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European thermal power sector ‘uninvestable’ says IEA’s Birol

July 18th, 2014

The European thermal power plant market is “almost uninvestable” at the moment according to Fatih Birol, chief economist of the International Energy Agency.

But he warned that this situation would have to change as he predicts 100 GW of new thermal power will be needed in Europe by 2025 to “safeguard reliability”.

Speaking at the annual energy conference of the Confederation of British Industry (CBI) in London yesterday, Birol (pictured bottom left) said that despite the rise of renewables in Europe, thermal power had a vital role to play in maintaining energy security.

Security of supply – and the policy decisions that promote it –also formed the basis of a speech by the CBI’s Deputy Director General, Katja Hall.

She revealed the results of a CBI poll of 550 British business leaders, who cited security of supply as a crucial energy objective for the UK.

But 57 per cent of those firms think the UK’s energy security is worse than it was five years ago,

And Hall (pictured top right) said that future investment in the UK energy market was being hindered by short-term political thinking.

With the UK due to go to the general election polls next year, the ruling Conservative and Liberal Democrat coalition parties and the opposition Labour party have turned energy into a political football.

Some vocal Conservative MPs have called for an end to building any new onshore wind farms, while Labour has promised an energy tariff price freeze if it comes to power.

Hall said: “Long-term certainty is needed, but just as policies start to click into place, the political climate heats up again. It feels like a game of snakes and ladders.

“One careless comment or populist proposal – whether we’re talking about cutting support for onshore wind farms or freezing energy prices – can make businesses feel like they’re right back at square one.

“For investors, this is a real worry. And when that investment can go anywhere in the world, it should be a real worry for politicians too.”

Talking of politicians, the CBI conference got to hear from two of them yesterday – Energy Secretary Ed Davey and his Shadow Cabinet counterpart Caroline Flint.

Davey (pictured top left) said Britain would “go green, but at the lowest possible cost”.

“For our move to low carbon market mechanisms is first reducing subsidies, then requiring investors to compete for ever lower subsidies and then will see such subsidies reduced to zero, as new technologies like CCS and offshore wind mature and become competitive in a world where carbon will be properly priced.”

Flint (pictured bottom right) also picked out CCS as a focus for investment, but stressed that current under-development projects in UK such as White Rose and Peterhead “must be the vanguard of a new industry and not technological curiosities”.

Combating the emerging cyber threat to power infrastructure

July 18th, 2014

Earlier this month Power Engineering International reported on the detection of a cybercrime operation that poses a serious potential threat to power plant operations in Europe and America.

US cyber security group Symantec uncovered the “Energetic Bear” malware operated by a state-backed group with early indications suggesting origination in Russia. Energy firms in 84 western countries were the targets of what was a well-coordinated cyber-espionage campaign.

This week PEi spoke to Daniel Jammer, Nation-E President and Founder and one of the world’s leading developers of cybersecurity software, about how governments, companies, and homeowners can cyber-secure their energy supplies and the accompanying consumer data.
Command and Control Centre
“This (Energetic Bear) is only the beginning of a lot of viruses or malware that are capable of attacking our infrastructure. This is the first time our physical infrastructure, in the shape of our utilities and energy infrastructure, have come under threat.”

Jammer says that despite the hundreds of millions being invested in information technology to upgrade software and deal with cyber-attacks, the persistence of malware is relentless and that informs his approach.

“The way we should think is in mirror-reverse, meaning we need to see that our energy must not just come from a localized infrastructure. It needs also to be monitored at single points. A utility today is approaching from a command and control centre, monitoring everything from there with the result that if something is attacked everything is attacked. If that happens to a utility it means hospitals, an airport, water utilities, everything is affected.”

Nation-E’s technology entails all critical systems having an independent monitoring infrastructure, still connected to a command and control centre, but one that will continue to ‘live’ after an attack.

