No.y 2015 12 | Jul Living Energy · PDF filesive lobby of Malaysia’s energy company...

No. 12 | July 2015 siemens.com/living-energy

The Magazine for International Energy Leadership

Living Energy

The Rise of the Energy InsurgentsAmory B. Lovins: The Disruptive Force of Smart Renewables

Combined Heat and Power

Making the Most of Waste Heat

Essay

Hiroshi Takahashi: The Future of Japan’s Energy Mix

Sustainable energy

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in their

only succeedwhen the countries

in question can

afford the changesor are

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Living Energy · No. 12 | July 2015 3

Editorial

Dear Reader, Truly sustainable energy transitions throughout the world can succeed only when the respective national economy can in fact afford the changes or when less-industrialized countries are supported in their efforts. In this spirit, Germany has already announced that it would be doubling its contri-butions for international climate protection mea-sures by 2020. Later this year, the follow-up treaty to the Kyoto Protocol is to be signed, pre senting binding climate goals for all 194 member states of the UN Framework Convention on Climate Change. In view of these developments, the interview with Amory B. Lovins, Cofounder and Chief Scientist of the Rocky Mountain Institute, is especially relevant. During his over 40 years of advising companies and governments to pursue energy efficiency and renewable energy solutions, Lovins has focused on the most efficient possibilities for making energy systems more sustainable. In the interview, he speaks of the disruptive force of renewables and how they are changing business models and creating business opportunities – not only for power plant operators and end custom-ers, but also for other system participants in a smart energy system. A second topic in this issue focuses on discussions regarding the current global trend in oil pric-ing. Developments here are obviously having an

Siemens Managing Board Members Lisa Davis and Roland BuschPhot

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impact on suppliers to the oil and gas industry, like Siemens. We continue to believe the slump in oil prices is output-driven, rather than a question of structural demand. And until oil prices and production bounce back in the mid-term, we will work closely with our customers to bridge the dry spell and explore new ways of serving the industry. Our special feature in this issue looks at ways in which new technologies and comprehensive solutions can lower CAPEX and OPEX over the long term so one can contin-ue to operate successfully even under changed market conditions.Also in this issue, we’re taking a closer look at Japan. The devastating earthquake and subse-quent tsunami in March 2011 struck a fatal blow to the Fukushima nuclear power plant and led to a massive reevaluation of national energy policy in the world’s third-largest producer of nuclear power. This April, the Japanese govern-ment announced its recommendations for the country’s energy mix in 2030: One quarter will remain based on nuclear power, one quarter will be provided by renewables, and the remaining half will depend on highly efficient fossil power plants. This decision is once again proof of how energy transitions can differ worldwide.

We wish you an enjoyable read!

Contributors

Glenn van Zutphen

“It was an extraordinary day when I walked into the expan-sive lobby of Malaysia’s energy company Tenaga Nasional Berhad (TNB),” says seasoned Living Energy correspondent Glenn van Zutphen, who works from Singapore. “In just a few decades, the power giant has driven the country into the first world. As a regular traveler to Malaysia since 1991, I’ve seen the massive change in this diverse and beautiful land. As I sat and talked with TNB President and CEO Datuk Seri Ir. Azman Bin Mohd, his calm, steady demeanor surprised me. I remember thinking: ‘How could someone with so much re-sponsibility, be so calm?’ I guess that after 35 years at TNB, Azman knows how to cope with the challenge of keeping the lights on.” (See p. 26)

Justin Gerdes, Nicholas Strini, Ye Rin Mok

“My introduction to Amory B. Lovins was a profile of his home that was included in an environmental science textbook in my freshman year of college,” says San Francisco-based energy journalist Justin Gerdes (center), who got to see that same building on his visit as part of the Living Energy team. “Mr. Lovins was nothing but gracious, generously making time for an interview and tour of his home.” To the delight of Gerdes and New York-based documentary filmmaker and pho-tographer Nicholas Strini (left), he also treated them to a performance of Beethoven’s Moonlight Sonata on the piano and to a crash course in Chinese calligraphy.The cover photo to go with this story was shot by renowned photographer Ye Rin Mok, who lives in Los Angeles and who also visited Lovins at his home. “It was quite a privilege and a unique experience to be able to meet Professor Lovins and to shoot his home,” she says. “In the cool and pristine environ-ment of Aspen it was pleasantly disorienting to enter a green-house filled with tropical plants. Lovins showed me all of the state-of-the-art energy gadgets that help to power his home.” (See p. 8)

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Mariela Bontempi

“Part of the magic of infographics is that they are the best way to show complex information at a glance,” says Argentini-an-born illustrator and graphic designer Mariela Bontempi, who lives in Madrid. “In this particular instance, my aim was to show a large variety of renewable energy projects in the map without getting lost in data. I particularly enjoy collabo-rating with people in the environmental and green energy sector. As communicators, I think it’s our duty to encourage people to participate in changing the way we live in order to save the planet.” (See p. 18)

Moritz Gathmann

While researching his story on combined heat and power (CHP) plants, Moritz Gathmann, who has been working for Living Energy for many years and divides his time between Berlin and Russia, was surprised that the idea of pro-ducing electricity and using the resulting waste energy was not new at all: “The new thing is the effi-ciency that clever engineers have made possible, especially concern-ing fuel utilization. In a world of scarce resources, that seems to be a very good way.” (See p. 50)

Claus Sjödin

“I’m especially fond of assignments that can help make a difference,” says Danish photojournalist Claus Sjödin – a pre-cise observer who consistently manages to recognize the larger picture. “One of the greatest challenges facing the world is the transition from fossil fuels to green energy. This is where sun, water and wind energy play a key role. The Esvagt Froude service vessel is an important element in the wind industry in the North Sea, and it was fascinating to report from a ship fea-turing these prominent technological solutions.” (See p. 38)

4 Living Energy · No. 12 | July 2015

Ward Pincus

“In reporting this story, it was fascinating to see the great diver-sity of technologies being used around the world to produce oil and gas, and the varied impact the oil price decline is having across different regions,” says long-standing Living Energy Middle East correspondent Ward Pincus, who has reported on energy, infrastructure, and oil and gas from Dubai for more than a decade. “Another interesting point was how this industry is both highly innovative in adopting some new technologies, and extremely cau-tious in considering others.” (See p. 56)


Living Energy · No. 12 | July 2015 76 Living Energy · No. 12 | July 2015

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Content

32 Offshore wind power

38 Service operation vessel

26 Powering Malaysia

50 Combined heat and power plants Energy Efficiency

15 Varying Currents Regulatory systems of rules, incentives, and subsidies

determine the regional success of technologies.

Transmission and Regulation

18 PJM – Going Green in America’s Garden State The high-tech control center built by US East Cost energy

giant PJM manages a grid serving over 60 million people.

Energy and Development

26 Powering Malaysia’s Future Azman Bin Mohd, President and CEO of energy provider

TNB, values productivity, efficiency, and reliability.

Column

30 The Power of Prediction Data analytics helps us manage complexity, explains

Michael Weinhold, CTO Siemens Energy Management.

Offshore Wind Power

32 Winding Down the Cost of Offshore Wind An AC substation reduces offshore grid access costs,

while a flagship turbine sets standards for gearless design.

Service Operation Vessel

38 Of Turbines and Men An innovative concept for a service operation vessel will

improve services to modern offshore wind farms.

Energy Management

46 Beyond Technology Jan M. Mrosik, CEO Siemens Energy Management, out-

lines the challenges facing utilities and grid operators.


50 An Efficient Combination Gas turbines heat can be utilized to generate steam for

industrial process applications, district heating – or in district cooling.

Oil and Gas

56 Volatile Prices – Balanced Response The comprehensive Siemens O&G portfolio helps

operators reduce costs in a fluctuating market for fossil fuels.

Distributed Energy

64 Managing an Intelligent Energy Future A decentralized world needs intelligent grids, says

Ralf Christian, CEO Siemens Energy Management.

Essay

68 The Future of Japan’s Energy Mix Hiroshi Takahashi, special adviser to the PM’s Cabinet

Office, looks at Japan’s post-Fukushima energy policy.

3 Editorial | 4 Contributors | 74 Directory, Imprint |

75 In Short | 80 Spotlight | 81 Trade Shows and Conferences

Cover Story

8 The Disruptive Force of Smart Renewables Amory B. Lovins: How renewables are changing markets and business models – and creating business opportunities.

Decentralized EnergyDecentralized Energy

Living Energy · No. 11 | November 2014 98 Living Energy · No. 11 | November 2014

Amory B. Lovins:

Amory B. Lovins is perhaps the world’s foremost champion of and authority on energy efficiency and renewable energy solutions. The Cofounder and Chief Scientist of Rocky Mountain Institute, Lovins is a longtime adviser to utilities, Fortune 500 companies, and heads of state. Living Energy met with Lovins in his Colorado home to talk about why mar-kets now favor efficiency, renewables, distributed resources, and customer services.

Text: Justin Gerdes Photos: Nicholas Strini & Ye Rin Mok

The Marriage of Smart Power

and Electronics

Welcomed Living Energy to his house in Colorado: Amory B. Lovins talking to Justin Gerdes.

View the film of this Living Energy interview.

Amory B. Lovins’ private residence in Old Snowmass, Colorado, is a showcase of efficiency ideas.

he offshore wind industry in Europe is up to 75 projects, 8 gigawatts, whereas the USA

has yet to put its first project in the water. Was it market forces? Was it the regulatory environment? What allowed that industry to rise in Europe as it stalled here?Amory B. Lovins: In Europe, it had pretty strong policy support. In Ger-many, it had access to the grid. It had a feed-in tariff. It’s had some support of that kind in the UK, and in Den-mark. In the USA, there was no such policy support. On the contrary, offshore wind projects were met with prominent opposition. But the industry does need early projects at higher cost to gain experience and bring the price down. It’s been retarded in the USA by these specific forms of either the “Not in My Back Yard” (NIMBY) syndrome or ideologi-cal opposition. Wind is certainly a huge resource. It’s enough off the northeast coast to run the whole re-gion. In time I’m sure we’ll develop it; we’ve just lost a decade through this sort of opposition. There’s certainly much more to be done from the mar-riage of smart power and electronics with electromechanical systems.

this, run their grids the way a con-ductor leads a symphony orchestra: No instrument plays all the time but the ensemble continuously produces beautiful music. To build the reliability or flexibility stack from the bottom up, as if it were a supply curve, the first thing you would do is optimize efficiency, which tends to make loads less peaky as well as smaller, and demand re-sponse. You would forecast the vari-able renewables accurately, which we now can. You would construct a diversified and, where possible, anticorrelated portfolio of both u

You make the argument that areas with some of the highest renewable penetration in the world, Denmark and Germany, have better reliabili-ty of supply than the USA.A. Lovins: Yes, by about ten times. Although the trend data are weak, they do suggest that the more re-newable western Europe becomes, country by country, the slightly bet-ter the reliability becomes. But this is just a large-scale effect. In the USA, 98 or 99 percent of power fail-ures originate in the grid. The more distributed your generators are, the closer to the load they are, the more you can avoid the main cause of outages. To take your point a little further, in 2014, 27 percent of German con-sumption came from renewables, but over 50 percent in Denmark and Scot-land, 46 percent in Spain, and 60 per-cent in Portugal, which has made really remarkable progress. The Ibe-rian Peninsula as a whole is quite a remarkable demonstration of how to get high renewable penetration with high reliability rather quickly without adding bulk storage. How do they do it? Well, they, and particularly the Danes, who are the best in Europe at

A Showcase Green Home

Background and Achievements

In 2009, Time Magazine named Amory

B. Lovins one of the world’s 100 most

influential people. The American physi-

cist and most eminent expert on energy

efficiency has published more than

30 books and more than 500 papers,

about half of them scientific, the other

half popular.

