Pei201309 DL

The magazine for the international power industry September 2013
Asian & Latin

American Focus
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Offcial Media Partner
POWER-GEN Brasil 2013
POWER-GEN Asia 2013
ASIAS
SOLAR BOOM
INSIDE BRAZILS
POWER SECTOR
VIETNAMS MIXED
MESSAGE
INTERCONNECTING
LATIN AMERICA
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www.PowerEngineeringInt.com 1 Power Engineering International September 2013
POWER ENGINEERING INTERNATIONAL
Contents
SEPTEMBER 2013/// VOLUME 21/// ISSUE 8
4 Industry Highlights
6 News Update
82 Diary
86 Project & Technology Update
96 Ad Index
Talking Point
16 Where and how to invest in Asia
With the economic growth of China and India slowing,
should power industry players and investors look at other
smaller Asian nations with booming economies?
Q&A
78 Benefts of turbocharger upgrade in Brazil
As ABB Turbocharging embarks on a major upgrade
contract in Brazil, the companys Reinier Bakker outlines the
challenges and subsequent success stories of the upgrade
process.
POWER-GEN Europe Best Paper Award Winners
An article based on one of the winning papers from this years
POWER-GEN Europe Best Paper Awards is featured.
52 Cutting the cost of carbon capture
Supported amine sorbents (SAS) could make post-
combustion carbon capture less costly according to the
results of a simulation.
Features
22 Joined-up thinking behind Latin American links
Latin America has ambitions to establish a fully-integrated
electricity market, but creating such a sector is notoriously
diffcult. We look at the progress so far and ask what is a
realistic time-scale for this rapidly-developing region.
68 Versatile fow meter delivers boiler performance
How an in-depth testing programme demonstrated that
thermal mass fow meters provided the solution to help
maximize the operation of the boilers at the Guohua Ninghai
power plant in China.
On the cover
Bangkoks skyline at night
Credit: iStock
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Bogota: how Colombia is targeting
power links with its neightbours p.22
1309pei_1 1 8/27/13 11:24 AM
2 www.PowerEngineeringInt.com
POWER ENGINEERING INTERNATIONAL
Contents
Meauring success: solar set for Asian boom p.34
Walking the torque: diesel gensets hold off gas p.74
Features
30 Austerity bursts the biopower bubble
Europes deteriorating economic conditions of recent
years have taken a toll on its biomass and biogas markets, as
many governments pull the plug on vital incentive
programmes.
34 Full of eastern promise for solar
Asia offers massive potential for the development of solar
power according to one European company, which has
opened a new base in Thailand.
40 Inside view on Brazils power sector
With Brazil being one of fastest-growing yet challenging
power markets in world, we hear from its regulator, its national
grid operator and the company leading the controversial
Belo Monte hydroelectric dam project.
46 Vietnam: land of challeges and opportunities
In order to achieve its ambitious capacity expansion goals
Vietnam will need to restructure its regulatory policies, power
tariffs and fuel linkages, as well as expand its fnancing and
attract foreign investment.
62 How India is beating the blackouts
A year on from the blackouts that made headlines worldwide,
we fnd out what steps India has taken to ensure they never
happen again.
74 Diesel gensets stave off gas rivals
How constant innovation and demand from emerging
markets are keeping diesel generation sets ahead of their
gas-powered competition.
SEPTEMBER 2013/// VOLUME 21/// ISSUE 8
Power Engineering International September 2013
Fuel for concern in Europes biopower market p.30
How Mumbai beat the blackouts p.62
1309pei_2 2 8/27/13 11:24 AM
1309pei_3 3 8/27/13 11:24 AM
4 Power Engineering International September 2013 www.PowerEngineeringInt.com
Industry Highlights
B
razil is one of the most captivating
countries in the world; from the
golden beaches of Rio to its lush
Amazonian forest in the west. Yet, things are
not quite right in paradise.
Despite it being a paid-up member of
the exclusive BRIC nations club, and the
largest economy in the Latin American region
(and the sixth in the world), there is growing
concern over the sustainability of Brazils
economic growth. In a recent forecast from its
central bank, the economy is only expected
to grow 2.2 per cent this year, with a timid
0.4 percentage point rise next year. Standard
and Poors goes further. In a report released
last month by the rating agency, it foresees
three years of weak growth, based on modest
exports, declining private-sector investment,
and the possibility of lower household
spending. Clearly this Latin American nation is
facing challenging times.
A particular area of concern is the
reported drying up of the much-needed and
signifcant investment to overhaul Brazils major
infrastructure, which clearly has implications
for its power sector and its future development.
According to EPE, the government-run
energy research company, electricity demand
is expected to be more than 50 per cent
higher in 2021 than it was back in 2011. Thus
the Brazilian power market has huge potential
for investors and industry players alike.
The government also has a development
plan in place. Earlier this year, the government
confrmed that a jaw-dropping 110 GW would
have to be added to Brazils installed capacity
over the next 15 years to meet demand. To
put that in context, it represents twice the
current installed capacity and eight times the
potential of the 14 GW Itaipu hydroelectric
dam, jointly operated with Paraguay.
According to 2012 fgures from the
government, hydropower was responsible
for 86 per cent of overall power production.
And Marcio Zimmermann, the federal mining
and energy secretary, has made it clear that
hydroelectricity is the fagship producer, but
also emphasized that greater investments
were needed in alternative sources, such
as wind, thermoelectric, nuclear and solar to
create a reliable generation mix.
Yet, there is a current disconnect between
what is wished for and what is actually
happening on the ground. As an example,
the government once again pushed back the
date of its A3 energy auctions by a month
from 25 October to 18 November. The concern
this postponement raises is that developers
will face an even tighter schedule to get
successful projects up and running.
The pressing nature of the situation was
also perfectly illustrated in April, when the
government was forced to deny there was a
threat of power shortages during next years
World Cup because of a lack of suffcient
infrastructure to guarantee a reliable supply.
And that is without considering the Olympics
in 2016.
Hydropower will undoubtedly continue to
be the mainstay of Brazils power mix, as it is in
many other countries in the region. One of the
fagship projects underway is the 11.3 GW Belo
Monte dam, located in the Amazonian region
of Para. Norte Energia, the power company
heading up the project consortium, recently
confrmed that a third of civil works were now
complete and that it expects the facility to
come fully on line in 2019.
However, the installation of another large
hydroelectric facility alone will not help to
plug the widening gap between supply and
demand. In recent years, Brazil has suffered
quite severe droughts, which have led to
water levels plummeting in its reservoirs and
a corresponding fall in the outputs of the
hydroelectric dams. To counteract the supply
defcit old, ineffcient and in many cases dirty
oil-fred thermal plants are fred up, which are
also expensive to run. So clearly Brazil needs to
diversify its generation mix and to do this with
some haste. Renewable energies (excluding
large hydro) are important, but again you
run into the intermittency issue, so modern,
effcient gas-fred plants are essential, as is
new nuclear build.
I dont want to say its all doom and gloom
for the Brazilian power sector because its not,
but we are in challenging times. And you know
what that means? It means there will plenty
to discuss and debate at the upcoming
POWER-GEN Brasil, which launches in Sao
Paulo later this month.
Electricity demand
in Brazil is expected
to be more than 50
per cent higher in
2021 than it was in
2011. Thus despite
challenges, of which
there are many, the
power market here has
huge potential
Dr. Heather Johnstone
Associate Publisher
1309pei_4 4 8/27/13 11:24 AM
1309pei_5 5 8/27/13 11:24 AM
News Update
INTERVIEW
World Bank takes long view on renewables growth
Last month the World Bank released its
report Sustainability for all Global Tracking
Framework, which has as one of its objectives
the doubling of the share of renewable power
generation in the global energy mix by 2030.
Its a report that looks set to be keenly
discussed at the World Energy Congress in
Daegu, South Korea, next month.
PEi spoke to Christopher Neal of the World
Banks Sustainable Energy Department and
put it to him that the doubling of renewable
power was an ambition that seems to be out
of step with economic realities, especially
when, to put it crudely, so many national
economies are broke.
Just a fortnight ago the Czech Republic
announced it was removing subsidies for
renewable power, while ahead of Germanys
elections, Chancellor Merkel served notice
of her intent to reduce the subsidy available
for renewable power. In the short term,
such happenings might suggest doubling
renewables strength is not realistic.
Youre right to say that the current
environment, with announcements being
made by European countries in the context of
the economic slump, is not encouraging, but
I think the longer term view is probably more
positive, says Mr Neal, adding that the report
launched by Ban Ki-moon was designed
to drive the initiative, making progress
measurable, and targets achievable.
In order to be able to double the share
of renewables in the global energy mix and
track, it you need a baseline, then agree on
defnitions and defne current status. Its the
frst in a series that will come every two years,
put together by 15 agencies led by the World
Bank.
Initially it was found that 18 per cent of
global energy is renewable and that includes
biomass and hydropower. Doubling it to 36
per cent by 2030 is very ambitious and where
you really see the ambition is partly about
mobilising the investment to do it.
A key element of the banks approach is in
helping to remove the barriers that currently
exist in hampering renewable energy potential
in various parts of the world.
The retreat from coal investment by bodies
such as the World Bank and European
Investment Bank is one aspect, as that
funding that might have at one time gone
into fossil fuels is now much reduced to those
generators, available only under limited
circumstances.
The signals being sent by the banks are
strong in terms of the overall global shift
towards a greener future.
The energy sector directions paper
discussed by the World Banks board in July
specifes that the World Bank will provide
fnancing for greenfeld coal only in rare
circumstances and subject to strict criteria. The
language being used refects an emerging
consensus and also refects the orientations
that are expressed in the sustainable energy
for all initiative as well. If you want to double
renewables then implicitly you think thats a
good thing to do and, indeed, its part of the
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News Update
banks climate agenda too. Neal says it isnt
only an environmental factor that informs
the institutions thinking there is also a
market element in that countries that have
a high reliance on coal face generally fewer
obstacles in getting fnancing because the
technology for using coal is well understood.
Its commercialised, and lower in cost
than others, so the case for the bank getting
involved is not as strong as in some other
areas in the energy sector where there are
more obstacles to getting fnancing.
By way of example Neal points to under-
utilised resources that could transform
much of Africa from an environmental and
economic perspective.
We are looking to mobilise and exploit
some of the geothermal potential in the Rift
Valley area of East Africa, which lies under
13 countries in that geographical region.
Hydropower is another one; less than 10
per cent of hydropower potential in Africa is
exploited at present and that tends to be more
diffcult to fnd fnancing for in the longer term
and these are areas where we are focusing
our efforts.
While Europes dysfunctional carbon
trading systems problems are well
documented, Neal is glass-half-full about the
prospects for similar schemes as well as the
European initiative itself.
I think its interesting what you say about
the Czech Republic and Germany also
and the subsidies being dropped left and
right, however China is launching a carbon
market, and there are carbon markets being
developed in subnational governments, for
example California, Quebec, Chile, Brazil,
Costa Rica and Colombia are all developing
some sort of carbon market, or emissions
trading or other forms, such as carbon taxes
in places like Turkey, South Africa and Mexico.
China often gets a bad press, not unlike
what the USSR received during the Cold War
era, however the statistics compiled by the
World Bank offer a balanced view of its record
in promoting renewable power generation.
The global tracking framework report- looks
at where the largest renewable investment is
being made, specifcally which countries are
spending the most on renewable energy and
effciency and China leads the pack in both.
There is often a very negative narrative
about Chinas role in terms of carbon footprint
- and justifably so in one sense, as its grown
more than any other country - but everything
China does the magnitude is always bigger in
its impact than what anyone else does.
The fact remains it has also done more
in terms of energy effciency and renewable
energy expansion than any other country in
the world.
China has done more
in term of renewable
expansion than
any other country
EUROPE
Europe hit by more
gas plant closures
Statkraft has decided to shut down two gas-
fred power plants in Germany, just six years
after they were commissioned.
The Norwegian frm has cited unproftability
for the decision to close 1200 MW of combined
capacity, putting the Knapsack and the
Herdecke plants in a wet reserve.
It comes not long after the decision earlier
this year to close the 510 MW Robert Frank
gas-fred plant in southern Germany.
Statkraft investor relations vice-president
Yngve Froeshaug said: Short-term power
prices have continued to fall [in Germany],
worsening the margin between power and
gas prices. Due to this, our gas power plants
in Knapsack and Herdecke, for the time being,
are out of production that is, in wet reserve.
Wet reserve means the plants could be
restarted in a relatively short time in case
market conditions change Froeshaug added.
Germanys RWE is to close up to one ffth of its
gas-fred power capacity as low demand and
a surge in renewables have made the plants
unproftable.
The countrys second largest utility has
decided to take 954 MW of gas-fuelled power
offine until the end of 2014. RWE will idle two
gas turbines with a generation capacity
of 272 MW each at its Weisweiler power
plant. The utility will also mothball its 410 MW
Gersteinwerk-F gas plant for all of next year,
as well as another 410 MW gas unit at the
Gersteinwerk-G site, which will be offine from
April 1, 2014, until the end of that year.
Meanwhile, Finlands Fortum has decided to
close down a 750 MW coal-fred power plant
near Helsinki.
The ageing plant has long been a loss
maker and been deployed purely as a back-
up power facility to the Nordic grid in recent
times.
The decision will lead to a loss of 90 jobs,
with a dozen employees taking a retirement
option. The move is prompted partly due to
falling electricity prices in Europe, driven by
Germanys shift toward renewable energy.
1309pei_8 8 8/27/13 11:24 AM
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News Update
INTERNATIONAL
Coal decommissioning market to hit $5.3bn
Greater environmental regulations and
increasingly competitive renewable energy
generation will lead to a surge in growth in
power plant decommissioning in the coal-
fred power sector in Europe and the US.
A report predicts that the market for
demolition and environmental remediation
services is set to expand as EU and US shut
coal plants, reaching $5.3bn between 2013
and 2020, as a result of continuing plant
closures.
The new research from analyst frm
Navigant Research predicts that the
coming wave of retirements offers signifcant
opportunities to the companies that will carry
out the decommissioning processes.
The report estimates the market for
decommissioning in Europe and the US will
grow from $455m in 2013 to $1.3bn in 2016,
before declining rapidly as the current feet of
ageing plants are closed.
The largest sector of the market is expected
to focus on environmental remediation,
which Navigant said will typically prove more
complex and costly than demolition, the costs
of which will be partially offset by the value of
the scrap materials that are collected.
AFRICA
Tender issued for
Botswana power plant
In an effort to address power shortage
problems, the government of Botswana has
issued a tender notice inviting bids to develop
a 300 MW coal-fred power plant.
The Ministry of Minerals, Energy and Water
Resources said the government wants the
plant to deliver power to the grid by 2016 and
by 2019 at the latest.
This year, Botswana was hit by power cuts
after the new 600 MW Morupule B power
station was beset by diffculties and failed to
go into operation.
With the deadline for submissions slated
for November, the government expects to
determine its IPP procurement process from
January 2014.
UK and China to lead
ten-fold global
offshore wind surge
Africas largest gas-fred power plant at
The global offshore wind market will thrive
throughout this decade, with its capacity
rising from 5.5 GW last year to 51.2 GW in 2020,
according to a new report.
The analysis from research frm GlobalData
states that the UK will lead the way in new
installations, yet it adds that by 2020 China
will be the largest wind power market, as it
attempts to reduce its carbon footprint while
increasing electricity production in rural areas.
According to the report, China has
doubled its cumulative wind capacity every
year between 2006 and 2011, growing at a
compound annual growth rate of 76 per cent
from 2006 to 2012.
GlobalData says that China, along with
the US, Germany, UK, Italy, Spain and India,
accounted for 74 per cent of global installed
wind capacity last year.
The report says that the success of the
Chinese wind power market can be attributed
to a combination of market guidance and
government encouragement, after the
Chinese government introduced a number of
fnancial and regulatory initiatives to promote
renewable energy sources.
GlobalDatas power sector analyst, Swati
Singh, said: Supportive government policies
that include an attractive concessional
program and the availability of low-cost
fnancing from government banks are the
main reasons for the growing wind power
market in China.
1309pei_10 10 8/27/13 11:24 AM
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News Update
MIDDLE EAST
Clean coal power
plant for Dubai
As part of its strategy to get 12 per cent of its
power capacity from coal, Dubai is planning
to build a 1200 MW clean coal-fred plant.
State-owned Dubai Electricity and Water
Authority is seeking bidders to build what
would be the frst such project of its kind in the
Gulf Arab region.
The utility has issued a request for tenders
for the plant, which will be built in two phases
to generate 600 MW each when completed in
2020 and 2021 respectively, a statement from
Dewa said yesterday.
The move is part of an emerging trend
whereby Gulf nations are looking to diversify
their energy mix to preserve oil and gas
reserves for export, which generate signifcant
sums for their economies.
MIDDLE EAST
Iraq to import gas
from Iran to run
Baghdad plants
Iraq is to import gas from Iran to fuel two power
plants in Baghdad.
The two countries signed a four-year deal
that will see Iraq buy around 850m cubic feet
a day of natural gas, which will be used to
generate 2500 MW of power for the plants.
The gas will be imported via a $342m, 140-
mile pipeline that is currently being built and is
due for completion in two months.
The deal is believed to be worth $3.7 billion
a year to Iran and was signed in Baghdad by
Iraqi electricity minister Kareem al-Jumaili and
Iranian oil minister Rostam Qasemi.
Iraqs own gas felds are underdeveloped
and the country currently cannot produce
enough gas to power its gas plants.
The International Energy Agency last year
predicted Iraq will need cumulative energy
investment of over $530 bn by 2022 more
than $25 bn per year and a signifcant step
up from the estimated $9bn it invested in its
energy sector in 2011. The IEA added that
catching up and keeping pace with rising
demand for electricity is critical for Iraq.
Power stations in Iraq produce more
electricity than ever before but prolonged
power cuts are still being experienced on a
daily basis in many parts of the country.
1309pei_11 11 8/27/13 11:24 AM
News Update
LATIN AMERICA
Cemig to invest
$621m in Brazils
Renova Energia
Brazils Energetica de Minas Gerais (Cemig)
has agreed to invest around $621 million in
renewables developer Renova Energia.
The investment is being made as part of
the companys strategy to focus on wind
power technology, along with other utilities,
including CPFL Energia and Tractebel Energia.
Cemig is expected to be a part of a
controlling group, along with Light Energia
and RR Participacoes, that will hold a 51 per
cent stake in Renova Energia, following the
completion of the agreement.
Analysts say the Brazilian utilities are
planning to focus on wind power technology,
which is expected to complement
hydroelectric projects in the countrys power
generation mix.
The wind power facilities are expected to
cater to the electricity needs of the country,
during the dry season.
Court blocks bid by
Endsea Chile to build
740 MW coal plant
Endesa Chile is to appeal against a court
decision to reject its plans for a $1.4bn coal-
fred power plant in the Atacama region of the
country.
The 740 MW plant, which was intended
to support the Chilean mining sector in the
region, was rejected by a local court.
The decision follows a Chilean ministerial
committees decision to also appeal the
courts ruling last week. The ruling voided
the committees approval to construct the
Punta Alcalde project, effectively blocking
development of the plant.
Endesa said it has decided to appeal to
the Supreme Court to seek ratifcation of the
ministerial committees decision.
The Punta Alcalde project, with two 370
MW units, would cover more than 10 per cent
of the current electricity demand on Chiles
largest power grid, the central SIC.
CFEs fnancial woes
worsen as half-year
losses hit $2.8bn
Mexicos state-owned power company CFE
(Comision Federal de Electricidad), has
reported net losses of up to $2.8bn in the frst
half of 2013, as operating costs climbed.
The latest losses are almost triple those that
CFE suffered during the frst six months of 2012,
when they were in the region of $1bn.
In the quarterly report supplied to the
Mexican Stock Exchange, CFE attributed the
higher operating costs to more reliance on
fossil fuel-based generation.
According to BNAmericas, in the frst half
of this year, CFE reduced hydropower output
to 7.76 TWh compared to 16 TWh a year ago,
as part of it efforts to return dams to normal
water levels, which are still low since a severe
drought last year.
This resulted in the company having to
resort to more thermal generation to meet
demand.
NORTH AMERICA
EDF to pull out of US
nuclear market
due to shale boom
French power company EDF is to withdraw
from the US nuclear market because of the
way shale gas has altered the American
energy sector.
Instead, EDF will focus on developing its
renewables business in America. However, the
company has stressed that its nuclear intent
elsewhere in the world particularly the UK
remains strong.
EDF chief executive Henri Proglio said
the prospects for nuclear power in the US
had been dealt a major blow by the true
revolution of shale gas, which he said had
completely reshaped the landscape of
electric power generation in favour of gas.
He said the spectacular fall of the price of
gas in the US, which was unimaginable a few
years ago, has made this form of energy ultra
competitive vis-a-vis all other forms of energy.
The circumstances for the development
of nuclear in the US are not favorable at the
moment. We are a major player in nuclear,
but we are not obsessed by nuclear. Our
development in the US will focus on renewable
energy that will be our vector of growth in
the US.
EDF is to pull out of Constellation Energy
Nuclear Group (CENG), which it half owns
as a joint venture with US energy company
Exelon. CENG operates fve US nuclear plants
with a total capacity of 3.9 GW.
It has agreed a put option that allows it
to sell CENG to Excelon between 2016 and
2022,at which time it will also receive an
exceptional dividend from CENG of $400m.
Proglio was speaking as EDF unveiled its
half-year results, which he said showed a
good operating performance.
EBITDA was 9.7bn, up 6.9 per cent on last
year, of which 6 per cent was organic growth.
On the back of the results, EDF has revised up
its operating performance targets for the year
to 3 per cent of organic growth.
1309pei_12 12 8/27/13 11:24 AM
News Update
NORTH AMERICA
New clean coal
technology approved
for US project
Hamon Research-Cottrell, a subsidiary of
Hamon Corporation, has received full notice
to proceed with the engineering, procurement
and installation of a Regenerative Activated
Coke Technology (ReACT) system at the 321
MW Wisconsin Public Service Weston coal-fred
power plant unit 3 in the US.
ReACT is an integrated multi-pollutant
control technology that removes SO2, NOx and
mercury from coal-fred plants by adsorption
with activated coke to attain emission levels
found at the best controlled coal-fred plants.
This system will reduce plant SO2 emissions
by more than 90 per cent, mercury by 90 per
cent or more, and NOx by more than 20 per
cent.
This technology simultaneously controls
multiple pollutants using only a fraction of
the water that conventional wet scrubbers
demand, while producing a saleable sulfuric
acid by-product commonly used in the
fertilizer, paper-making, and many other
industries.
Engineering and procurement activities
have already commenced and the project is
expected to be completed and in service by
December 31, 2016.
GE plans to turn down
the tubine volume
GE is exploring the possibility of increasing the
power generation capacity of its wind turbines
while reducing noise levels.
The company, through its Global Research
Unit, is working alongside the US Department
of Energys Sandia National Laboratories.
GE said its scope of work was focused
on advancing wind turbine blade noise
prediction methods by performing tests on
airfoil level acoustic measurements in wind
tunnels.
Field measurements have also been done
to validate acceptable noise levels, and noise-
reducing operating modes were deployed in
the control system.
The company expects a one decibel
quieter rotor design may increase the energy
from by a turbine by 2 per cent a year.That
increase will add up to 5 GW of wind power,
given that around 240 GW of capacity is set
to be installed globally in the next fve years.
1309pei_13 13 8/27/13 11:24 AM
News Update
ASIA PACIFIC
Mitsubishi Heavy to
build 977 MW power
plant in Thailand
Mitsubishi Heavy Industries (MHI) has received
a full-turnkey order for the construction of a
977 MW gas plant from Khanom Electricity
Generating Co, an independent power
producer in Thailand.
The gas-turbine combined-cycle (GTCC)
plant will comprise two trains of a 488.5 MW
power-generation unit, with both blocks slated
to go on-stream in June 2016.
MHI and Kegco, a wholly owned subsidiary
of Electricity Generating, also concluded a
long-term service agreement for the plant,
but MHI has not disclosed the value of the
contract.
Once the GTCC power plant, which will
be in Nakhon Si Thammarats Khanom district,
is completed, its output will be supplied
to the Electricity Generating Authority of
Thailand under a long-term power purchase
agreement.
The plant will have dual-fuel specifcations
enabling both natural-gas and diesel
combustion, and will consist mainly of two
Mitsubishi M701F5 gas turbines, two steam
turbines and two generators.
Civil and installation work at the
construction site will be handled by Sino-Thai
Engineering and Construction.
Wartsila wins frst contract in Australia
Gas engine supplier Wartsila has signed a ten-
year service agreement with Australias Energy
Developments to maintain the remote 53 MW
McArthur River Mine gas-fred power plant,
which is under construction in the Northern
Territory.
The contract marks Wartsila entry in the
Australian power market.
The McArthur River Mine plant is being built
to power the McArthur River zinc mine and is
currently projected to start operations ahead
of schedule before the end of this year.
Energy Developments has signed a 20-year
electricity supply agreement to sell the power
plants entire output to McArthur River Mine.
The mine is currently in the midst of a $360m
expansion that will increase zinc production
twofold, while prolonging the mines lifetime
until 2036.
Fears for renewable
investment in Australia
The renewables sector in Australia fears a
A$4bn ($3.6bn) loss in investment should the
coalition win this months federal election.
The coalitions climate change plan is also
$4 billion short of the funding required to meet
its promised 5 per cent cut in greenhouse
emissions by 2020, according to independent
think tank The Climate Institute.
Big investors are planning for the impact
if opposition leader Tony Abbott axes the
carbon price and dismantles the clean
energy fnance system. They expect that about
$4.1bn in private funding would be funnelled
away from large-scale renewable power,
starving the sector of capital due to regulatory
uncertainty and a lack of returns, according to
sources in the carbon fnance sector.
Clarke breaks into
Bangladesh with
Orient Power stake
Clarke Energy has acquired the Bangladesh
arm of Orient Power Systems and GE
Jenbacher has appointed Clarke Energy as
distributor and service provider for Jenbacher
gas engines in the country.
Bangladesh, with its large domestic
reserves of natural gas, has been an attractive
proposition for Clarke, and in a statement
the company pointed out that it offers great
opportunities for reciprocating gas engine
technology, particularly for the independent
power producer and captive power plant
segments.
Jenbacher has a successful track record
in Bangladesh with over 450 gas engines
installed to date in the country, each with an
electrical output of between 0.3-4.4MW.
This installed base helps to maintain
stable power supplies for the population and
industry.
The acquisitions focus will be to develop
an advanced service infrastructure with in-
country parts stockholding, further train and
develop the Bangladesh service team and
to expand Jenbachers installed base in this
signifcant gas to power segment.
China pulls plug on
coal plant over
pollution concerns
China has responded to civic concerns about
air pollution and decided to scrap a 2000 MW
coal plant on the coast of the South China
Sea, 50 km from the major city of Shenzhen.
Some 43 members of the citys Peoples
Congress petitioned the administration to
cancel the project and not to allow the
construction of any new coal-fred power
plant anywhere within the citys borders.
The administration reacted only a few
weeks later, asking Shenzhen Energy Group to
stop the power plant construction.
This is the frst project to be cancelled in
China mainly on the basis of concerns about
air pollution.
1309pei_14 14 8/27/13 11:25 AM
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1309pei_15 15 8/27/13 11:25 AM
Charles Diestel, Vice-President, Samsung C&T, Singapore
Naturally, big markets such as China and India
are very tempting and should not be forgotten
even if their economies are slowing. Keep an
eye on them. Also though, carefully consider
the risks and diffculties of building power
plants in those countries versus the rewards.
For me, I would focus my efforts on
Southeast Asia countries.
Malaysia needs more and newer power
plants. Vietnam is growing rapidly and needs
the power, however breaking into the system
there might be somewhat challenging.
Myanmar is severely in need of
electrifcation they know it and are opening
their doors by hosting power conferences
and seminars. The time is ripe for investing in
Myanmar for sure.
One should always check out the
Philippines as well and Thailand is always a
good place to do business as well.
Overlooked somewhat is Indonesia. They
need electricity for their 240 million people
and many islands. Indonesia is growing up
and becoming more transparent in their
business dealings. I believe their government
bonds are no longer considered junk bonds,
although not Triple-A quite yet.
Talking Point
Should investors and power industry
players be now targeting Asias smaller
emerging economies?
With the economic growth of Asias giants
China and India slowing, is the time now
right for power industry investors and players
to focus their efforts on other Asian countries
with booming economies, such as the
Philippines, Indonesia and Malaysia?
1309pei_16 16 8/27/13 11:25 AM
Talking Point
Matthias Hiddemann, Regional Product Manager
Asia, Alstom Power, Malaysia
In general, from the OEMs perspective there
are various drivers for the power markets.
Besides the economic growth and
environmental regulations, the variation
in the fuel supply and fuel price, as well
as the variation in the electricity price, the age
of the existing power generation equipment
and the liberalisation of the energy market
all have an impact on which kind of power
generation technology investments will take
place.
Within a specifc power market, existing
operators have to fulfl certain requirements:
they have to produce electricity at the lowest
possible costs for low electricity tariffs, the
power generation has to be reliable to ensure
each countrys energy security and the impact
on the environment has to be minimised.
OEMs have to take the situation of every
countrys power generation market and its
power generation suppliers into consideration.
As well as offerings for new power plants,
solutions for the already-installed power
generation base have to be available, such
as performance and emission improvements
or solutions to integrate the different power
generation technologies in the generation-
mix.
Moreover the identifcation of new trends
as well as the introduction of new technologies
has to be monitored and adequate products
meeting the requirements have to be
developed.
Within this environment it is mandatory
to be permanently present in each market,
independent from the actual economic
growth, in order to be up-to-date with the
market requirements and understand the
needs of power generation companies. Only
this enables the possibility to offer the right
solution or technology matching with the
differing market environments.
John Gustke, Managing Director, Ebery Asia,
Black & Veatch, Thailand
I think a more measured and stable view
of the power needs within each country is
important to keep in view, as well as long term
business relationships with stakeholders in