“You can island an airport, a water utility or bank for several hours, giving you time to reshape your critical infrastructure in the command and control centre, getting everything back online and back to normality. The problem is, if you do not have this type of technology in place, everything collapses at the same time.”

Jammer’s company has built up its reputation by being hothoused in one of the most security-conscious countries in the world, Israel. Unhappily for Israel, continuous threats to physical infrastructure constitute a fact of life. A happy by-product is that its companies can bring that experience to a world which has slowly woken up to the emerging cyber-threat.

“For us it’s not something new, but for the outside world it is becoming more and more applicable," Jammer said. "The Energetic Bear is spreading continuously from one network to another. The cyber has no timing; it can be inside your system and you don’t know when it will attack you. It could be today, six months or one year. So we need to define what is important to us in order to protect it. After the Energetic Bear virus the last persons who have been naïve or sceptical about cyber-threats are now fully aware that this type of phenomenon is real.”

Nation-E’s most recent business in protecting critical infrastructure was very high profile, FIFA being the client.

“Our last exposure was for protection of the 2014 World Cup broadcasting and satellite infrastructure, and basically you saw that every game was seen without disruption. On the other side we are working with utilities, water utilities and banking infrastructure. We produce something very unique which will help humankind resist the threat.”

While not dealing directly with the customer, other companies (think the likes of IBM, Cisco and Intel) take the technology under their umbrella when serving the customer.

Jammer paints for PEi some doomsday scenarios his company’s technology seeks to prevent. The growing progress of renewables and the growth of a smart grid is used to illustrate one such scenario.

“Look at the potential for smart meter infringement –a case where a consumer gets a £5000 bill instead of the usual £100 and you are forced to get a lawyer involved. Look at it the other way around – malware leading to your utility invoicing you for £5 instead of £100 –1 million people getting that £5 invoice – the utility losing £95m, this continuing for 12 months and it going into billions. What we are looking at is not only malware that can black you out, it can also infringe the billing process and infringe the security of power.”

The capacity for interruption of the burgeoning smart grid presents numerous possibilities for those with malign purposes.

“The smart grid is about integrating all sources of energy into one network,” Jammer continues. “If that network is infringed, the malware might instruct providing solar power at 10pm and not at 1pm when the utility really needs it. There will be resulting power problems in the network, and those occurring frequently will cause blackouts that cost a lot of money. In the US in 2013, $164bn was lost due from power blackouts. Imagine how a cyber-problem could potentially cost so much more.”

The implications in terms of insurance cover are also striking, as comprehensively discussed at a recent forum on the matter by the Willis Group in London - but there is, as Jammer puts it, a much more tangible “threat to disrupt our lives, security and our democracy and we need solutions to protect that.”

Nexans debuts new overhead conductor in Brazil

July 18th, 2014

A new power transmission line in Brazil, developed by Nexans, is set to deliver power to 300,000 people in the São Paolo region.

The line between Jandira and Cotia is the world’s first commercial installation of Lo-Sag conductors that use a carbon fibre composite core to save weight and double capacity.

São Paulo metropolitan region currently has approximately 20 million inhabitants. 

Looking at ways to improve the service its offers to the region, a new power transmission line has been built by Eletropaulo (the main utility in the region) with Lo-Sag, an overhead conductor technology from Nexans. This thermally resistant design, based on a carbon fibre core, is both lighter and stronger than conventional conductors, as well as offering double the transmission capacity, the company says.
Power Line
"This is the world’s first commercial installation of Lo-Sag and is an important landmark that follows the success of trial installations in Brazil and France," said Sidney Ueda, Product Manager at Nexans Brazil, in an email statement.

He added that the main challenge lay in adapting the solution to the amount of energy transmitted. "There are 21 km of 138 kV conductors used to create 3.5 km of double circuit power transmission line."

The new power line from Jandira to Cotia allows load relief on existing lines and increased benefits for the region. "Because it is new, it is less susceptible to failures and interruptions in energy supply," said Amadeu Macedo, Eletropaulo specialist engineer.