Lovins has redesigned numerous build-

ings, vehicles and factories, all with the

goal of making them more efficient and

cost-effective. Over a career spanning

more than 40 years, he has advised

23 heads of state and firms in more

than 60 countries.

Amory B. Lovins is the Cofounder and

Chief Scientist of Rocky Mountain Insti-

tute, and the recipient of twelve honor-

ary doctorates. Since 2011, he is a

member of the US National Petroleum

Council. He has worked with the oil and

electricity industries for four decades.

Lovins Is the recipient of many honors,

including the National Design Award in

the USA, the Blue Planet, Volvo, Zayed,

Onassis, Nissan and Mitchell Prizes.

Amory B. Lovins

Energy Efficiency


variable renewables and dispatch-able renewables, so that they’re not all of the same kind and in the same place, seeing the same conditions and responding the same way. You would integrate them with dispatch-able renewables and with combined heat and power, often using waste heat. You would integrate with ther-mal storage, like ice-storage air-conditioning, and distributed electric storage, especially in smart electric vehicles. You could go further and use fossil-fueled backup, and even bulk storage, but these costliest op-tions may not be needed.

You’ve written much about the disruption of the utility market in Europe, making the argument that the big incumbent utilities were slow to change. Can they make the transition fast enough?A. Lovins: Time will tell. It’s certainly faster once you start. These are com-panies that have wonderful technical skills that we need, and I hope they find a way to thrive in the new world. They supposed that incumbents would set the pace of the transformation. That isn’t actually what happens. In-surgents set the pace. In fact, the market shifts even quicker than you

T

“ Run the grid the way a conductor leads a symphony orchestra: No instrument plays all the time but the ensemble con-tinuously produces beautiful music.” Amory B. Lovins quoting RMI Manager Clay Stranger


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Completed in 1984, Amory B. Lovins’ home – and

RMI’s original headquarters – exemplifies RMI’s

“abundance by design” ethos. The home is outfitted

with advanced energy-saving technologies – LED

lighting, an electric cooktop that uses 60 percent less

energy than an induction cooktop, superwindows

that achieve a center-of-glass R-value of 14 (k-0,4) –

but the takeaway for building professionals is that

the home illustrates the value of integrative design.

Lovins designed the home to suit the site and climate

(the home is situated at an elevation of 7,100 feet)

with the use of superinsulated stone walls and a

heat-trapping indoor greenhouse. “We ended up sav-

ing 99 percent of the heating energy, about US$1,100

cheaper in construction costs than if we had simply

met the building standard,” says Lovins. “Why get

there the long way around when you can tunnel

through the cost barrier by asking right up front:

‘Is there a sensible way to design this building so

it won’t need any mechanical equipment?’”

Energy Efficiency

Cofounded in Snowmass, Colorado in 1982 by

Amory B. Lovins and L. Hunter Lovins, Rocky

Mountain Institute (RMI) is an independent, non-

profit “think-and-do tank” that creates a clean,

secure, and prosperous global energy future. From

humble beginnings – for many years, staff worked

out of an office in the Lovins’ home – RMI now

employs more than 140 analysts, designers, and

engineers at offices in Colorado, New York City,

and Washington, D.C. RMI consults with business,

government, academic, nonprofit, philanthropic,

Energy Efficiency


u

customers so they will leave faster. But there are many intelligent re-sponses available to you. You could buy the insurgents and offer their products as your own branded prod-uct. You could become an integrator of all technically qualified offerings. You could become a financier of the transition. You do, after all, have cus-tomer relationships, financial exper-tise, and large cash flows. There’s no particular reason you should own as-sets on only one side of the meter. There are other coopetition models that may also make sense and make money. RMI has developed a technique it calls integrative design. Can you describe what it entails and give an example or two of a project in action?A. Lovins: Integrative design is a way to design a building, a factory or industrial process equipment, a vehicle, any technical device as a whole system for multiple benefits, rather than as isolated components for single benefits. Your typical result is radical efficiency at lower costs, and, therefore, expanding not dimin-ishing returns to investments in efficiency. The more you save, the cheaper it gets. That’s a game changer.When we led the design of the retrofit for the Empire State Building it was

lot of messy detail. But consumers are becoming prosumers. We need to be intently customer-centric. The IT-electricity mash-up is producing a flood of new business models and financing mechanisms that sweep away the old business models pretty quickly. We need to be prepared for customer production, savings, and other service provisions to beat anything we can provide centrally. In the medium term, it will still be very desirable to have the grid, but more and more customers will become able to drop off the grid cheaper than buying power from the grid. This is already happening in Hawaii. One of the reasons Barclays recently downgraded the whole US utility sector’s international rating was a paper we wrote called The Economics of Grid Defection point-ing out that the ability to use efficiency and solar and cheaper bat-teries to leave the grid altogether would roll across the rest of the USA well within the lives of existing utility assets. If you’re an incumbent utility faced by this swarm of insurgents on the demand and supply sides, there are a number of ways you can respond. Ostrich is not a wise posture. Trying to tax, fight, or block the insurgents isn’t a very smart strategy either, partly because it annoys the

Considered among the world’s leading authorities

on energy, Amory B. Lovins has published 31 books and

more than 530 papers.

lose customers because the capital markets quickly sniff disruption and shift their investments competitively. Photovoltaics were only at 4.5 percent of electric production in Germany when the major utilities lost half their market cap because the shift in merit order destroyed their business model. They should have seen this coming; most of them didn’t. The market has shifted irrevocably to favor those who provide efficiency, renew-ables, distributed resources, and customer services. Some are doing very well in this transition. But there are laggards, and they will be pun-ished in the market. Siemens is mak-ing some excellent contributions, and many others are playing catch-up.

We’ve touched on disruption of the utility sector in Europe. In the USA, a handful of states, notably California and New York, have initiated efforts to figure out what comes next. If you’re looking out 10 years, 20 years, what is that going to look like?A. Lovins: Customers are figuring out that they can buy fewer electrons, use them more productively, and produce more of their own, and it’s a good idea to sell customers what they want before someone else does. All the rest is detail. Now, there is a

Rocky Mountain Institute

and military partners “to accelerate and scale

rep licable solutions that drive the cost-effective

shift from fossil fuels to efficiency and renew-

ables.” RMI’s 2025 goals are to accelerate

the shift of the US electricity system to renew-

able energy, make US buildings superefficient,

transform commu nities’ energy systems, and

ensure that the Reinventing Fire vision is adopted

by China and other major energy users. In Decem-

ber 2014, RMI announced a merger with Carbon

War Room.


considered pretty good that we’d saved 38 percent of the energy with a three-year payback. How? Remanufacturing the windows on-site into superwin-dows that would pass light but block heat and insulate four times better, and doing other improvements, cut the peak cooling load by one-third. Then we could renovate smaller chill-ers instead of adding bigger chillers. That saved US$17 million in capital costs, more than paying for the superwindows. But three years later we saved 70 percent on a difficult 50-year-old big office building, mak-ing it more efficient than the best new US office – which in turn uses twice the energy of RMI’s new office now be-ing built in Basalt, Colorado, with no heating or cooling equipment. Inte-grative design typically pays for much or all or more than all of the efficien-cy gains by downsizing or eliminating supply-side equipment. We must also take the right steps in the right order at the right time. That’s important

because a big building gets a major renovation at least every 20 years or so to renew the facade or the mechan-icals. If you do a major whole-system retrofit at that time, you can make the mechanicals much smaller, or per-haps get rid of them, and thus save a lot of capital costs and make the eco-nomics spectacularly better. Integra-tive design makes energy savings much bigger and cheaper than had been thought. The low-hanging fruit keeps growing back faster than we can pick it. p

Justin Gerdes is an independent journalist specializing in energy issues based in the San Francisco Bay Area. His work has appeared at Forbes.com, The Guardian, Yale Environ-ment 360, and MotherJones.com, among others.

rossing the border into Germa-ny, one of the first things one notices is the huge number of

rooftops covered in photovoltaic (PV) panels. Why did solar power take off in such a big way here, compared to neighboring countries with similarly sunny conditions? The same question might be asked about the popularity of combined cycle power plants in the Middle East, or the rapid growth of high-voltage direct current (HVDC) transmission in India and China.Certainly, geography plays a role in determining the success of a giv-en energy technology in specific

be motivated by economic consider-ations or the wish to achieve climate goals. It involves a broad array of factors including tariff regimes and environmental regulations both at the global and at the national levels.

Can Renewables Sustain Themselves? In the case of renewable energy, gov-ernment intervention has had a massive impact on the spread of tech-nologies and the resulting changes in energy markets. Take those PV pan-els in Germany, for example. A succes-sion of regulatory frameworks over

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Why do certain technologies take off in some parts of the world, but not in others? Regulatory systems shape the energy mix by setting rules, incentives, and subsidies.

Text: Swati Prasad and Christopher Findlay Illustration: Anton Hallman

CurrentsVarying

“ The market has shifted irrevocably to favor those who provide efficiency, renewables, distributed resources, and customer services.” Amory B. Lovins

A piano takes a center space in Lovins’ residence: The energy expert is also a pianist and composer.

regions. Wind conditions, coastlines, and population density determine a preference for on- or offshore wind farms. HVDC is helpful in bridging long distances between generation and load centers with minimal trans-mission losses. Ultimately, though, the adoption and market share of a given technology depends to a large extent on the regulators, whose job is to translate government policy into laws and market instruments.What do they aim to achieve? Regula-tory intervention may be designed to foster innovation or help bring a proven technology to market; it may

The Living Energy app with addi-tional features can be downloaded for free from the Google Play Store and the Apple App Store.

siemens.com/living-energy/ lovins-interview-yt

Shaping the New Energy Market

A film by director Nicholas Strini of the interview by Justin Gerdes with Amory B. Lovins can be viewed online.

Energy Efficiency


Energy Efficiency

the past two decades has stimulated research and development of solar energy technologies and offered incentives for private households to purchase the hardware. And even as solar panels were flying off the shelves domestically, they were also being exported in ever-greater num-bers: In 2011 and 2012, the German PV business accounted for roughly 50 percent of the global market.In the meantime, however, that eco-nomic success story has become a cau-tionary tale about the perils of overde-pendence on government subsidies. Changes to Germany’s Renewable Energy Act and tighter governmental regulations have hit the industry hard, and the market experienced a sus-tained loss of 75 percent in value last year. Facing tough competition from Asian producers and a “tough-love” approach from government regulators, it remains to be seen whether the German PV industry can pull through, even as the technology becomes more and more popular.