each country.
Opportunities for investment and
project participation in the power industry
in Southeast Asia have been, and remain,
strong. Its important that a variety of
indicators are taken into consideration and
the right business approach for each market
is adopted.
Throughout Asia, theres close to 700 million
people without electricity. Migration to cities
and industrialisation continues at pace and
with that comes rising power infrastructure
demands. The pace of development may
slow over time but there are many real and
pressing gaps throughout the region.
The two biggest effects of the China and
India slowdown will be a rise in competition
within the power sector throughout Asia
and also knock-on effects to the economic
health of China and Indias trading partners,
including the Southeast Asian markets under
discussion.
The need for power infrastructure, as
said, will still remain. With rising competition,
tightening margins and reduced access to
fnance, the question around how this will
happen will be brought under scrutiny. This
means power producers across Southeast
Asia will demand improved solutions on
how better to manage risk and schedule
and procure equipment, delivering much-
needed large scale projects on time without
sacrifcing quality.
Throughout the region, including China
and India, all power producers will continue
to ask how they can balance price without
sacrifcing quality. This is where the industry
must continue to focus, regardless of location.
So to summarise, I strongly believe the time
is ripe to invest in various Southeast Asian
countries, especially Myanmar, Indonesia,
and Malaysia. Of course, the favour or
situation in each country needs to be studied
to know how to invest in a particular country.
For example, it may be benefcial to have
a local partner to guide you through the
countrys ways of doing business.
1309pei_17 17 8/27/13 11:25 AM
Talking Point
Normen Kegler, Advisory Council Chairman, Independent Power Producers Forum
(IPPF), Hong Kong
For quite some time the power generation
sectors of China and India have shifted
away from foreign direct investment as
their respective market practice, regulatory
framework and tariff policies hardly
encourage traditional foreign independent
power producer investment.
The question is rather how than if foreign
direct investment will explore opportunities in
other markets in the region.
The days of the classic IPP model appear
to be numbered as most countries in the
region have matured and gained direct
access to the capital, technologies and
expertise required to develop their power
generation sectors.
Foreign IPPs that are still successful and
proactive in the Chinese and Indian power
generation market currently demonstrate
business development models that indicate
the future role and shape of IPPs in the region.
They keep strong and multiple affliations
with domestic stakeholders and have
refned their capability to cater for advanced
technical and managerial demands in niche
segments to maintain their success. They pay
close attention to the advanced technologies
favoured by governments in their energy
policy development, as those determine the
market niches that an IPP can successfully
occupy without facing too much domestic
competition.
Some IPPs have engaged in local
supporting industries such as coal processing
and coal blending, thus deepening their
market integration.
Public private partnerships may allow for
a more effcient project risk management on
both sides. However, since the partners differ a
lot in their basic purposes and management
styles, such partnerships can be troublesome.
Generally, IPPs have learned to move along
with the host country rather than offering
prefabricated standard solutions that were
incorporated in their business models and
applied all around the world.
Therefore IPPs have become more
sustainable partners for addressing specifc
sets of requirements and therefore will continue
to play an important role in developing the
power generation markets in Asia.
Joseph Jacobelli, Senior Analyst - Pan Asia Utilities, Bloomberg LP, Hong Kong
We are indeed witnessing a slowdown in the
GDP growth rate of Asias two power giants.
China and India saw GDP growth averaging
9.2 cent and 7.4 per cent respectively over
the past three years while the expectation by
economists for the next three years is 7.4 per
cent and 5.8 per cent respectively.
At the same time, Chinas energy
requirements are expected to rise threefold
or more in the coming 30 years while Indias
should be at an even higher rate: despite
its 1.35 billion people, Chinas total installed
power generation capacity of 1142 GW is only
slightly smaller than that of the US and Indias
225 GW is currently less than 20 per cent of
China. As such, Asias two power giants still
offer great scope in terms of opportunities.
That said, overseas investors have not
been investing in power generation in both
countries. China has not been an attractive
market partly due to a lack of long-term power
purchasing agreements (PPAs). Power output
is typically agreed one year forward and the
tariff paid by the grid to the generators is set
by central authorities all without a clear
mechanism to protect the generators from
fuel costs volatility. Moreover, overseas investors
have found it tough to be price competitive
versus the long established domestic giant
power generation groups. As such, today there
are barely any foreign developers in China.
India, unlike China, has offered long-
term PPAs. However, the fnancial strength, in
terms of the payment capability of the state
electricity boards, has been a challenge, as
has fuel availability. As such, just like China, few
foreign developers can be found.
A few Southeast Asia power industries have
attracted high overseas capital. The clear
winner, by the presence of foreign investors,
has been Thailand and more recently the
Philippines and Indonesia have seen good
levels of interest. Thailand has offered an open
and liberal approach to foreign investors in
the sector coupled with relatively consistent
and transparent rules and regulations. In the
near future most industry participants expect
this to continue if not even to accelerate.
1309pei_18 18 8/27/13 11:25 AM
www.aarding.com
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1309pei_19 19 8/27/13 11:25 AM
Talking Point
Robert McGregor, Head of Power & Utilities, Asia, HSBC, Hong Kong
I dont expect to see a meaningful change in
investment interest towards Southeast Asia it
has always been there.
The advantages of the larger markets in
China and India were that they provided
economies of scale and room for multiple
participants developers could see a
pipeline of opportunities extending into the
foreseeable future a chance to build a
meaningful regional business. But, for various
reasons, the growth opportunities have rarely
translated into deliverable shareholder value
for the international players.
Even so, this will not result in a switch to
Southeast Asia. The scale opportunity has
never existed there the smaller market sizes,
with different regulatory regimes, different fuel
mixes and different levels of IPP ownership
have always made it diffcult for international
developers to build a regional platform of any
size. So, Southeast Asia has always been an
asset-by-asset play on a country-by-country
basis and international developers have
always pursued different strategies in the
region versus in China and India.
But, as these international players look at
Southeast Asia today, they see the indigenous
power developers have become fnancially
stronger, technically more capable and
commercially much stronger than was the
case 15 years ago. An international developer
considering a Southeast Asian investment
strategy must take account of the enhanced
competition from EGCO, Ratchaburi and PTT
in Thailand; from 1MDB, Malakoff, Tenaga in
Malaysia; or from Aboitiz Power, First Gen and
Meralco Powergen in the Philippines.
So, even on an asset-by-asset basis, there is
nothing to suggest that international players
can simply switch attention to Southeast Asia
to deliver shareholder value. International
players need to re-evaluate strategies where
they get rich with Asia, and not from Asia
and for me that applies whether you are in
China, in India or in Southeast Asia.
Markus Lorenzini, Head, Siemens Energy Sector, ASEAN-Pacifc Cluster, Indonesia
The ASEAN countries, together with China and
India, have been shifting the centre of gravity
of the global energy system toward Asia.
Ongoing urbanisation and industrialisation in
these countries have driven growth in energy
usage. This growth continued even through
the recent global economic crisis, which
prompted a fall in energy use at the global
level.
In recent years, ASEAN countries have been
placing increasing emphasis on improving
the effciency of energy use, in recognition
of the need to curb demand growth, reduce
energy imports and mitigate pollution.
Thailand, the Philippines and Malaysia,
especially, have shown a very positive trend
of new power generation, especially towards
innovative and highly-effcient technologies. In
addition, Thailand and the Philippines are also
investing in wind power and have established
tariff regimes that support investments in
renewable energy production.
ASEAN, particularly Indonesia, Thailand,
Malaysia and the Philippines, will have
continued growth and energy demand in the
next coming decades, where investors have
an attractive environment.
Dale Probasco, Managing Director, Navigant Consulting Inc, US
This is an interesting question and, for me,
the answer is somewhat dependent on a
companys current position.
The sheer size of the markets in China and
India, even during a slower period of growth,
would dictate that a power company with a
current presence in either market is likely to
continue seeing benefts.
However, diversifcation into other markets
such as Malaysia, Thailand and the Philippines
may also be an option to protect against a
potential downturn in China or India.
Further, since global markets are often
dependent on each other, the impact of the
slowing of any economy is likely to be felt in
other areas, and we know there has already
been some slowdown in the Malaysian, Thai
and Philippine markets.
For power companies just establishing
their presence in Asia, it might be prudent to
start in a smaller market with growth which
can serve as a stepping stone into other
regional economies.
Visit www.PowerEngineeringInt.com
for more information
i
1309pei_20 20 8/27/13 11:25 AM
1309pei_21 21 8/27/13 11:25 AM
I
t is one thing to talk the talk quite another
to walk the walk. Energy experts cite this
popular refrain when asked how long it
will take for Latin America to build a fully-
integrated power market.
They stress many governments are
enthusiastic about pursuing such project
but have to negotiate an incredibly complex
political roadmap.
In industry forums, politicians always
talk about the need for integration and
brotherhood in Latin America but in practice,
that goal is much more complicated to
achieve, says Isaac Castillo, an independent
energy consultant who has worked on several
regional integration projects.
Echoing other observers, Castillo says
a basic electricity market is unlikely to be
ready until 2025, mainly due to technical and
political obstacles.
Maria del Carmen Tobar, a Lima-
based lawyer who oversees electricity grid
connections in Latin America for Baker
& McKenzie, agrees. Finding more ways
to interconnect the power markets is an
important objective for Latin America, she
says. All the administrations have it on the
agenda but they dont prioritise it. I see this
moving slowly with no signifcant progress until
ten years from now.
According to observers, a string of
international accords, technical co-ordination
and studies to help governments understand
the economic gains that can stem from
integration are crucial to create a regional
and wholesale power market something
that will not happen overnight.
Integration benefts questioned
That said, some countries are working to
link-up their electricity networks and have
made progress. Castillo cites Colombia
and Ecuador as notable examples. The two
neighbouring nations boast the Andean
Communitys (Comunidad Andina, CAN)
largest interconnected network, exchanging
up to 500 MW through two 230 kV transmission
lines. Ecuadorian power frm Centro Nacional
de Control de Energia and Colombian
counterpart XM trade electricity through
bilateral agreements.
The connection between Ecuador and
Colombia has helped resolve supply defcits
in Ecuador and enabled Colombia to sell big
surpluses, Castillo says.
In turn, Venezuela and Colombia are also
expected to increase electricity trade, due to
big supply defcits in southern Venezuela. In
2012, Colombia sold 478.4 GW to Venezuela,
up 92.3 per cent from 2011, say analysts.
Full market integration in Latin America
Latin America has
ambitions to establish a
fully-integrated electricity
market, but creating such
a market is notoriously
diffcult. Ivan Castano
looks at the progress so
far and asks what is a
realistic time-scale for this
rapidly-developing region.
Making
the Latin
American
connection
Credit: Akbar Nemati
1309pei_22 22 8/27/13 11:25 AM
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1309pei_23 23 8/27/13 11:25 AM
The growing ColombiaVenezuela,
ColombiaEcuador trade shows there is
huge exchange potential in the region,
Castillo says. However, in the long term, we
are looking at big territories and countries
that have very different energy requirements
and for which the benefts of integration are
not equitable.
Mexico to Colombia
Currently, Mexico and Guatemala swap
200 MW through a network connecting their
southern and northern borders. Mexican state-
owned power supplier CFE (Comision Federal
de Electricidad) and its Guatemalan peer
Inde (Instituto Nacional de Electrifcacion)
trade through a bilateral agreement via which
Guatemala buys most of the power.
According to Castillo, the CFE wants to
expand that exchange to gain access to
Central Americas largely integrated and
promising power market. However, Guatemala
has resisted such a move, arguing that the
Mexican connection should remain bilateral
and not regional. Panama and Colombia
are caught in a similar situation, with Panama
saying it does not want Central American
power frms to meddle in highly-complex
negotiations to merge their power markets.
Guatemala is also blocking Belizes efforts
to access the Central American market.
Currently, Belize and Mexico exchange some
80 MW of power. These countries have to lift
their barriers for integration to take place,
Castillo says. There is going to have to be a lot
of talking and patience needed to convince
politicians that regional integration is better
than bilateral.
PanamaColombia stalemate
Investors looking to participate in a long-
planned, yet highly problematic, 600 km line to
link Panama and Colombias electricity grids
will also need patience.
The $500 million undertaking, which could
see both countries share up to 300 MW, is
frozen because of a political impasse.
Experts say Panama does not view the
project which will require a high-voltage line
across the dense Darien forest that virtually
blocks road access to Colombia as a priority,
not does it want to bankroll it.
However, there are talks for a third and fourth
investment partner to join the initiative, which
initially called for Panama and Colombia to
equally share construction costs. However, in
light of Panamas reaction, several Colombian
and international investors have expressed
strong interest to help fnance the line.
Such investors include Colombian
generators ISA and Endesa Colombia,
says Castillo, who is confdent Panama will
eventually take part in the project to avoid
looking bad politically as investors continue
to pressure the government to fex its muscles.
Siepac nears completion
Despite their interest, Colombian generators
will have to wait before the Central American
market is big enough to turn a proft.
The $494 million Siepac (Sistema de
Interconexion Electrica de Paises de America
Central) network links Guatemala and
Panama through an 1800 km line starting in
Guatemala and passing through El Salvador,
Honduras, Nicaragua and Costa Rica. It is set
to have a trading capacity of 300 MW through
the gradual creation of a regional market.
The network is almost fnished except for
a 10 km portion between the towns of Parrita
and Palmar Norte in Southern Costa Rica
because of land-owner restrictions. However,
an alternative route is being studied and the
entire circuit is expected to be completed in
late 2014, observers say.
Interconnection is already taking place,
however, albeit at a tiny rate. Analysts say the
six countries share less than 1 per cent of
generation due to a lack of excess capacity.
They say Central American countries are
not investing enough to expand output for
export and that more co-ordination is needed
to boost interconnection rates. For this reason,
they do not expect the line will reach full
capacity until 2018. The little power traded in
Central America is being done through short-
term bilateral contracts and a spot market in
San Salvador. In the dry season, electricity can
sell for as much as $200/MWh.
Bogata: Colombia has made progress in trying to establish electricity links
Credit: David Knox
1309pei_24 24 8/27/13 11:25 AM
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Latin American grid interconnection
Tim Stephure, a Latin America energy
consultant at IHS Global Insight, says linking
Central America will be diffcult. All of these
countries have different regulations and tariff
regimes so there needs to be a stronger
regulatory framework and tariff mechanism
put into place. There are also a lot of power
cost discrepancies between the countries
and they need to fgure out how this cost will
be shared between them.
ColumbiaChile study
In South America, an ambitious, $1.8 billion
project to connect Colombia to power-starved
Chile, dubbed Proyecto de Interconexion
Electrica Andina, is also on the cards.
According to Alejandro Bellorini, a senior
partner at Sigla Consultancy in Buenos Aires,
a regulatory harmonisation and infrastructure
study is underway and scheduled to be
completed in mid-2014.
The initiative will link Colombia with Ecuador,
Peru, Bolivia and Chile (an associated CAN
member) by expanding the existing Andean
electricity interconnection system (Sinea)
and striking a series of bilateral agreements
between the fve countries.
Last September, CAN energy ministers
agreed to back the project in a meeting in
Santiago de Chile. The summit was led by
the Andean electricity regulation committee
(Canrel), which will be in charge of setting up
a regulatory, legal and commercial framework
to eventually operate an Andean power
market. As part of the meeting, the ministers
also agreed to launch working groups to help
pursue and monitor the project.
This is a very clear integration project
that will beneft, once achieved, all the
countries quality of life and improve their
competitiveness and productivity, says
Perus former foreign relations minister and
chancellor, Jose Antonio Garcia Belaunde.
All the countries involved are taking this
project with seriousness, responsibility and
with their eyes on the future, Garcia adds.
Meanwhile, Gabriel Salazar, electricity
co-ordinator at the Latin American Energy
Organization in Quito, Ecuador, says current
interconnection infrastructure between
Colombia, Ecuador and Peru should help
the Andean project gain traction. Apart from
Colombia and Ecuador, Peru and Ecuador
exchange as much as 100 MW, he adds. We
have much of the infrastructure. What we
need to do now is establish the political and
commercial framework to make this possible.
He adds several multilateral agreements
within the CAN and between the CAN and
Chile will need to be hammered out before
the Interconexion Andina can take off. There
is political interest to increase interconnections
between these countries. There are also power
stations being built in Colombia, Peru and
Ecuador to partly help Chile meet its growing
power demand.
Ecuador and Perus exchange will also
need to be bolstered, Salazar says. More
important, however, will be the linking of Peru
and Chile, something currently on the table.
According to Tobar, Peru is negotiating
interconnection deals with both Brazil and
Chile. However, she says a Chilean agreement
will likely come frst because of the countrys
rising energy needs. Bereft of oil and natural
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gas resources, fast-growing Chile is highly dependent on Argentinian gas
and other energy imports. Tobar does not expect a PeruChile accord
soon, however. There is political will but very little push, she explains.
Regarding Interconexion Andina, she adds South American nations
are prioritising self-supply projects to meet soaring demand so this goal
could delay the project.
Stephure agrees. These [referring to CAN and South America] are fast-
growing economies so satisfying domestic demand and electrifcation
is a priority, he says. There are large amounts of people in Venezuela,
Colombia and Ecuador that dont have electricity access. Subsidies are
also a big issue and sometimes you have historical political disputes
that can get in the way.
Such is the case of Bolivia and Chile. Some analysts expect the two
countries strained relations which stem from long-standing territorial
disputes may stall negotiations to create the Interconexion Andina. This
is because Bolivia wants to raise the interconnection question with other
neighbours such as Brazil and Argentina before Chile, a political stance
that may complicate negotiations.
Mercosur expansion
In the Mercosur trading bloc of Brazil, Argentina, Uruguay and Paraguay
there are plans to expand Uruguay and Brazils 70 MW interconnection
grid with a new 500 kV line, with 500 MW of trading capacity. The project
faced several regulatory and political challenges, mainly because
Uruguay and Paraguay have different power frequencies, says Ramon
Mendez, director of Uruguayan electricity network management frm
Adme. However, a $200 million converter will help resolve that, with the
line expected to be completed early next year.
According to Mendez, Uruguay and Paraguay hope to sign bilateral
exchange agreements before their fedgling grid is ready. Uruguay too,
Guatemala: the country currently swaps 200 MW with Mexico
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hopes to eventually sell power to Brazil and increase trade with Argentina
and other Mercosur nations. This is mainly due a major incursion into
renewable power. Indeed, the small country, which sits atop Argentina,
plans to generate half of its power from renewable sources by 2016,
making it Latin Americas most ambitious nation in this regard.
As part of a $5.5 billion clean-energy expansion plan, the government
will work to install at least 500 MW of wind power generation capacity
and develop solar, biomass, mini-hydro and other microgeneration
projects. If all goes well, Uruguay could lead the world in terms of the
percentage of electricity it generates from renewable sources.
Meanwhile, a project to build two new hydropower stations (with
2000 MW of transmission capacity) feeding from the Uruguay River
straddling Argentina, Brazil and Uruguay aims to increase Argentina
and Brazils interconnection capacity to 4200 MW.
The scheme calls for the construction of one plant in Panambi
and another in Garabi, both BrazilArgentina border towns. Both
countries have signed an agreement to pursue the project but future
fnancing diffculties probably from the Argentinian side could delay
construction, according Eduardo Lerner, an energy regulation professor
at the University of Buenos Aires and independent industry consultant.
Currently, Mercosur is Latin Americas largest power-trading network.
Brazil and Argentina share some 2200 MW through a hydropower
complex in Garabi that operates two 1100 MW transmission lines
connecting the Argentine town of Rincon de Santa Maria with Garabi.
Meanwhile, through Salto Grande, Argentina and Uruguay swap
1900 MW. Brazil and Paraguay also transfer some 3000 MW via the Itaipu
hydropower facility. Lastly, Argentina and Paraguay trade 1700 MW
through the Yacyreta hydro station and 800 MW via the Clorinda line.
According to Juan Jose Carrasco, executive director of Montevideo-
based regional integration commission (Cier), Mercosur members
trade electricity through a series of long-running government-to-
government bilateral contracts.
However, the exchange is irregular and happens mainly on an
opportunity basis. This is partly due to Argentinas decision to stop
selling power to other countries during its 2002 recession, which saw
its energy supplies dwindled. As a result, other Mercosur members also
began concentrating on self-supply. Carrasco says Cier is lobbying for
trade to grow though a system of so-called border exchange points
that will enable Mercosur countries to sell power through volume and
price-based contracts that ensure supply security.
The scheme aims to boost the countries confdence in exchanging
power and to encourage the signing of frmer medium and long-term
trade contracts that will form the basis for a more active regional market
and eventually the establishment of wholesale market. That process will
take a while, says Mendez. We share Ciers vision but we are very far
from it, he notes.
Time is also needed for other initiatives to take off. With so many
projects on the table, Stephure echoes other views that merging Latin
Americas electricity networks will happen at a snails pace.The idea
is to integrate everything but there are many obstacles, he says. Cross-
border transmission is hard to accomplish and the required investment
to make it all work will be huge. Integration will be a slow process.
Ivan Castano is a freelance journalist, specialising in energy.
i
Table 1: A breakdown of the SIEPAC interconnection
Country Length (approx. km) Total no.
sections
Total no.
towers
Total no.
substations
Substations
Guatemala 282.8 3 664 3 Aguacapa, Guatemala Norte & Panaluya
El Salvador 286 4 736 3 Ahuachapan, Nejapa & 15 de Septiembre
Honduras 270 4 727 2 Aguacaliente & Buenaventura
Nicaragua 308 3 755 2 Sandino & Ticuantepe
Costa Rica 493 5 1352 4 Canas, Parrita, Palmar Norte & Rio Claro
Panama 150.4 1 398 1 Veladero
Total 1790.2 20 4632 15
Source: Empresa Propietaria de la Red (EPR)
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Capturing carbon dioxide from thermal plant emissions and, ideally, putting it to use
could offer an economical route to a low-carbon economy
Credit: Drax
European biomass and biogas
Europes deteriorating
economic conditions of
recent years have taken
a toll on its biomass and
biogas markets, as many
governments pull the
plug on vital incentive
programmes. Kelvin Ross
examines the state of
the market.
J
ust a few years ago, the European
biomass sector was expecting a
boom time and biogas, while
anticipating less dizzy highs, was
also looking forward to signifcant
growth.
The biomass industry had every reason
to be optimistic. As governments around the
world set renewable energy targets, biomass
was seen as something of a sure thing to
play its part in meeting countries low carbon
ambitions.
And when the operators of coal-fred
plants realised that they could extend the
life of power stations by converting them in
part to run on biomass fuel, then the outlook
looked even more promising.
But like so many other forms of power
generation renewable or otherwise both
biomass and biogas in Europe have taken a
hit from the economic crisis.
In times of austerity, the subsidy and
incentive programmes needed to drive
the biomass/biogas sector have proved
fnancially unsustainable and governments
have shelved many projects.
This market instability has also resulted
in the acquisition of several major market
players, such as AE&E, MWM and MW Power.
The biomass and biogas sector in Europe
breaks down as biomass holding 67.7 per
cent and biogas 32.3 per cent. Globally,
biomass accounts for 3 per cent of electricity
generation capacity, and half of this is
located in Europe.
Of the biomass segment, 62 per cent of
installed capacity is in power plants and
38 per cent in combined heat and power
(CHP) plants percentages set to become
more balanced as the trend is slowly moving
towards CHP installations as they receive
better incentives than power plants.
The European market comprises more
than 50 companies with the major players
being Foster Wheeler, Metso, Andritz, GE
Jenbacher and MWM. Together these
companies hold 78 per cent of the market
for biomass and 77 per cent for biogas. Other
notable market participants included Perkins,
BWE Energy and Kohlbach.
Analysts at consultancy Frost & Sullivan
estimate that the current value of the
European biomass and biogas market is
3.33 billion ($4.4 billion), and it is set to
experience a compound annual growth rate
(CAGR) of 2.5 per cent between now and
Austerity bursts
bio bubble
Credit: Dreamstime
1309pei_30 30 8/27/13 11:25 AM
o use
y
ax
2017. They also forecast that the installed capacity base will reach
42,322.1 MW by 2017 witnessing a CAGR of 5.3 per cent for the same
period, as the market tries to stabilise itself after the economic crisis
in the continent.
However, the economic crisis has had its casualties in the sector,
the most recent being Tilbury power station in the UK.
Tilbury stopped generating electricity last month after 44 years of
operation as a coal plant and the last two years as the worlds frst 100
per cent biomass facility.
It opened in 1967 as a 1467 MW coal-fred plant and was
scheduled to close under the EUs Large Combustion Plant (LCPD)
Directive, giving it 20 000 hours of operation from 1 January 2008.
However, in 2010 its operator RWE decided to begin converting it
to run on biomass for the remainder of its LCPD hours and it started
operating in this capacity in 2011.
The biomass plant had a capacity of 750 MW and RWE has
claimed that it delivered more than 10 per cent of the UKs total
renewable electricity.
Once the LCPD deadline ran out on 14 August, RWE had planned
to close it for two years while it carried out a full-scale biomass
conversion, which the company said would have given Tilbury up to
12 more years of work.
However, the UKs Department for Energy and Climate Change
revealed earlier this year that the project was ineligible for the
governments Contracts for Difference, a new support mechanism
for low-carbon technologies, which forced RWE to take the diffcult
decision not to proceed with the project, as it is no longer economically
viable.
RWE stressed that Tilbury remains an excellent site for power
generation and said it was reviewing future plans for the site.
The lessons learned from the successful biomass conversion
will be shared across the RWE Generation portfolio, as RWE remains
committed to exploring new energy technologies that can provide
energy solutions that are both affordable and sustainable.
A successful experiment
So is Tilbury a warning shot to other existing and potential biomass
plant operators. David Hostert of Bloomberg New Energy Finance says
its closure has damped the mood in the biomass industry and warns
that projects that have been in limbo for the last four to fve years are
now even further away from fnancing.
However Ashay Abbhi, energy and environmental research analyst
at Frost & Sullivan and one of the authors behind a recent report,
Opportunities in the Biomass and Biogas Power Market in Europe, is
more positive on Tilbury and its legacy.
Tilbury should be looked at as a successful experiment, he says.
It was a success in my view because it has given an alternative to the
large-scale production of power and it has given confdence to RWE
and a lot of other power corporations to go ahead [with biomass].
He adds it has set the tone and become a pioneer for such plants.
However, in its report, Frost & Sullivan is less upbeat about the
wider European biomass and biogas markets, where it warns that
deteriorating economic conditions have limited market expansion.
Countries have cut down or even stopped subsidies for power
generation from biomass and biogas, jeopardising the prospects of
plant owners, it concludes. The report also highlights that a lack of
steady raw material supply in the region poses another challenge.
It states that high-demand customers are willing to pay more to
keep their power plants running, which triggers a rise in feedstock and
equipment prices, affecting proftability. The withdrawal of government
incentive schemes further dampens revenues.
Abbhi says: Biopower plants are increasingly preferred as a
source for large-scale power generation owing to their low-capital
requirements. Their effciency, longer operational times and reliability
The value of the European biomass and biogas
market is estimated to be $4.4 billion
Source: Siemens
www.schwarze-robitec.com
1309pei_31 31 8/27/13 11:25 AM
further boost their popularity over other
sources of renewable power generation.
But he warns that government support
is necessary for technology development,
especially as constant innovation will enable
a reduction in capital expenditure.
Abbhi states: For now, the conversion of
coal power plants to biomass plants will be
the strongest market trend as it requires far
less investment than setting up a greenfeld
biopower plant.
This would certainly seem to be borne
out in the UK: Drax, which operates Britains
largest coal plant, has a 700 million
programme underway to convert three of the
plants six units to biomass. Drax Group chief
executive Dorothy Thompson says: We are in
the middle of a project to turn it from a coal
station that burns a little bit of biomass to a
biomass station that burns a little bit of coal.
The frst unit is already in operation and
the second is expected to follow suit by the
end of 2014.
Drax will use wood pellets imported from
the US to fuel the units and is building four
silos each bigger than Londons Royal
Albert Hall, in which to store them.
The company has also designed Britains
frst purpose-built rail freight wagon to carry
biomass imports to the plant from the ports
of Tyne, Hull and Immingham. At 18.9 metres
long with top doors stretching 18.2 metres
and bottom doors of 3.7 metres, the supersize
wagon has a capacity of 116 m
3
, allowing
a biomass load weighing 71.6 tonnes. Its
volume is almost 30 per cent bigger than any
freight wagon currently used in the UK.
Meanwhile, in the same week as Tilbury
ceased generating electricity, it was
announced that a new 40 MW biomass plant
is to be built on the site of a former sugar
factory in Lincolnshire, England.
Brigg renewable energy plant will be built
by Danish company BWSC part of Japans
Mitsui Engineering & Shipbuilding and is set
to be operational by 2016, when it will run on
locally-sourced straw.
This activity confrms the UKs status as
the prime mover in the European biopower
market, along with Germany. But Frost &
Sullivan expects their dominance to slowly
give way to opportunities in the developing
Central and Eastern Europe markets, with
Poland expected to be a hotspot.
Abbhi says: Poland has proper incentive
systems and it has not cut subsidies.
Companies are willing to invest, the
availability of wood chips is quite abundant
and if not, they are in close proximity.
He says the framework the government
has is quite impressive Poland has all the
right ingredients for biomass to work. He
concedes that the economy could hamper
the growth, but is hasnt thus far and expects
Poland to become one of the biomass and