In addition to the inhabitants of the region, the line will serve large companies that receive electricity at high voltage, and also the training centre of São Paulo Football Club, which hosted the Colombia team during the recent world cup.

For more power transmission news

Power executive pleads guilty to bribery

July 18th, 2014

William Pomponi, a former vice president of Alstom US, has pleaded guilty to a role in a scheme to bribe government officials in Indonesia.

According to a statement by the US Department of Justice, the former vice president of sales for the French company's Connecticut-based power subsidiary pled guilty to conspiring to violate the Foreign Corrupt Practices Act.

The seven-year scheme entailed bribing Indonesian officals in order to win the $118m Tarahan coal-fired power plant project in southern Sumatra.
Tarahan power plant
The project, completed in 2007, was completed in conjunction with Marubeni Corporation, who has already paid an $88m fine for their role in the scandal.

Two other Alstom (Euronext: ALO) executives, including a former vice president of global boiler sales and a vice president of regional sales at the US unit, have already pled guilty in connection with the scheme.

Prosecutors accused the former Alstom executives of bribing an Indonesian lawmaker and members of the state-owned electricity company to get their help in securing the contract.

They concealed the bribes through payments to two purported consultants, prosecutors said.

Alstom potentially faces hundreds of millions of dollars in fines for violating a US law that bars bribes to officials of foreign governments.

GE Forum explains benefits of FlexEfficiency to gas power interests

July 17th, 2014

Old Trafford, home of the Manchester United football team, was the venue last week for General Electric Power and Water’s FlexEfficiency Forum, aimed at getting the most out of gas turbine technology.

GE (NYSE: GE) chiefs used the event to demonstrate to UK-based gas-fired power sector personnel the benefits of harnessing the company’s big data and analytics resources, GE’s 9E Advanced Gas Path (AGP) and 9F-3 Advanced Gas Path (AGP) upgrade solutions.

The focus of the technology is on helping plant owners fulfil burgeoning power demands more flexibly, efficiently, and while maintaining a low emissions footprint. Ultimately the technology is about bringing more predictability and sustainability to power generation operations.
GE 9F turbine
Predictability is highly sought after for power plant owners and management, and that ability to forecast costly issues is key to the product. The company has invested significantly in a software centre of excellence in Silicon Valley which has as its aim an imperative for power planned owners: having planned rather than unplanned outages, giving them the ability to see failures on the horizon before system failures actually arise.

Explaining the technology in terms of asset management and asset optimization, Eric Kauffman, Director of Product Strategy, Software & Analytics at GE Power Generation, provided a football analogy to bring home the qualities of the product in maintaining performance.

Inspired by the Old Trafford backdrop to the event, Kauffman said that what GE is doing is similar to the practice of teams “using saliva tests on players after games or training to determine nutritional needs so that each player gets a custom energy drink and is then ready for the next game as quickly as possible.”

“When we talk about predictivity we are talking about getting information from instrumented machines with lots of data coming from that, giving that to experts such as engineers, arming those people with the analytical tools to come up with the best solutions.

“The thing we can do for power plants is, we can help plant maintain its maximum performance across the entire power plant – the scheme cycle, the gas cycle, all of the components.

“We have the analytics to calculate that corrective to standard conditions and track degradation and then remotely monitor it and engage experts when they’re needed. Then we can combine that with the on-site services of testing and evaluation, full plant level, not just the gas part of it.”

For reliability it’s very similar. GE works with its clients and facilitates their objectives through harnessing data-driven insights from 100+ million hours of operating data on what is the world’s largest gas turbine fleet.

“We monitor about a thousand signals from each machine and those also go to our remote monitoring centre. We have algorithms we go to look for issues and we contact customers when we find issues. We combine that with inspection data. For example if a customer has high dynamics in their combustion and let’s say they don’t have auto tune we can identify the high dynamics, tell the customer what the impact is, and remotely re-tune the machine to keep the dynamics in check.”