The US Approach: Tax CreditsIn the USA, where government regu-lation is often viewed with suspicion, there is a great deal of pressure on producers of green energy to bring costs down. Regulatory support for renewable technologies takes the form of the Production Tax Credit (PTC), an income tax credit that cur-rently stands at US$0.023 per kilo-watt-hour. This indirect subsidy has set off successive waves of investment

bring down costs, e.g., through better parts, materials, and software, by improving blade and gearbox design, or by reducing the effort of service and maintenance. In Europe, Siemens aims to lead the cost-down of electric-ity produced from offshore wind farms to around €0.095 per kilowatt-hour by 2020. Another example of regulation foster-ing innovation is the US state of California, where new rules require the state’s big three investor-owned utilities to add 1.3 gigawatts of energy storage to their grids by 2020. Under this mandate, the utilities can own no more than half of the storage assets they procure. This has opened the path for a massive growth of merchant stor-age, customer-owned energy assets, and other arrangements. The regula-tion creates three separate classes of storage at the transmission-connected, distribution-connected, and customer-side levels. How utilities and third parties will manage the interplay of ownership and operation of those dis-tinct assets remains to be seen.

Nuclear Energy: a Political ChoiceIt isn’t only renewables that depend on government support, though, as the case of nuclear energy shows. While some national governments support this technology and others do not, one thing is clear: Nuclear energy is far from being competitive in its own right, as it is very expensive com-pared to other options. Government support for nuclear power is

in onshore wind across the USA. But the PTC is not linked to any specific technology and can also be earned with geothermal, solar, and biomass energy or hydropower, for example.All renewable technologies depend on long-term guaranteed financial support. Whether or not investments are made depends on direct or indi-rect subsidies; and in several Euro-pean countries, investments in re-newable energy technologies are stimulated and made viable by feed-in tariffs (FiTs). Even if no direct sub-sidies were on offer anymore, the regulatory mechanisms of preferred feed-in and compensation for throt-tling would remain in place. But experts agree that these renewable energy technologies must also become even more competitive and hold their own against conventional technologies at some point.

Fostering InnovationThe development of offshore wind in Europe is a good example of how the interplay between regulation and market forces determines the adop-tion of a new technology. Energy com-panies have been investing heavily in offshore wind, but also depend heavi-ly on support from governments. At the same time, they must now com-pete with cheaper onshore wind farms. That creates pressure to bring down prices.One way of achieving that is through innovation that makes the technology more affordable and competitive. Siemens has consistently sought to

therefore always linked to other ulte-rior motives. In Japan, a hotly contested debate is currently under way over the future role of nuclear power in the wake of the Fukushima disaster. Its fallout has prompted many citizens to chal-lenge the previously unquestioning reliance on nuclear power as a way of compensating for the country’s lack of natural resources. In the UK, the government’s subsidies for this technology are part of an all-out effort to achieve the extremely ambitious goal of reducing CO2 emis-sions by 20 to 40 megatonnes per year until 2030. This target requires pulling all the stops in low-emissions power generation, including nuclear. The price is high, though. The cost of generating nuclear energy in the UK stands at about €0.09 to €0.10 per kilowatt-hour, combined with an FiT that currently stands at €0.13 per kilowatt-hour – significantly higher than the cost of renewables.

Regulating Conventional PowerInvestments in conventional genera-tion methods, including from fossil fuel sources, are also determined by market instruments and governmen-tal or supragovernmental policies; witness, for instance, the ongoing de-bate over energy-only markets (where peak prices determine the cost of en-ergy) versus capacity markets or sub-sidies for strategic reserves (where producers are compensated for main-taining a generation capability that can be activated when needed). Here, too, rules and regulations often make

the difference in the viability of a giv-en technology.The EU’s carbon pricing policy is another important regulatory factor: The European Union Emissions Trad-ing System (EU ETS), aimed at reduc-ing carbon emissions, is based on allowances and credits that can be traded. In the UK, this scheme is com-plemented by a carbon price floor intended to stimulate investment in low-carbon generation and capacity maintenance; it is at least partly responsible for the recent strong in-terest in gas-powered plants. In Germany, on the other hand, an over-reliance on market forces has made the operation of conventional plants economically unattractive.

CCPP: Counting the WaysElsewhere, combined cycle power plants (CCPPs) are taking off in a big way, and for a variety of reasons. For instance, China – which relies on its huge coal reserves for 80 percent of its power generation – is exploring gas-fired power generation due to environmental concerns in its urban areas. Moreover, by diversifying its energy system, China wants to add another pillar to its power generation capacities.The highly efficient CCPPs are also gaining popularity in the Middle East, but for entirely different reasons than in China. In the OPEC countries, the main motivation is to save oil for exports by using gas for domestic electricity consumption. Japan, on the other hand, is adopting CCPPs to reduce its dependence on nuclear energy, even though it has to import

liquefied natural gas for the gas-fired plants. Singapore is adopting the technology to become more self-reli-ant in energy. US companies, for their part, are investing in CCPPs to make better use of the large deposits of nat-ural gas found trapped between shale formations.

Blunt Weapon or Sharp Tool?Clearly, regulatory frameworks are highly influential and in some cases indispensable instruments for foster-ing innovation and bringing ideas to market maturity. The success or fail-ure of a given technology depends on political priorities and economic considerations as much as on topog-raphy and other external conditions. Much depends on whether govern-ments wield the instrument of regu-lation as a blunt weapon, or use it as a sharp tool that is tailored to the constantly changing realities of a glo-balized market. As the examples above show, legislative frameworks can be crucial for the emergence of entire new business sectors. They can also determine the success or failure of policies and make the difference in achieving specific economic goals. For companies like Siemens that are in the business of technological inno-vation, the goal is clear – every power generation technique must sooner or later stand on its own feet and be viable without regulatory support. p

Swati Prasad is a freelance business journalist who lives and works in India as an editor and correspondent. Christopher Findlay is a journalist living in Zurich, Switzerland. He writes on science and politics.

Transmission and RegulationTransmission and Regulation


New Jersey provides vital links in an electric transmission network that serves 61 million people in 13 states. To ensure the stability and security of the system, energy giant PJM has partnered with Siemens to create one of the world’s most advanced control centers.

Text: Sameh Fahmy

Going Green in America’s Garden State

The giant on the US East Coast: PJM serves 13 states and Washington, D.C.

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ocated on the busy mid-Atlantic corridor of the USA and within a day’s drive of more than 130 mil-

lion people, New Jersey is an integral part of one of America’s most dynam-ic centers.The state is a national leader in the use of renewable energy, and its posi-tion adjacent to New York and Penn-sylvania makes it a vital link to a much wider distribution system. The elec-tric transmission network that powers New Jersey – a hub for life sciences, finance, information technology and several other industries – is owned by four electric distribution companies and controlled by PJM, a regional transmission organization that en-sures both the reliability and the secu-rity of the bulk electric power system. In 2011, PJM partnered with Siemens to launch the Advanced Control Cen-ter, the world’s most advanced energy management system and the only

New Jersey released the final version of its Energy Master Plan. The ambi-tious, 138-page document details a vi-sion for the use, management, and development of energy in the state. It also builds upon Governor Chris Christie’s efforts to make New Jersey, which has been nicknamed of “the Garden State” since the late 1800s, the largest and fastest-growing solar en-ergy market in the USA.“This final adopted Energy Master Plan demonstrates the administration’s firm commitment to change the way energy is produced, distributed and used as part of our broader emphasis on driving the development of clean-er and renewable sources of energy to spur business and economic growth throughout the Garden State,” Christie noted in a statement that accompa-nied the announcement of the plan. Just two years after the Energy Master Plan was announced, the state marked


a significant milestone in surpassing 1 gigawatt of installed solar capacity. The state has more than 20,000 solar projects on homes, business and government facilities, as well as on underused land such as landfills and brownfields. New Jersey has adopted a renewable portfolio standard requiring that at least 22.5 percent of net electricity sales come from renewable energy resources by 2021, with specific solar and offshore wind requirements. The state is on track to meet that re-quirement, and Terry Boston points out that New Jersey’s renewable port-folio standard is part of a larger trend among states. He notes that 10 of the 13 states that PJM serves have renew-able portfolio requirements or goals. “Renewables are here to stay,” Bos-ton says confidently. “We currently have 6,500 megawatts of wind at-tached to the PJM system and about

2,000 megawatts of solar, most of which is in New Jersey.”

Infrastructure for TomorrowBoston notes that the increased share of renewables in New Jersey and the rest of the PJM network highlights the need for technologies that can help rapidly balance energy generation and loads. “On a partly cloudy day, you’ll see the solar loads swing by 90 percent in a matter of seconds,” he points out. In the lobby and outside the compa-ny’s Valley Forge, Pennsylvania head-quarters sit several examples of how the inherent variability of solar and wind can be managed. PJM is also evaluating the use of electric and plug-in hybrid vehicles to store en-ergy, for example. Boston explains that off-peak electricity from the grid could charge the vehicles, while the vehicles could provide regulation services to the grid in the daytime

The Advanced Control Center: an unmatched degree of reliability.

one in North America to employ a “dual primary” control center config-uration. Two geographically dispersed centers are capable of operating the grid independently or combined as a single control center to create an un-matched degree of reliability. The Ad-vanced Control Center has already proven itself through many challeng-es, including a record-breaking hur-ricane in 2012.“The Advanced Control Center is probably the most sophisticated in the world,” says PJM President and Chief Executive Officer Terry Boston. “Since it was launched, we have not had a single outage of the main con-trol function … and we’ve had some weather extremes.”

An Energy Master PlanIn addition to being the year that the Advanced Control Center was launched, 2011 also was the year that

“ The Advanced Control Center is probably the most sophisticated in the world.”Terry Boston, PJM President and CEO

hours. PJM also is evaluating the use of thermal storage with a large elec-tric water heater that responds to grid needs when it receives pricing and regulation signals from PJM dispatchers.In addition, a 2-megawatt array of lithium-ion batteries on the PJM campus provides regulation service in the PJM market. A much larger 32-megawatt battery facility that sits on a mountain in West Virginia went into operation in 2011 in conjunction with a 98-megawatt wind farm. The battery facility is capable of changing its output in less than one second in response to PJM requests to balance the grid.Rather than expecting to find a single solution to balancing energy loads, Boston envisions several technologies working together. “People say storage is the holy grail or the silver bullet,” Boston says, “I’m focused on silver



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buckshot … the opportunities are end-less in terms of smart control.”For its infrastructure projects, PJM uses a 15-year planning horizon that is driven by the need to maintain reli-ability across PJM’s massive network. Of particular importance to the Gar-den State is a project to upgrade a transmission line that runs from Pennsylvania to New Jersey from 230 to 500 kilovolts for its entire 72-kilo-meter length. The power line project was mandated by PJM, and the Penn-sylvania portion is being built by PPL Electric Utilities while the New Jersey portion is being built by PSEG, New Jersey’s largest electric utility. The New Jersey portion alone is ex-pected to cost approximately US$790 million, including construction of a new switching station and the expan-sion of another, while the Pennsylva-nia portion of the transmission line is estimated to cost an additional US$630 million. The result, however, will

help ensure reliability across the re-gion and foster economic growth.A 2011 report commissioned by WIREs, a nonprofit trade association that in-cludes transmission providers, re-newable resource developers and re-gional transmission organizations, found that every US$1 billion of US transmission investment supports ap-proximately 13,000 full-time-equivalent years of employment and US$2.4 bil-lion in total economic activity.The Susquehanna-Roseland power line through Pennsylvania and New Jersey is one of four high-visibility projects in the PJM network that are informally referred to as “backbone projects.”Boston notes that maintaining the reliability of the grid while at the same time making needed upgrades is a challenge that often involves working in the fall, spring and winter to ensure that lines are in service and available during the summer peak

season. “It’s kind of like maintaining the engine on your airplane while you’re flying,” he says only half-jok-ingly. “You must keep the lights on during the venture.” Boston points out that the project is proceeding ahead of schedule and will be operational by summer 2015 thanks to the work of PPL Electric Utilities and PSEG and its designa-tion as a priority project by the White House and the Interagency Rapid Response Team for Transmis-sion which was created in 2009 to en-able nine federal agencies to closely coordinate their review of electric transmission on federal lands to streamline infrastructure permitting.