biogas leaders in Europe.
As of last year, Poland had a total installed
biopower capacity of 2662.9 MW, and Frost
& Sullivan expects the nations capacity to
reach 2864.1 MW by 2017.
Abbhi adds that more coal-to-biomass
conversions are expected in Poland for 2015,
which currently has one converted plant.
For other countries, the future is not
quite so rosy. Frost & Sullivan believes that
Germany will observe sluggish growth with
reduced incentives and Spains growth will
be non-existent as the country abandons
A lack of steady raw materials is a
challenge for Europes biomass sector
Source: Dreamstime
1309pei_32 32 8/27/13 11:25 AM
its incentive schemes for renewable power
generation.
It also warns that many European countries
will turn their focus towards developing other
forms of renewable energy to complete their
designated targets by 2020, as biopower
installations are becoming unsustainable
because of reduced incentives.
Abbhi says that the future for the industry
is a little bleak although if the European
economy revives within the next fve years he
believes the investment will return.
However he warns that in the short-term,
the initial investment is going to decrease
even further.
He says the sector is suffering from
being overshadowed by other renewable
technologies such as solar and wind
especially offshore wind.
I think governments are not paying much
attention to it - it is not being given the credit
it is due.,
Recent European biomass activity
GDF Suez has inaugurated a 205 MW
biomass power plant in southern Poland
which it claims is the biggest 100 per cent
biomass-fuelled facility in the world.
The plant at Polaneic is to provide
electricity for 600,000 households and is
powered by a mix of tree-farming product
and agri-fuels.
It is located at the site of the utilitys
existing 1780 MW coal/biomass co-fred
thermal plant, GDF Suez Energia Polska.
Construction of the plant, dubbed the
Green Unit, began in 2010, engineered
by Tractebel Engineering. Foster Wheeler
supplied a circulating fuidized bed boiler
believed to be the largest ever deployed at
a biomass power plant.
Meanwhile, Doosan Power Systems has
been awarded a major biomass conversion
and turbine upgrade project for E.ONs coal-
fred Provence power plant in Gardanne,
France.
The project will help to create what
will become Frances largest biomass-
fred power plant to date. The new unit will
generate electricity from the combustion of
wood, including forest chips, green residues
and recovered timber, and will be converted
from the existing coal-fred Provence 4 unit.
It will provide 150 MW of power with base
production of more than 7500 hours per
year until 2034.
A proposed biomass-fred combined
heat and power (CHP) plant is slated to
be the UK Green Investment Banks frst
investment in Scotland.
The 465 million ($710 million) CHP
project will be developed at the Port of
Grangemouth by Forth Energy a joint
venture between Forth Ports and SSE
and received approval from the Scottish
government in June.
The CHP plant will use sustainably-
sourced, primarily imported wood fuel and
will have the capacity to generate 120 MW
of electricity and 200 MW of heat.
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1309pei_33 33 8/27/13 11:26 AM
S
olar power looks set to become
a greater part of the energy mix
in Asia.
Growing populations and
economies are pushing up
the demand for energy, and
governments throughout the region are
realising it will be impossible to satisfy this
demand through their already hard-pressed
power generation infrastructures and deliver
electricity at manageable cost.
With solar energy systems now more
affordable than ever, and solar irradiation
levels that are the envy of other regions of
the world that spend many months of the
year under gloomy skies, Asia is looking to
renewable energy, particularly solar, as the
way forward.
Factor in environmental concerns about
nuclear or fossil fuel, and the strong imperative
to substitute expensive diesel generators in
regions that are off grid, and Asia could be the
new powerhouse for the global solar industry,
leapfrogging other regions in terms of speed
of uptake.
With growth stalling in the traditional solar
power markets, the Asia-Pacifc (APAC) region
presents the industry with great opportunities:
by 2015, capacity in the region (excluding
China) is expected to reach 11 GW.
Good ft for challenges
Despite huge disparity between the countries
in the APAC region from the highly developed
market of Japan, which is driving forward
solar investment as a way to escape reliance
on nuclear, to countries seeking to reduce
dependence on expensive power imports,
or, like India, struggling to get power to their
populations the common denominator is
solar irradiation.
Solar energy is a good ft for many of the
imperatives across Asia. At one end of the
scale, it provides clean, green energy as
an alternative energy source. At the other,
it delivers power to the many people in the
region who have no access whatsoever to
national grids.
By moving straight from (often rickety)
diesel generators to solar, large parts of
the region can potentially bypass the step
of installing power gridlines, or upgrading
substandard infrastructure.
Markets in Asia are in fact developing in
two directions. Price is at the heart of both,
and is proving key to making solar such a
predominant part of the energy mix.
Some markets are still upheld by subsidies;
others are beginning to be driven by grid parity,
the cost level at which solar is competitive
with conventional sources of energy. This will
completely change the market dynamics as
solar is more able to stand on its own.
One reason why grid parity is now within
reach is that system costs for solar power
generation have fallen sharply in the past
three years, reducing the capital expenditure
of projects and making the move to solar an
increasingly viable option for many countries
to meet power needs.
The levelised cost of electricity for solar
is already in the range of $0.120.15/kWh,
making it more than able to match diesel
on cost. In the Philippines, for example, the
average electricity price is $0.26/kWh. If we
also consider the cost of carbon, this could
push up the price of fossil energy even
further, making solar energy even more cost-
competitive.
So how is the solar industry faring across
the region? How are manufacturers and
providers addressing the opportunities in such
disparate countries? Weve highlighted a few
of the common trends and challenges.
Power alternatives in India
Like many countries in the region, India has
an infrastructure that is unable to keep pace
with energy demand. The historic blackout
in India in July 2012 was the greatest power
outage in history. Its impact was felt by over 600
million people, with an estimated capacity loss
of 32 GW.
India knows to its cost what will happen
if the country remains excessively reliant
on a centralised grid and fossil fuels. Given
the huge demand for electricity and the
countrys high irradiation levels, the outlook
for Indias solar market is highly positive.
Solar power in Asia
Credit: Dreamstime
Sunrise in
the east
Asia could be heading for pole position in solar power uptake according to
Tim Ryan at Norwegian company REC
1309pei_34 34 8/27/13 11:26 AM
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1309pei_35 35 8/27/13 11:26 AM
Solar power in Asia
There is strong growth in the utility-scale
solar market, with growing opportunities in
rooftop commercial and industrial markets, as
well as broad potential for offering solutions
to electrify remote spots and replace or
complement diesel installations, which are
nowhere near as cost-effcient as solar energy.
The cost of a unit power from an off-grid
solar system is $0.18 to $0.21 per kWh lower
than power from diesel generators at $0.30
to $0.33 per kWh. Moreover, solar energy is
actually available when needed, during peak
hours in strong contrast to grid power, where
an overloaded network can fail precisely
when it is needed most.
Despite the apparent logic of moving to
solar in regions that have little or no access
to grid power, a major challenge facing
would-be installers is the diffculty of securing
fnancing.
One reason is that this is still a young
market, and there is no single country-wide
feed-in-tariff to provide investors with a secure
ROI projection. However, as less experienced
players exit the market and best practices
begin to take hold, solar projects are likely
to have an easier time securing fnancing,
paving the way for a solar future in the country.
In addition, Indian anti-dumping tariffs are
creating uncertainty in the market, and this to
some extent is slowing investment.
Thailands ambitious targets
Another country aiming high with solar
power is Thailand. As things stand, Thailand
meets around half of its primary energy
needs through imports, so the country is
understandably keen to generate more of its
energy itself.
The aim is to have a quarter of energy
needs met by renewable sources, including
solar, by 2021. Thailand was one of the frst
countries in Asia to launch incentive schemes
to promote power generation from renewable
sources, and operates Power Purchase
Agreements guaranteeing premiums on feed-
in tariffs to incentivise new solar installations.
In contrast to India, the programmes
succeeded in creating stable, predictable
conditions (and revenue streams) for investors
to sell their solar-generated electricity into the
grid.
New policy packages were recently
approved to renew support for solar power
in the country, with preferential feed-in tariffs
for rooftop and ground-mounted solar
systems, demonstrating Thailands continued
commitment to scaling up the percentage
of power generated from renewable sources:
with the country targeting a solar generation
capacity of 2000 MW by 2022, it is therefore
no surprise the country is a magnet for solar
investment.
Japans appetite for renewables
At the other end of the scale is Japan. Prior
to the Fukushima nuclear disaster, Japan had
neglected solar and other renewable sources,
despite the countrys high levels of irradiation,
instead favouring nuclear power.
Since Fukushima, the country has had
a far greater appetite for renewable energy
programmes. New schemes are in place
with generous feed-in tariffs to promote solar
investment, and these measures are set to
take Japan into the top three solar markets
globally this year.
A report by Bloomberg New Energy
Finance predicts that Japans solar capacity
will double by the end of 2013, making it the
second fastest growing solar market in the
world after China.
Japan aims to cover around one ffth of
its energy mix through renewable sources in
the next decade. The feed-in tariffs are helping
promote investment in the sector, creating
excellent opportunities for industry players
right along the value chain.
What it takes to thrive
The huge price reductions that are spurring
solar uptake in Asia are inevitably creating
challenging conditions for the solar industry.
The main cost pressure for a long time has
been on module manufacturers due to
overcapacity. This is now easing.
System prices will continue to fall, but the
pace of reduction is likely to slow. Cost pressure
has now shifted away to other components in
the system, notably the inverter industry, where
we are seeing some consolidation, following
takeovers in 2013 of two of the top ten industry
players.
The systems business of REC has completed
more than 130 MW of systems designed and
executed by REC teams, and can handle
the full life cycle for the customer, from solar
panels to system design to EPC.
REC also arranges fnance solutions
and oversees long-term operations and
maintenance for the facilities we install.
REC is convinced that a local presence
also makes all the difference to success in Asia.
REC has opened its own offce in Bangkok as
part of its commitment to capturing growth
opportunities in Thailands fast-growing
solar market. The company also has its own
offces in Japan and India, and employs over
1000 people at an integrated, state-of-the-art,
800 MW production facility in Singapore.
Since opening in 2010, the factory has
demonstrated via high standardisation and
automation that its production costs can
compete with any plant in the world. The
company also continues to invest in and build
our Asian sales and engineering teams to
meet rising demand.
Work still to do
Solar energy may already have gained
traction in Asian markets, but there is some
way to go before it can unleash its full power.
Financing, for instance, remains a
stumbling block. Even though the fnance
REC solar panels being assembled in Singapore
Credit: REC
1309pei_36 36 8/27/13 11:26 AM
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community has understood and is beginning
to embrace solar, and no longer views solar
energy initiatives as excessively risky, no
investment will be forthcoming without robust
evidence to demonstrate ROI commensurate
with the risk of the project and the length of
its term.
This means presenting a solid business
case and long-term performance data.
Investors will therefore prefer installations with
high quality, high-performing solar panels from
a manufacturer who is fnancially stable and
certain to stay around.
We are proud that REC fulfls these
requirements: we produce high-performing
solar panels in our Singapore plant and
offer an industry-leading product and power
output warranty. REC is well positioned to
manage these challenging market conditions
and has a strong fnancial position compared
to our industry peers.
REC, as an environmentally responsible
company, also feels much more can be
done to improve energy effciency in Asia.
Measures can be small-scale and still be
effective everything from improved insulation
in housing, to educating people on both the
private and commercial levels as to why and
how they should save energy.
This will slow the energy demand, ease the
strain on hard-pressed grids, and make for an
environmentally sustainable solution.
Another challenge for the industry not
just in Asia is the dependence on subsidies.
Subsidies do have a vital role to play in
getting a country to the position on its solar
development trajectory where it would like to
be. This holds true for a variety of countries
across the Asia region, where energy policies
and incentive programmes such as those
in Japan are bold in scale, framed by the
nuclear disaster of early 2011.
However, with prices now lower, solar
energy can increasingly compete without
subsidies. This is a challenge to many of the
players in the market and inevitably many
will not survive once the fow of subsidies dries
up. To be viable into the future, solar will have
to work toward a world without subsidies, with
technology that is able to survive alone.
This is a key opportunity for the strong
players and we count REC among them to
show the value of solar.
Making solar mainstream
Much work also remains on overcoming the
reluctance of utility companies to accept
solar power. This may in fact be more of an
issue in advanced markets such as Japan
rather than in the emerging economies in
Asia; utility companies in these countries,
casting around for innovative ways to resolve
energy challenges, are only too aware that
a completely fresh approach, such as solar,
is an answer. Could Asian utilities leapfrog
their equivalent companies in Europe, and
fully embrace smart grids? As solar energy
gains more ground in markets such as India,
there will be myriad smaller, distributed power
generation facilities some in previously un-
electrifed spots feeding power into the grid,
and smart grid technology provides greater
fexibility for handling these complex network
topologies with infeeds from many small-scale
sources. New approaches to demand-side
management and power storage will also be
key in better managing the peaks in energy
consumption.
These solutions take solar energy to a
new level. The industry will create value by
providing customers with complete solutions
for their energy needs. Manufacturers who
have acquired broad experience with
projects in strong markets in Europe, and can
contribute their experience and expertise
in new emerging markets looking for fresh
approaches, are those who are likely to reap
the benefts as Asias journey to solar energy
gathers speed.
Tim Ryan is senior vice-president of Sales
for the Asia Pacifc region at REC, For more
information, visit www.recgroup.com.
Silicone production at RECs plant in Singapore
Credit: REC
i
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Brazilian electricity sector
40 www.PowerEngineeringInt.com Power Engineering International September 2013
A
s one of the BRIC nations,
Brazil is a major emerging
economy in the world. It is
also the largest economy in
the Latin Amercian region.
However, more recently
conerns have been raised over its continued
economic growth.
According to a recent forecast from its
cental bank, the economy is only expected
to grow 2.2 per cent this year, with a slight
rise to 2.6 per cent next year, although Guido
Mantega, Brazils fnance minister, gave a
positive signal last month, reporting that
economic growth accelerated in the second
quarter from the beginning of the year.
Like most countries, its electricity sector
will play a fundamental role in helping Brazils
continue its economic development. Here,
on our behalf, Focus Reports spoke to key
stakeholders in the sector: ANEEL, the regulator
of the electricity sector, Norte Energia, which
heads up the consortium building the
11.3 GW Belo Monte dam in the Amazon, and
ONS, which operates the national grid.
Romeu Rufno, President, ANEEL
ANEELs hydro development vision indicates
a bright future for hydro, but what about the
exploitation of other renewable sources?
Brazil is one of the best places on earth to
invest in renewable and green energies, and
our mission is to achieve this goal. In addition
to our unique hydro resource we have great
potential to utilise other renewables.
PROINFA a renewable energy incentive
programme was established because of
the governments fundamental desire to grow
these energies. It has been very successful,
enabling wind, solar and biomass to all
become more competitive in energy auctions.
Recent work by EPE the state-owned
energy research company show that wind
power has the potential to generate close to
The electricity sector
in Brazil is undoubtedly
one of the most exciting
and dynamic in world,
yet it is also one of the
most challenging. We get
an insiders view of the
sector from its regulator,
the company leading the
controversial Belo Monte
hydroelectric dam project
and the national grid
operator.
Brazils power sector:
An inside view
The construction of the 11.3 GW Belo Monte hydroelectric dam in the Amazon is in full swing
Credit: R. Santos/Norte Energia
1309pei_40 40 8/27/13 11:26 AM
350 GW, which represents nearly three times
the current total level of power generation in
Brazil. Wind auctions to date have shown real
promise, so it is only a matter of time before
success for the wind industry is realised.
Solar energy is still at an early stage in its
development, yet it has incredible potential.
Our country, particularly in the north, has
a fantastic solar potential all year round.
Investing in solar plants in these areas
undoubtedly represents a secure investment.
We just need to provide the appropriate
regulation to develop this market.
Biomass is already strong here. Brazil is a big
producer of sugarcane, so biomass derived
from this industry bagasse is a source of
power that refects our cultural roots. It will
grow along with thermal plants as they look
for alternative sources to fuel their turbines.
Overall, renewable energies will grow in the
future. I believe we will soon conduct auctions
by source and by region, which will enable
these energies to fourish rapidly. Managing
auctions in this manner is fundamental to the
sustainability of our energy matrix.
ANEEL has many responsibilities. Nonetheless,
one of its most important roles is to establish
electricity tariffs. How is this done?
ANEELs role in determining electricity
tariffs is highly transparent. A large part of
establishing a tariff focuses on the concession
contract and defning the time of concession
granted for the company winning the
auction, as well as the tariffs applied across
this period.
For instance, the last tariff introduced
for distribution companies took a year. We
consulted with all stakeholders to assess which
regulation improvements should be applied
to the tariffs. This regulation provides the basis
for the tariffs. When dealing with specifc
companies, tariff readjustments are made
when consumers need to be compensated or
to avoid price variations over time.
In the end, we at ANEEL are the guardians
of the regulations developed by governmental
bodies to consolidate and establish fair rules
for the sector. Regulatory stability is our priority.
Brazil is recognised as having one of the
highest electricity tariffs in the world. Can
these tariffs be reduced?
It is clear that our electric power tariffs are
too high, particularly given the tax burden on
consumers. In this sense, one third of the fnal
electricity tariff represents the cost of state and
federal taxes: ICMS taxes on the circulation of
merchandises and services; COFINS [social
security contribution] and the PIS Program for
social integration. Another third corresponds
to the actual cost of generating the electricity,
and the fnal third corresponds to transmission
and distribution costs.
Brazil has 63 distribution companies
covering very different geographical areas.
For instance, Brasilia is one concession area
that is extremely privileged its market is
highly concentrated, with a high per-capita
consumption but a small transmission area.
Therefore tariffs there are below average. In
contrast, if we take Celpa, in the Para region,
it has a diffuse population, resulting in a large
transmission area. This, and its low per-capita
consumption, increases tariffs substantially.
In real numbers, the best concession area
has half the cost of the worst. In some states,
the ICMS reaches up to 42 per cent of the
total electricity price. We must, therefore,work
towards reducing these taxes as much as
possible because in the end it is our citizens
who suffer.
With so many decisions to be taken in regard
to the future of Brazils electric power mix,
what will ANEEL be focusing on over the next
fve years?
Romeu Rufno
President of ANEEL
1309pei_41 41 8/27/13 11:26 AM
Brazil still lacks good electricity supply
services, and it must be our priority to improve
this situation. Other countries have invested
in underground electrical lines, bringing
safety and reliability, as well as reducing the
systems environmental burden. We must work
to accomplish similar results and show the
rest of the world why Brazil is the sixth largest
economy in the world.
In addition to this goal, ANEEL will remain
a strong regulatory agency, implementing
the government directives, ensuring that new
regulations are adhered to and providing a
fair electric power market for all stakeholders,
including all our citizens.
We shall remain the guardians of Brazils
energy policy and collaborate with other
government and non-government bodies to
focus on improving the sector. This is ANEELs
key aim.
Duilio Diniz de Figueiredo,
President, Norte Energia
How is your wealth of industry experience
helping to ensure that Belo Montes starts
operations on schedule?
In my 42 years of experience in the power
sector, I have seen frst-hand the reforms
and adaptations that our industry and Brazil
have gone through. At the beginning of
my career, Brazil was behind in technology
and innovation, but today I can proudly say
that we have some of the most advanced
technology and are capable of managing
some of the most complex hydro projects
ever seen.
Belo Monte defnes my appetite for new
challenges and I am honoured to be part
of such a marvelous project, which is a
momentous part of Brazils legacy for future
generations.
With a capacity of 11.3 GW, Belo Monte will
be the third largest hydroelectric dam in the
world. What does it represent for Brazil?
Belo Monte is in the Para region, which in
fact is bigger than many European countries.
Our municipal area Altamira is almost as
big as Portugal.
Even though 90 per cent of the construction
work for Belo Monte takes place in Victoria
de Xingu, which has 10 000 inhabitants, it
is the Altamira area, which has seen the
biggest changes. Prior to our arrival, Altamira
had 100 000 inhabitants.
However, this region is logistically
challenging because the river does not have
a linear shape and is surrounded by dense
tropical forest. To ease the movement of
materials, we constructed a port to reduce
the costs incurred by transporting goods by
land.
New laws for hydropower projects and
Norte Energias vision to improve the region
go hand-in-hand with the governments
sustainable development plan for the
regions, resulting in environmental and social
compensations being awarded over time.
Because of this a council was established
the Regional Plan for Sustainable
Development of the Xingu where all
stakeholders, including federal and state
government and local communities are
represented. Norte Energia is one out of 30
representatives with the right to vote. Given
we have one of 30 votes in this council, other
stakeholders have key infuence over the
shaping of this project.
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Could you outline the above-mentioned
compensations to elaborate on the social
and environmental benefts of Belo Monte?
Compensation for the communities and
funding for environmental protection are
signifcant, and cover health, education,
public safety, sanitation and housing, as well
as the local fora and fauna.
In terms of health, Altamira will receive a
modern 100-bed hospital. We will also make
improvements to the local hospital at Sao
Rafael, transforming it into a maternity hospital.
Norte Energia also donated 11 ambulances
and four rescue boat teams, which will provide
a fast response to communities living along
the river. Furthermore, malaria is a serious
threat in this region, so our health teams have
been involved in addressing this problem.
From January to June this year, malaria
incidents fell by 77 per cent, compared to the
same period in 2011.
With regard to our education plan, 44
schools have been built and 22 are under
construction. These new facilities, built to
national standards, will give 8500 students the
chance to have a solid education.
Since 2010, Norte Energia has established
new job location services helping communities
fnd a position on the construction site. This has
helped to register over 25 000 people, out of
which only 6000 are migrants.
Our participation has also improved the
regions sanitary conditions and infrastructure.
Around $250 million will be invested in water
and sewage networks connecting Altamira to
Vitoria do Xingu. New neighbourhoods have
also been constructed. By 2014, this will total
4100 living units.
One key component of our activities in this
region is our local support for indigenous tribes.
We have put real emphasis and priority on
the matter of preserving these communities,
their cultural identity, ethnic development,
and protection of their land. We will assist
them with a tailor-made programme, covering
health, education, environmental protection,
infrastructure and territorial management.
We are fully aware of their expectations and
are doing our best efforts to meet their land,
culture and freedom requirements.
Norte Energia has also invested in 14
environmental programmes to protect the
regions unique wildlife and plants. Beyond
species protection, we are undertaking a
number of scientifc studies, with the aim
of taking real steps forwards in terms of our
understanding. This will help further protect the
future of the natural fauna and fora. We have,
for example, undertaken a fsh biotelemetry
project, using combined acoustic and radio
telemetry, to learn more about their migration
and behavioral patterns before and after Belo
Monte was initiated.
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President of Norte Energia
1309pei_43 43 8/27/13 11:26 AM
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Overall these actions highlight Norte
Energias care for local communities, which is
underpined by our belief that hydropower is
a powerful source of multilateral development
for a region.
If we were to meet again in fve years time,
how would you like us to view Norte Energia?
Norte Energia should not be seen only
as a generator of electricity. It is also a social
development tool, promoting education,
health, public sanitation, public safety and
environmental development. We have invested
more than $500 million in environmental and
social projects in the area, as well as supporting
neighbouring communities. By the end of the
Belo Monte project, the investment is expected
to reach $1.8 billion. Our investments are a
testimony to our belief in the development
potential of this region.
In fve or six years, the region will be
transformed and Belo Monte will be part of the
landscape. Hence, the biggest transformation
will be social, granting families dignity, and for
the frst time will give locals better opportunities
in life.
Hermes Chipp, General Director,
ONS
A countrys electricity transmission network
represents its backbone, ensuring supply
and sustainability. What are your views on the
Brazilian transmission system?
In Brazil, the transmission grid does not
simply connect generation sites to load
centres: rather it is a fundamental tool to
enable us to take advantage of the diversity
of hydrological behavior of the countrys
river basins, and thereby maximise the use of
available hydro resources.
The expansion of new hydro projects in
the Amazon region brought with them the
challenge of transporting their power over a
distance of 2500 km to the major load centres,
located in the southeast and northeast of the
country. Therefore, HVDC technology was the
obvious solution. Our engineering capabilities,
technology used and expertise in high-voltage
transmission make Brazil highly competitive in
this domain.
In recent years, the country has achieved
landmarks in the integration of electric power
systems. The states of Acre and Rondonia
were integrated into the grid in 2009 and, this
year, we will complete the interconnection of
Amazonas and Amapa. We expect to integrate
the last remaining state, Roraima, by 2016.
Innovation is a fundamental part of being
able to establish a highly-effcient and
reliable power system. What is the status of
technology developments in this area?
Due to the unique characteristics of the
Brazilian power system, it was necessary
to develop our own solutions to manage
the countrys energy resources. CEPEL, the
electric power research centre, together
with our major universities, play an important
role in the development of tools to achieve
optimisation.
The Brazilian power sector closely follows
the international development of technologies
for control centres and grid management,
and many fruitful national and international
partnerships have helped us to reach a high
standard in power system operation.
Controlling the operations of generation and
transmission companies is a very challenging
1309pei_44 44 8/27/13 11:26 AM
task. How has ONS been successful in this
initiative, and what are the measures that
need to be taken to assist these companies?
ONS is pleased to be a member of the
GO 15 Reliable and Sustainable Power
Grids, comprising major grid operators from
rigth across the globe. The main aim of this
special association is to discuss the necessary
transition and adaptation of power systems
to make grids more effcient through new
technologies and to discuss the future of
energy markets.
Together these operators represent more
than 70 per cent of the worlds electricity
demand and are discussing above all else
what reforms need to happen to increase the
participation of renewable energies for the
sustainability of their own energy models.
What we are observing today is that
operators that own their grid have total control
over what their equipment achieves. Here, in
Brazil, this is not the situation. Nowadays we rely
on 25 grid codes and our objective is always
to build on and improve these procedures, in
order to help us control and coordinate our
complex grid.
Collaboration is a must in any industry and
should be embraced to enable the sharing
of experience, and even assets. This is exactly
what GO 15 aims to do. These representatives
are CEOs with clear ideas about the necessary
reforms that need to be put in place to
improve grid reliability right across the globe.
Therefore bilateral agreements have been
signed and currently we are in an agreement
process with Spain for wind technology
transfer in return for our expertsie in HVDC.
In conclusion, what would you say are the
future priorities and ambitions of ONS?
Our frst priority is to achieve our institutional
mission, which is to guarantee the economic
and reliable supply of power to all consumers,
taking into account the increasing operational
complexity of the power system because
of the diversity of energy resources and the
continental size of the transmission grid.
Secondly, our ambition is to be up to
date with new technological advances in
power system operation, such as smart grids,
demand-side management, solar panels
and electrical vehicles. All these issues will
very soon become part of ONS day-to-day
reality.
In partnership with Focus Reports, we will be
publishing an in-depth report on the Brazilian
electricity sector this year scheduled for the
November issue. For more information on
Focus Reports, visit www.focusreports.net
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Hermes Chipp
General Director of ONS
1309pei_45 45 8/27/13 11:26 AM
V
ietnams economy has been
transformed by ongoing
market-oriented reforms
and recent rapid economic
growth of over 7 per cent
between 1990 and 2011.
GDP has increased from $6.4 billion in 1990 to
$141.6 billion in 2012. Demand for electricity
in Vietnam is now at an all-time high due
to the rapid growth in the last decade and
expansion of the countrys economy. Many
challenges have stood in the way of improving
the countrys power system. Between 2007 and
2012 an average of less than 2000 MW were
added annually, which was not enough to
meet current demand, and with government
projections of over 50 000 MW needed by
2020, Vietnam must address issues hampering
the development of its power sector.
Vietnam
For the past decade
Vietnam has witnessed
GDP growth in excess of
7 per cent, but this has
not been matched by an
increase in generation
capacity. In order to
achieve its ambitious
capacity expansion goals
Vietnam will need to
restructure its regulatory
policies, power tariffs and
fuel linkages, as well as
expand its fnancing and
attract foreign investment,
argues Ravi Krishnan.
A land of both
opportunities
and challenges
Son La Dam: power generation in Vietnam
is dominated by hydro and natural gas
Credit: Alstom
5% Others & Imported
35% Hydro 37% Gas & Oil
23% Coal
Figure 1: A breakdown of Vietnams current fuel mix
1309pei_46 46 8/27/13 11:26 AM
Vietnam
Figure 2: Structure of Vietnams power industry
Ministry of Industry and Trade
Policy Making
Development guidelines
Industry regulator
Prime Minister
Final approval of policies
and guidelines
Independent Power PLants
(IPPs)
Local IPP developers
Foreign IPP developers
Independent Power
Distribution Companies
Develop and operate rural
low-voltage networks
Rural Customers