AGP technology also enables GE customers to benefit from lower fuel consumption, and the industry's longest gas path maintenance intervals that extend gas turbine assets and parts life.

The AGP solution exemplifies GE's Power LifeMax, a portfolio of hardware and software-blended solutions that enables customers to improve performance and long-term value of their existing B/E-Class gas turbine assets.

Among the benefits of using the technology are a 2 per cent increase in output combined cycle, a 2 per cent increase in fuel efficiency for combined-cycle and up to 32,000-hour or 1200-start gas path maintenance intervals, which can extend outage intervals up to 33 per cent. There is also the potential to extend gas turbine assets and parts life out to as much as 96,000 hours.

GE's OpFlex corrected parameter control software suite can further improve AGP performance. For example, it can lead to up to an 8 per cent increase in output with <25 ppm NOx.

It can also enable power to be delivered to the grid in less than 10 minutes and allow turndown to as low as 50 per cent.

In developing the product, the company leveraged more than 30 million hours of fleet operational experience in applying design innovations to key gas turbine components, including hot gas path buckets, nozzles, and shrouds.

In terms of successful deployment, Dubai Aluminium (DUBAL), one of the world's largest producers of aluminum products, has experienced a 3.4 per cent output increase and a 1.5 per cent fuel efficiency improvement on one GE 9E gas turbine since installing the AGP solution. These performance improvements have delivered nearly an additional 6 MW of power to the site's power station, and enabled DUBAL to reduce its fuel costs.Lazslo Varro

DUBAL is to install AGP technology on two additional GE 9E units, and expects to gain comparable performance improvements that will translate to nearly 18 MW of additional power across all three gas turbines.

At the launch, the International Energy Agency’s head of gas, coal and power division, Laszlo Varro, said that there was much to be positive about for gas-fired power providers in the UK, and pointed to the expense and environmental pitfalls of competing means of power generation.

“If UK energy policy succeeds, there could be problems for gas-fired power. The business case for gas is less strong if policy is successful. However no nuclear power build has ever been on time.

“Also, the reason lignite coal is dirt cheap is because it is dirt.”

For more gas-fired power news

Abbott government abolishes carbon tax in Australia

July 17th, 2014

Australia has become the first country to reverse action on climate change after the country’s senate voted to scrap the price on carbon.

The government justified the move on the basis of providing relief to consumers and businesses but it now leaves Australia without an approved mechanism for tackling emissions.
The repeal bill was passed 39 votes to 32 in the 76-member upper house, dismantling a law introduced by the previous Labour government that initially charged polluters A$23 ($21.50) per tonne of greenhouse gases emitted.

The move will go down well domestically, but not so well internationally. Australia hosts the G20 Summit in November and the country’s policies run counter to those of other nations, such as the US, which are pressing for a global agreement to combat climate change.

Australia, the world’s biggest emitter of fossil fuels per capita, hasn’t backed US calls to add the issue to the G20 agenda when leaders meet in Brisbane.

The repeal will save the average family A$550 per year through lower electricity prices and will make Australian companies more competitive, Prime Minister Tony Abbott said in an e-mailed statement after the vote.

Australia, the world’s 12th-largest economy, will still be able to meet its promised 5 per cent reduction in emissions by 2020, the government added.

For more Australasian power generation news

Sembcorp increases stake in Indian coal plant JV

July 17th, 2014

Singaporean energy, water and marine conglomerate Sembcorp Industries has invested an additional $84m in an Indian coal-fired power plant project. 

The project’s developer, Thermal Powertech Corporation India Ltd (TCPIL), is a joint venture between Sembcorp and Hyderabad-based Gayatri Energy Ventures. With the additional investment Sembcorp has raised its stake in the JV from 49 per cent to 60 per cent, with its investment now totalling $377m.

The JV was formed to develop, own and operate a 1320 MW coal-fired power plant in Andhra Pradesh, near the Bay of Bengal coast.