Managing ChallengesOne of the biggest challenges that the PJM network faced came on October 29, 2012, when Hurricane Sandy, the largest Atlantic hurricane in recorded history, roared ashore and disabled

Connecting Cities with Power with HVDC

The Neptune HVDC project, completed in 2007 for PowerBridge LLC, connects the TSO Long Island Power Authority to the competitive PJM market and pro-vides power to a fast-growing load cen-ter on Long Island. The system is a monopolar cable transmission link with a DC voltage of 500 kilovolts and a con-tinuous power transmission rating of 660 megawatts. The cable stretches from First Energy Inc.’s substation in Sayreville, New Jersey, to Uniondale, New York-based LIPA’s Newbridge Road

substation in Levittown. Siemens, as the leader of the consortium for this turnkey project, was responsible for the installation of two converter stations.The consortium partner Prysmian deliv-ered and installed the cable package including an 82-kilometer DC submarine cable section from New Jersey to the landfall at Jones Beach followed by a 23-kilometer DC land cable section to the converter station with AC cable connections from the two converter stations to the grid.


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Newark 278,000 Jersey City 247,000

Paterson146,000

Elizabeth 124,000

Edison103,000

Toms River88,000

Trenton84,000

Atlantic City 40,000

New Jersey in Numbers

One of the highest renewableenergy portfolio standardsin the USA

Population of New Jersey

22.5%

*Source: New Jersey Board of Public Utilities http://www.njcleanenergy.com/renewable-energy/project-activity-reports/installation-summary-technology/installation-summary-technology

Technology # Projects Total kW

Solar 33,927 1,456,569.7 kW

Biomass 19 31,155.0 kW

Fuel Cell 8 1,505.0 kW

Wind 43 9,609.1 kW

Total* 33,997 1,498,838.8 kW

The mostdensely

populated American

state 47th

by area

11th

in terms of population


INDIANA

TENESSEENORTH

CAROLINA

ILLINOIS

Gulf of Mexico

Lake Erie

L. Huron

Lake

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Lake Ontario

PJM zones

Canada

AtlanticOcean

USA

Biomass 197

Hydro 264

Methane 85

Other 268

Solar 753

Storage 3

Wood 57

Wind 2,734

Nonrenewable 43,885

Serves a population of

61 million(16 % of USA)

Serves an area covering

630,447 km2

Transmission lines:

100,674 km

Includes more than

900 memberswith a cumulative

generating capacity of

183,604 MW

Regional transmission organization that

coordinates the movement

of wholesale electricity in all

or parts of 13 states and the District of Columbia

Has approved transmission additions

and upgrades totaling nearly

US$29 billion since 1999 Living Energy · No. 12 | July 2015 25


The Hudson HVDC Project

The Hudson project, a back-to-back HVDC installa-tion completed in consortium with Prysmian, for the Hudson Transmission Partners, was completed in summer 2013. This project connects power from New Jersey to Manhattan through a 7.5-mile (12-kilo meter) underground and underwater cable. It is capable of providing 660 megawatts of reliable power to New York City, approximately 5 percent of the city’s peak demand. In addition to the rein-forcement of power supply, the project also pro-vides New York City with access to renewable re-sources throughout the PJM network and includes significant upgrades and reinforcements to the transmission system in New Jersey.

more than 140 transmission lines and tripped 40 generators offline. New Jersey was the hardest-hit state in the PJM network, with many outag-es resulting from flooded substations. PJM was able to manage the grid suc-cessfully thanks to a number of fea-tures provided by the Advanced Con-trol Center. Boston says that perhaps the greatest advantage the Advanced Control Center offers is its intelligent alarm processing, which allows opera-tors to prioritize tasks and better in-terpret patterns to more rapidly ad-dress potential weaknesses in the grid. “When Sandy came through, the big-gest problem we had was high volt-age because the distribution systems came out before the transmission, so we had to take some lines out of ser-vice manually to hold the voltage down in the system,” Boston says. “But we got balance pretty quickly.”He notes that while local distribution systems were severely damaged by the hurricane, the bulk electric system remained stable throughout the storm. In addition to Hurricane Sandy, the Advanced Control Center managed re-cord heat in 2011 that brought the temperature to 42 degrees Celsius (approximately 107 degrees Fahren-heit), in New Jersey, and in the same year a storm known as a derecho that was 322 kilometers wide and nearly 1,000 kilometers long, with peak winds of 161 kilometers per hour.New Jersey holds a special place in the PJM network, and not just because of its location and leadership in re-newable energy. The company’s history dates back to 1927, when the chief ex-ecutive officers of three utilities in New Jersey and Pennsylvania formed

“ Perhaps the greatest advantage the Advanced Control Center offers is its intelligent alarm processing, which allows operators to prioritize tasks and better interpret patterns.”Terry Boston

the world’s first continuing power pool. The idea was that by planning transmission and optimizing dis-patch, they could save significant amounts of money and pass those savings on to stockholders as well as to consumers. Today’s PJM network is substantially larger and more complex, but the fundamental advantages that make collaboration appealing remain. “That same economy of scale applies today,” Boston says. “Dispatching the system over a large service terri-tory and having a larger diversity of resources and weather provides benefits to consumers.” p

Sameh Fahmy is a freelance technology journalist based in Athens, Georgia, USA.

Source: http://www.pjm.com/renewables/default.html

PJM in Numbers

PJM Renewable Energy Projects

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he weight of 8 million custom-ers rests on the shoulders of Datuk Seri Ir. Azman Bin Mohd,

President and CEO of Malaysia’s en-ergy giant Tenaga Nasional Berhad (TNB). In line with the corporate motto of “Powering the Nation,” he approaches the heavy load with a clear sense of mission and the steady calm of someone who’s worked at TNB for 35 years: “Every day, I feel re-sponsible to our customers. We exist because they exist, and we work very hard to meet their expectations.” This clarity and focus appears to be work-ing, as TNB posted its best-ever profit in 2014 of RM6.4 billion (US$1.84 bil-lion), with over 99 percent coverage across the country.Even with those impressive numbers, Azman knows that energy use across

Malaysia’s rapid economic development requires reliable and efficient power supply. Datuk Seri Ir. Azman Bin Mohd, President and CEO of the country’s main energy provider TNB, is striving for new standards of efficiency, reliability, and cost-effectiveness.

Text: Glenn van Zutphen Photos: Sha Ying


his country is on the rise; as of Sep-tember 2014, TNB recorded a peak demand of 16,901 megawatts, which is expected to grow by some 4 percent each year. He knows that his team will need to look forward and devise creative solutions to ensure long-term, sustainable supply. To deal with future growth and the expiration of existing generators in the system, the federal government introduced an international competitive bidding process for new power plants. “TNB believes that bidding is crucial to the electricity supply sector, as it keeps prices at reasonable levels and encourages healthy competition,” Azman says with confidence. He fur-ther believes that TNB’s participation in bidding on power plants ensures that successful bidders will make

Datuk Seri Ir. Azman Bin Mohd is President and CEO of TNB, the leading energy provider in Southeast Asia: “We power Malaysia. As the nation grows, we will be there.” Tenaga Nasional Berhad:

New Ways to Power Malaysia’s Future


T reasonable returns and customers will pay competitive electricity pric-es – a scenario that he says is good for everyone.

Future Flexibility at PraiIn fact, as part of the bidding process, TNB is partnering with Siemens to realize the Prai Combined Cycle Pow-er Plant (CCPP) project in the north-ern part of Malaysia, which will boost productivity, efficiency, and reliabili-ty. Prai will help TNB face challenges over the next two decades across a landscape where local natural gas is depleting and fuel prices are volatile. The company must also face the im-plementation challenges of alternative fuels like nuclear power, hydropower, and renewable energy (RE), as well as increasingly stringent emission

standards imposed by the regulators who are addressing climate change and emissions from burning fossil fuels. He believes these issues will be even more pressing in the years to come. “Due to a lack of alternatives, we have to capitalize on hydropoten-tial, RE, and other power sources to develop our future generation capaci-ty,” says Azman. “We need to manage the “Not in My Back Yard” (NIMBY) syndrome for everything from green-field power plants to the building of transmission lines – all with a view to serving our customers.”Currently, fossil fuels like coal and gas still account for about 94 percent of the energy mix for electricity gen-eration in Peninsular Malaysia, while hydro makes up the other 6 percent. Other clean sources such as solar,

biomass, or mini-hydro are emerg-ing, but are still a very small part of the total. One reason why the new Prai CCPP is so important to Malaysia’s future is that it offers great flexibility in incorporating RE into the energy mix. Renewable sources are in line with the national agenda on climate change to reduce carbon emission intensity (per GDP) by up to 40 per-cent by 2020 from 2005 levels. Azman notes: “Since we are blessed with abundant renewable resources, we want to encourage their develop-ment. Our government is fully com-mitted to stimulating such develop-ment through policies such as the National Renewable Energy Policy, the Action Plan 2010, and the Renew-able Energy Act 2011. The feed-in tariff (FiT) scheme introduced in u


While coal and gas will remain impor-tant fuel sources, the vision of de-centralizing power generation and harnessing RE through various government policies (the Fuel Policy in 2001, FiT in 2011, and the creation of the Sustainable Energy Develop-ment Authority) are all about plan-ning for the future. The FiT scheme, for example, will help accelerate the development of renewable tech-nologies such as solar, biomass, bio-gas, mini-hydro, and municipal solid waste projects. This orchestrated effort across Malaysia, it is hoped, will give the country energy security while allowing it to lower its carbon emissions. “Malaysia is treading the path toward becoming a developed nation that emphasizes RE technology, competency development, and invest-ment in renewables; TNB is committed to supporting and fulfilling these government plans,” Azman asserts.

Decentralizing and IslandingTNB is also trying to ensure opera-tional efficiency by decentralizing and “islanding” its operation by zones. Currently, large power plants are planned to ensure the stability and security of the national grid. But decentralization through microgrids is another option being explored in remote areas, far from the estab-lished grid.While Malaysia has put strong emphasis on energy self-sufficiency, decision makers also see the advan-tages of being linked to other ASEAN countries, and realize that power sharing could benefit the domestic market as well as neighboring Thai-land and Indonesia. The 2003 ASEAN Interconnection Master Plan study (AIMS) looked at how to “develop the ASEAN Power Grid (APG), promote power interconnection and trade and increase transmission capacity of interconnection among and between ASEAN member countries.” A revised version of that study (AIMS 2) was completed in 2010.