Rural cooperatives
Rural households
10 million Customers

Industrial & commercial
Urban households
Electricity of Vietnam
Generation: 50.7%
Transmission: 100%
Distribution: 95%
Sells electricity to
customers
Sells electricity to
customers
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Sell electricity to customers
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Flexible, intuitive, object-oriented user interface
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1309pei_47 47 8/27/13 11:26 AM
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The Vietnamese government is in the process of deregulating
the power industry which will increase competition and effciency
in the marketplace. While advances have already been made, the
full realisation of a competitive retail market is not expected until
2022. Other contributing factors to the current shortfalls in capacity
addition that must still be overcome are the shortage in domestic coal
production, high prices for imported coals, administered natural gas
prices discouraging investment, and water scarcity.
Low-reserve margins
Vietnam currently has approximately 23,000 MW of installed capacity
and its annual power production is approximately 115 000 GWh.
Vietnam has one of the lowest electricity consumption rates in Asia
at just over 1000 kWh per capita. The current annual GDP growth
rate is approximately 6 per cent, however the growth of electricity
consumption is 12 per cent per year. This gap will continue to widen
if construction of new power plant capacity does not increase. In the
fve-year span from 2007 to 2012, the total power generation capacity
of Vietnam increased by 9500 MW. Yearly additions averaged under
2000 MW, which is well short of the average annual target of 4000 MW.
Looking forward, the power demand is projected to increase
about 4100 MW every year between 2013 and 2015 based on an
annual 7 per cent average GDP growth. The shortfall in power supply
is especially prevalent at times of peak demand. Thirty-fve per cent
of the countrys installed capacity is provided by hydroelectric power
plants which exacerbates the already poor situation during the dry
season. One recent example was the 2010 drought, which resulted
in signifcantly reduced availability at hydroelectric power plants,
which in turn caused rolling blackouts and periodic load shedding,
particularly in the major cities.
Not keeping up with demand
Vietnams ambitious plans to increase power capacity are marked
by a proposed rapid build-out of thermal power plants. The long-term
target by the government is to achieve 75,000 MW by 2020. According
to the base case scenario of the 7th Power Development Plan, the
overall domestic power demand is forecasted to increase by 1416 per
cent annually in 201115, and by over 11.5 per cent per year between
2016 and 2020.
On the other hand, the growth rate of the total power supply in
the periods of 201115, and 20162020 are at least required to reach
about 14 per cent and 10 per cent respectively. Within the eight
years from now, Vietnam must construct an additional 53,000 MW
to meet this goal. New coal-fred capacity requirement is targeted at
28,000 MW by 2020. New oil- and gas-fred capacity is targeted at
14,700 MW by 2020. In 2020, the frst nuclear power plant with the
designed productivity of 2000 MW in Ninh Thuan will commence
operation. As per the Power Development Plan, by 2030, coal-based
generation will increase to 56 per cent while hydropower and gas will
drop by 15 per cent and 13 per cent.
Challenges to overcome
The bulk of Vietnams power challenges stem directly from how
the countrys power sector is structured. The power industry is still
dominated by public ownership. In its attempt to increase private
1309pei_48 48 8/27/13 11:26 AM
Vietnam
sector participation, the country split its power sector operations
into three state-owned companies in the mid-1990s: PetroVietnam,
Vinacomin (former Vinacoal), and Electricity of Vietnam (EVN). Today,
EVN and its affliates generate 80 per cent of the nations electricity, 40
per cent of which come from hydropower.
EVN is a state-owned enterprise which reports directly to the prime
minister, and is currently the major producer of electricity. EVN also
holds a practical monopoly on electricity transmission and distribution.
This makes it effectively the controller of the existing energy businesses
and prevents introduction of new players.
In 2006, the government approved a roadmap for establishing a
competitive power market and began to restructure the sector, starting
with establishing EVN as a private holding company.
This restructuring involves a move from the system of state-owned
rms having direct market control to a system in which the energy
supply and demand is decided by the market. The restructuring is
intended to encourage fair and efcient competition, and some
results have been achieved. Private investors are being encouraged
to participate in power generation projects and trade in petroleum
products. Prices are being benchmarked against international prices
in the downstream market for coal, and benchmarking of oil and gas
is planned to be established by 2015.
In accordance with the Vietnam Electricity Law, a roadmap
has been set up that includes three phases for power market
development. The rst phase for a competitive power generation
market, commenced in 2009, and is slated for completion in 2014. This
will be followed by the second phase, beginning in 2014 and ending
in 2022, establishing a competitive market in bulk power. Finally, the
third phase is the introduction of a competitive retail power market,
scheduled to take place from the year 2022.
The process of deregulation has been plagued by continuous
delays due to bureaucracy and hold-ups in generating units in
installing the required systems and processes to enable collection and
processing of information to calculate their power prices
One of the biggest challenges for Vietnam is to satisfy the swelling
coal requirement. A country that in 2008 produced 40 million tonnes of
coal a year and exported nearly 80 per cent of it will witness a growing
domestic demand for coal but cannot guarantee its future supply. The
coal requirement for 2020 and 2030 will be around 78 million tonnes
and 170 million tonnes respectively based on current projections.
Vietnams indigenous supply of coal increases only 58 per cent
annually. Inadequate domestic supply will continue to challenge
capacity expansion issues. It is estimated that over 30 billion tonnes
are located in the northern Red River basin, but these are untapped
because the region is one of the countrys largest rice-growing area.
Additionally, Vietnam does not have the capital to develop new mines.
Another reason cited is the high cost of producing Vietnams primary
coal anthracite at $230/tonnes compared with an average $110/
tonne for steam or thermal coal.
Imported sub-bituminous coal from Indonesia is the most likely
source of coal to meet domestic shortfall. However, use of imported
fuel will require tariff revisions. Either EVN has to implement a retail tariff
mechanism that passes these costs to consumers or else government
guarantees are needed. Domestic supply of coal is becoming more
expensive and likely to be reaching production limits by 2020. Therefore,
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1309pei_49 49 8/27/13 11:27 AM
Vietnam
the government needs to develop policy that
adjusts power prices to refect the cost and a
reasonable rate of return for private producers.
Additionally, Vietnams ability to take equity
positions in overseas coal mines is limited.
The government strictly regulates electricity
retail prices, with adjustments recommended
by the Ministry of Trade and Industry (MoIT)
and requiring approval by the prime minister.
A unifed tariff is applicable across the
country and is low in comparison with other
regional countries. Both average urban and
rural residential rates are cross subsidized
by higher rates for industry, commerce, and
foreign consumers.
To attract more investment from the private
sector in developing IPP projects, MoIT and
EVN have been working on a roadmap for
price increases and gradual elimination of
governments control. Any initiative to increase
tariff rates can be politically risky for the
government. To harness foreign fuels, EVNs
average tariff needs to be 3035 per cent
higher than current levels to make EVN a secure
counter-party. Subsidies and price ceilings can
potentially make EVN a risky off-taker.
Natural gas prospects are presently
impacted by depressed prices paid to
developers and poor pipeline infrastructure.
Furthermore, meeting future power generation
targets will be subject to gas volume and supply
confrmation from southeast and southwest
Vietnam. The policy of maintaining the low gas
price tends to discourage investment in gas
exploration and development.
As a result, gas supply will not be suffcient
for economic development in the coming
years, especially after 2015. Vietnam needs to
make structural changes such as:
Instituteacomprehensivenational
natural gas policy;
Establishacomprehensivegaslaw;
Openaccessandwholesalecompetition;
Removegaspricecontrols;
Reducepressureongasdemand.
Today, power generation in Vietnam
is dominated by hydro and natural gas.
However, looking into the future, this southeast
nations current Power Development Plan
(PDP) is setting its sights on coal-fred power
generation with proposed rapid build-out of
thermal power plants.
Faster commissioning
The long-term forecast as per Vietnams Master
Year 2007 2008 2009 2010 2011 2012
Total installed capacities (MW) 12,510 13,850 15,539 18,540 20,040 22,044
Increase on previous year (MW) 240 1340 1689 3001 1500 2004
Growth in Vietnamese generating capacity, 2007-12
1309pei_50 50 8/27/13 11:27 AM
Vietnam
Plan VII is targeting 75,000 MW of installed
capacity by 2020 and 158,000 MW by 2030.
Power projects will have to be commissioned
at signifcantly faster rates as capacity grew by
only 12,000 MW in the last ten years.
Several challenges will need to be
overcome, including diversifying its energy
mix, securing future fuel supplies, increasing
domestic coal production, power tariff
revisions, raising investor capital to build new
projects and controlling corruption. Due to
subsidies, domestically-produced coal and
natural gas are priced substantially lower than
imports, which are at international levels. Dual
pricing makes it diffcult to determine the true
cost of electricity. Further, electricity tariffs are
still regulated by the central government, and
are underpinned by signicant cross-subsidies.
This causes distortions in the energy market
system dissuading international investment.
Additionally, the dominance of state-
owned enterprises makes them effective
controllers of the existing energy businesses
and prevents the introduction of new players.
Therefore, along with the deregulation,
additional measures such as monopoly
prevention, equitisation, and privatisation
are needed in order to develop an effcient
energy market.
About the author Ravi Krishnan is managing
director of Krishnan & Associates Incorporated,
a US-based market advisory frm providing
market information, analysis, regulatory and
technology assessments on various global
energy markets. For more information, visit
www.krishnaninc.com.
i
Wholesale Competitive Market Retail Market
Genration Competitive Market
(Single Buyer)
2005 2009 2014 2016 2022 2024
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Road map for Vietnamese power sector deregulation
1309pei_51 51 8/27/13 11:27 AM
U
sing current technology to
capture the carbon in fue gas
at fossil fuel power plants would
increase the cost of electricity
they produce by between 35
per cent and 85 per cent, but
a simulation shows that using supported
amine sorbents (SASs) instead could be a less
expensive solution.
SASs would reduce these facilities capital
expenditure on a capture facility because
the adsorber which contains these materials
would be about 60 per cent smaller in volume
than the absorber that would be required if
the monoethanolamine (MEA) solutions of
todays technology were used to perform the
same task. This is because the SAS system
avoids the slow mass transfer associated with
dissolution and diffusion in the liquid in the
MEA system. And these cost savings come on
top of energy savings.
Today capture and compression costs
contribute to around 80 per cent of the total
cost of carbon capture and storage (CCS)
[1]
.
But excluding compression, thermal energy
consumption and other operational costs
dominate capture costs, as shown in Figure
1, and the capital expenditure, 28 per cent, is
mainly made up of the cost of the absorption
unit, covering almost 50 per cent of the total
CAPEX.
Figure 2 breaks down the energy
requirement fraction (44 per cent of the total
cost of CO
2
capture) into contributions for
reaction or desorption heat, sensible heat and
solvent evaporation.
A large part of the energy requirement
of an MEA process arises in the heating
of the amine solution from the absorption
temperature to the desorption temperature,
and in the evaporation of solvent in the
desorber column, so replacing the water
phase with an SAS greatly reduces the energy
required for regeneration. An adsorption-
based capture process could reduce the
net energy requirement for CO
2
capture from
roughly 3.3 GJ/tonneCO
2
(GJ/tCO
2
)
[4]
to
below 2 GJ/tCO
2
, assuming that 75 per cent
of the heat contained by the regenerated
sorbent is recovered for heating the sorbent
before it enters the desorber.
If co-adsorption of water can be prevented
and no water has to be evaporated in the
desorber, the process energy requirement
could even be 1.7 GJ/tCO
2
.
Another advantage of using SAS
would be the reduction of the emissions
of toxic degradation compounds such as
nitrosamines and nitramines.
Cost-effective carbon capture
Supported amine sorbents (SAS) could make post-combustion carbon capture
less costly. So says A. B. M. Heesink, R. Veneman, G. Magneschi and D. W. F. Brilman,
who outline a conducted simulation that points to this conclusion.
Cutting
the cost of
carbon capture
Figure 1: Typical cost breakdown for MEA-based
carbon capture
[2,3]
Figure 2: Typical energy breakdown for NEA-based
carbon capture
[2,3]
Cost breakdown
28% OPEX (other)
28% CAPEX 44% Energy req.
45% Sensible heat
15% Evaporation
Energy requirement
36% Reaction heat
1309pei_52 52 8/27/13 11:27 AM
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Simulation
Our simulation employed DNV KEMA Energy
& Sustainabilitys Spence
fowsheeting tool,
which determines power plant performance
accurately. Data about the sorbent has
come from SAS that the University of
Twente in the Netherlands has produced
through the physical impregnation of
polymethylmethacrylate, (PMMA) in this case
Diaion HP-2MG, with tetraethylenepentamine
(TEPA) and polyethyleneIimine (PEI) of different
molecular weights and chain lengths.
Our analysis calculated the effciency of
a typical natural gas-fred combined-cycle
(NGCC) plant of 446 MWe and a ultra
supercritical pulverised coal (PC) plant of
1069 MWe, each equipped with either an
MEA-based capture facility or an SAS-based
one, providing four cases. The analysis
compared the amount of energy consumed
per kg of CO
2
captured in each case.
SAS characteristics
SAS consist of a support material of high
surface area with amine functional groups on
their surface
[5]
. The universitys sorbent material
had a CO
2
capacity of 3.8 mol/kg sorbent [6].
Figure 3 shows adsorption isobars for a
typical developed sorbent. The sample was
heated from 40C to 140C at a rate of 0.1
K/min in fractions by volume of 1 per cent, 5
per cent, 10 per cent and 80 per cent CO
2

atmosphere (balance N
2
) at a total fow rate
of 100 ml/min. From the selected adsorption
and regeneration conditions the sorbent
operating capacities were calculated for CO
2
capture at NGCC and PC plants.
Flue gas from an NGCC plant typically
contains 47 per cent of CO
2
by volume,
whereas from a PC plant it contains 10 to 15
per cent.
The sorbent working capacity is the
difference between the CO
2
loading under
adsorption conditions and the loading under
desorption conditions. During capture, when
the fue gas contains 10 per cent of CO
2
by
volume and desorbing is at 130C, working
capacities of around 3.1 mol/kg can be
achieved with the developed sorbent. For
capture from fue gas containing 5 per cent
CO
2
, working capacities of about 2.6 mol/kg
can be achieved under these conditions.
Process analysis
The Spence fowsheeting tool calculated how
much thermal energy each case of power
plant would require for regeneration of the
solvent or sorbent and what the resulting drop
in power from the plant would be. This thermal
energy would come from low-pressure steam
at 4.6 bara (460 kPa) for the NGCC plant and
3.5 bara for the PC fred plant.
Table 1 shows general information about
the carbon capture facility. The boundary
of interest of the system excludes CO
2

transport and storage systems but includes
compression.
The models
The modelled MEA-based capture facility was a
standard regenerative absorption-desorption
system, with a net thermal energy input of
3 GJ/CO
2
. Values for the heat requirement of
leading absorption technologies are between
2.73.3 GJ/tCO
2
[4]
. Operational assumptions
for the absorber and desorber column were
110 kPa and 40C, and 170 kPa and 118C,
respectively. The fue gas side pressure drop
was 8.15 kPa for the PC system and 4 kPa for
the NGCC system.
The electrical energy requirement of the
capture facility came from three types of
equipment: the fue gas blower, the pumps to
circulate the absorption liquid and the CO
2

product compression equipment.
The SAS model was also a regenerative
system in which sorbent material circulated
between the adsorber and desorber columns,
the operating temperatures in which were
60C and 130C, respectively, and the pressure
atmospheric in both cases.
Calculation of the thermal energy input
of this facility relied on the work of Li et al
[7]

and sums the desorption heat, equal to
1.5 GJ/tCO
2
[8]
, and the sensible heat required
to raise the sorbent from the adsorption
temperature to the desorption temperature,
Figure 3: Adsorption isobars for 1 per cent, 5 per cent, 10 per cent and 80 per cent of CO
2
by volume
(P
total
= 100 kPa). The sorbent was 38 per cent by weight TEPA on PMMA
Parameters NGCC PC
Flue gas CO
2
content (vol.%) 4.4 13.7
CO
2
captured (kg/s) 38.0 202.3
Capture effciency (%) 90 90
CO
2
purity (%) 95 95
Pressure CO
2
product stream (bar) 110 110
Table 1: Capture plant data for selected cases
1309pei_54 54 8/27/13 11:27 AM
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which depends on the heat capacity of
the sorbent (1.5 KJ/kg/K), the temperature
difference between the adsorption and
desorber columns (70 K) and the cyclic CO
2

capacity of the sorbent.
Figure 4 shows the net thermal energy
requirement of the process as a function of
sorbent working capacity. For the selected
adsorption and regeneration conditions,
this is about 1.7 GJ/tCO
2
at sorbent working
capacities of 2.63.1 mol/kg when heat
integration is applied, or 40 per cent lower
than in MEA-based systems with advanced
stripper confgurations typically 3 GJ/tCO
2
.
At working capacities higher than 2 mol/
kg the reaction heat dominates the thermal
energy demand. Furthermore, increasing the
sorbent working capacity beyond 4 mol/kg
does not improve the overall performance.
Heat integration (lean/rich heat
exchanger) is more important in aqueous
solvent based processes, as fgure 5 shows.
In the calculations underlying Figure 4 the
assumption was made that 75 per cent of the
sensible heat required for heating the sorbent
can be recovered. Possible co-adsorption of
water in the adsorber column was not taken
into account.
The calculation of the electrical energy
required summed the energy consumed by
the fue gas blower, sorbent circulation and
CO
2
compression. Generally compression of
captured carbon accounts for 2025 per cent
of the total electrical energy requirement
[9]
. The
experimental work at the University of Twente
shows sorbent regeneration at elevated
pressure of up to 1000 kPa can further improve
the energy effciency of an SAS-based capture
process in a CCS setting. Releasing CO
2
at 500
kPa, for example, would reduce the electrical
energy required for compression signifcantly
and eliminate one compression stage.
The fue gas side pressure drop in the
absorber depends strongly on the type
of contactor chosen. Fixed bed operation
leads to very high pressure drops and is not
a realistic option. Moving bed and fuidisation
technologies are more suitable options.
From an ongoing process optimisation
study by Veneman et al
[6]
the most promising
option appears to be a countercurrent gas-
solid (GS) trickle bed contactor. The pressure
drop for this contactor is estimated to be
around 6.4 kPa. Our energy calculations used
a value of 7.5 kPa. On the regenerator side the
pressure drop is less critical and a (staged)
fuid bed confguration might be a more cost-
effective option.
The installation of a capture facility at a
power plant results in a decrease in electrical
power output because steam is extracted
from the plant for the regeneration of the
solvent or sorbent. Table 2 shows the effect.
However, the lower thermal energy
requirement of the SAS-based process means
the loss in gross power is less than in the case
of a solvent-based process.
A PC power plant emits 2.7 times more CO
2

