit, low battery

indication and an optional backlight.

The unit incorporates an

auto-power off facility that

automatically turns the instrument

off after approximately ten minutes,

maximising battery life, said ETI.

Each unit is housed in a durable,

ABS case that has an integrated

rubber seal to ensure IP67 protection

complete water tightness and help

reduce the possibility of damage in

harsh environments.

ETI offers an extensive range of

interchangeable type K thermocouple

temperature probes, for a variety

of different HVAC applications. A

protective silicone boot complete

with foot stand and wall mounting

magnet is also available as an

optional accessory.

The Therma Differential

Thermometer manufactured in the

UK, where it is priced at £75 ($118)

plus VAT.

ETI launches its new HVAC Therma Differential Thermometer


��

Our recent archievements

1x127 MW, Pioneer CCPP, India

1x32 MW, Essar – Matix CCPP, India

1x320 MW, Hatay CCPP, Turkey

1x122 MW, Ramat Hovav CCPP, Israel

1x125 MW, Hagit CCPP, Israel

1x138 MW, Eshkol CCPP, Israel

1x45 MW, Stendal pulp and paper, Germany

1x39 MW, Lund biomass, Sweden

1x44 MW, Sleaford biomass, United Kingdom

2x145MW, Yunus Emre fossil power plant, Turkey

1x175 MW, modernisation, Salmisaari heating power

plant, Finland

1x110 MW, modernisation, Sabarmati fossil power

plant, India

Please

visit our booth

# 1120 at Power

Gen India

& Central Asia

2012

We offer optimum project solutions for:

� �� In applications:

� �� !�� "�� #�� "�� /�� #��"� $��

%-./0 �.�� #� ��"#�� /�� #�� "�� /�� &�� " �� '�� (�� #�� #�� .�� "��" �� )* �� )+,* $� �� "� �� # �(�� )** �� #�� "�

��Tylova 1/57, 301 28 Plzen, Czech Republic, Phone: + 420 378 185 000; Fax: +420 378 185 910 ��

��

EquipmentRoundup


GE has announced the release of

its End-to-End Fault Detection,

Isolation & Restoration (FDIR/FLISR)

system, a complete distribution

automation solution that enables

utilities to significantly improve

the reliability of their distribution

network, according to the company.

The new solution is capable of

detecting power system outage

locations and automatically

sectionalising and reconfiguring

distribution circuits to restore

power to as many customers as

possible, said GE.

The new FDIR/FLISR advanced

distribution automation system

can often reduce typical customer

outage time from hours to under a

minute as well as improve a utility’s

SAIDI and SAIFI reliability indices,

claims GE.

This powerful solution from GE

includes the Multilin D400 DA, a

substation-based FDIR system that

can automate up to 20 distribution

feeder circuits; the Multilin DGCS

Switch Controller; the Multilin

DGCR Recloser Controller; and

the MDS Wireless Communication

network, which seamlessly work

together enabling easy deployment

across the distribution network.

This solution is very scalable

and can be rolled out incrementally

across the system providing

utilities with the flexibility for

staged deployments as their

network requires. This distributed

substation and field intelligence

solution provides additional

reliability with the ability to restore

local parts of the network even

when wide-scale problems such as

loss of backhaul communications

to the control center occur.

For more information about GE’s

Distribution Automation Reliability

Improvement System, please visit:

http://www.gedigitalenergy.com

The CPM 500 is a new mobile

device for measuring and analysing

cylinder pressure in combustion

engines. The device is designed

to deliver highly precise readings

that can be used for optimum

adjustment of the engine

settings of the combustion engine,

thereby contributing to reducing

fuel consumption and harmful

emissions.

Heinzmann describes the

newly developed CPM 500

(Cylinder Pressure Monitoring) as

a useful service tool that further

expands the company’s product

portfolio. The CPM 500 offers a

range of benefits in comparison

to conventional measurement

processes, according to the

company.

For example, it provides highly

accurate readings, can be used

with 2- and 4-stroke applications

and is very easy to use, said

Heinzmann. Handy dimensions

and reliable battery power supply

makes the CPM 500 a portable

device that can be used in any

possible application, according to

its maker.

In terms of measurement

accuracy, the CPM 500 performs

considerably better particularly

than mechanical indicators,

according to Heinzmann. This will

enable combustion engine settings

in the future to be adjusted even

more precisely.

At the same time, the devices

will make it easier to meet the

increased requirements for

emissions values. The precise data

recording is guaranteed by the

use of the high-precision and an

equally robust pressure sensor,

according to Heinzmann.

The pressure sensor is also

impressively durable and reliable

which keeps the maintenance

costs of this service tool very

low, said the company. The CPM

500 is easy to use compared

to mechanical indicators which

means a considerable saving in

time for recording and analysing of

readings.

Heinzmann lists the CPM 500’s

advantages as:

• Precise cylinder pressure

measurement on diesel engines

over several cycles

• robust and cost-effective

pressure sensors

• important contribution to engine

optimisation

• improvement of combustion

performance

• reduction of fuel consumption

and emissions

• easy-to-use electronic metering

and recording device

The Heinzmann Group describes

itself as one of the leading system

suppliers worldwide for engine and

turbine management solutions,

specialising in all relevant

technologies.

Semaphore, a CSE Global company,

announces that the T-BOX LT and

MS RTU product lines for remote

monitoring and SCADA system

applications are now available with 3G

cellular modems.

The new modems are compatible

with GSM quad band and UMTS triple

band, 3G cellular networks, worldwide.

Two versions are distinguished by

UMTS compatibility. The US version

supports Band V (850 MHz) while an

EU version supports Band VIII

(900 MHz).