Interconnected ASEANOne important element of the APG is to establish an interconnected, reliable electricity supply across


neighboring countries. Doing it together spreads the burden of the large infrastructure investment that is necessary for generating ca-pacity and building transmission lines. One project, the HVDC link be-tween Thailand and Malaysia, has been in operation for nearly a de-cade; Siemens supplied part of that infrastructure. The Malaysian government also wants to import power from Sarawak to boost power generation capacity in Peninsular Malaysia. Thus, TNB and the Sarawak Energy Berhad (SEB) are now reviewing what’s known as the Sarawak-Peninsular Malaysia HVDC interconnection project, with a view toward harnessing the SEB’s hydro- resources. Looking to neighboring Indonesia, TNB and Perusahaan Listrik Negara, the Indonesian government-owned corporation that controls electricity distribution, are planning an HVDC link between Sumatra and Peninsular Malaysia. “The interconnection, power transfer, and purchase between Malaysia and Sumatra would enable each system to optimize its power generation development program in the future,” states Azman. In addition to the HVDC’s ability to provide power between countries during emergen-cies, it also makes sense for power sup-ply management, notes Azman, be-cause Malaysia uses most of its power during the day and Thailand and Sumatra have heavier usage at night.Whether working on the domestic grid or building partnerships among its neighbors, Malaysia is striving for new and innovative ways to power its future. “When I drive down the road and see TNB transmission lines,” says Azman, “I think of security, stability. We power Malaysia. As the nation grows, we will be there.” p

Glenn van Zutphen has been working as a journalist for 28 years for the likes of CNN International, CNBC Asia, and ABC News Radio. He is based in Singapore.

2011 encourages new and significant investment from the private and pub-lic sectors to enable RE to be integrated into the power grid, complementing conventional sources such as liquefied natural gas, coal, and hydro.”

Record-Setting Power and EfficiencyWhile the obligation to “keep the lights on” is the obvious priority, Azman says TNB is constantly expanding its business strategy and practice toward sustainable develop-ment across its value chain. These developments are divided into two straightforward categories familiar to any utility company: supply and demand. The supply side comprises generation, transmission, and distri-bution of the electricity business – such as smart grid projects and low-carbon generation technologies. The demand side is made up of electricity end users and customers who are looking toward demand-side manage-ment and energy efficiency.To help address supply-side manage-ment at the Prai CCPP, two Siemens SGT5-8000H gas turbines will help make it the most powerful (1,000 mega-watts) and efficient (60 percent effi-ciency rating) gas-powered plant in Southeast Asia. TNB chose this pioneering Siemens technology – first proven in 2011 at Irsching near Munich, Germany – because of the 8000H’s technical specifications in terms of efficiency, fast start-up, and low emissions, and also because its flexible design can accommodate the introduction of RE into the plant while producing the lowest levelized cost of ectricity. “Since the gas price is expected to increase in the future, highly efficient and flexible CCPPs are important to ensure lower gener-ation costs and competitive electricity prices for our customers,” says Azman. “Moreover, the system oper-ating regime will change, with CCPPs no longer serving as base-load plants, but operated in cycling mode; they should be able to perform frequent start-stop operations and fast load-ing and deloading to meet demand.”TNB is exploring alternative fuel sources to feed into CCPPs. Potential

solutions include importing energy from Sarawak, nuclear power, and measures to be developed under the ASEAN Interconnection Master Plan Study, which looks at how a regional transmission network can link ASEAN power systems. All could help to di-versify Malaysia’s future generation mix. Azman anticipates that by 2030, that mix will include 76 percent fossil fuel, 4 percent hydro, 2 percent RE, and 8 percent imported energy from Sarawak and ASEAN countries.

Time for a Smart GridTo meet these new standards of efficiency, reliability, and cost-effec-tiveness, TNB is starting a smart-grid pilot project to deploy more automation and ICT technology in the Bukit Bintang commercial zone, Melaka, Putrajaya/Cyberjaya, and Medini areas of the country. While smart grids make sense for a lot of reasons, Azman knows that the

implementation costs are significant, and the case has to be made to cus-tomers as to how such technology will benefit them. “The pilot project is designed to help us understand the technical, customer-related, and reg-ulatory challenges in applying new smart-grid technologies to our exist-ing system,” Azman says. “If we can successfully implement the smart grid and advanced metering infra-structure, customers can better un-derstand and manage their energy use, and TNB can deliver better cus-tomer service when it comes to sup-ply-related issues like outages, re-mote connections, choice of prepayment, and other issues.” Azman notes that it’s “ absolutely important” to have intelligent power distribution together with transmis-sion networks to increase reliability, response, and restoration time as well as offer new and more efficient services.



6.4 billion Malaysian ringgit (RM) in profits

≈ US$1.84 billion

RM110.7 billion in assets (US$30.1 billion)

RM10 billion in CAPEX (US$2.8 billion)

36,146 employees

nationwide

8,636 MW installed capacity

8.6 million customers

In 2014, TNB Reported …

Generation mix

Coal

Hydro

Gas

35.3 %

10.3 %

53.8%

Distillates

0.6 %

“ The smart grid and advanced metering in-frastructure will help customers better un-derstand and manage their energy use.”

Datuk Seri Ir. Azman Bin Mohd: at the Helm of Southeast Asia’s Largest Power Company

Background and EducationBEng (Electrical Engineering), University of Liverpool; MBA, University of Malaya

Professional Experience Has been working at TNB in various capacities for the past 35 years Appointed Chief Operating Officer of TNB in 2010 President and CEO of TNB since July 1, 2012


Column

The energy system I studied as a young engineer consist-ed of just three major elements: central large-scale con-ventional power plants, grids, and loads. Only pumped hydro was used for energy storage in public grids (with the exception of very few battery-based or compressed air energy storage installations). Loads could be predicted well, and any remaining uncertainties or sudden incidents were balanced out using the flexibility of these power plants and industrial loads across transmission networks. In many parts of the world, we are now witnessing trans-formational changes to the energy system, including the widespread integration of renewable power. Energy market players must anticipate the intake of wind or solar and the development of wholesale market prices by processing large amounts of sensor information, includ-ing highly specific meteorological data – a new business field. Recently, I had the opportunity to visit a startup company that provides such information based on raw da-ta from four meteorological services to utilities, grid operators, and other interested parties. The more refined the models are, and the more experience and data these analytics companies can gather, the better they become at forecasting.Our increasingly complex energy system is no longer con-ceivable without data analytics. Here’s an example of how these developments could soon play out in everyday life. Imagine a neighborhood in which electric cars have become fashionable, where many people with the same pattern of living all come home and charge their cars at the same time. You’d be looking not at 3 kilowatts of charging, but at 40 or 50 kilowatts. It’s easy to see how even small popu-lations could quickly have a great impact, and why the ability to coordinate and make predictions becomes crucial.The same might be said for other infrastructures such as heating systems, microgrids in private homes, or complex industrial setups, all of which require process analytics to operate efficiently. Data analysis not only deals with com-plexity, but also facilitates many everyday conveniences. With that, I’ve already described a key part of the value streams being created. Our energy systems involve more and more sensors, communications lines, and data stor-age capacities; we now also have the massive computing power required, in combination with cloud-based data warehousing. Those trends are bound to increase: We will

see more “smart sensors” with better connectivity, com-puting power, and bandwidth to digest the raw data via fine-tuned algorithms. Analytics companies take the data – the “haystack,” as it were – and their clients’ questions to help them find the “needle,” or even cross-correlations between various “haystacks” of data sets. Thus, big data and analytics en-able us to make better-informed decisions despite in-creased complexity and uncertainty and deliver smart services with ever-greater precision.This data is collected unstructured from various sources. For instance, power plant service staff are required to file reports that contain valuable information for establishing best practices. What’s more, the value chain from sensors, connectivity, data storage, and analytics to derivation of information is found in many other sectors where patterns and images must be identified.A clear picture can be gained even from vague data points. This raises privacy concerns, since such information can be used by actors with all kinds of business models or in-tentions to build profiles of customers, for example. We know that meta-information on telephone connections can be analyzed to reveal almost everything about a per-son’s life. In the energy sector, data about electricity usage patterns, when correlated with other data, will soon be as valuable as the electricity itself. Often, the default op-tion is to collect the data and then see how it can be used. Clearly, regulators and policymakers have their work cut out for them, and for Siemens, cybersecurity is also a major focus.Nevertheless, the advantages are just as obvious: With the correct information, product design and development can be improved; service and spare parts can be delivered in a more targeted manner; the resilience of infrastructures can be enhanced; and climate change may be mitigated by improving coordination between conventional power plants, renewable power plants, energy storage, and loads – for example, with Virtual Power Plant technologies. There is a global swarm to push back the boundaries of data analytics. Sensors, communications, and processing power are all improving, and information is processed to ever-finer granularity. What will we end up doing with it? Despite all our computing power, that’s a difficult one to predict. p

Data Analytics: The Power of Prediction

Weinhold’s Power Lines

Michael WeinholdCTO Siemens Energy Management

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From complexity to integration: Michael Weinhold sketches

the shift in perspective afforded by data analytics.


Conventional Grid Access

New AC Grid Access

The cost of offshore wind energy is decreas-ing, thanks in part to two innovations from Siemens: a smaller AC substation called the Offshore Transformer Module and a higher-capacity wind turbine.

Text: Charles Murray Illustrations: Jochen Stuhrmann

Winding Down the Cost of Offshore Wind

Offshore Wind Power


C utting costs by one-third is a tall order in any line of business. But it’s one that the offshore

wind power industry has promised to deliver: to push down the price per kilowatt-hour of wind energy by 2020 from €0.14 to 0.15 to under €0.10. With five years to go, the contours of how this will happen are starting to emerge, and two innovations are ex-pected to be standouts in capturing wind offshore. One is a substation that has been sim-plified, standardized, and shrunk – called the Offshore Transformer Mod-ule (OTM). The other is an uprated version of the wind turbine itself.

A Pioneer’s ProgressBoth innovations fit Siemens’ profile as a trusted, stable partner to its cus-tomers, with over 23 years of experi-ence in delivering offshore projects on time and on budget. These factors, alongside a firm commitment to in-vest in renewable energy such as wind power, makes Siemens’ offshore wind turbines the most bankable solution in the market. This careful balance of innovation with reliability and low risk is the source of Siemens’ global reputation. Going forward, Siemens aims to maintain its leading position in the offshore market and drive it to long-term sustainability. To that end, the levelized cost of energy needs to be reduced significantly in an in-creasingly heterogeneous market.Wind power first went to sea a quarter-century ago. That step-out was typi-fied by the first in-water installation ever, at Vindeby, Denmark, delivered in 1991 by Siemens. Still operated today by Dong Energy, its eleven tur-bines’ 5 megawatts of output was a milestone for the industry. Moreover, Vindeby is located relatively close (1.5 to 3 kilometers) to land and in shallow water (2 to 6 meters).In subsequent years, as the push to-ward renewable energy surged ahead, there was also a drive to reach greater distances, depths, and capacities. As

all the easily accessible sites on shore and near the coastline filled up, and in some areas, due to environmental concerns, wind power plants had to be placed further out and deeper in the sea. Today, offshore wind is one of the most advanced emerging technologies. A steep technological development has taken place since Vindeby was installed in Danish waters. As for the wind tur-bines, there is a clear trend toward larger machines and larger rotors. In the decades since offshore wind pow-er took off, the capacity of the wind turbines has multiplied by more than 200, while blade length has multi-plied by 15.

While hurdles of distance, depth, and size had been cleared, newer projects would have to achieve the same at significantly lower cost.