per MWh than an NGCC plant, so application
of carbon capture at a PC plant has a higher
impact on the power output.
Figure 6 plots the energy demand in
GJ/tCO
2
of the capture facility for each case.
The columns labelled Thermo min. work show
the thermodynamic minimum amount of work
required for CO
2
separation and compression
to 11,000 kPa.
The desorption energy fraction is related to
the decrease in the electrical energy output
of the power plant caused by the extraction
Figure 4: Thermal energy input for an SAS facility in a process simulation. Heat integration yields 75 per cent
of the energy needed to raise the sorbent temperature from that of adsorption to that of desorption.
Figure 5: Importance of capture plant heat integration for MEA and SAS. For MEA it is assumed that the
pinch in the rich-lean heat exchanger is 10C
1309pei_56 56 8/27/13 11:27 AM
2
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of low-pressure steam for the regeneration of
sorbent/solvent. The electrical energy fraction
includes energy for the circulation of sorbent
or solvent and the power demand of the fue
gas blower. The compression energy fraction
is related to the power consumption of the
CO
2
compressor.
Figure 6 shows that an SAS-based capture
facility at an NGCC plant would be 32 per
cent more effcient than an MEA-based one.
For a PC plant an SAS-based plant is 35 per
cent more effcient.
Additional savings could be reached by
further reduction of the fue gas side pressure
drop and possibly via high-pressure sorbent
regeneration, which could save up to 10 per
cent of the CO
2
compression energy. A value
of 65 kJ/molCO
2
for the reaction heat was
assumed here, typical for secondary amines.
The values reported by Gray et al of 47.5 and
51.6 kJ/molCO
2
for immobilised PEI would
reduce the reaction heat contribution by
another 0.30.4 GJ/tCO
2
to below 1.5 GJ/tCO
2

and reduce the overall energy consumption by
0.1 GJ/tCO
2
.
Process design & CAPEX
Figure 7 shows the breakdown of purchased
equipment costs for an MEA-based capture
unit at a 500 MWe PC plant (excluding the CO
2

compressor). Almost 30 per cent of the costs is
associated with the absorber
[10]
. The size of the
absorber is predominantly determined by the
residence time of the fue gas.
The application of SAS could potentially
reduce the size of the absorber column
because GS systems have a higher overall
mass transfer rate.
For conventional MEA scrubbers, overall
mass transfer rates depend on the type of
packing but are 10
-2
to 10
-1
(k
L
a/s)
[11].
Typical
values for GS systems are 10
1
k
G
a/s [12]. So
CO
2
uptake rates are expected to be higher
than for the MEA benchmark technology,
even though CO
2
absorption is signifcantly
enhanced by the chemical reaction
between CO
2
and the dissolved MEA.
The enhancement factor E
A
can be as
high as 10
2
. This means an SAS-based facility
could be equipped with an adsorption
Figure 6: Electricity consumption for capture facilities studied
Plant Data NGCC PC
No capture MEA SAS No capture MEA SAS
Heat input (MWth) 756.7 756.7 756.7 2307.3 2307.3 2307.3
Gross power (MWe) 452.4 408.2 431.1 1116.7 935.9 1031.8
Net power (MWe) 445.5 384.2 403.8 1068.6 804 897
Power plant auxiliaries (MWe) 6 5.1 5.6 45.9 46 45.9
Capture plant electricity demand (MWe) - 6 7.3 - 19.9 14.2
CO2 Compression (MWe) - 12.1 13.6 - 64.5 72.9
Power output reduction (MWe) - 61.3 41.7 264.6 171.6
Net plant effciency (%) 58.9 50.8 53.4 46.3 34.8 38.9
Effciency penalty (%-points) - 8.1 5.5 - 11.5 7.4
Emitted CO
2
(kg/s) 42.2 4.2 4.2 224.8 22.5 22.5
Captured CO
2
(kg/s) 0 38 38 0 202.3 202.3
Emission rate (tCO
2
/MWh) 0.34 0.04 0.04 0.76 0.10 0.09
CO
2
capture energy requirement (GJ
el
/tCO
2
) - 1.61 1.10 - 1.31 0.85
Table 2: Simulation results
1309pei_58 58 8/27/13 11:27 AM
column smaller than the absorption
column of an MEA-based facility.
When applying SAS, a GS trickle fow
reactor could perform as well as a CO
2