The plant’s first unit is expected to come online in the fourth quarter of this year, with the second unit planned for operation in 2015.

According to DBS Group Research, a financial analysis firm, SCI’s increased investment represents a desire to “cash in” on India’s rapidly growing power sector.

“India's power sector offers tremendous growth potential because of a mismatch in electricity demand-supply in the country. … SCI is expanding its foothold in India as it believes this market will grow significantly over the longer term, despite the usual impediments to growth,” DBS said.

UK unveils reform package for EU ETS

July 16th, 2014

The UK government has today called for major reforms to improve the emissions ‘cap and trade’ system put in place by the European Union to tackle climate change.

The EU Emission Trading System (ETS) has since 2005 given companies from heavy industries and the power sector the flexibility to decide whether to invest in carbon abatement or to purchase emission allowances to comply.

But with a current surplus of more than two billion allowances, the UK’s Department of Energy and Climate Change (DECC) has said that the system “is not stimulating the low-carbon investment needed now to meet long-term targets”.

In a statement it said: “Various factors, such as the economic downturn and an insufficiently ambitious target for 2020, have resulted in a lower than expected demand for allowances, and therefore a weak price signal for low-carbon investment.”

In a policy paper published today called UK Vision for Phase IV of the EU ETS, DECC has set out a series of reforms which it said are needed “to strengthen the ETS so that it helps businesses to deliver future emissions reductions cost-effectively, fosters investment in innovative low-carbon technologies, and protects the competitiveness of UK industries in the transition to a global low-carbon economy”.

There are three key reforms in the paper:

Cancellation of surplus allowances before 2020. DECC said this will “help restore the balance between supply and demand, and put the system back on track once and for all”.

“If not tackled, the surplus will continue to depress the carbon price, delaying the low-carbon investment that is needed now to meet our emissions reduction targets cost-effectively. The UK government is considering the potential of the Market Stability Reserve to address this problem, a mechanism proposed by the European Commission in January.

Revision of free allowances provisions. DECC stated that while the system of free emission allowances, which are designed for certain businesses to stay competitive during the transition to a low-carbon economy, “must continue to protect those who need support most to adjust over the long term”, it added that “as the amount of free allowances available within the cap continues to fall after 2020, allocation must be based on robust evidence and target the sectors that are genuinely at risk of losing competitiveness”.

Cutting unnecessary red tape to strike a better balance between fairness, cost-efficiency and simplicity. As an example, DECC said that compliance and administrative costs “could be reduced by ensuring that small sources of emissions are treated proportionately”.

UK Energy Secretary Ed Davey said: “The UK is asking for bold and comprehensive reforms to restore the ability of the EU’s Emission Trading System to drive cost-effective emission reduction and low carbon investment.

“A glut of emission allowances on the carbon market has thrown the system off course. This is delaying the low-carbon investment that countries need now to meet long term targets, and thwarting the economic growth that these investments will bring.”

German power firms set for China boom time

July 16th, 2014

German companies are poised to reap the rewards from power opportunities in China, India and developing Asia, according to an energy expert.

Jonathan Robinson, senior energy consultant at Frost & Sullivan, said that German technological know-how was set to prove vital to China as it tackles its carbon emissions.

“Pollution in China has been a serious issue for some time, but it has now become one of the biggest sources of public discontent in the country, and as a result is a hot political issue.

“The Chinese government is focused on both reducing environmental damage – both in terms of atmospheric emissions and also water pollution – as well as making better use of the waste resource that is produced.”

Robinson said that Germany “is a global leader in environmental technologies, thanks to years of tough regulations and attractive incentives for alternative energy solutions” and added that it was already “China’s largest trading partner in Europe, and China is Germany’s in the Asia Pacific region, so both countries already understand what each can offer”.