Slimline SubstationOne key cost target, recalls Siemens Transmission Solutions CEO Tim Dawidowsky, was the AC substation that connects the majority of offshore wind parks to the onshore power grid. Thanks to Siemens’ pioneering ef-forts in the industry, the company has already innovated and reduced costs in offshore grid access. By introducing new developments based on actual experience and standardizing around this best practice, Siemens has been at the forefront of the drive to reduce costs.Since Siemens delivered its first AC offshore platform for the Thanet proj-ect in the UK, there has been a steady evolution of designs in the market-place. During this evolution, the trend has moved toward ever-increasing specifications, increased functionality, and higher power ratings – and a resultant increase in costs. Starting in 2014, a task force with representa-tives of all relevant Siemens divisions came together, drawing on their ex-tensive offshore wind experience as well as the best ideas from a broad cross-section of customers, partners, suppliers, and other key industry stakeholders. Within eleven months, the group had generated a design for future AC platforms – one that Dawidowsky hails as the vanguard of the third generation. Four key fea-tures set the third generation apart from the conventional, more bespoke offshore substation platforms cur-rently in the market: A simple design with no moving parts; a more envi-ronmentally friendly design, with the elimination of mineral oil; overall weight is three times lighter than that of a typical conventional AC offshore substation platform; and cost is re-duced by up to 40 percent across the offshore scope.

Plug-and-Play PrinciplesOther, more mature industries have already noted and leveraged the ad-vantages of a standardized, modular approach in traditionally complex engineering projects. Rather than building major equipment directly on the deck of an offshore platform, resulting in increased interfaces and critical paths, these are instead built into standard-sized containers. Such

containers can then be mounted on a simple platform deck at the fabrica-tion yard. The process is analogous to “plug and play” within the con-sumer electronics industry. Modular assembly cuts out an enormous amount of cost, Dawidowsky points out, and it means Siemens can lever-age a true standardized approach across multiple projects at all levels of the supply chain.

After nearly a quarter-century, offshore wind is one of the most advanced emerging technologies today.

Maintenance is also simplified. Rath-er than bringing specialists to mal-functioning equipment, a modular approach allows the customer to de-cide whether to rectify faults offshore in minor cases or to bring the equip-ment onshore, replacing it with an immediately available spare unit. Re-pairs done on land, Dawidowsky notes, “are about ten times less ex-pensive than doing the same on the

Projects also have grown consider-ably. The trend in offshore wind is to-ward larger parks that are further offshore. This ultimately gives way to more complex projects exposed to severe sea and wind conditions. At the moment, the world’s largest offshore wind farm is the London Array of 175 wind turbines with a combined capacity of 630 megawatts that match-es many state-of-the-art conventional gas or coal power plants. Inaugurated in 2013, this project was successfully de-livered by Siemens with its SWT-3.6-120 turbines that sit 20–25 kilometers off-shore in the Thames Estuary at depths of up to 25 meters. Even as the London Array was being built, generators and suppliers were recognizing their next challenge.

A more compact AC substation, the Offshore Transformer Module helps cut operational and maintenance costs.

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Offshore Wind Power Offshore Wind Power


platform itself.” Downtime is nearly eliminated, because units can be ex-changed altogether with replacement units held as spares, another case of “plug and play.”

Smaller SwitchgearBoth high- and medium-voltage trans-formers have been optimized, in-creasing capacity whilst minimizing bulk. Fans and pumps have been completely eliminated. “No moving parts!” Dawidowsky enthuses, noting the inherent reduction in mainte-nance costs. Neither do the transformers require any mineral oil. Instead, they employ a nonflammable, highly biodegrad-able fluid called ester liquid. This brings two benefits over oil: It allows an elimination of the fire-suppres-sion system and it is a much lower risk for marine life. Gas-insulation tech-nology – already applied on Siemens AC offshore platforms – has been

refined and improved, based on accu-mulated experience.

Shedding PoundsThe 2014 task force was also set a clear goal to reduce the weight of the off-shore substation and significantly bring down overall costs. The realization that cutting total mass below 1,000 tonnes could bring about a step change in cost reduction became a key factor in the development of the concept. Below 1,000 tonnes, the OTM can be in-stalled by conventional ships and cranes already deployed on the wind farm for wind turbine and foundation installation, as opposed to using large specialized vessels that are much more costly, much less available, and subject to greater weather restrictions in their operations. The solution, not obvious at first but brilliant in retro-spect, was to split the substation into two smaller ones, each of which can be mounted on separate foundations

that are almost identical to those used for the wind turbines themselves, thus eliminating the need for a large bespoke foundation. The smaller OTMs also allow utilization of a much broader, potentially more local supply chain for construction, something that many customers find valuable.

Combined SavingsBy eliminating the need for its own, separate foundation, the new, smaller design can also be added to an exist-ing wind turbine foundation while hosting the wind turbine itself. This delivers even greater cost savings, as it eliminates the need for any addi-tional foundation to support the two modules. Typically, Dawidowsky estimates, all this requires is adding 15 percent to the turbine foundation’s structural steel to ensure that it can handle the increased loading require-ment. In addition, by thinking holisti-cally across the whole wind farm, considering both the turbines and the grid connection, with the new solu-tion one can avoid the need to use dedicated compensation reactors for the transformer. By using this capa-bility to cancel out the capacitance of the cables, it eliminates the need for another large piece of equipment off-shore with a resulting further optimi-zation of the platform structure. All told, each new substation module weighs in considerably lighter, at around 630 tonnes (generating 250 mega watts each), a reduction of nearly 60 percent from conventional designs. For larger capacities, multi-ple modules can be used. Given that typically, two-thirds of offshore capital costs are expended on building and installing platforms, this can result in a serious reduction of future project budgets. “This is a real cost-saving op-portunity for AC grid connections,” summarizes Dawidowsky, adding that Siemens is working on cost improve-ments in the DC sector as well. The company is well versed in both types

Natural Progression to 7 Megawatts

As offshore capacities continue to grow, so do those of wind turbines themselves. Siemens’ flagship off-shore wind turbine, the SWT-6.0-154, has already set new standards in gearless turbine design. In early 2015, Siemens raised the bar yet again by introducing a generator upgrade to 7 megawatts. The Siemens SWT-7.0-154 delivers nearly 10 percent more ener-gy than its predecessor, while retain-ing its proven reliability. Develop-ment engineers have refined only those turbine components needed to increase electrical output. The new model is set to go into serial produc-tion by 2017. Stronger permanent magnets and generator segments in the permanent magnet generator provide the key to harvesting a high-er yield. Additionally, the converter and transformer have been upgrad-ed, in line with the higher electrical output. All other components share the proven engineering of the 6.0-megawatt wind turbine, giving Siemens customers the assurance of relying on proven technology and an established supply chain while signif-icantly increasing energy generation.“Our new wind turbine offers custom-ers an investment as reliable as our proven G4 and D6 product platforms,” notes Offshore CEO Michael Hannibal of Siemens Wind Power and Renew-ables. “However, it also answers mar-ket demands to achieve greater energy yield at lower cost and effort.” Cost reduction through innovation is the key factor of the new turbine and also of new Siemens grid access solu-tions. The turbine’s long structural design lifetime of 25 years and in-creased power rating create a remark-able cost of energy benefit. p

Charles Murray is a science journalist who writes about technology and sustainability issues. He is based in Zurich, Switzerland.

Tail Winds for Turbines

The Siemens SWT-7.0-154 delivers nearly 10 percent more energy than its predecessor, while retaining its proven reliability.

“ Repairs done on land are about ten times less expensive than doing the same on the platform itself.”Tim Dawidowsky, CEO, Siemens Transmission Solutions

SWT-6.0-154

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75 m

18,600 m2

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Pitch regulated, variable speed

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SWT-7.0-154

of current. In addition to its AC grid connections, where Siemens has deliv-ered about 3 gigawatts of transmission capacity, Siemens also has delivered four DC substations with a combined rating of 2.9 gigawatts. A fifth connec-tion with a capacity of an additional 900 megawatts was ordered in 2014 and is scheduled to go into operation in 2019.

Offshore Wind Power

siemens.com/swt-7-0-154

Of

Boarding a new ship is always an exciting experience, and the offshore service operation vessel Esvagt Froude was no exception. This nautical innovation significantly enhances offshore service and maintenance operations for wind projects, particularly those located far from the shore.

Text: Onno Groß Photos: Claus Sjödin

andTurbines

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40 Living Energy · No. 12 | July 2015 Living Energy · No. 12 | July 2015 41


he offshore wind industry plays a key role in the global energy mix. Today, more than 30 giga-

watts are planned for installation globally, with more to come. Offshore innovation is one of the strengths of market leader Siemens. “We are the first and the most pioneering compa-ny in this field and the only company offering an integrated solution throughout the lifetime of the wind turbine,” says Mark Albenze, CEO Global Wind Power and Renewable Service, based in Orlando, Florida. “We currently have the largest wind power plants in commercial opera-tion, and we collect and analyze enor-mous amounts of data that can lead to future evolutions in design and pro-vide for operational flexibility. And we have a very long history of services. It’s a full life cycle approach, which is part of our core business, and we are sharing this knowledge with our cus-tomers.” For offshore wind farms, the

T latest Siemens solution is a brand-new custom-designed service operation vessel (SOV), which sets a techno-logical benchmark.

In the HarborNear the beach of Esbjerg in Denmark, a group of four huge men sit staring stoically out to sea. Made from white concrete, Mennesket ved Havet (“Men at Sea”) by Svend Hansen is a remark-able, 9-meter sculpture that honors the long history of the country’s most important North Sea port. On a day in mid-February, however, a dozen peo-ple gathered on top of a shipping of-fice building, staring not out to sea but toward the pier at a rather distinc-tively shaped ship. The arrival of the brand-new, 84-meter SOV Esvagt Froude, constructed by Havyard Ship Technology in Norway, opened a new chapter for Esbjerg, which today is fa-mous as the “wind industry port.” With its peculiar design and high crossbow,

Søren Thomsen, CEO of Esvagt.

Ingo Bischof, Siemens Project Manager Service Offshore for OWP Butendiek.

René Wigmans was one of the first aboard the new vessel.

its large windows, and its sophisticated deck structures, it certainly stood out among the cargo ships in the vicinity.René Wigmans, Head of Maritime and Aviation Solutions at Siemens Service Wind Power, was one of the first on board. “The vessel is groundbreaking for our service and for the scheduling of maintenance,” says Wigmans. “As it will be positioned within the wind farm for weeks at a time, it will allow our technicians to literally ‘walk to work.’ Another key benefit is that with the unique access features on this new vessel, we can significantly reduce weather downtime, which in turn increases efficiency; and we can make sure that we are able to deploy techni-cians safely and transport them com-fortably to the turbines. Additionally, we use the vessel as an independent warehouse in the wind farm. All this innovation and effective use of re-sources can lead to greater value for our customers.”

The contract for the SOV Esvagt Froude – named after William Froude (1810–1879), an English naval archi-tect who helped lay the first transcon-tinental ocean cable – was signed with the Danish shipping company Esvagt back in 2013. While the raw hull of the ship was built in Turkey, final assembly was done in the ship-yard of Havyard Ship Technology in Norway. The company has extensive experience in building special vessels for the oil and gas industry, but this one was unique in its own way, as it required meticulous planning and a lot of technical know-how.“The further the service area lies from the shore, the more you have to come up with solutions,” explains Søren Thomsen, CEO of Esvagt. “The ship has many new features, such as the engine system, and it will certainly heave and sway much less, which will help the people on board substantially.”

The service operation vessel will be positioned within the wind farm and allow the technicians to literally “walk to work.”