adsorber. It allows for counter-current GS
contacting and can be operated at gas
velocities equal to or higher than those
in an MEA scrubber, without resulting in
unacceptable pressure drops. Preliminary
sizing of a GS trickle fow adsorber was
performed using the hydrodynamic model for
trickle fow reactors developed by Dudukovic
et al
[13]
.
Table 3 compares SAS and MEA systems
for productivity, pressure drop in view of
electricity consumption for the fue gas blower,
Figure 7: Breakdown of the costs of purchased
equipment of an MEA-based capture facility
(excluding the compressor) at a 500 MWe coal
fred power plant
[10]
Technical comparison (MEA) Fisher et al
[10]
(SAS) current work
Flue gas fow rate (m
3
/s) 576.4 579.2
CO
2
captured (kg/s) 115.2 115.2
Solvent/Sorbent capacity (mol/kg) 0.96 3.6
Solvent/Sorbent fow rate (kg/s) 2739 873
Ab-/adsorber volume (m
3
) 4713 2387
Number of ab-/adsorption units 4 2
Ab-/adsorber dimension
height: 15 metres,
diameter: 10 metres
height 11 metres,
diameter: 12 metres
Adsorber productivity (mol/m
3
/s) 0.56 1.2
Gas velocity (m/s) 1.83 2.55
Pressure drop (kPa) 10.3 6.42
NTU 2.2 3.32
HTU (m) 6.82 3.04
(E
A
)k
m
a/(s) 0.27 0.84
Table 3: Design for absorber or adsorber for capturing 90 per cent of the CO
2
emitted by a
500 MWe PC-fred power plant
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and operating velocity in view of the footprint
of the absorber/adsorber. Productivity was
defned as the amount of CO
2
captured per
second per m
3
of installed reactor volume,
which is a measure of compactness and,
therefore, of capital expenditure.
Expectations are that a gas-solid trickle
bed adsorber would outperform an MEA
scrubber column in productivity (1.20 mol/
m
3
/s versus 0.56 mol/m
3
/s). The total installed
reactor volume is expected to be two to three
times smaller primarily because of the higher
mass transfer rates in trickle bed reactors.
Recommendations
Table 4 compares a sorbent-based capture
process with state-of-the-art capture
technology that employs aqueous amine
solvents.
Co-adsorption of water by a sorbent results
in extra energy consumption during capture
and complicates sorbent regeneration
because CO
2
water separation would
be needed. However, frst measurements
performed by the University of Twente have
shown that CO
2
capacity is not negatively
affected by the presence of water.
A second recommendation is to determine
possible sorbent degradation by traces of
NOx and SOx in the fue gas, as well as the
potential presence of nitrosamines and
nitramines in the treated fue gas and, with this,
the need for a washing section.
The mechanical stability of the sorbent
should also be examined to determine the
maximum number of cycles that can be
attained with a single batch.
Sorbent regeneration under elevated
pressure needs further examination too.
Pressurised regeneration would enable further
energy savings as CO
2
compression would
consume less energy and one compression
stage can be omitted.
A fnal recommendation is to prepare a
conceptual design of a full-scale sorbent-
based carbon capture unit to provide a more
detailed estimate of what the savings will be in
energy and capital expenditure.
Parameter/feature
Aqueous amine
solvent (reference)
SAS
Energy consumption +/- ++
Potential for further energy savings +/-
+ (high-pressure
regeneration)
Solvents / sorbents handling +/- -
Solvent/sorbent degradation +/- +/-
Bare equipment costs (CAPEX) +/- +
Emissions of toxic nitrosamines/
nitramines
+/- (not known)
Table 4: Comparison of aqueous amine solvents and SAS
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References
1.Brunetti A, Scura F, Barbieri G, Drioli E,
Membrane technologies for CO2 separation,
J. of Membrane Science, 359 (2010) 115-125.
2. Abu-Zahra M R M, Schneiders L H J, Niederer
J P M, Feron P H M, Versteeg G F, CO2 capture
from power plants: Part I. A parametric
study of the technical performance based
on monoethanolamine, Int. Journal of
Greenhouse Gas Control, 1 (2007), 37-46
3. Abu-Zahra M R M, Niederer J P M, Feron P
H M, Versteeg G F, CO2 capture from power
plants. Part II. A parametric study of the
economical performance based on mono-
ethanolamine, Int. Journal of Greenhouse
Gas Control, 1 (2007), 135-142
4. Mathieu P, The IPCC special report on
carbon dioxide capture and storage, ECOS
2006: Proceedings of the 19th International
Conference on Effciency, Cost, Optimisation,
Simulation and Environmental Impact of
Energy Systems, Vols 1-3, (2006) 1611-1617.
5. Ebner A D, Gray M L, Chisholm N G, Black Q T,
Mumford D D, Nicholson MA, Ritter JA, Suitability
of a solid amine sorbent for CO2 capture by
pressure swing adsorption, Industrial and
Engineering Chemistry Research, 50 (2011)
5634-5641.
6. Veneman R, Li Z S, Hogendoorn J A, Kersten
S R A, Brilman D W F, Continuous CO2 capture
in a circulating fuidised bed using supported
amine sorbents, Chemical Engineering
Journal, (2012).
7. Li Z S, Cai N S, Croiset E, Process analysis
of CO2 capture from fue gas using
carbonation/calcination cycles, AIChE J, 54
(2008) 1912-1925.
8. Fauth D J, Gray M L, Pennline H W, Krutka H
M, Sjostrom S, Ault A M, Investigation of porous
silica supported mixed-amine sorbents for
post-combustion CO2 capture, Energy and
Fuels, 26 (2012) 2483-2496.
9. Rochelle G, Chen E, Freeman S, Van Wagener
D, Xu Q, Voice A, Aqueous piperazine as the
new standard for CO2 capture technology,
Chemical Engineering Journal, (2011).
10. Fisher K S, Beitler C, Rueter C, Searcy K,
Rochelle D G, Jassim D M, Integrating MEA
regeneration with CO2 compression and
peaking to reduce CO2 capture costs,
DOE/NETL report, Contract No. DE-FG02-
04ER84111, (2005).
11. Jassim M S, Rochelle G, Eimer D, Ramshaw
C, Carbon dioxide absorption and desorption
in aqueous MEA solutions in a rotating
packed bed, Industrial and Engineering
Chemistry Research, 46 (2007) 2823-2833
12. Kiel J H A, Prins W, van Swaaij W P M,
Mass Transfer between gas and particles
in a gas solid trickle fow reactor, Chemical
Engineering Science, 48 (1993), 117-125
13. Dudukovic A P, Nikacevic N M, Petrovic D
L, Predojevic Z J, Solids holdup and pressure
drop in gas fowing solids-fxed bed contactors,
Industrial & Engineering Chemistry Research,
42 (2003), 2530-2535.
A. B. M. Heesink and G. Magneschi are from
DNV KEMA, based in the Netherlands, and
R. Veneman and D. W. F. Brilman are researcher
at the Dutch University of Twente.
This article is based on a Best Paper Awards
winner at POWER-GEN Europe 2013.
1309pei_61 61 8/27/13 11:27 AM
India grid development
A
year after the worlds most
extensive blackout, India
has avoided a repetition
and can claim to have
addressed many of the
issues that led to it.
The blackouts last July occurred in the
northern and northeastern regional grids and
affected an estimated 600 million people,
although the widespread use of backup
generators in a country familiar with rolling
blackouts did soften the impact.
The outage resulted from an unanticipated
imbalance between regions, caused by a
combination of extreme weather, human error,
underinvestment and poor regulation and
system management.
The power grid failure refected an
extreme situation created by drought, which
resulted in very heavy electricity demand for
agricultural irrigation pumps combined with
low hydro power production, as well as poor
power demand management for the states
linked to the grid, says Rajiv Biswas, Asia
chief economist at consultancy IHS Global.
The result was to expose weak links such as
inadequate fail-safe systems for preventing
cascading failures and a lack of proper
outage planning all in a cash-strapped
transmission system that has historically been
at a disadvantage to generators in competing
for already scarce funds.
Since then, according to Harish Agarwal,
chief executive of Supreme & Co, a
Kolkata-based power infrastructure supplier,
the government has been tackling these
issues with a variety of measures, including
a tightening of the grid frequency band
to ensure states dont overdraw, auditing
protection systems to improve grid health,
power islands and demand management.
Biswas says since the blackout, there had
been much closer management of supply
and demand for power by Power Grid Corp
of India Ltd (PGCIL) together with the states in
line with planned schedules, which had so far
helped avert another grid collapse. Attention
has also been paid to the fnancial health
of distributors, which have frequently been
squeezed by political considerations and
upon which the sector depends for income.
In addition, considerable funds are being
pumped into grid development. Power
Grid is undertaking a large-scale investment
programme over the current fve-year plan
period ending in 2017, with an estimated
$18 billion of new investment planned to
double its transmission capacity and upgrade
its existing transmission networks, says Biswas.
By early next year, the southern grid which
is currently connected to the rest of Indias
grid by HVDC links will be fully connected at
AC level. And India is upgrading nearly 1700
critical electricity transmission stations and is
installing high-voltage lines to transmit power
over long distances.
One of the key investments PGCIL is
undertaking to deal with peak load capacity
The shortcomings
of Indias electricity
infrastructure were
thrown into sharp
focus by last years
blackouts. Twelve months
on, Jeremy Bowden
discovers that multi-
billion programmes
have been initiated to
ensure the countrys
lights stay on.
Beating the
blackouts
Since last years blackout there has been much closer
management of supply and demand of power in India
Credit: PGCIL
1309pei_62 62 8/27/13 11:27 AM
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shortages is to create a national energy
transmission grid by linking the grid for
southern India with the four regional grids
in the north, which are already connected,
said Biswas. This is intended to better manage
peak load shortages and is expected to be
implemented by early 2014, according to
Indias Power Minister, Jyotiraditya Scindia.
Inter-regional power transmission capacity
is estimated to increase from 27,750 MW in
2012 to 65,550 MW by 2017, along with almost
140,000 km of transmission lines.
According to Suba Arunkumar at
consultancy Frost & Sullivan, PGCIL is
planning on spending one trillion rupees on
improving the infrastructure and grid system
to ensure such blackouts do not happen
in future. The company is developing 11
high-capacity transmission corridors to
connect power from various projects across
Indias electricity producers to the network.
However, it is politically diffcult to secure
right-of-way for new transmission lines, so
power utilities have focused on upgrading
existing corridors.
Rohit Pandit, director of the Indian Electrical
& Electronics Manufacturers Association
(IEEMA), says the focus for power sector
investment over the years has typically been
in the generation segment, and more money
needs to go to the grid to keep pace.
Generating capacity is expanding rapidly,
despite coal shortages and other constraints.
In the last fscal year, the target was
16,500 MW, which at 20,450 MW was exceeded
by a third, according to Power Minister Scindia,
who forecasts a rise from a 228 GW demand
now to 400 GW by 2022 and 800 GW by 2032.
This will be driven by increases in per capita
consumption, which is currently very low
at around 600 kWh compared to a world
average of 2700 kWh as well as expanding
to include 300 million unconnected citizens.
In July 2012, there was a gap of about
9 per cent between the countrys energy
requirement and the amount available,
according to Indias Central Electricity
Authority (CEA). Based on the statistics as of
31 March 2013, the gap remains stable, and
not growing, notes Arunkumar.
However, increasing network capacity will
be critical, because most of Indias demand
is growing in the western states, while most of
the suitable locations for new plants are in the
east. PGCIL has embarked on a signifcant
fnancing programme for the new investment,
including new debt issuance, as well as new
equity raising, according to Biswas.
Pandit notes that what is being achieved
is currently ahead of schedule: From April
2012 to June 2013, the actual achievement
has been a total of 20,009 km of transmission
lines against a target of 19,118 km for this
period. Similarly, from April 2012 to June 2013,
the actual achievement has been a total of
72,700 MVA of sub-stations against a target of
33,319 MVA.
Balancing state grids
According to Biswas and Agarwal, since the
July 2012 grid failure, there has been much
more careful management by PGCIL of power
supply and demand by individual states linked
to the grid, to avoid situations where states are
either supplying or drawing power signifcantly
different to planned power schedules.
To help manage demand more effectively
at state level, larger penalties under the
availability based tariff (ABT) system, known
as unscheduled interchange (UI) rates, have
been introduced by the Central Electricity
Regulatory Commission (CERC) for state
distribution companies that inaccurately
estimate their daily call on the grid.
In addition, states must also make those
estimates more accurate, narrowing the
required frequency band which is an
indication of how close a grid is to balancing
supply and demand to to 49.750.2 Hz from
the existing 49.550.2 Hz. If power is overdrawn,
then band volatility rises. CERC has also been
pushed to cap market prices to ensure no one
can take advantage of system vulnerabilities.
Mumbai: the city avoided the July 2012
blackout thanks to its use of islanding
Credit: MERC
1309pei_64 64 8/27/13 11:27 AM
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India plans to have an integrated national
grid. The target frequency prescribed by the
Indian Electricity Rule is 50 Hz, says Agarwal.
All states are now participants in the central
ABT scheduling mechanism.
These changes had been proposed in
draft form in March before the blackouts,
and now that they are implemented,
should provide strong fnancial incentives to
discourage states from providing the sort of
faky estimates that led to the mismatch in
supply and demand last year.
To ensure accurate estimates and a
narrow frequency band, states must be able
to quickly react to changes in supply and
demand within their area by changing power
output or shedding load, rather than just
increasing their call on the wider grid. Indias
power minister has authorised the national
transmission authorities to shut down power
fow to states which deviate too far from
their estimated grid call. So far this year the
government says states are responding well to
the new fnancial discipline.
However, transmission and distribution
losses in the Indian power sector remain high,
at levels estimated to be around 26 to 28 per
cent of total electricity generated, compared
to a range of around 4 to 8 per cent in most
developed economies, according to Biswas.
Indias electricity grid reform programme
R-APDRP has committed $3.7 billion
to strengthen the distribution system and
mitigate losses. Under the programme, if a
utility cannot reduce ineffciency losses by 15
per cent, its grant will be reduced.
PGCIL power pact
Every year PGCIL signs an agreement with the
Ministry of Power, indicating its role, and state
utilities make arrangements with PGCIL, which
is steadily increasing its share of the transmis-
sion network, as state distribution companies
(Discoms) fail to make required investments.
PGCIL is planning to boost its market
share to 70 per cent from the existing 50 per
cent by 2017, by increasing spending on
strengthening infrastructure, says Arunkumar.
Revenue is also expected to rise sharply
according to senior PGCIL management,
who claim a doubling of expenditure on
transmission projects in the fve years to March,
2017, will quadruple income once completed.
PGCIL continues to be dependent on
Indias state generators and distribution
companies (discomms) for business. Should
producers fail to meet expansion targets,
as has been the case for the last 50 years,
PGCIL could fall short of its investment target,
according to local observers.
Chetan Varma, general manager of PGCIL,
says that the present state of distribution
companies is due to high losses, old and
unreliable distribution network and ineffcient
metering, billing and collection effciency.
To improve the picture, he explains central
government schemes like APDRP and R-APDRP
for urban and semi-urban area and RGGVY
for rural areas were envisaged and are under
implementation and they are all aimed to
improve the technical and fnancial condi-
tions of the distribution companies.
Pandit says: The poor fnancial state of
state discoms is a major hindrance in up
gradation of the power infrastructure at the
state level.
Politically-motivated electricity pricing has
lowered rates and dried up revenue, thereby
1309pei_65 65 8/27/13 11:27 AM
limiting funds to invest in the grid. Clearly, coal
shortage and the poor fnancial health of
discoms have slowed down the sector. There
has been fnancial shortage for key projects,
resulting in less investment, says Biswas.
Recently, indexation of coal prices and
reforms steps have been announced to
make discoms fnancially viable, he adds.
The central government is also helping state
governments with over $5 billion in fnance to
expand distribution.
Arunkumar says funding had not been a
major constraint on transmission investments
in the last year, although Pandit cautions
that projects often failed to be completed.
Help has also come from outside India, with,
for example, the Asian Development Bank
planning a second loan to upgrade state
power grids in India to help solar plants
sell electricity. Such intervention can speed
capacity development as it saves developers
the cost of connecting to the grid individually.
Smart grid roll out
The R-APDRP electricity reform programme
should help pave the way for a successful
smart grid rollout. Indias Ministry of Power has
invested in smart grid projects, but so far a
mix of power theft, supply shortfalls, and inef-
fciency in metering and bill collection are
making it rather pointless.
Despite this, the India Smart Grid Task Force
is seeking government approval for 14 smart
grid pilots to develop a proven blueprint that
can be rolled out nationally, says Varma. He
says PGCIL is developing a consumer-utility
interactive pilot smart grid/city project in
Pondicherry. A smart grid control centre has
been established. Under this pilot, already 650
consumers are covered under advanced
metering infrastructure solution, which will
enable demand management.
While smart grids could play a part in
the future, without more peak-load plants,
Indias immediate need is for demand-side
management (DSM) to offset peak demand
and load growth.
The 12th Five Year Plan targets a reduction
in the energy consumption of small and
medium enterprises [SMEs] by 5.75 per cent
in energy intensive manufacturing process,
says Arunkumar. Efforts to implement energy
effcient manufacturing process are enforced
in these energy intensive SMEs.
However, many of the DSM initiatives are
from IPPs. For example, Tata Power in Mumbai
has launched thermal energy storage and
DSM initiatives that has supported peak
load shifting by high end consumers. These
initiatives have helped the participating
industries to reduce electricity consumption
by 30 to 40 per cent, says Arunkumar.
Greater use of HVDC will also help
strengthen Indias national grid. Varma says:
HVDC systems have always been known
for their higher effciency and improved
economics for long distance bulk power
transmission. In addition, they also provides
controllability of power fow, enhancing system
stability, maintaining grid parameters, and
facilitating integration of renewables from
different resource areas.
He adds HVDC will play a major role in
the growing interconnections and envisaged
synchronisation of the southern region.
The blackouts have shown that even
within Indias large, interconnected grid, it
is useful to have some local generation in
case of emergency, and this is major driver
of distributed generation. Large companies
have started introducing micro-grids due to the
persistent power outages in most urban areas.
The proliferation of micro-grids in both rural
communities and new urban developments
could therefore play a signifcant role in
addressing Indias electricity shortages over
the next decade, says Biswas.
Mumbai avoided the 2012 blackout and
uses a scheme called islanding to avoid
large outages, by ensuring it has enough
local generation to allow it to disconnect from
the grid and keep essential services running.
Now Delhi is considering a similar islanding
scheme.
i
The India Smart Grid Task Force is trying
to get 14 polot schemes off the ground
Credit: MERC
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1309pei_66 66 8/27/13 11:27 AM
1309pei_67 67 8/27/13 11:27 AM
T
o meet Chinas growing need for
electric power generation, the
Guohua Ninghai power plant of
Shanghai has a total planned
operating capacity of 4 x 600 MW.
The plant is in the Ninghai
township, Ningbo city, in Zhejiang province,
and serves the regions electricity needs.
The Ninghai plant relies on coal-fred
steam-driven turbines to generate electricity,
with six sets of HP-983 medium speed coal
mills supporting a tangentially corner-fred
boiler. This makes the plants large production
operations complex.
Coal is frst fed from silos at the plant to mill
pulverizers, which grind the coal into a fne
powder. A fan blends and forces a primary
fow of mixed ambient cold air and pre-
heated hot air into the coal mill.
This air is mixed with the coal powder
creating a combustion air supply for the
furnace heating water in the boiler. The boiler
produces steam to drive power-generating
turbines. The plants sophisticated, energy-
effcient boiler technology requires accurate
and responsive air fow measurement for its
control system.
Critical requirements
The boilers steam production effciency is
controlled by adjusting a precise fow of
blended primary ambient air and pre-heated
air which fow from separate ducts.
Each of the duct air fows is controlled by
louvered dampers located inside the ducts.
The primary air, which is a precise blend of
cold and hot air, fows into the coal mills and
afterwards to the boiler.
Accurate, responsive and reliable air fow
measurement is critical to the automated
control of the dampers and the effciency of
the boiler, which also ensures safe operation
of the boiler and reduces plant operation
energy costs.
Boiler optimisation
Hu Yaqi and Steve Craig
explain how an in depth
testing programme
demonstrated that
thermal mass fow meters
provided the solution
to help maximize the
operation of the boilers
at the Guohua Ninghai
power plant in China.
Versatile
fow meter
delivers boiler
performance
The four-unit Guohua Ninghai power plant utilises
complex and effcient tangentially corner-fred boilers
1309pei_68 68 8/27/13 11:27 AM
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Boiler optimisation
The temperature of the pre-heated air fed
to the boiler is 270C (518F) and the primary
ambient air temperature is 30C.
The size of the primary air duct is 1200 x
1200 mm (47x47 inches), the pre-heated air
duct has the same dimensions (1200 x 1200
mm), and the ambient forced draft air duct is
500 x 800 mm.
The air fow to the coal mills and into the
boiler is controlled by the plants distributed
control system (DCS), which requires accurate
and responsive air fow measurement data to
control the dampers and keep the primary air
fow to the coal mill entrance at precise and
effcient levels. Figure 1 shows the primary air
duct at the entrance to the coal mill.
Engineers from the China Electric Power
Research Institute (CEPRI) and the Guohua
Ninghai power plant researched several
fow meter technologies for accuracy and
responsive performance, as well as the
overall suitability for the unique application
conditions in their air feed lines.
Then they further considered existing
installations and reference applications at
other power plants in China. From these
criteria they narrowed their choices to two
technologies for further evaluation, thermal
mass fow meters also known as thermal
dispersion - and averaging pitot tube fow
meter (or differential pressure, dP).
Both of these technologies were further
evaluated and compared with actual on-site
installed performance testing. With the large
duct sizes involved, the technologies were
deployed in a multi-point design.
The engineers determined that the key
criteria for the fow meter technology ultimately
selected would be the one that was most
accurate, responsive and impervious to large
temperature fuctuations that allowed them to
best control the air fow automatically via the
dampers in the ducts using the plants DCS.
These application criteria can be diffcult to
achieve because of the large cross-sectional
Figure 1: Confguration of primary air duct at the coal mill entrance
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area of the air ducts and the temperature stratifcation in the primary air
duct caused by the mixing of the pre-heated and ambient air.
For the fow measurement test programme, the two different types of
fow meters were installed on coal mills C and D, which feed boiler 3.
Thermal mass fow meters with multiple sensing points were installed in
each of the pre-heated and ambient air ducts. This installation eliminates
the large temperature fuctuations that are present in the main primary
air duct because of the mixing of the pre-heated and ambient air. It also
provides a more precise and responsive damper control within the air
ducts.
The averaging Pitot tube fow meter was installed in the main primary
air duct downstream from the preheated and ambient air ducts.
The output readings from the two thermal mass fow meters were
compared to the averaging Pitot tube fow meter and to the changes
in the dampers.
Based on the result of the test programme, the thermal mass fow
meters provided the best system control. The thermal mass fow meters
on the duct for boiler 3 provided an accurate and responsive output of
the air fow rate, which was consistent with the damper positioning. See
Figure 2 for the air fow measurements recorded at mill D.
Both the averaging pitot tube fow meter and the thermal mass fow
meter tracked the damper positioning changes in this test and their
air fow readings were within 1 per cent accuracy of each other. While
the averaging pitot tube fow meter provided a similar accuracy and
was responsive, its accuracy was adversely affected when the air fow
pressure dropped.
The tests showed the fow rate output of the thermal mass fow meter
matched the set position of the cold and hot air dampers, and the
thermal mass fow meter provided the response time required of the
automatic control feedback loop within the DCS.
The thermal mass fow meters responsiveness was enhanced by an
anticipator algorithm programmed into the DCS. The DCS PID parameter
proportion factor was adjusted from 0.3 to 0.4 and the integration
factor was reduced from 300 to 150. The accuracy performance of the
averaging pitot tube fow meter, however, was greatly degraded by low
air pressure conditions and low air fows.
Due to the low pressure in the test the averaging pitot tube fow meter
installed on mill C did not track well with the damper position changes.
Boiler optimisation
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In addition, averaging pitot tube fow meters
require signifcantly more maintenance
because their sensor design includes small
air inlets, which can clog in the fy ash laden
air fow inside the ducts. A plus for the thermal
mass fow meters is they do not have small air
inlets nor any moving parts, so they impervious
to the fy ash laden air fow conditions
and do not require routine or preventative
maintenance.
After completion of the test programme,
Fluid Components Internationals (FCI) Model
MT86 Series multi-point thermal mass fow
meters (see image on p.71) were selected
for installation at the Guohua Ninghai power
station.
Maximising effciency
After testing and evaluating both fow meter
technologies, the engineers from CEPRI and
the Guohua Ninghai power plant solved the
challenge of fnding the most accurate air
fow measurement technology which would
be responsive enough for automatic damper
control of the mix of preheated and ambient
air fowing into the coal mills.
The FCI thermal mass fow meters air fow
accuracy and responsiveness provided the
necessary fow data to automatically control
the dampers and maximise the effciency
of Boiler 3. Their non-clogging sensors and
rugged design ensured the lowest overall
maintenance and longest service life.
Hu Yaqi is an automation & process control
engineer at Zhejiang Guohua Zheneng
Power Generation Company Limited in
China and Steve Craig is senior engineer
at Fluid Components International LLC (FCI)
in the US. For more information, visit www.
fuidcomponents.com.
i
Boiler optimisation
The solution: MT Series fow meters
These precision air fow meters are installed
and operating around the world in numerous
electric power generation plants in similar
applications because of their accurate,
stable and reliable fow measurement over
wide temperatures and variable pressures.
The FCI Model MT86 Series meters can
be supplied with up to eight discrete thermal
mass fow sensors.
These sensors can be installed along a
single probe assembly or on multiple probes,
whatever is optimal for the application and
installation conditions.
An MT Series fow meter is ideal for
use in both thermal and nuclear power
generation applications, as well as in other
heavy process or manufacturing industries
with large diameter pipes or large duct
applications. It provides very high air and
gas fow measurement performance in
applications such as these coal-fred
combustion air systems, as well as in HVAC
systems, fues, and stacks.
MT Series fow meters are highly versatile,
with a wide turndown range available from
5:1 to 1000:1 and fow sensitivity from 0.25 SFPS
(0.08 NMPS) to 150 SFPS. With its smart digital
fow transmitter and advanced thermal
dispersion fow sensing element(s), the MT86
Series, and its sister product MT91, meet a
wide range of environmental monitoring
requirements worldwide, including CEMS
and QAL1.
They have a no-moving parts design
with no orifces to plug or foul, FCIs thermal
mass fow sensing technology places
two thermowell protected platinum RTD
temperature sensors in the process stream.
One RTD is heated while the other senses the
actual process temperature. The temperature
differential between these two sensors is
measured and is directly proportional to the
mass fow rate of the fuid. The sensor outputs
are fully temperature compensated resulting in
high accuracy and repeatability in changing
media and ambient installation conditions.
Outputs include multiple 420 mA and relays
and units can be powered by either AC mains
(85265 Vac) or 24 Vdc.
Thermal dispersion principle of operationxxxxx
Figure 2: Test data for the thermal mass fow meter
1309pei_72 72 8/27/13 11:28 AM
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A diesel genset from FPT Industrial: the Italian frm
predicts a dominant role for diesel gensets.
Credit: FPT
Diesel genset market
Diesel innovates
as gas closes gap
The global diesel generator set market is more than holding its own against gas
rivals, boosted by demand in emerging countries and technology innovation.
A
ccording to a new report,
the global diesel genset
market will grow and be
worth $41 billion by 2018
despite competition from
natural gas gensets.
The analysis by Navigant Research of
the US found that diesel gensets will remain
one of the least expensive, most reliable
technologies available today for commercial
facilities like hospitals and data centres that
require mission-critical power in the event of
a grid outage.
Navigant says in the short term, countries
with strong economic and/or population
growth rates that increasingly suffer blackouts
such as Nigeria, India, Chile and South
Africa will continue to drive diesel sales.
The report highlights India as an example
of a country where industries have become
highly dependent on diesel due to power
outages spanning as much as 16 hours per
day, making them more vulnerable to price
volatility. The market for diesel gensets in
India is growing at a rapid pace and recent
data expects its total revenues to pass $3.3
billion by the end of 2018. Southern India
accounts for most diesel genset sales, with
Bangaloreand Chennai the foremost users.
Yet Navigant Research warns that diesels
grip on the market is gradually waning.
Although providers of diesel gensets can
expect to see continued growth over the next
several years, they face rising competition
from natural gas gensets, says Dexter
Gauntlett, a Navigant research analyst.
Over the next decade, the increase
in unconventional gas resources and
tightening emissions regulations for stationary
generators will favour clean-burning natural
gas systems over their diesel counterparts in
North America.
And Navigant says that globally, gas
gensets are poised for rapid growth,
particularly in markets where inexpensive
natural gas is widely available. Navigant
forecasts that natural gas genset installations
will reach 13.2 GW per year by 2018 and
produce nearly $45 billion in cumulative
revenue between now and then.
Nonetheless the diesel genset market
continues to thrive because of the growing
energy needs of so many developing
countries and the ease of which diesel
solutions can address these needs.
On top of that, the diesel genset
technology is still evolving apace, as vendors
develop next-generation generators in a
bid to differentiate their products to get a
competitive edge.
The companies that dominate the market
include Caterpillar, Cummins and Kohler
while other players include Siemens, GE,
Mitsubishi Heavy Industries and FPT Industrial.
Some manufacturers are developing
generators with comprehensive control and
Power Engineering International September 2013 www.PowerEngineeringInt.com 74
1309pei_74 74 8/27/13 11:28 AM
CAT, CATERPILLAR, their respective logos, Caterpillar Yellow, the Power Edge trade dress, as well as corporate
and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
2013 Caterpillar. All Rights Reserved.
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1309pei_75 75 8/27/13 11:28 AM
monitoring systems, which can improve the overall effciency of the
equipment, while others are trying to offer user-friendly generators,
where end-users can easily operate the generators irrespective of
whether or not they possess proper technical knowledge.
FPT Industrial is the power generation arm of Italys FIAT Industrial
Group and manufactures a range of gensets. Its diesel products are
made in four dedicated power generation facilities: Sete Lagoas in
Brazil; Fecamp in France; Pregnana Milanese in Italy and Chongqing
in China.
The company agrees that the current hotspots for diesel gensets
are in emerging markets. The bulk of new opportunities are coming
from Asian countries, the Middle East and select African countries,
says Douwe Hilarius, FPTs marketing & communication manager.
In general, developing and modernising countries will have a
signifcant increase in demand for gensets due to the fact that GDP
and infrastructure investments will grow.
And he sees no sign of the popularity of gensets waning. Overall,
the worldwide market is increasing. Highly developed regions like
Japan, North America and Europe are mature markets and they
have lower growing rates because of the robustness and capillary
of the electricity grid.
In the long term, gensets will continue to exist and to play a
dominant role in the energy supplying industry.
Hilarius says geography will also be the key factor in where gas
may take over from diesel as the genset of choice.
Gas gensets are an increasing market where there is high gas
availability at low prices North America, Russia and China have
those features and they are expected to grow respectively at 5 per
cent, 10 per cent and 20 per cent yearly to 2015.
However he adds diesel will continue to play a dominant role
in stand-by application due to better performance in terms of load
acceptance and lower installation cost.
Are there any innovations that diesel manufacturers can employ
to keep ahead?
Genset manufacturers have to pursue innovations that allow a
reduction in total cost of ownership. Working on energy effciency
and power controls to reduce operating cost will be the key topics
within the genset industry, says Hilarius.
i
The Cummins C1000 D5 genset.
Credit: Cummins
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www.PowerEngineeringInt.com 77 Power Engineering International September-October 2013
AUMA Riester GmbH & Co. KG
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Diesel at heart of innovation
Two recent projects highlight how diesel gensets are still the frst
choice for key projects in Europe and the US.
Caterpillar Incorporated won a deal to provide equipment for
emergency standby power generation at New York Citys historic
Grand Central Terminal.
The facility was outftted with two 2000 kW Cat 3516 diesel gensets
and paralleling switchgear to add signifcantly more backup
generating capacity.
The New York Power Authority (NYPA) managed the design,
procurement and installation of the two generators and switchgear.
The project for the Metropolitan Transportation Authority was
intended to provide an additional level of security to Grand Central
Terminal in case of problems on the electric power grid that could
affect the transportation hubs electricity service.
The new backup generators accept ultra low-sulphur fuel,
in correlation with MTAs air-permitting restrictions. Another NYPA
provision was that the generators, switchgear and load bank were
required to be completely factory tested to ensure all emergency
power, load sharing and paralleling capabilities were fully functioning
together prior to shipment, to avoid complications that could arise
in an underground rail tunnel. All components were transported to
Grand Central Terminal on rail cars and then reassembled on site.
Meanwhile, in a $21 million project, Mattala Rajapaksa
International Airport in Sri Lanka has installed a pair of Cummins
Power Generation diesel gensets to act as standby power provision
in the event of outages.
Project contractor China Harbour Engineering Company (CHEC)
installed two 939 kVA stand-alone Cummins Power Generation
C1000 D5 gensets.
Because the generator set for the airports cargo unit had to be
installed within the cargo building itself, noise management was a
key consideration. Soundproofng the genset to achieve a level of
70 decibels at a distance of 1 metre from the room proved to be an
effective solution.
Opened in March 2013, Mattala is the second international
airport in Sri Lanka that serves domestic and international fights.
It acts as a hub for air and sea cargo trans-shipments together
with Magampura Port and as the airport is located in the rural area
of Hambantota, it was crucial for the generators to be installed to
ensure continuous supply of power in the event of an emergency.
Grand Central Terminal
Credit: MTA
1309pei_77 77 8/27/13 11:28 AM
Q&A
As ABB Turbocharging embarks on a
major upgrade contract in Brazil, the
companys Reinier Bakker outlines the
challenges and subsequent success
stories of the upgrade process.
New fuel-saving
options offer
rapid payback
and payoff
ABB Turbocharging is carrying out major
upgrades to a series of power plants in Brazil.
The deal is part of the companys collaboration
with Wrtsil and will result in the upgrading of
30 turbochargers in a series of plants operated
by the Finnish frm.
Every upgrade and every customer is
different, says ABB Turbochargings senior
manager of OEM Service Sales, Reinier Bakker,
and here he outlines what makes the Brazilian
deal unique.
Q:
What role do upgrades play in a country such
as Brazil, which is heavily investing to expand
and rejuvenate its power systems?
A:
Upgrades play a big role. With these packages,
you have an upgrade of the installation with
an added beneft of fuel saving, and thats
what everyone is looking at these days, so the
project essentially pays for itself. The return on
investment is typically three years.
Q:
Outline the upgrades you are carrying out in
Brazil?
A:
There is a conversion of something like 15
engines and these power plants supply to
the grid. We are talking about upgrading
30 cartridges and one spare cartridge on
multiple plants. So this upgrade is a great
way to meet or even increase productivity
above and beyond what youd be able to
do in the engine. And for engine providers
who have to show their customers that their
engines will be as productive as possible,
this type of additional gain constitutes a real
advantage, especially for companies with
contracts stipulating productivity targets.
Q:
What is notable about the Brazil upgrades?
A:
The turbocharger stays on the engine
basically everything happens inside the
turbocharger. The turbocharger and the
housing stay the same. You just take out the
cartridge, put your new cartridge in, and it is
done within one day. The deal is between ABB
Brazil and the engine builder in Brazil, and our
team will implement it all on the engine. Our
guys are also doing the regular maintenance,
but the turbochargers and engines
themselves are under an O&M agreement
with the engine builder.
Q:
Had this sale been long in the planning?
A:
Well, the customer had only our simulation,
and then all of a sudden, their Brazilian sales
organization put in an order for 31 cartridges
and wanted to know when we could supply.
The orders are all in, and the frst conversions
began in the summer. Normally, customers are
cautious about trying new solutions a small
change here or there, to see how it goes. In
Brazil they want to combine this order with
an upcoming SIKO exchange, which is an
exchange of key rotating components at a
set time for safety reasons.
Q:
What did you frst learn in the process of
developing the upgrades?
A:
That we had to collaborate closely with the
engine builder to make the concept work. It
was our work together with the engine maker
who was also interested in upgrades as an
option that enabled us to see that with the
right modifcations to both the turbocharger
and the engine, we would in certain cases
be able to achieve up to 3 per cent in fuel
savings.
Q:
When did you put things in motion?
A:
We started with an upgrade in 2011 that
required a complete change on the engine,
and the engine OEM introduced Miller timing
with a new cam-shaft. Putting in a new
turbocharger made that possible. You almost
1309pei_78 78 8/27/13 11:28 AM
1309pei_79 79 8/27/13 11:28 AM
could say that a matching process was
implemented with the new turbocharger. And
practice confrmed our theory about these
new modifcations we achieved over 2 per
cent fuel savings as a result of matching the
turbocharger and the engine together in a
completely new combination.
Q:
Outline the frst meetings between ABB
Turbocharging and the engine builder?
A:
There were two sessions in which we looked for
the frst time at the real technical, matching,
engine and turbocharger data to fnd out
what new operating values we would be
able to achieve. The turbocharger and the
engine need to ft together as well as possible
in the given environment, so you minimise
the amount of effciency lost through pipe
connections. So we worked a lot to optimise
the positioning of the turbocharger and our
work did confrm a new engine-turbocharger
combination in those two sessions, so they
were very productive.
Q:
What was the most crucial technical fnding to
come out of your talks?
A:
Probably that we needed to make sure that
our solution would operate within the right
boundary conditions. We didnt know in detail
what our partners on the engine side wanted
to do in terms of tuning the engine and what
introducing Miller timing could bring with
respect to fuel savings.
Q:
How is speed margin affected by upgrades?
A:
A turbocharger is always designed to run at a
particular rotation speed, but it can operate
effciently at higher speeds at least up to a
point. Speed margin is the range between
a turbochargers standard operating speed
and the maximum speed at which it can still
run effciently. When ambient temperature
increases to, say, 45C from 23C, the rotor
has to turn faster in order to pump the same
amount of air into the turbocharger. Speed
margin allows the turbocharger to increase
its rotation speed and pump more air into the
engine at varying temperatures. A power plant
at sea level will have a different turbocharger
specifcation than one at high altitude. In
practical terms, then, if you increase the speed
margin with an upgrade it means you have
more fexibility in the turbocharger operation
in different environments, including altitude
and temperature.
Q:
How signifcant is the drop in temperature
achieved through an upgrade?
A:
Its a very signifcant drop. Normally, engines
run at a very constant temperature, and only
vary plus or minus 5C. With an upgrade, you
can achieve a drop in temperature of up to
35C. A signifcant drop would be -20C, so fall
of -35C is absolutely huge. If youre able to
get the same engine output with a reduced
temperature, it will have a positive impact on
thermal fatigue, and it will also have a positive
effect on the fouling of the turbocharger.
Q:
Your frst upgrades happened outside of Brazil.
What sticks in your mind about the very frst
technical sessions for those upgrades?
A:
During those sessions with the engine maker,
we did simulations about the potential
improvements that could be reached with
the upgrades we were proposing. Those were
simulations on fuel savings, temperature
reduction and on pressure. Since it was our
frst upgrade project, there was no chance
to confrm the simulation with actual feld
measurements. Your frst couple of run-
throughs become your points of reference.
By now we know with the upgrades that
weve done just how accurate that frst
simulation was. So when we talk about doing
an upgrade, were talking about providing a
better turbocharging solution by simulating
both the old and new situation with a high
degree of accuracy.
Q:
When you say high degree, what sort of per
cent are you talking about?
A:
We were within 10 per cent of the actual
measurements of the simulated value. Actually,
the measurements were slightly better than the
simulation and that is incredible. That is also
true for the temperature or fuel-savings curves,
they are measured as a function of the engine
load. So you simulate it at 50, 60, 70, 80, 90, 100
per cent of the possible load, and then you do
the measurement in the same way. And what
we saw was a good correlation between the
simulation and the measurements.
Q:
How do these fgures compare with a regular
overhaul?
A:
With a regular overhaul, you also get some
savings, as a result of cleaning the engine and
turbocharger. But here, in the measurements
that we did, we cleaned everything before
we began to measure our comparative data.
The 2 per cent fuel savings is calculated
through the comparison between the old
turbocharger once it had been cleaned
versus a clean, new one.
Q:
And what did doing the upgrade mean in
terms of operational benefts?
A:
It was an improvement in every way: lower fuel
consumption, higher speed margin and lower
engine exhaust temperature. The upgrade
enabled new, more fexible, wider boundary
conditions that allowed us to make changes
that were ultimately all good, and only good.
i
Q&A
1309pei_80 80 8/27/13 11:28 AM
ADVANCING ASIAS ENERGY FUTURE
2 4 October 2013
IMPACT Exhibition & Convention Centre
Bangkok, Thailand
www.powergenasia.com
OWNED AND PRODUCED BY: PRESENTED BY: SUPPORTED BY: OFFICIAL SUPPORTER: SUPPORTING ORGANIZATIONS:
Department of Alternative
Energy Development and Effciency
POWER-GEN Asia, co-located with Renewable Energy World Asia, is the regions leading exhibition and
conference dedicated to the power generation, renewable energy and transmission and distribution industries.
Attracting 7,000 delegates and attendees from over 60 countries from South East Asia and around the world,
nowhere else gives you the opportunity to reach and meet senior executives and industry professionals in one
place at the same time, providing key networking and business opportunities.
The POWER-GEN Asia conference has become the major annual platform for the industry to discuss the topics
and issues of today and is regularly contributed to with keynote speeches from Government Ministers and
Governors of the regions utility companies.
POWER-GEN ASIA INDUSTRIAL WATER DAY
For the frst time POWER-GEN Asia will include an Industrial Water Day on Thursday 3 October. You can register for this full conference
track via the One Day Pass, for just $700. Visit www.powergenasia.com for further information.
JOINT OPENING KEYNOTE SESSION WEDNESDAY 2 OCTOBER 2013 9AM
Dr. Twarath Sutabutr, Deputy Director-General, Department of Alternative Energy Development
and Effciency, Thailand
Mr. Soonchai Kumnoonsate, Governor of Electricity Generating Authority of Thailand, Thailand
Dr. Piyasvasti Amranand, Chairman, Energy for Environment Foundation, Thailand
Mr. Markus Lorenzini, Head of Energy Sector, ASEAN Pacifc Cluster, Siemens, Indonesia
TOPICS DISCUSSED AT THE CONFERENCE INCLUDE:
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JOIN US IN BANGKOK, THAILAND ON 2 - 4 OCTOBER 2013
EXHIBITION OPENING HOURS:
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Thursday 3 October 2013: 10:00 18:00
Friday 4 October 2013: 10:00 16:00
LEADING INDUSTRY EXHIBITION
Discover new ideas, technologies and developments at
the regions foremost exhibition for the conventional power
and renewable energy generation industries from leading
companies and suppliers from around the world.
REGISTER TO ATTEND POWER-GEN ASIA
Trends, Finance & Planning
Power Plant Technologies
Operation, Optimization & Servicing
Industrial Water
Environmental Challenges, Fuel Options &
Distributed Generation
1309pei_81 81 8/27/13 11:28 AM
Diary Diary
Hydrogen & Fuel Cells Energy
Summit
3031 October
Berlin, Germany
www.wplgroup.com/aci
November
RenewableUK Annual Conference
& Exhibition
56 November
Birmingham, UK
www.renewableuk.com
International VDI Conference:
Operational Flexibility and
Effciency Increase in Power Plants
67 November
Berlin, Germany
www.vdi-international.com/powerplants
Nuclear Power International 2013
1214 November
Orlando, US
www.nuclearpowerinternational.com
POWER-GEN International
1214 November
Orlando, US
www.power-gen.com
Renewable Energy World
North America
1214 November
Orlando, FL, US
www.renewableenergyworld-events.com
POWER-GEN International Financial
Forum
1314 November
Orlando, FL, US
www.powergenfnancialforum.com
VGB Conference Challenges of
Biomass Combustion
1314 November
Berlin, Germany
www.vgb.org
December
Global Energy 2013
35 December
Geneva, Switzerland
www.globalenergygeneva.com
2nd International Conference on
Power Science and Engineering
2021 December
Paris, France
www.icpse.org
2014
January
International Conference on
Electrical Energy and Networks
45 January
Phuket, Thailand
www.iceen.org
World Future Energy Summit
2022 January
Abu Dhabi, UEA
www.worldfutureenergysummit.com
DistribuTECH Conference &
Exhibition
2830 January
San Antonio, US
www.distributech.com
February
World Biomass Power Markets
35 February
Amsterdam, the Netherlands
www.greenpowerconferences.com
VGB Conference Maintenance in
Power Plants
1920 February
Dresden, Germany
www.vgb.org
October
POWER-GEN Asia
24 October
Bangkok, Thailand
www.powergenasia.com
Renewable Energy World Asia
24 October
Bangkok, Thailand
www.renewableenergyworld-asia.com
Africa Electricity 2013
911 October
Johannesburg, South Africa
www.africaelectricity.com
COGENERATION DAYS 2013
1315 October
Cestlice, Prague, Czech Republic
www.cogen.cz
22nd World Energy Congress
1317 October
Daegu, South Korea
www.daegu2013.kr
13th Annual Outage Restoration
and Response Conference
2223 October
San Antonio, TX, US
www.marcusevans-conferences-
northamerican.com
Grid Analytics Europe
2324 October
London, UK
www.gridanalytics-europe.com
Utilities Operations & Service
Management
28 October
San Diego, CA, US
www.wbresearch.com/utilitiesfeldservice/
i
1309pei_82 82 8/27/13 11:28 AM

POWERING
INDIAS GROWTH
Join experts from the Indian and international power industry for the joint annual POWER-GEN India & Central Asia,
Renewable Energy World India, HydroVision India and DistribuTECH India 2014 conference and exhibition as the event
returns to New Delhi under the theme Powering Indias Growth.
POWER-GEN India & Central Asia has an unrivalled reputation for attracting senior executives and industry leaders from
across the globe. This is your opportunity to impart your knowledge and experience and join this informative, quality event
reaching the regions key decision makers.
We invite you to be a part of the rapid investment in India & Central Asia by speaking at this event and adding to the debate
about key implementation challenges for Indias electricity sector and long term sustainable energy supplies, as growth and
demand for power intensifes.
5-7 MAY 2014
PRAGATI MAIDAN
NEW DELHI, INDIA
POWER-GEN India & Central Asia
DistribuTECH India
Samantha Malcolm
Conference Manager
T: +44 (0) 1992 656 619
E: samantham@pennwell.com
Renewable Energy World India
HydroVision India
Amy Nash
Conference Manager
T: +44 (0) 1992 656 621
E: amyn@pennwell.com
Event Organizer: Presented by: Supporting Organization:
www.power-genindia.com www.renewableenergyworldindia.com
www.distributechindia.com www.hydrovisionindia.com
CALL FOR PAPERS
SUBMISSION DEADLINE: FRIDAY 25 OCTOBER 2013
FOR DETAILS ON SPONSORSHIP AND EXHIBITING OPPORTUNITIES
VISIT THE WEBSITE TODAY.
SUBMIT YOUR ABSTRACT TODAY:
1309pei_83 83 8/27/13 11:28 AM
Diary
VGB Conference
Maintenance of
Wind Power Plants
1920 February
Dresden, Germany
www.vgb.org
Wave & Tidal 2014
2627 February
Belfast, Northern Ireland
www.renewableuk.com
March
HydroVision Russia
46 March 2014
Moscow, Russian Federation
www.hydrovision-russia.com
Russia Power
46 March 2014
Moscow, Russian Federation
www.russia-power.org
EWEA 2014
1013 March
Barcelona, Spain
www.ewea.org
POWER-GEN Africa
1719 March 2014
Cape Town, South Africa
www.powergenafrica.com
DristribuTECH Africa
1719 March 2014
Cape Town, South Africa
www.distributechafrica.com
2014 WTUI Conference
2326 March
Palm Springs, US
http://wtui.com
Intersolar China
2528 March
Beijing, PR China
www.intersolarchina.com
April
April Power & Electricity World Asia
2225 April
Singapore
www.terrapinn.com
Smart Electricity World Asia
2225 April
Singapore
www.terrapinn.com
May
DistribuTECH India
57 May
New Delhi, India
www.distributechindia.com
HydroVision India
57 May
New Delhi, India
www.hydrovisionindia.com
POWER-GEN India & Central Asia
57 May
New Delhi, India
www.power-genindia.com
Renewable Energy World India
57 May
New Delhi, India
www.renewableenergyworldindia.com
VGB Conference Steam Turbines
and Operation of Steam Turbines
2122 May
Koblenz, Germany
www.vgb.org
June
Eurelectric Annual Convention
23 June
London, UK
www.eurelectric.org
Intersolar Europe
36 June
Munich, Germany
www.intersolar.de/en/intersolar.html
POWER-GEN Europe
35 June
Cologne, Germany
www.powergeneurope.com
Renewable Energy World Europe
35 June
Cologne, Germany
www.renewableenergyworld-europe.com
IDEAs 105th Annucla Conference &
Trade Show
811 June
Miami, US
www.districyenergy.com
July
Intersolar North America
710 July
San Francisco, US
www.intersolar.us/en/intersolar.html
HydroVision International
2225 July
Nashville, US
www.hydroevent.com
August
COAL-GEN
2022 August
Charlotte, US
www.coal-gen.com
October
POWER-GEN Middle East
1920 October
Abu Dhabi, UAE
www.power-gen-middleeast.com
1309pei_84 84 8/27/13 11:28 AM
POWER GENERATION WEEK
NOVEMBER 1214, 2013 | ORANGE COUNTY CONVENTION CENTER | ORLANDO, FL, USA
Covering every aspect of the power generation industry, POWER-GEN International, NUCLEAR POWER International,
Renewable Energy World Conference & Expo North America and POWER-GEN Financial Forum converge in 2013 to
form POWER GENERATION WEEK. Beneft from fve days packed with pre-conference workshops, technical tours,
over 70 conference sessions, panel discussions, three exhibition days and multiple networking events. Like never
before, youll have access to nearly every facet of the market all under one roof.
4 Events. 5 Days. 1 Roof.
Owned & Produced by Presented by Supported by
www.PowerGenerationWeek.com
1309pei_85 85 8/27/13 11:28 AM

Metso wins deal for
worlds biggest
gas-to-liquids plant
Metso has won a deal for the largest gas-to-
liquids plant in the world.
Qatar Shell has awarded a service contract
to Metso supporting an earlier delivery of
valves and intelligent positioners to the Pearl
gas to liquids (GTL) project in Ras Laffan
Industrial City.
Jointly developed by Qatar Petroleum and
Shell, Pearl GTL is the biggest such plant in the
world and the largest energy project in Qatar.
As part of the capital project, Metso
delivered more than 2500 valves and 1200
ND9000 positioners. As the plant is designed
to run 24 hours, Shell took advantage of
streamlining the spare part procurement
process to ensure competitive pricing and
speedy order delivery. The fve-year spare parts
agreement with Metso covers more than 1000
items.
Sami Alatalo, Metso service manager in
Doha, said the agreement provides Shell and
their service contractor with a frm basis to
plan valve service actions with delivery times
and agreed prices.
Project Update
Emerson upgrades Iberdrola CHP plant
US-based Emerson Process Management has
upgraded the control systems at Iberdrolas
EnergyWorks Cartagena combined heat and
power plant in Spain with the latest version of
its Ovation expert control system.
The gas-fred plant is on the south eastern
coast and the 95 MW, combined-cycle
cogeneration facility supplies process steam
and power to a neighboring polycarbonate
factory.
The existing control systems needed to be
upgraded to improve plant responsiveness,
extend the life of the plant and maximise
production effciencies.
Plant manager Carlos Gonzlez Costea
said: We needed to use this opportunity to
upgrade our systems to enable the plant
to continue to provide effcient production.
However, this had to be balanced against our
obligation to maintain the supply of steam to
our customer.
Emerson supplied four pairs of redundant
Ovation controllers, installed the operating
software and implemented the changeover
during a 10-day planned shutdown of the
plant.
The upgrade was scheduled in two phases
to minimise revenue lost due to the power
station being off-line and ensure a continuous
supply of steam to the plastics factory.
Since the project was completed, Emerson
says reliability and effciency has improved
and faster system response has enabled the
plant to react more quickly to changes in
demand.
The control systems are in two sections,
one covering the CHP plant and the other
covering the separate package boilers. While
the CHP plant was modernised, the package
boilers generated the steam required by the
plastics factory.
Steam generation then reverted to the CHP
plant during the upgrade of the package
boilers.
This allowed Emerson to ensure the steam
supply was uninterrupted and local operation
of auxiliary services was maintained.
This was a particularly challenging
migration project with a very tight timeframe,
said Bob Yeager, president of Emerson Process
Managements Power & Water Solutions.