T-BOX LT is a very compact,

rugged, Ethernet RTU with up to

32 I/O points, said Semaphore.

T-BOX MS is a modular system

that can accommodate up to 20

communications ports and more than

800 I/O points.

T-BOX employs an innovative,

decentralised architecture that

enables the complete integration of

programmable automation, alarm

management, data logging and IP

telemetry in a single, rugged package.

Simple yet powerful platforms

leverage web technologies and push

messaging via e-mail, SMS text

and FTP. T-BOX systems are easy

to con� gure and offer dramatically

reduced costs versus traditional PLC

and SCADA architectures.

Semaphore’s sees its RTU

products as ideal for a broad range of

monitoring and control applications

across many sectors.

GE Energy introduces end-to-end fault detection system

Heinzmann unveils mobile device for measuring cylinder pressure

Semaphore launches 3G cellular modems for RTU product line

BRINGING THE WORLD TOGETHER FOR HYDROPOWER.

LITERALLY.

Owned & Produced by:

* Combined with Co-Located Russia Power.

** Combined with Co-Located POWER-GEN India & Central Asia AND Renewable Energy World India.

MARCH 5-7, 2012, MOSCOW, RUSSIA

JULY 17–20, 2012 | LOUISVILLE, KY | USA

APRIL 19-21, 2012, NEW DELHI, INDIA

September 25-27, 2012, Rio de Janeiro, BBrasil

www.hydrovision-russia.com

www.hydroevent.com www.hydrovisionbrasil.com

www.hydrovisionindia.com

QUICK FACTS:

• Russia’s premier event dedicated to the hydropower industry.

• 5,876* Attendees

• 37 Exhibitors

QUICK FACTS:

• The largest dedicated event for the global hydropower market.

• 3,451 Attendees

• 311 Exhibitors

QUICK FACTS:

• Part of India’s most important power-related event.

• +6,000** Attendees

• 190** Exhibitors

QUICK FACTS:

• Latin America’s newest event focused on the hydropower industry.

• 650 Attendees

• 85 Exhibitors


EquipmentRoundup


PEi Webcard

ADVERTISEMENT INDEX

AGGREKO INTERNATIONAL POWER PROJECTS 33

AMERICAN WIND ENERGY ASSOCIATION 31

ANSALDO ENERGIA C4

AUMA RIESTER GMBH 22

AVEVA SOLUTIONS LTD 43

BABCOCK & WILCOX CO 6-7

BECHTEL 19

BFI AUTOMATION 57

CARPENTER TECHNOLOGY CORP 51

CATERPILLAR INC. 39

CRESTCHIC LIMITED 72

DOOSAN HEAVY INDUSTRIES & 49

CONSTRUCTION CO LTD

DOOSAN SKODA 69

DR THIEDIG 35

ERC EMISSIONS-REDUZIERUNGS-CONCEPTE GMBH 59

GE ENERGY 45

GGB BEARING TECHNOLOGY 54

HAMON THERMAL 23

HILLIARD GMBH 3

HYDRATIGHT 56

HYDROGROUP EVENTS 71

HYTORC 9

HYTORC 11

INDIA POWER EVENTS 65

LUVATA 5

MAGALDI POWER S P A 25

MAN DIESEL SE 37

MEMBRANA 20

MTU MAINTANANCE-BERLIN BRANDENBURG GMBH 29

PERKINS ENGINES COMPANY LTD 15

PETRO CANADA 27

POWER-GEN AFRICA 63

POWER-GEN ASIA C3

POWER-GEN INTENATIONAL 67

RENEWABLE ENERGY WORLD CONFERENCE- 53

NORTH AMERICA

SIEMENS AG 17

TOGNUM ASIA PTE LTD C2

TOPOMASTER 21

TURBOTECT LTD 55

VESTAS WIND SYSTEMS 13

WELLAND & TUXHORN AG 47

WOODWARD GMBH 41


CONFERENCE & EXHIBITION

IMPACT EXHIBITION & CONVENTION CENTRE,

BANGKOK, THAILAND

3 – 5 OCTOBER 2012

WWW.POWERGENASIA.COM

TOWARDS A SECURE ENERGY FUTURE

INVITATION TO EXHIBIT

Celebrating its 20th Anniversary in 2012, POWER-GEN Asia has established itself as the premier conference and exhibition

dedicated to the power generation and transmission and distribution industries.

Attracting 7,000 delegates and attendees from over 60 countries from across South East Asia and around the world, it is the leading

industry event to meet and network with senior executive and industry leaders.

Thailand’s GDP is predicted to see a 5.6% growth, leading to a 6% growth in peak power demand between 2012-2016 to 35,600

MW and 44,200 MW by 2021. With current capacity of around 28,500 MW, and despite current energy imports from neighbouring

countries, Thailand will see a shortfall in capacity in the next few years.

To gain access to the opportunities within the power industry of Thailand and wider region, you should ensure your presence at

POWER-GEN Asia 2012.

We invite you to celebrate 20 years of POWER-GEN Asia with us in Bangkok, Thailand from 3-5 October 2012.

OWNED AND PRODUCED BY: PRESENTED BY:

CO-LOCATED WITH:

Anniversary

For exhibition and sponsorship

opportunities contact:

Kelvin Marlow

Exhibit Sales Manager

T: +44 (0) 1992 656 610

C: +44 (0) 7808 587 764

F: +44 (0) 1992 656 700

E: [email protected]

For information about participating at

the conference contact:

Mathilde Sueur

Conference Manager

T: +44 (0) 1992 656 634

F: +44 (0) 1992 656 700

E: [email protected]

SUPPORTING ORGANIZATION:


Shaping the future

of energy

ansaldoenergia.it


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