“ The vessel is groundbreaking for our service and for the scheduling of maintenance.”René Wigmans, Head of Maritime and Aviation Solutions at Siemens Service Wind Power

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The brand-new SOV Esvagt Froude has an overall length of 83.7 meters, its breadth is 17.6 meters,

and the draft is 6.5 meters. The so-called Havyard Design has a high bow, a surround asym-

metric bridge, and a large cargo deck. The ship has a maximum speed of 14 knots. It has 60 single

cabins, a duty mess, and features a conference room, two cinemas, and a fitness studio.

The deck equipment includes a number of cranes and the Ampelmann gangway system. The

ship has powerful diesel engines, equipped with a Siemens Blue Drive System®. This active

and passive roll damping system is used for optimized comfort and the gangway operations. In

addition, the ship navigates in dynamic positioning mode inside wind farms. The name of the

ship refers to William Froude, an English engineer and naval architect.

Service Operation Vessel Esvagt Froude

Inside the Esvagt Froude

The Havyard ship design with its prominent inverted bow and large stern decks serves to achieve higher speed and calmer motion in rough seas. The high front is further charac-terized by an asymmetric glass- surrounded bridge and big cabin windows, which is reminiscent of a research vessel. But more than half of the ship is dominated by a huge afterdeck with cranes, and space for the Safe Transfer Boat Wind 1 as well as two other special-ized Esvagt Froude boats. In the su-perstructure decks up front, modern corridors run through four decks with comfortable cabins, and various stairways lead from the engine rooms up to the top bridge. Beneath the afterdeck is an impres-sive storage hall with as much as 430 square meters of space and stor-age capacity for six standard 20-foot containers. This is the heart of the ship’s body: Here are the workshop rooms, dry rooms for special equip-ment, and a transport elevator for moving the heavy spare parts up to the main deck. Since around 1,000 spare parts are expected to be utilized in an offshore wind power plant, a vast number of them have

to be on hold for annual maintenance. Previously, any missing spare part had to be picked up in a small crew transport vessel, a trip of several hours.

The Wind Farm OfficeOn the port ship decks, the wind farm control room is situated where the logistics and systems will be operated. Here, big windows offer a close view of the wind farm once the ship arrives in its service area. The control room will soon be packed with computers, Wi-Fi equipment, and direct commu-nication channels to the bridge. “The SOV is a long-anticipated puzzle part in offshore logistics,” says Ingo Bischof, Siemens Project Manager Offshore Service for OWP Butendiek in the North Sea. The wind farms are operated and controlled remotely from the main office in the city of Brande in central Denmark. But once spare parts and maintenance duties are on the agenda, the SOV comes into play. “Managing a wind farm requires sophisticated service planning, and with the SOV, we can deliver that effi-ciently and accurately,” says Bischof. “At present, North Sea offshore wind farms consist of up to 80 turbines, and we expect 30 minutes of approach

Welcome aboard the Esvagt Froude! “The SOV is a long-anticipated puzzle part in offshore logistics,” says Siemens Project Manager Offshore Service Ingo Bischof.

The ship is designed to travel at higher speed with calmer motion in rough seas.

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uses a simulation tool to calculate the optimal paths within a wind farm, which will reduce travel time and save costs. That is why all eyes are on the new SOV.

The GangwayAnother important feature of the ship is the gangway, which allows for safe passage to the turbines even under harsh conditions and with significant wave heights. The gangway was built by Ampelmann, an innovative Dutch company from Delft. Instead of a moving cockpit, the Ampelmann sys-tem features a gangway platform that stays stable while the ship underneath heaves and sways.In reality, it looks like a fire ladder built on six insect-like legs. While the ship moves under this structure, the motion sensors and most valuable parts of the Ampelmann system stabilize the platform and its 25-meter gangway automatically. One million crossings to offshore structures have proven this to be a safe technology. By the

way, the system’s name “Ampelmann” refers to the green man in walking motion featured in German pedestri-an lights, signaling that it is safe to cross the road.

In the Bowels of the ShipBut maneuvering offshore demands more than a stable gangway. That is where the Siemens Blue Drive System® comes into play. It is located in the engine room, far below the water level, where the sound of the diesel

engines has an almost calming effect. The engines are fully operated by computer terminals and come with a basket of benefits, as Kristian Ole Jakobsen, COO of Esvagt, explains. “One feature of the Blue Drive System is that it saves fuel, reduces emis-sions, and makes propulsion and the power system as efficient as possible. Our diesel generators can run on low revolutions per minute, which saves fuel, just like in a car when you take your foot off the pedal. This is signif-icant, because in the wind farm, the ship has to stay on the spot for a long time. In addition, the Blue Drive Sys-tem accesses each motor separately, so we have a high redundancy should one motor fail.”Further interesting features of the vessel lie under the waterline: There are two propulsion units with contra-rotating propellers in order to facili-tate a better water flow. Beside the two bow thrusters for going sideways, there is a retractable Azimuth engine in front. A stable dynamic positioning

system and active roll damping ensure perfect steering.

At SeaOnce it is out at sea, the SOV Esvagt Froude’s reliability will be put to a first test at a UK wind farm during the installation process. Later in 2015, it will be in charge of long-term service and maintenance at the Baltic 2 wind farm. Its sister vessel, the SOV Esvagt Faraday, will start its working life in the North Sea wind farm Butendiek.“Looking forward, we are interested in maximizing the predictive and preven-tive maintenance tasks as opposed to re-active maintenance,” says Mark Albenze. “So to be even more efficient, we re-motely translate data into operational recommendations for the SOV based on each wind turbine’s condition. And the SOV has the right features to bring this proactive idea to life.” p

Onno Groß, based in Hamburg, Germany, is a science and business journalist who writes on mar-itime issues for a number of prestigious media.

Operation and maintenance of offshore turbines involve sophisticated teamwork.

Most of the monitoring is done from control centers on land supported by remote

diagnostics, but when service technicians have to go out to sea, they are transferred

via a crew transfer vessel. Seasickness, extensive travel times, limitations due to

harsh weather, a time delay due to acclimation before entering the turbine, and

difficulties in transporting necessary spare parts are only some of the obstacles

to optimal performance, especially for distant offshore wind farms.

A logistic solution such as the SOV Esvagt Froude makes offshore operation more

efficient. The ship will deploy its technicians either via the gyroscopic Ampelmann

gangway directly to the turbines, even when waves are head-high, or by using its

own Safe Transfer Boat. It has a large storage capacity and workshops, while

dynamic positioning enables it to maintain a set position, and an active roll damping

system improves onboard safety and comfort. In addition, computerized cruising

programs will help to design optimized work schedules and will greatly improve the

efficiency of offshore maintenance, thus contributing to reducing operating

expenditures for wind power at sea.

Maintenance at Sea


Instead of a moving cockpit, the Ampelmann system features a gangway platform that stays stable while the ship underneath heaves and sways.

Vessels like the Esvagt Froude improve offshore wind turbine maintenance, for instance with the Ampelmann hydraulic gangway.

siemens.com/living-energy/service-vessels

siemens.com/ living-energy/ making-waves-yt

The Living Energy app with additional features can be downloaded for free from the Google Play Store and the Apple App Store.

Steady Crossing in Rough Seas

“ Managing a wind farm requires sophisticated service planning; and with the SOV, we can deliver that efficiently and accurately.”Ingo Bischof, Siemens Project Manager Service Offshore for OWP Butendiek

time between turbines. With the SOV, we can reduce travel time to and within the wind farm by up to three hours a day; we can transfer techni-cians more safely to the installation and back; and we can work in more adverse weather conditions than was previously the case.” The ship’s crew


hen it comes to energy man-agement, we’re living in interesting times. Which de-

cisive trends do you see for utilities and grid operators? J. Mrosik: The energy system in most parts of the world has been almost static for decades. But right now, we’re seeing a lot of change happening at the same time. This mostly concerns the generation mix, because obvious-ly, emerging countries like China or India are encountering strong growth in their industrial environments. They’re hungry for energy, and they need to electrify. In other countries we have great changes in the energy conversion chain, in the energy sup-ply chain and – if you take Germany for example – changes in the whole energy generation mix. Nuclear is be-ing phased out while renewables are increasing: In 2014, the amount of re-newables increased to 27.8 percent of the gross power consumption. This, in turn, calls for entirely new systems in order to bring power from the source of generation to the consumer, requir-ing major changes in the grid. Last but not least, utilities are facing huge pressure because of market liberaliza-tion, so the whole business environ-ment is changing from a legal as well as from a business perspective. Our response to these changes on behalf of

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Siemens has been to create an over-arching team within the Energy Management division that now repre-sents the whole grid, from high volt-age down to low voltage.

What are the challenges when it comes to the grid structure?J. Mrosik: If you look at Europe, renew-ables – solar or wind – are massively expanding, and the energy they pro-duce must be fed into the grid. Areas of energy production and energy con-sumption are often far apart, so we need electricity highways. Since much of the energy production is decentral-ized, we need to strengthen distribu-tion grids at the same time. Further-more, renewable energy sources are fluctuating. So ideally, when the wind is not blowing or the sun is not shin-ing, you’d be able to get excess energy from neighboring countries. For that, we need interconnections.

And elsewhere in the world?J. Mrosik: In parts of the USA, the grid is almost a 100 years old and un-stable. A storm is enough to cut mil-lions of people off from their energy supply. So what we need there is re-furbishment – a lot of investment in order to make the aged grid and its 450,000 miles of high-voltage trans-mission lines more resilient. Without

Energy management is a huge challenge for practically every utility in the world. The CEO of Siemens’ Energy Management Division, Jan M. Mrosik, talks about solutions and a whole range of new business opportunities.

Text: Marc Engelhardt Photos: Detlef Schneider

“We Have to Go Beyond Technology”

this investment, the American Society of Civil Engineers expects the annual cost of service interruptions to soar from around US$30 billion to over US$70 billion by 2020.

Are renewables taking off in the USA on a similar scale as in Europe?J. Mrosik: In the not so distant fu-ture, renewables will grow massively in the USA. In some states like Iowa or South Dakota, already more than a quarter of consumed energy is pro-duced by wind turbines. Nationwide, wind power is expected to more than double over the next five years and reach 35 percent of total energy pro-duction by 2050. All that energy has to be transmitted to the huge indus-trial and population centers, espe-cially on the West and East Coasts.

How about the emerging markets?J. Mrosik: In India, the high-voltage grid is being upgraded to 1,100 kilo-volts over the next years to match ris-ing demand. In Rajasthan in western India, there are plans to build the world’s largest solar plant with a final output of 4,000 megawatts. Again, to transport this enormous amount of energy to the points of consumption, huge HVDC links are going to be required.

Energy Management


stakeholder, and I am convinced that providing big-data solutions to our customers through this entity will trigger major changes in the industry.

Considering the massively increased data flow, isn’t cyber-security also fast becoming a new important challenge for utilities?J. Mrosik: Cybersecurity is a major issue. If someone were to intrude into a grid, the consequences could be severe. The challenge is to maintain security from end to end. Because these grids are very complex, there are a lot of vulnerable entry points that have to be secured. It starts with the security of devices in the field and continues with the communica-tion lines between these protection devices, sensors, meters, and any other device out there. Of course, the IT systems as such have to be se-cure, too. Then you have to test ev-erything thoroughly, because even if each and every device is secure, it doesn’t necessarily mean that the whole chain is secure. To that end, we consult with our customers, the utilities and grid operators, and provide tailor-made end-to-end secu-rity solutions.