Areva to provide fuel assemblies to nuclear plant in Switzerland
French nuclear company Areva has been
awarded a contract for the fabrication of fuel
assemblies for fve reloads at Gosgen nuclear
power plant in Switzerland.
The company will deliver 180 fuel
assemblies to the plants owners, Swiss utility
Gosgen-Daniken, starting in 2018.
Areva was involved in the building of the
1020 MW plant which produces district
heating as well as power and has been
fabricating its fuel elements since it was
commissioned in 1979.
The company is currently retroftting
the reactors instrumentation and control
technology.
Gosgen is one of fve reactors operating
in Switerland. In 2011 following the Fukushima
disaster in Japan, the Swiss government
Gosgen: Areva will deliver 180 fuel assemblies
1309pei_86 86 8/27/13 11:28 AM
Mitsubishi Heavy clinches India
and China contracts and
completes SCR testing in US
Mitsubishi Heavy Industries (MHI) has won an order to supply core
components for two sets of a 660 MW supercritical coal-fred boiler
and steam turbine to be installed at an Indian power plant.
The components will be ftted in two new high-effciency coal fred
units at Chhabra power station, approximately 300 kilometers south-
southwest from Jaipur.
The plant is owned by RRVUNL and the new units are due to be
operational in 2016.
The boilers and turbine generators will be built and supplied by
L&T-MHI Boilers and L&T-MHI Turbine Generators, two joint ventures
set up by MHI in conjunction with Larsen & Toubro, Indias largest
construction company and heavy machinery manufacturer.
MHI will manufacture the core components of the boilers and
turbines while Mitsubishi Electric Corp will supply the core generator
components.
RRVUNL was formed in 2000 when the Rajasthan government
unbundled its state electricity board into fve companies, including
RRVUNL.
MHI has also won an order for a steam turbine with a capacity of
around 90 MW for a pulp and paper plant in China.
The plant in Rizhao, Shandong Province, is owned and operated
by Indonesian manufacturer Asia Symbol (Shandong) Pulp and
Paper.
MHI previously delivered two steam turbines to Rizhao plant in
2008 and the latest order is slated to go on-stream in 2015.
The turbine will be used primarily for in-house power generation
to accommodate demand associated with augmentation of the
plant facility.
Meanwhile, Mitsubishi Power Systems Americas (MPSA), the
business base for MHIs power systems operations in the US, has
successfully completed verifcation testing of a large-scale selective
catalytic NOx reduction (SCR) system.
The system is to be installed at an 800 MW large-size gas turbine
simple-cycle power generation plant.
The testing was carried out at the Marsh Landing Generating
Station in the San Francisco Bay Area, California, which operates on
four Siemens 200 MW gas turbines, and MPSA said its SCR system
reduced gas emissions, including nitrogen oxides (NOx) and
ammonia, within compliance limits.
MPSA said the testing marked a milestone achievement for the
SCR system, demonstrating its capability to meet emission limits with
a 200 MW class simple-cycle gas turbine.
MPSA said its SCR system successfully demonstrated the ability
to keep within emission limits during quick starts and load changes
and with gas turbine loads across the entire zero to100 per cent
range.
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1309pei_87 87 8/27/13 11:28 AM
Project Update

Ingeteam to supply
inverters to one of
Africas largest
photovoltaic plants
Spanish electronics company Ingeteam is
to supply its 1 MW central inverters to one of
the largest photovoltaic plants in the African
continent.
The project, Jasper PV, is to be built by a
consortium formed by Iberdrola Engineering
and Construction South Africa and Group
Five, a South African construction company.
This plant is to have an installed output of
96 MW to be delivered to South Africas grid
via the 78 INGECON SUN PowerMax central
inverters which Ingeteam is to supply inside its
40ft, 2 MW power station shelters.
Ingeteam is also to provide the plant with
its INGECON EMS Plant Manager control
system, which will be responsible for ensuring
compliance with all requirements of the grid
operator and South African regulations.
The Jasper project will be equipped with
325 000 polycrystalline modules covering 180
hectares in the province of Northern Cape.

Underwater cable delivered for
UK and Ireland HVDC link
ABB has announced delivery of what it calls the worlds highest
capacity high voltage direct current (HVDC) light underwater power
link to Eirgrid, the Irish transmission system operator.
The 500 MW cable is to operate as a link between Ireland and
the UK, and enables leveraging of wind energy and facilitates power
fows between the two countries and is based on voltage source
converter (VSC) technology.
The cable will enhance grid reliability and security of electricity
supplies and facilitates power trading between the two countries
and connects Ireland to the European grid.
As Ireland expands its wind power capacity, it can export surplus
electricity to the UK, and can import power when required.
A 262 km cable system connects Woodland in County Meath,
Ireland and Deeside in north Wales. The cables are equipped with
extruded polymeric insulation that provides strength and fexibility to
endure the severe conditions of the Irish Sea. HVDC Lights black start
capability can help restore power quickly in the event of an outage,
without the aid of external energy sources.
HVDC Light is an evolution of HVDC technology that helps address
the needs of long distance underground and subsea transmission. It
is increasingly being deployed across many applications, including
integration of renewable energies from land-based and offshore
wind farms, mainland power supply to islands and offshore oil and
gas platforms, and interconnections, often across seas.
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Project Update
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GE celebrates Estonian
wind turbine debut
GE has opened the 45 MW Paldiski wind farm
on the Pakri peninsula in north western Estonia.
With 18 GE 2.5-100 wind turbines, the wind
farm operated by Eesti Energia and Nelja
Energia marks the commercial debut of the
companys wind turbine technology in the
country.
Cliff Harris, general manager of
GE Renewable Energy Europe, said:
Advancements in serviceability and grid
integration from earlier GE turbine models
make the 2.5-100 turbine a great ft for Estonias
robust wind conditions.
Estonia erected a record number of wind
turbines last year with a total capacity of 86
MW that resulted in an overall capacity of 269
MW.
1309pei_89 89 8/27/13 11:29 AM

Chinese hydropower
milestone for Voith
Voith has announced the commissioning of
the frst of three Francis turbine-generators with
an installed capacity of 784 MW, at Xiluodu
hydropower plant in China.
The Xiluodu plant, which lies on the Jinsha
River, experienced a successful 72-hour test
run prior to Voiths handover to China Three
Gorges Corporation.
With 784 MW the output of the generator-
turbine unit in Xiluodu is higher than that of
the worlds largest hydropower plants and
consequently sets new standards, according
to Voith.
Upon completion, the total capacity of
the three Voith units for Xiluodu will be roughly
the same as the output of Germanys largest
nuclear power plant.
Voith Hydro chairman Roland Munch
said the commissioning of the frst turbine
generator is a milestone towards the frst 1 GW
unit.
When Xiluodu is fully connected to the grid
in June 2014, it will have a nominal capacity
of 13.86 GW, making it the worlds third largest
hydropower plant.
Project Update

Malaysian utility breaks four-minute mile of certifcation
Malaysias largest utility has achieved a
leading asset management certifcation.
Tenaga Nasional Berhad (TNB) has been
certifed by Lloyds Register to the Publicly
Available Specifcation PAS 55-1:2008 (PAS
55) making it the frst company in South East
Asia to win the certifcation.
TNB is the largest electricity utility in
Malaysia and one of the biggest in Asia. It
is the national transmission system operator
responsible for the Malaysias main grid.
Its president Y.Bhg Datuk Seri Ir Azman
Mohd said: In these modern and challenging
times, we have to make sure our ability is still
relevant in the industry.
We must also strengthen our position to
progress and make TNB a company that is
dominant domestically and a champion
regionally. I believe PAS 55 is an enabler for
this ambition.
We are very proud to be the frst company
in South East Asia to achieve this certifcation.
He compared trying to achieve the
certifcation to the four-minute mile,
which initially was thought of as physically
impossible, and added: Our certifcation
will set an example and Im expecting many
more companies in the region to follow our
approach to achieve this milestone.
Lloyds Registers work in the certifcation
process involved a two-stage assessment
before recommending TNBs transmission
division for certifcation. This process included
an examination of the design of TNBs asset
management system and processes,
followed by a second review where the asset
management system was tested across the
companys transmission division.
Mohd Azhar Sulaiman, managing director
of Lloyds Register Technical Services in Kuala
Lumpur, said: As TNB is the frst company
in South East Asia to achieve this type of
certifcation, it sets a glowing example to other
businesses throughout the world that good
asset management is an important factor
in any business and should be recognised
from a companys daily operations to the
boardroom agenda.
1309pei_90 90 8/27/13 11:29 AM
Project Digest
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Technology Update

Vattenfall hails wind farm radar breakthrough
Swedish energy company Vattenfall has
invested in innovative radar technology to
enable it to go ahead with extending one of
its offshore wind farms in the UK.
Vattenfall claims that its deal with
American frm C Speed marks the
worlds frst ever permanent installation
of a fully wind farm-capable radar
system.
The system, called C Speed LightWave
radar, is currently on trial at Manston Airport
in Kent, England, which is the nearest
airport to Vattenfalls Kentish Flats offshore
wind farm.
Kentish Flats was built in 2005 and
comprises 30 Vestas turbines. Vattenfall
wants to add a further 17 turbines to the
site but there were concerns on the impact
this would have on air traffc at Manston,
which is mainly used by Dutch airline KLM
to fy to The Netherlands, France, Italy and
Portugal.
The airport is also to be used as a base
by BA for its Airbus A380, the worlds largest
passenger plane, where it will be used to
train pilots and cabin crew.
Vattenfalls solution was to contract C
Speed to design and install its system at
the airport, where it is currently gathering
data. If it proves successful it will be the
frst time that a wind farm-capable radar
has been installed, integrated and then
submitted to regulator the Civil Aviation
Authority for approval.
Vattenfalls project manager for Kentish
Flats, Goran Loman, said: We gained
consent for this scheme earlier this year
on condition we tackle this radar issue
effectively. Vattenfall is confdent the C
Speed system will mitigate the potential
impact of our project on Manston Airport
and we look forward to getting the
condition discharged to allow the wind
farm and the airport to safely co-exist.
He added: If this technology works, as
we expect, its hoped the UK government
will be satisfed this issue has been dealt
with.

Time for T? New T-pylon could debut at Hinkley Point
An innovative new electricity pylon could be
used for the frst time at the site of Hinkley Point
C new nuclear power station in the UK.
The T-pylon is the brainchild of Danish
engineering frm Bystrup and in 2011 won an
international design competition run by the
Royal Institute of British Architects to fnd a new-
look pylon for the 21st century.
It could make its operational debut as
part of the Hinkley Point C Connection, which
will run between Bridgwater and Avonmouth
in England and will carry electricity for the
southwest of the country.
The connection which is to be built by
British transmission operator National Grid
will include Hinkley Point C power station,
which EDF wants to build next door to existing
Hinkley reactors.
Communities living in the area feared
that the new 400,000 volt pylons needed
to carry the connections wires would be
much higher than those on the existing
132,000 volt line currently running along the
route.
However, at 36 metres high, the T-pylon is
nearly one third shorter than the traditional
400,000 volt lattice design and engineers
from National Grid are now working with
landscape experts to identify sections along
the connections route where the new pylon
would have the most beneft.
It will then be included in the next round
of public consultations on the connection in
September.
Peter Bryant, National Grids project
manager, said:The steel lattice pylon has
served us well and will continue to be used
where appropriate but in September were
looking forward to hearing peoples views on
the T-pylon and where along the route it would
be the best choice.
UK Energy Secretary Ed Davey said: To
see T-pylon becoming a reality just 20 months
after winning the competition is a fantastic
achievement for National Grid and Bystrup.
He said the T-pylon was a graceful, refned
structure ft for the needs of our low carbon,
21st century and would give communities a
radical departure from the traditional lattice.
1309pei_92 92 8/27/13 11:29 AM
INVITATION TO PARTICIPATE
POWER-GEN Europe, co-located with Renewable Energy World Europe comprises a comprehensive exhibition foor populated by the
major players in the thermal and renewable energy sector. Complementing the exhibition is a multi-track conference that is known for
addressing the key issues facing our industry.
POWER-GEN Europes community of power professionals will help map out the route through the power transition maze and point to a
clean, secure and economic power future.
3 5 JUNE 2014 I KOELNMESSE I COLOGNE I GERMANY
NAVIGATING THE POWER TRANSITION
WWW.POWERGENEUROPE.COM
Owned and Produced by: Presented by: Supported by: Co-located with:
NAVIGATE YOUR WAY THROUGH THE POWER TRANSITION BY JOINING US IN COLOGNE IN 2014
UK, Italy, France, Greece,
Turkey & Benelux:
Gilbert Weir Jnr.
T: +44 (0) 1992 656 617
E: exhibitpge@pennwell.com
Russia & CIS:
Natalia Gaisenok
T: +7 495 249 49 15
E: nataliag@pennwell.com
Svetlana Struckova
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Northern Germany, Scandinavia
& Eastern Europe:
Leon Stone
T: +44 (0) 1992 656 671
Asia, Middle East,
Southern Germany,
Austria & Switzerland:
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T: +44 (0) 1992 656 610
Latin America, Spain & Portugal:
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T: +44 (0) 1992 656 614
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SALES AND SPONSORSHIP CONFERENCE
1309pei_93 93 8/27/13 11:29 AM
Technology Update

Green Energy picks
Metso for African
plant valve order
Metso has won its 10th repeat order from
Norwegian company Green Energy Group
for its Neles rotary control valves and triple
eccentric disc valves.
The valves were tested in the companys
geothermal pilot plant in Kenya, where they
will control the steamy process fow coming
from the boreholes drilled into the ground.
The loosened soil from the ground can
include silica and sand, which sets special
requirements on the valves to be able
provide accurate control ability in such rough
conditions. One of the challenges in these
applications is the silica scaling.
Not many valves are able to operate in
this type of environment, said Snorri Einarsson,
steam systems product manager at Green
Energy Group.
He added that the next step will be to
get all the plants hooked up to the Metso
FieldCare Device and Asset Management
software to carry out predictive maintenance
with live monitoring of the valve performance.
Green Energy Group delivers a power plant
system that is prefabricated in ready modules
and commissioned on-site in weeks. This year
the company is delivering four geothermal
power plants and has received an order for
fve more for next year.

ABB launches iPad wind energy app
ABB has launched a dedicated Wind Energy
Landscape app for iPads as a free download.
The app encapsulates ABBs portfolio
of products and services for onshore and
offshore wind energy projects and was
developed originally by ABB for use on its
stands at renewable energy events.
However, the company said that it has
proved so popular that ABB has now decided
to make it available to the general public.
The app enables users to explore ABBs
commercial wind power solutions from within
an interactive 360 virtual landscape. The user
is initially presented with the option to explore
any of the three virtual wind solution areas:
onshore, offshore (near), offshore (far).
After selecting their entry point, the
user is presented with a virtual landscape
containing all of ABBs relevant wind solutions.
Each solution is tagged with interactive icons
that indicate further information is available
for each subcomponent. Using traditional
touch screen gestures, the user can activate
the icons to reveal further product information.
The application uses animations to
describe some of the essential technical and
operational features of ABBs products and
related services.

Most powerful wind test bench is operational
Vestas has activated what it calls the most
powerful test bench in the wind industry at its
global testing centre in Aarhus, Denmark.
The 20 MW test bench is capable of testing
the full nacelle of the V164-8.0 MW, validating
the performance, robustness and reliability of
the turbine over a simulated 25-year lifetime.
The test bench is 42 meters long and 9
meters wide. Its total weight, including the
motors, wind simulator and generators is
nearly 700 tonnes. Vestas installed 50 m deep
concrete foundations to support the weight.
Motors powering the bench produce 20 MW
- the equivalent of 26 820 brake horsepower,
and the torque exerted on the components
of the turbine can be up to a massive 18
meganewton metres.
The enormous test bench will stress the
drivetrain, including the gearbox, main shaft
and generator of the V164-8.0 MW - in a
controlled environment - reproducing the
harsh wind conditions in the North Sea, using
a comprehensive and rigorous test regime
based on experience and data gathered
from over 25 000 turbines.
Chief technology offcer Anders Vedel said:
Vestas has invested in the industrys most
powerful test bench to ensure the turbine
will perform in challenging conditions for 25
years.
1309pei_94 94 8/27/13 11:29 AM
INVITATION TO EXHIBIT
POWER-GEN Africa, co-located with DistribuTECH Africa, will once again
provide comprehensive coverage of the power needs, resources, and issues
facing the electricity generation industries across sub-Saharan Africa.
A three day event, POWER-GEN Africa serves the industrys information
and networking needs with a dedicated trade show foor featuring the
prime movers in the conventional power and renewable energy industries.
Additionally, a multi-track conference covering strategic, technical and
renewable topics will feature commercial and practical solutions and
experiences, for power industry businesses.
POWER-GEN Africa has quickly established itself as sub-Saharan Africas
premier and leading event dedicated to the power generation industry,
focusing on the current and future trends, as well as the needs and resources
within this region of the world. Nowhere else provides you with the
opportunity to reach and meet over 2,000 high-level industry professionals
in one place, allowing networking, business and sales opportunities with key
industry buyers and infuencers from around the continent.
If your company supplies, or is looking to supply products or services to the
power generation industries in Africa, then POWER-GEN Africa is essential to
reaching the key industry professionals and decision makers.
SOLUTIONS FOR AFRICAS
ENERGY FUTURE
Conference & Exhibition
1719 March 2014
Cape Town International Convention Centre
Cape Town, Republic of South Africa
www.powergenafrica.com
Owned and Produced by:
Presented by: Supported by:

Leon Stone
Exhibition Sales
International
Phone: +44 (0) 1992 656 671
Email: leons@pennwell.com
Andrew Evans
Exhibition Sales
Africa
Phone: +27 (21) 913 5255
Email: andrewe@pennwell.com
Tom Marler
Exhibition Sales - Renewable/Hydro
International
Phone: +44 (0) 1992 656 608
Email: tomm@pennwell.com
For exhibition and sponsorship
opportunities contact:
Co-located with:
FOR FURTHER INFORMATION PLEASE VISIT:
WWW.POWERGENAFRICA.COM
1309pei_95 95 8/27/13 11:29 AM
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WESTINGHOUSE ELECTRIC CO 57
WOOD GROUP GTS 3
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1309pei_C3 3 8/27/13 11:15 AM
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1309pei_C4 4 8/27/13 11:15 AM
For t he i ndus t r y s c ar eer - mi nded pr of e s s i onal s SUMMER 2013
A suppl ement t o PennWel l publ i c at i ons | www. PennEner g yJ OBS. c om
New Horizons:
The Growth of
Offshore Wind
Around the World
FROZEN ASSETS:
The Artic Push
in Offshore
Oil & Gas
INDUSTRY INSIGHTS
Offshore Energy:
Mitigating Risk
TRAINING INSIGHTS
Empowering our Troops:
AEP Career Initiatives
for Veterans
ENERGY 101
Wave & Tidal Power
1308pejew_C1 1 8/20/13 2:58 PM
1308pejew_C2 2 8/20/13 2:58 PM
2 EDITORS LETTER
Offshore Energy: Towards the Great Horizon
Dorothy Davis Ballard, PennWell
3 NEW HORIZONS
The Growth of Offshore Wind Around the World
Dorothy Davis Ballard, PennWell
5 FROZEN ASSETS
The Artic Push in Offshore Oil & Gas
Hilton Price, PennWell
6 INDUSTRY INSIGHTS
Offshore Energy: Mitigating Risk
Matthew Gordon, Viking SeaTech
8 CAREER INSIGHTS
Regulatory Experts: Career Opportunities Galore
Volker Rathman, Collarini Energy Staffng
10 TRAINING INSIGHTS
Empowering our Troops: AEP Career
Initiatives for Veterans
Dorothy Davis Ballard, PennWell and Scott
Smith, American Electric Power
12 ENERGY 101
Wave & Tidal Power
PennEnergy.com
w w w . P e n n E n e r g y J O B S . c o m
SUMMER 2013
A PENNWELL PUBLI CATI ON
Stacey Schmidt, Publisher
staceys@pennwell.com
Dorothy Davis Ballard, Content Director
dorothyd@pennwell.com
Hilton Price, Editor
hiltonp@pennwell.com
Cindy Chamberlin, Art Director
cindyc@pennwell.com
Daniel Greene, Production Manager
danielg@Pennwell.com
Tommie Grigg,
Audience Development Manager
tommieg@pennwell.com