He said that reducing air pollution is a key objective in China and the country’s coal plants already have pollution control technology installed, “but many industries, particularly manufacturing, petrochemical and chemical industries are still heavy polluters”.

Robinson added that “water is another key issue. China’s coal industry is water intensive – this includes the mining, usage in power plants and also usage in associated heavy industries. Installing wastewater treatment solutions could help to avoid water shortage within the industry, ensure sufficient availability for the population and agriculture.”

He also stressed that the waste-to-energy potential “is also huge, as is the potential for greater waste recycling and re-use and the potential for biogas, which offers huge opportunities”.

However he added that “the big concern for German companies is to find a way to sell their products and services into the Chinese market, while also protecting their intellectual property rights – something that has proved an issue for a number of major companies in the past”.

“The most likely route to market would be through partnerships/joint ventures with Chinese players or potential technology licence agreements – although these carry the risk of creating competitors for the future.”

UK gets fourth energy minister in as many years

July 15th, 2014

The UK has two new energy ministers following Prime Minister David Cameron’s most extensive Cabinet reshuffle yesterday.

While Secretary of State for Energy Ed Davey keeps his job – there was never any doubt that he would not – his twMatthew Hancocko ministers have changed.

Former Energy Minister Michael Fallon – who also served as minister for Business, Innovation and Skills – has been promoted  to Defence Secretary, while Greg Barker, who as Minister for Energy and Climate since the government came to power in 2010 was the longest serving energy minister – has resigned from the government.

In his resignation letter to Cameron, Barker said that “on the basis of what we have already delivered, this is genuinely the greenest government ever”. He cited several initiatives as successes, including the formation of the Green Investment Bank, an expansion of decentralised energy and the establishment of marine energy parks.

Barker was well-regarded by many in the power industry, particularly those in the renewables sector.

David Taylor, Business Development Manager at UK-based Flogas Renewables, said Barker had been a “well-respected advocate of growth for the UK solar market”.

“There is no doubt that representatives across the industry will miss Greg Barker’s commitment and enthusiasm to delivering renewable solutions.”

However he added that “the overhaul of the department presented a very real opportunity to channel renewed energy into renewables”.

Dr Nina Skorupska, chief executive of the UK's Renewable Energy Association, said: “Greg Barker was the only DECC minister to have been in post since the last election. Not only did he bring stability to the department, he also brought passion and enthusiasm. Although during his stewardship he had to make tough decisions we didn’t agree with, there is no doubt that Greg was a champion for green business. I hope he continues to be an advocate for a low carbon economy, ensuring the UK’s energy is sustainable and secure."

Maria McCaffery, RenewableUK chief executive, added: “RenewableUK is also grateful to Mr Barker who, during his long time as Energy and Climate Change Minister, was a consistent advocate for renewable energy in government. Mr Barker devoted considerable energy and enthusiasm into advancing our world-leading wave and tidal sector, and we look forward to working with his successor on marine and small wind issues”.

Barker is being replaced by Amber Rudd (pictured right), who was previously not in the Cabinet, while Fallon’s successor is Matthew Hancock (pictured above). Both have a background in banking and economics and both have worked for UK Chancellor George Osborne. Indeed, some industry observers see their appointments as a means of the Treasury keeping a grip on the purse-strings on the Department of Energy and Climate Change.Amber Rudd

Hancock becomes the fourth energy minister since May 2010, following Charles Hendry, John Hayes, and Michael Fallon.

Ed Davey said of the new appointments: “I’m looking forward to welcoming Matthew Hancock and Amber Rudd to DECC. They join us as we are increasingly demonstrating the success of our policies to meet Britain’s energy and climate change challenge. I know their combined experience and abilities will be an enormous asset as we complete this Government’s work.

“I want to thank Michael Fallon and Greg Barker for their immense contributions to turning around the legacy of energy underinvestment we inherited. I was particularly grateful to Greg for his support on my battles on climate and to Michael, for his backing for my pro-competition approach to the Big Six.”

For more European power generation news

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