PennWell Corporation
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PennWell.com
Recruitment Advertising Sales:
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918 831 9558
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Adv er t i s er s
I ndex Chevron C2
PennEnergy Research Services C3
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1308pejew_1 1 8/20/13 2:57 PM
2 Summer 2013
|
FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com
|
EnergyWorkforce
Edi t or s
Let t er
T
HE worlds oceans and vast waterways have always evoked feelings of wonder
and piqued the adventurous spirit. Teeming with life and uncharted depths,
these fuid bodies are awe inspiring in the way they are so vast and yet joining together
everything.
In the ancient world the challenge was to transverse these great expanses, to fare
into the horizon of the unknown for sustenance and wealth. Today, the world beyond
our shores holds the promise of new bounties. We turn again towards the great horizon,
abundant with the promise of resources to fuel all we have developed.
In this issue of Energy Workforce we delve into offshore energy as it is moving
ahead in great leaps and
bounds. We begin with an
overview of offshore wind
power on page3, highlighting
the incredible global growth
of this industry as it moves
towards becoming a truly
competitive resource.
Next, we look to the
offshore oil & gas industry
and its renewed push into artic territories on page 5, followed by a timely editorial on
mitigating risk on page 6 as offshore exploration & production moves to tap these once
unreachable resources.
With a focus on career development, we hear from an industry expert on expanding
opportunities for regulatory experts on page 8 and speak with an executive of U.S.
energy major AEP about initiatives for veterans in energy on page 10.
We close this issue with another round from our Energy 101 series, this time a brief
introduction to the evolving wave and tidal power industry on page 12.
We hope you enjoy these insights and encourage you to keep us on your summer
reading list to stay ahead with the latest energy news, research, and jobs at PennEnergy.
com and PennEnergyJobs.com.
Carpe diem!
Dorothy Davis Ballard
Towards the Great Horizon
Today, the world beyond our shores holds
the promise of new bounties. We turn again
towards the great horizon, abundant with
resources to fuel all we have developed.
1308pejew_2 2 8/20/13 2:57 PM
Cover STORY
EnergyWorkforce
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Summer 2013 3
The Growth of Offshore
Wind Around the World
By Dorothy Davis Ballard
A
S more countries around the
globe realize the potential of
offshore wind, new turbines
are being installed off of our coasts.
In 2012, 1,296 megawatts of new off-
shore capacity were installed a 33
percent increase from 2011, according
to the Global Wind Energy Council
(GWEC). The world now has at least
5,415 MW of offshore wind energy gen-
erating around the globe.
Offshore wind represents about 2 per-
cent of global installed energy capacity,
but that number could, and is expect-
ed to, increase rapidly. This renewable
resource, which is able to generate far
more power than onshore wind tur-
bines, could meet Europes energy de-
mand seven times over, highlights the
GWEC. While in the United States, off-
shore wind has the potential to provide
four times the energy needed capaci-
ty needed.
Europes lead in offshore wind
Currently, more than 90 percent of the
globes offshore wind power is installed
off the coast of northern Europe in the
North, Baltic and Irish seas. There is
now also a solid presence in the Eng-
lish Channel. Last year, the United
Kingdom took the lead in new wind ca-
pacity, adding 854.20 MW of offshore
wind power assets. Denmark added 46.8
MW in 2012 and Belgium 184.5 MW.
As of this article, Europe has a to-
tal of 4,336 MW generating from 1,503
offshore wind turbines at wind farms
located across 10 countries. The Euro-
pean Union has set a goal to generate
20 percent of its electricity from renew-
able sources by 2020, and offshore wind
is slated to play a major role in making
that a reality.
In early July, the offshore wind
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4 Summer 2013
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EnergyWorkforce
industry celebrated a milestone: Dong
Energy inaugurated the worlds largest
offshore wind power facility. The proj-
ect, which includes 175 Siemens wind
turbines, is called London Array and lo-
cated 12.4 miles off the Kent and Essex
coast in the Thames estuary. It has a to-
tal capacity of 630 MW, enough to pow-
er 500,000 households.
The UKs Department of Energy &
Climate Change recently approved an-
other major offshore wind project, which
will add to Europes expanding wind en-
ergy output. The 1.2 GW Triton Knoll
project will be led by RWE and located
off the Lincolnshire and Norfolk coast.
Along with supplying clean, alternative
energy, the project is expected to gener-
ate more than $5.5 billion of investment
in the region and create about 1,130 jobs.
Germany, too, has had its sights set
on the development of alternative ener-
gies like wind and solar as part of a na-
tional commitment towards the phase
out of nuclear power. The country add-
ed 80 MW of offshore wind energy to the
electric grid in 2012, and another six util-
ity scale offshore wind projects are under
construction.Petrofac, and Siemens En-
ergy also recently entered into a $53 mil-
lion contract to build two major offshore
wind projects in the North Sea off the
coast of Germany - one totaling576 MW
and another set for 800 MW.
US makes commitment to offshore wind
North America is aiming to add some
6.5 GW of wind power this year, and the
United States is looking to be a major con-
tributor. While there are no offshore wind
farms in the U.S. at the moment, the fed-
eral government has recently completed
its frst-ever round of auctions
for offshore wind leases. Deep-
water Wind, a company based
in Rhode Island, came in with
the highest bid of $3.8 million
for two areas totalingmore than
164,000 acres off the coasts of
Massachusetts and Rhode Is-
land. The auction was viewed
as a historic moment for the
U.S.s future commitment to
clean energy.
The federal government is
expected to hold another auc-
tion in September for a possi-
ble wind project off the coast of
Virginia. Areas offshore Mary-
land, New Jersey and Massa-
chusetts have also been sited as possible
locations for future wind developments.
PensionDanmark announced in June
it will be funding $200 million in capi-
tal for the planned Cape Wind project
expected to include up to 130 Siemens
turbines of 3.6 MW each. If completed,
the project off the coast of Massachu-
setts Cape Cod would become one of
the worlds largest offshore wind farms.
Asia will boost wind output
According to the GWEC, Asia will con-
tinue to boost its wind energy output an-
nually, reaching 25.5 GW by 2017. When
it comes to offshore wind energy, Japan
reached 25.3 MW last year. Meanwhile,
South Korea reached 5 MW of offshore
wind generation.
China holds the third spot for most
offshore wind capacity, with 258.4 MW
installed. China is also home to the frst
commercial offshore wind project outside
Europe. The Shanghai Donghai Bridge
project was installed in 2010 and totals
102 MW. China hopes to have 5 GW
of offshore wind by 2015 and 30 GW by
2030, according to the GWEC.
Cheaper costs will drive demand
A major challenge for expanding off-
shore wind development is the current
high costs of the technology. Deep wa-
ters far offshore, higher waves and steeper
construction costs can make these proj-
ects somewhat cost prohibitive. Howev-
er, like other renewable energy sources
being developed around the globe, off-
shore wind technology is steadily improv-
ing to boost its overall return on invest-
ment. Investment remains strong across
the broader wind power industry with
2012 marking several milestones. It ap-
pears with continued cost reductions and
the growing push towards renewable re-
sources, offshore wind is positioned to be
a key player in meeting global energy de-
mand through the next decade.
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EnergyWorkforce
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Summer 2013 5
Frozen Assets
Despite immense challenges, the Arctic cant
keep away exploration and drilling.
By Hilton Price
W
HEN U.S. arctic waters saw
a drillship for the frst time
in 2 decades, it seemed the
return to a bygone era of exploration
had begun. Although Shell was ready
to usher in a new age for exploration
in those icy waters, process hurdles,
equipment issues, and natural obstacles
left the companys dream unrealized.
Immediately after, as word of techni-
cal violations added insult to injury, it
seemed potential reservoirs in U.S. arc-
tic waters would remain unexplored for
at least a little while longer.
The frigid waters of the arctic present
one of the greatest challenges for any ex-
ploration company. These natural hin-
drances, combined with ongoing legis-
lation from the countries that lay claim
to those waters, make it a massive un-
dertaking. Shell lost billions in its failed
2012 campaign, and as the season end-
ed the company announced it would not
attempt a return in 2013.
However public Shells struggle in
the region may be, it is only a set-back.
2014 looms, and there is still no word
whether Shell will attempt a return to
the Arctic, but it is looking likely.
Shell is planning specialized surveys
of the area, using ships deployed to ar-
eas in the Chukchi and Beaufort seas.
This kind of data collection will be in-
valuable to potential future exploration
campaigns, and could save Shell in both
cost and risk if it chooses to return.
The same success Shell is hoping for
in U.S. arctic waters is being realized by
other companies in other areas of the
tumultuous region.Offshore Norway is
proving successful for numerous compa-
nies exploring the area. In the UK, three
of the countrys Big 6 energy compa-
nies are planning Arctic drilling. E.On,
Centrica, and RWE Npower are all ex-
pressing interest in the region.
Likewise, there is a growing interest
offshore Russia, where legislation is loos-
er than the U.S. and reservoir potential
just as high. Shell has turned its atten-
tion to this area. If the company is suc-
cessful there, it could affect U.S. arctic
drilling policy, and possibly open the re-
gion further in the future.
In the U.S., however, there is an-
other element that could swing the
pendulum the other way, and close
off the country to further arctic ex-
ploration. The U.S. shale exploration
boom is changing the global energy
landscape. The country is expected to
become a major exporter in the com-
ing decades, and successful produc-
tion of these unconventional resources
could affect the interest in traditional
exploration. It could end the return to
the U.S. arctic before it truly begins.
There is a growing call for environ-
mental stewardship, the same kind that
brought an end to U.S. arctic drilling
decades ago. That concern for our natu-
ral environments isnt likely to fade. Any
company heading to the area must show
respect for the land, and for those who
fght for it, or risk an evaporation of sup-
port for its work in the region.
Arctic drilling is hardly over. In ar-
eas offshore Norway, it thrives as much
as ever. In U.S. arctic waters, the pro-
cess may be stalled, but across the
sea in Russias arctic waters, oppor-
tunities are increasing. Success there
could further push exploration inter-
est here, and possibly overcome the
fnancial and legal hurdles that stand
in the way.
Meanwhile, success with shale oil
and gas could turn U.S. interests away
from the arctic, and back on land. But
that isnt stopping companies from re-
viewing the region, and critically an-
alyzing collected data. For an area of
the Earth where even basic exploration
means a multi-billion dollar campaign,
every move matters and every decision
is crucial.
1308pejew_5 5 8/20/13 2:57 PM
6 Summer 2013
|
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EnergyWorkforce
INDUSTRY Insights
Offshore Energy:
Mitigating Risk
By offering an integrated offshore support package, variant
forms of risk can be avoided, according to Viking SeaTech
Surveys General Manager Matthew Gordon.
By Matthew Gordon
P
OST-MACONDO, there has been
an increased focus on the miti-
gation of risk. The industry has
reviewed operational practices from top
to bottom. Everyone from the
operators to offshore specialists
has been affected by the major
incident.
As a result, there has been an
increase in the contractual tug
of war between operators and
contractors in relation to the ac-
ceptance of risk and liabilities.
This has led to lengthy nego-
tiations as legal teams look to
reach middle ground, resulting
in increased administration,
time and cost.
It could be said that offering
an integrated and streamlined service re-
duces administration, costly contract ne-
gotiation and indemnities. Expanding in-
house services could not only hold the
key to unlocking cost savings, but also
to reducing risk in a risk wary industry.
Bringing new thinking to an old problem
Offshore service businesses are reinforc-
ing their position in the marketplace
by providing a fully integrated package.
Previously, smaller companies offered
a niche service that was considered sat-
isfactory twenty years ago. But as the
large corporations priorities adapt in
line with supply and demand, support
companies have risen to the task.
Viking SeaTech has looked at how
a new business stream can be injected
into a maturing and heavily saturated in-
dustry, in order to meet the changing re-
quirements of their clients.
By offering more services under a sin-
gle contract, including survey services,
we can provide a convenient package that
offers all the benefts, minus the opera-
tional burden. Our integrated approach
supports our efforts to make rig-moving
safer, faster, cheaper and eas-
ier to execute.
Reducing the
operational burden
Contract negotiations can
be time consuming; la-
bor intensive, costly and
can often impact project
scheduling. This is multi-
plied by having several con-
tracts to set up and manage
simultaneously.
An integrated approach
works towards removing
these barriers. It is highly advantageous
to the client to have a single contract in
place for service provision. This equates
to a single point of contact, invoice and
company-specifc set of terms and condi-
tions to manage.
The benefts of such a contracting ap-
proach are realized when an issue arises.
Instead of managing multiple contactors,
it takes one call to a single organization to
1308pejew_6 6 8/20/13 2:57 PM
EnergyWorkforce
|
|
Summer 2013 7
remove the issue. If a single contractor is
working towards a shared goal, the time
taken to resolve the issues is also reduced.
The rig moving food chain
Operational effciency is improved when
operators use the integrated approach,
and also removes the need for multiple
contractors. By having numerous disci-
plines working together in-house, com-
munication is strengthened and it is en-
tirely realistic to suggest that the risk to
client operations is reduced.
From a quality assurance perspective,
Viking SeaTech Survey is involved at ev-
ery stage of the life cycle, from design
to evaluation and through working with
other disciplines. This process identifes
errors that may not be uncovered until
much later in the job, resulting in proj-
ect delays and increased cost.
Eradicating the blame culture
Contractor confict can trouble clients.
We have found that the greatest issue for
our clients is managing multiple contrac-
tors, especially when they are in confict,
as this can often lead to spending vast
amounts of time acting as arbitrator.
This is understandably irksome and
often it is the client who pays for this in
the form of lost time and additional costs.
An Integrated service approach can re-
move much of the operational burden
and the single contractor can resolve
problems on the clients behalf. This
approach allows the client to spend their
valuable time working on other things,
while we deal with the issue at hand. This
is becoming even more important as or-
ganizations become fatter and individ-
uals within those companies have more
responsibility, meaning that time is a pre-
cious commodity.
Bespoke options
Large frms have the option of using
the offshore support specialist for their
rig moving operations expertise. It may
seem obvious, but advising clients at the
earliest point in the process is fundamen-
tal to the success of the job at hand. Step-
ping in at the initial engineering and de-
sign stages makes things easier later in
the job. Once these specifcations have
been approved by the client, a list of ma-
rine procedures can be made. This step-
by-step guide advises as to how the boats
and personnel will move the rig from
start to fnish.
Our potential clients may have fve
or six different options from multi-
ple contractors. To make the decision
easier, we tailor the options to ft the
client exactly. By offering multiple ser-
vices, operational burden is lifted and
risk is less likely. The more links in the
operational chain, the more things that
can go wrong. We are trying to bring it
down to just two links, us and the client.
Furthermore, uniform policies and pro-
cedures lead to a safer operation. A unit-
ed quality system that clearly informs all
personnel of operational methods will
drive a safer practice.
Looking to the future
The integrated service model brings end-
less possibilities. Removing the burden
for the operator is not only advantageous
in terms of costs, time and schedule, but
it can remove the incidence of risk within
an operation. Risk comes in many forms,
but can be reduced by using a stream-
lined business with one goal, the swift,
safe, coordinated and accurate comple-
tion of a contract.
I foresee integrated services becom-
ing more common place as the indus-
try continues to adapt. The often long
and drawn out processes attached to
drawing up contracts between opera-
tors and contractors, and subsequent
legal associations, has proved costly in
the past. Integration will become the
norm once the industry realizes this
effcient business prototype is one to
be utilized.
Risk comes in many forms, but can be reduced by using
a streamlined business with one goal, the swift, safe,
coordinated and accurate completion of a contract.
1308pejew_7 7 8/20/13 2:57 PM
CAREER Insights
8 Summer 2013
|
|
EnergyWorkforce
Regulatory Experts
Career Opportunities Galore
Evolving regulatory systems in the petroleum industry
provides an emerging career path
By Volker Rathman, Collarini Energy Staffng
W
ITH the drilling moratorium
lifted, the oil and gas indus-
try is trying to fgure out how
to deal with the onslaught of new regu-
lations. The effects on the job markets
have already been felt: Thousands of
jobs in the offshore industry were tem-
porarily lost after the moratorium was
put in place in the wake of the Macondo
incident.
We say temporarily, since over time
many of these jobs will come back. This
is in no way belittling the effect the loss of
jobs has had on those involved and their
families. It is stating a belief that our in-
dustry is resilient and will come back
stronger and better.
Well over 80 percent of this countrys
energy comes from hydrocarbons. No
number of alternative or renewable energy
sources will change that percentage quick-
ly. Oil and gas are here to stay; and, frank-
ly, the country needs us to produce hydro-
carbons for them, even if the importance
is not always realized by many Americans
outside of our industry.
So our take on the future job market
is positive. Regulations about to be dealt
with by the industry will have an increas-
ing effect on job creation, since many
1308pejew_8 8 8/20/13 2:57 PM
EnergyWorkforce
|
|
Summer 2013 9
more people will be needed to under-
stand what the new rules mean and to
develop the best practices to implement
them. Regulatory experts and analysts
may apply here!
The role of the regulatory analyst has
expanded in all sectors of the oil and gas
industry as a result of proposed, new and
revised legislation.
A regulatory analysts position may in-
clude such responsibilities as:
Preparing and submitting permitting
requests for all new operations activi-
ty and any revisions to prior approvals
Monitoring and reporting gas and oil
production and inventory for compa-
ny-operated wells
Managing and updating regulatory in-
formation and forms
Interfacing with local, state and feder-
al regulatory agencies
An experienced analyst will have pri-
or regulatory permitting and reporting
experience for full cycle development
planning, drilling completion, workover
operations, and feld abandonment. The
role also requires knowledge of permitting
specifc to the governing agency and geo-
graphic area.
Additionally with conventional on-
shore drilling, the process of shale ex-
traction is regulated under a number of
laws, most notably at the federal level,
the Environmental Protection Agen-
cy, The Clean Water Act, The Safe
Drinking Water Act, and The Nation-
al Environmental Policy Act. While
the federal agencies administer a gen-
eral one-size-fts-all set of guidelines,
the regulatory bodies at the state and
local levels may be distinctly different
due to geographic location, hydrology,
population density, wildlife, climate
and local economics.
This stew of agencies and rules cre-
ates career opportunities for experts in
each area and for generalists keeping an
eye on the big picture and the interface
among all parties.
Experts in this feld will be needed in
the permitting processes. This will create
employment opportunities particularly in
the context of:
Greenhouse gas and air emissions
Noise pollution
Erosion and sediment control and
Environmental threats to endangered
and threatened species
We do not know how the regulatory
scene will play out. We are certain, how-
ever, that regulatory compliance needs
will not decrease; this could create a boon
for those professionals seeking a switch
in their careers.
Tis fast-growing sector of the indus-
try holds promise to any regulatory pro-
fessional due to the diversity of agency
interface, geographic variety and environ-
mental concerns. As industry technolog-
ical developments and practices improve
and legislative requirements continue to
evolve, so will the unique opportunities
in these regulatory roles.
The role of the regulator y analyst has expanded
in all sectors of the oil and gas industr y as a
result of proposed, new and revised legislation.
1308pejew_9 9 8/20/13 2:57 PM
10 Summer 2013
|
|
EnergyWorkforce
Empowering our Troops:
AEP Career Initiatives for Veterans
H
EADQUARTERED in Colum-
bus, Ohio, American Electric
Power (AEP) is one of the
largest electric utilities in the United
States, delivering electricity to more
than 5.3 million customers in 11 states.
AEP has a long history of community
engagement and has established itself
as one of the top employers for military
men and women.
As a leading utility, AEP partners
with veterans organizations and job pro-
grams, provides special benefts to vet-
eran employees, and supports veteran
employees and their families through
mentoring and recognition programs.
Recently, PennEnergy was invited to
learn more about AEPs veterans ini-
tiatives and given the opportunity to
engage Scott Smith, AEP Senior Vice
President for Transmission Strategy and
Business Operations.
A former U.S. Army captain and com-
bat engineer, Smith serves as an execu-
tive sponsor for AEPs Military Veteran
employee resource group. Smith collab-
orated with PennEnergy content direc-
tor, Dorothy Davis, to offer greater in-
sight into AEPs veterans initiatives and
how they beneft our military heroes,
the energy industry, and the communi-
ties they serve.
PennEnergy (PE): What percentage of
AEPs current workforce is represented
by veterans?
Scott Smith (Smith): Veterans com-
pose 10 percent of AEPs workforce, with
1,770 military veterans working through-
out our 11-state service territory.
PE: When did AEPs veteran outreach
initiatives begin and what prompted
them?
Smith: Though AEP has a long his-
tory of supporting military veterans, it
became even more pertinent in recent
years as we increasingly realized that the
skills military veterans could bring to the
workplace closely match the skills we are
seeking for new employees. Many vet-
erans have the job-related training we
need to operate equipment and to per-
form other technical functions, along
with the personal attributes we value,
including leadership skills, f lexibili-
ty, adaptability, dedication and team-
work. We also have recognized the
signifcance of building a skilled work-
force pipeline that will help us meet the
future needs of our ever-evolving indus-
try. With this in mind, we have placed
increasing attention on our military re-
cruiting efforts as well as on our compa-
ny pay and benefts policies that support
Reservists and National Guard members
who are called into active duty.
PE: What programs does AEP have
in place for helping to recruit and
transition veterans into civilian ener-
gy careers?
Smith: At AEP, we have taken a
number of approaches to target the vet-
eran community and transition them
to successful careers at AEP. For exam-
ple, instead of fltering through thou-
sands of resumes, which can be time
consuming, we work with veterans or-
ganizations and national and state jobs
programs to locate veterans who have
the skill sets that match utility jobs.
This spring, AEP hosted an open
house at the AEP Transmission train-
ing facility near Columbus, Ohio, for
an up-close and personal view of the
daily activities of linemen, station tech-
nicians, protection and control elec-
tricians and other jobs. The event,
co-sponsored with veterans groups,
TRAINING Insights
1308pejew_10 10 8/20/13 2:57 PM
EnergyWorkforce
|
|
Summer 2013 11
provided an orientation about the types
of careers available at AEP. Several AEP
military veterans served as mentors dur-
ing the event. AEP seeks out veterans at
traditional recruiting events, too. For ex-
ample, we participate in Hire Our He-
roes, a U.S. Chamber of Commerce-
sponsored job fair.
In addition, AEP is one of a handful of
utilities that directs ex-military job appli-
cants to an online military occupational
specialty decoder that translates military
skills, capabilities and training into civil-
ian terms. The decoder helps veterans
recognize the meaning and value that
their military skills and training have in
the civilian workforce.
PE: What impact has AEPs veteran
program had on the company and its
service communities?
Smith: For 10 consecutive years, AEP
has been ranked among the top mili-
tary friendly employers in the country
by GI Jobs Magazine. Our program has
not only increased the number of veter-
ans in our ranks, but it has helped veter-
ans transition successfully through men-
toring and company support.
I serve as an executive sponsor for
our Military Veteran employee resource
group, which was launched on Veterans
Day in 2012. The group not only men-
tors newcomers, but it also supports em-
ployees by assisting their families while
the employees are away on active duty.
The resource group partners with veter-
ans groups and sponsors events to honor
veterans throughout AEPs 11-state ser-
vice territory. Ultimately, we want to show
our employees and our service commu-
nities that we value the service of veter-
ans who have fought to protect our free-
doms and want to help them secure the
economic prosperity, ongoing support,
and respect they deserve.
PE: How does AEP envision the role
of veterans in evolving energy industry?
Smith: When we look at the veter-
an community, we see a skilled, disci-
plined workforce that can help our in-
dustry succeed as we begin a period of
rapid infrastructure modernization and
expansion. Nationwide, utilities will
need to replace an estimated 200,000
skilled Baby Boomers expected to retire
in the next fve years a third of the ener-
gy workforce. At the same time, utilities
across the U.S. are expected to invest $50
billion to modernize electric transmis-
sion infrastructure through 2020. This
estimate could surpass $100 billion if
additional investments are made to en-
hance communications and cyber secu-
rity capabilities.
Through 2020, AEP alone plans to
spend billions to build around 480 new or
enhanced transmission substations and
roughly 1,800 miles of new transmission
lines. We plan to rebuild another 3,900
miles of transmission lines between 2013
and 2015. We also are focused on prepar-
ing ourselves for success in a competi-
tive transmission business environment,
which will require us to move quickly and
fnish projects on time and on budget.
As a result, targeting military veter-
ans who are transitioning to civilian ca-
reers makes sense since their capabilities
match the qualities necessary for us to
succeed in a rapidly growing, competi-
tive transmission landscape.
PE: What is ahead for AEPs veteran
initiatives?
Smith: As we seek to recruit more
veterans into our ranks, we have looked
at how we can best support this popu-
lation of employees, particularly those
who continue to serve. AEP recently an-
nounced it will make up the difference
between an employees military pay and
his or her AEP base wage when the em-
ployee is off work for required training.
Additionally, we are supporting indus-
try-wide efforts to leverage the talents of
the veteran community. AEP helped es-
tablish the Troops to Energy Jobs pro-
gram, a product of the Center for En-
ergy Workforce Development. The
Center recently published a 54-page na-
tional model to help energy companies
develop a comprehensive program for
military outreach, education, recruit-
ing and retention. Through such col-
laborative efforts, we are determined to
help more veterans by providing a road-
map to civilian employment in the en-
ergy industry. In turn, we are ensuring
that we have the skilled workforce need-
ed to continue generating and deliver-
ing the reliable electricity that is essen-
tial to American homes, businesses and
national security.
When we look at the veteran communit y,
we see a skilled, disciplined workforce...
1308pejew_11 11 8/20/13 2:57 PM
12 Summer 2013
|
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EnergyWorkforce
Energy 101: Wave & Tidal Energy
PennEnergy.com
W
AVE and tidal energy is
a predictable form of re-
newable energy that uses
the power and movement of wave
and tidal fows to generate electric-
ity. With the use of underwater tidal
turbines, energy from the sea is cap-
tured to create a non-polluting form
of electricity.
A dam approach with hydraulic
turbines is the most modern tech-
nology being used across the world
to harness tidal power. Tidal dams
are most effective in bays with nar-
row openings. Gates and turbines are
installed at certain points along the
dam, and when an adequate differ-
ence in water elevation on the dif-
ferent sides of the barrage occurs,
the gates open, creating a hydrostatic
head, the Ocean Energy Council re-
ported. During this process, water fows
through the turbines to create electric-
ity. The technology used at tidal ener-
gy facilities is similar to that used at
traditional hydroelectric p ower plants.
Wave and tidal power is one of the
oldest forms of energy used by humans,
with tide mills used by the Spanish,
French and British as early as 787 A.D.
Its estimated the worlds potential for
ocean tidal power is 64,000 megawatts
electric, the OEC reported. However,
tidal power has a low capacity, usually in
the range of 20 to 30 percent.The tech-
nology for tidal energy is also expensive,
though powerful. It is estimated that if
a barrage was placed across a high-tid-
al area of the Severn River in western
England, it could provide 10 percent of
the countrys electricity needs, accord-
ing to the OEC.
Growing popularity
Tidal and wave energy technology is ad-
vancing rapidly as more countries are
beginning to realize the renewable en-
ergys benefts.
In the United States alone, there are
about 2,110 terrawatt-hours of wave en-
ergy being generated each year. Yet, ac-
cording to the Renewable Northwest
Project, this is just 25 percent of how
much the U.S. could be generating on
its coastsfrom tidal power.
Using special buoys, turbines or
other means, the country is captur-
ing the power in waves and tides from
the ocean - power that can be more
predictable than wind. Because tidal
energy reacts to the gravitational pull
of the moon and sun, experts can pre-
dict their arrival centuries in advance.
Oregon and Washington experience
the strongest waves in the lower 48
states. In Washingtons Puget Sound,
the U.S. could develop wave and tidal
technology that could capture sever-
al hundred megawatts of tidal power.
The U.S. Department of Energy
also recently unveiled a foating off-
shore wind platform that uses under-
water turbines to capture tidal energy
and create electricity, Forbes report-
ed. Another wave project that includes
10 buoys is being tested off the coast of
Oregon. It is expected to generate 1.5
MW. U.S. regulators see projects like
this as a smart and valuable solution to
diversify the countrys energy mix with
greener technologies. These regulators
also see wave and tidal power as more
predictable than wind and solar.
The United Kingdom also sees tidal
power as a viable alternative to fossil fuel
power. The U.K. is seen as a world lead-
er in wave and tidal stream technologies
due to its abundance of marine energy
resource. It is estimated that tidal tech-
nologies could generate up to 300 MW
of power by 2020. However, overall po-
tential is between 25 and 30 gigawatts.
1308pejew_12 12 8/20/13 2:58 PM
Actionable data for the Power industry:
Make your next step
your BEST step.
Power Generation
Renewable Energy
Transmission & Distribution
Smart Grid
...and much more
www.PennEnergyResearch.com
DIRECTORIES SURVEYS FORECASTS INDUSTRY ANALYSIS
STATISTICAL TABLES CUSTOM RESEARCH
1308pejew_C3 3 8/20/13 2:58 PM
Weve got people.
PennEnergy JOBS is the key to attracting the
energy industry professionals you need to hire to
meet your business goals. Our process puts your
recruitment message in front of the industrys best
talent whether its online, in print, or at an event.
This approach offers you the fexibility to create
custom recruitment advertising campaigns best
suited to meet your budget and objectives.
|
Learn More
|
Visit: www.PennEnergyJOBS.com
Call: 1-800-738-0134
Got jobs?
1308pejew_C4 4 8/20/13 2:58 PM

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