Energy Management

How do new grids in general differ from previous ones? There’s a lot of talk of smart grids.J. Mrosik: Transmission grids have in fact been smart and fully auto-mated for a long time. The high- and maximum-voltage grids all over the world are closely observed, carefully measured, and maintained. That is because they are extremely critical to a country’s infrastructure. Whenever a high-voltage line fails, millions of people might see an outage. So we have control centers in place, IT sys-tems, and sensors. What has to be added now is a comprehensive system that ensures wide-area monitoring, also covering the low- and medium-voltage distribution grids, which will have to become smarter.

Why is that?J. Mrosik: The medium-voltage to low-voltage grids are the ones closest to the consumer. In the past, these grids were fairly “dumb” – simply be-cause they didn’t need to be smart. If there was a problem, customers would call and an electrician would go and fix it. But that’s not good enough anymore. Since we are feed-ing more and more energy from de-centralized renewable sources into the system through the distribution grids, we urgently need to start man-aging them. Grid operators have to know what kind of capacity, what kind of energy flows through each and every cable within the distribu-tion grids. Today, for instance, there might be an overload, but we wouldn’t know that before it’s too late. Also, the voltage levels are changing because of the infeed of renewables. With sunrise, for instance, a lot of energy is pushed into the distribution grids. Currently, they are not designed to cope with that. What these grids need is a whole lot of intelligence: sensors, smart meters, and IT technology.

So operations technology and in-formation technology will be inte-grated in the long run?J. Mrosik: Yes, and that comes with many advantages. Real-time data from smart meters, for instance, can be used by utilities to optimize their

Energy Management


“ Utilities are under enormous pressure. At Siemens, we provide them with energy management solutions that help them successfully build their business in times of change.”Jan M. Mrosik

Jan M. Mrosik

“I work in the most fascinating busi-ness there is,” says Jan M. Mrosik, an engineer who also studied business administration and holds a PhD in the field of laser radar sensor technology from the Technical University RWTH Aachen, Germany. “Energy matters for everyone individually and for societies as a whole – and we as Siemens can contribute to a better world because we are in a leading position in all relevant application areas.”Jan M. Mrosik has been with Siemens for 19 years and has held several execu-tive positions. He was appointed CEO for the Siemens communications busi-ness in Southern Africa in 2005. Then

he returned to headquarters in Nurem-berg in 2007, as CEO of Business Unit Energy Automation. Four years later, he took over the Smart Grid Division as CEO. In May 2014, the Power Transmis-sion Division was added to his CEO port-folio. Since October 2014, Jan M. Mrosik has been CEO of the Siemens Energy Management Division, which combines traditional technology from high volt-age to low voltage and IT to shape the intelligent energy system of the future. Jan M. Mrosik is responsible for the business units “Transmission Solutions,” “High Voltage Products,” “Transformers,” “Energy Automation,” and “Smart Grid Solutions and Services.”

energy management. There are op-portunities for entirely new business cases, thanks to this integration. For example, decentralized wind tur-bines, small hydro-, or solar energy sources can be bundled on a virtual platform to be used as if they were a single power plant. We’re currently creating such a virtual power plant in the province of New Brunswick, Cana-da. The local utility had to decide whether to build a gas-fired power plant that may only have been needed over a few hours during the year. In-stead of that huge investment, they decided to let us put a system in place that uses decentralized generation units and switches off excess loads, both industrial and residential, if need be. In this way, the virtual power plant provides up to 500 megawatts.

We’re talking of huge amounts of data though – how can they be properly analyzed?J. Mrosik: Indeed, the number of data points alone is enormous and can quickly go into the millions. The amount of data created from distri-bution grids and smart meters is one thing. Then there are other sources, for instance weather reports. The gener-ation of renewables largely depends on the weather. To analyze these mas-sive datasets, you have to use big- data platforms that process the data according to the specific data model a grid operator or a utility requires. Data analytics is therefore the key: turning data into knowledge (see also “Weinhold’s Power Lines,” p. 30). As Siemens, we are partnering with a company called Teradata, a well-known expert in the field. Last but not least, we provide applications with algorithms that are utility-spe-cific and tailored to their very partic-ular tasks. Collecting the data is comparatively easy. It’s making sense of it and coming to the right conclusions that makes the difference – and that’s what our smart grid unit is doing. Moreover, in order to make sure that our customers get the maximum value out of this, we have formed a joint venture with Accenture called Omnetric. Siemens is the majority

We’re talking about a lot of invest-ment here. But is it really worth the money?J. Mrosik: Definitely – I’d say this in-vestment will secure the present and the future of many utilities. In the past, it was all about serving demand. Today, reliability and quality are key topics, together with cost-effectiveness and innovation. Utilities are under enormous pressure. At Siemens, we provide them with energy manage-ment solutions that help them success-fully build their business in times of change. We develop solutions that help to bring down cost in line with market requirements. At the same time, we ensure that the highest qual-ity is maintained. Take the latest de-velopments in HVDC technology, for example, transformers with a high efficiency level, low-noise transform-ers that are also very environmentally friendly. We’re investing quite heavi-ly to be on the forefront of such de-velopments, on the IT as well as on the system side of things.

How do you help utilities and grid op-erators to meet these new challenges?J. Mrosik: Many markets are regulated, and in these regulated markets it is important to convince regulators that

an investment is necessary and that there is a guaranteed return on invest-ment. In these cases, we support utili-ties in terms of putting business cases together. We also help them to find the necessary arguments, bearing in mind social, environmental, and eco-nomic aspects.Then there are lots of other cases for industry and investors in more liberal-ized environments where the busi-ness case as such has to work. Let’s say the electricity prices in country A and B are different. Then we help to build a business case around the fact that energy prices fluctuate through-out the day because of consumption patterns, so that energy can be pro-vided and delivered to where it’s ex-pensive from where it’s cheap today. And these business cases have to be based on very efficient technology. For us as a provider, that means we need to go beyond technology, under-stand the systematics and the foun-dation of a business case for our cus-tomers, and support them in terms of bringing an investment through. p

Marc Engelhardt reports from Geneva on the UN, international organizations, and business for various media, including Deutschlandfunk and the German news agency epd.

KolumnentitelKolumnentitel

50 Living Energy · No. 12 | July 2015 Living Energy · No. 12 | July 2015 51

Highly efficient and flexible combined heat and power plants open new business cases in terms of ecological responsibility for industries and suppliers. The waste heat from gas turbines can be utilized as process steam, in district heating – or even in district cooling.

Text: Moritz Gathmann

Heat and Power:

F or more than 50 years, Düssel-dorf’s Rhine harbor was domi-nated by the twin chimneys of a

coal power plant, 150 and 100 meters high – landmarks of a city in the heartland of German heavy industry. Times are changing, however: Smok-ing chimneys are no longer a symbol of progress, and a few years ago, the stacks were removed. A new landmark will take their place less than a year from now: the “Fortuna” block of the Lausward power plant, its 50-meter-high chimney encased by a glass shell

that will be illuminated at night.The new power plant will not only supply electricity and heat for Düssel-dorf’s 500,000 citizens, it will also epitomize the new identity of the city as a modern metropolis powered by cutting-edge technology and driv-en by a sense of ecological responsi-bility. Just one example: The city has committed itself to lowering its CO2 emissions by 10 percent every five years. “The efficiency of this new com-bined heat and power (CHP) plant in terms of electricity and fuel

An EfficientCombination

consumption is exceptional,” says Udo Brockmeier, Chairman of the Managing Board at the municipal en-ergy utility Stadtwerke Düsseldorf. “Today, you can hardly imagine a more effective power plant to cover the needs and demands of our city. We are able to generate and provide sustain-able energy and district heating for Düsseldorf.”At the heart of the new plant will be a Siemens SGT5-8000H gas turbine, one of the most efficient gas turbines avail-able in the 50- and 60-hertz market. u

Siemens is building the world’s most efficient power plant

in Düsseldorf, Germany. It will break three records and set a new

industry benchmark.

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Combined Heat and PowerCombined Heat and Power

By incorporating a special three-stage heat extraction design, the efficiency of the system can be maintained at high levels throughout the entire range of heat extraction.

Three World RecordsThe option of using the low-quality steam or low-quality heat of gas-fired power plants is not new, but modern CHP plants like Lausward are setting new benchmarks in scale and effi-ciency: The combined cycle gas turbine power plant will have an electrical output of 595 megawatts. That’s a new record for a combined cycle block based on a single gas turbine. The total energy conversion efficiency will exceed 61 percent. That’s also a record, surpassing the previous re-cord of 60.75 percent achieved at the Siemens-powered combined cycle

That explains why the German gov-ernment wants to raise the share of CHP plants to 25 percent by 2020 and supports their construction with a range of subsidy instruments. Another important reason for build-ing a CHP plant in Lausward was pub-lic opinion: The inhabitants of nearby Düsseldorf, located in the most dense-ly populated area of Germany, pre-ferred a gas-fired plant because of its relatively low emissions, especially in comparison to coal plants. Gas-fired CHP plants can reach over 61 percent net efficiency in condensing mode, compared to coal-fired plants, which reach maximum levels of 46 percent.

CHP Technology for Industries and CitiesCHP plants are on the rise all over the globe. Having reached an installed capacity of 50 gigawatts by the end of 2015, experts expect total CHP capacity worldwide to reach 80 gigawatts in 2022, with the highest growth rates in the Asia-Pacific region. Siemens projects in the Netherlands, Poland, South Korea, Malaysia, Cana-da, and Mexico are under way or have already been built. For instance, the city of Holland, Michigan, uses waste heat for its citywide snowmelt system, while Europe’s biggest waste water treatment plant in Psyttalia, Greece, uses it for the cleaning of wastewa-ter. Huge refineries in Malaysia and Poland have decided to integrate CHP systems including SGT5-8000H gas turbines because their needs for both process steam and power are per-fectly met by CHP technology. The co-generation plant in Malaysia includes four H-class gas turbines and will produce 1,220 megawatts of power and up to 1,480 tonnes per hour of steam for the Pengerang Integrated Complex, a refinery built by Malay-sia’s national oil company Petronas in southern Johor. A similar project is the cogeneration plant in the city of Plock, Poland, which will produce 596 megawatts of electrical power and process steam for the refinery of East-ern Europe’s largest oil company PKN Orlen. “Our success in CHP projects is due to the experience of our en-gineering experts. Together with the

major key components manufactured in-house, that is the basis for highest operational reliability and flexibility of power plants,” adds Hauenschild.In “old” industrial nations like Germa-ny, Siemens is mainly replacing older and less efficient plants. In other countries like South Korea or Malaysia, however, the company is building power and heat supply for newly built industries and residential districts. This year, a plant with two SGT6-8000H gas turbines and an SST6-5000 steam turbine went online in the South Ko-rean city of Ansan, boasting a capacity of 834 megawatts and the lowest NOx emissions of any power plant in South Korea. Ansan is a fast-growing industrial city on the west coast of the Korean peninsula. CHP technology is an ideal answer to its electricity and district heating needs. At the same time, the price for gas – which is only transported to South Korea as lique-fied natural gas – is exceptionally high, making it even more important for the customer to use it efficiently. While an ordinary combined cycle plant normally reaches a maximum level of 61 percent electrical net efficiency, the CHP plant in Ansan achieves a fuel utilization factor of 75 percent.Sung-Taek Seo, Project Manager at South Korean steelmaker POSCO, ex-plains their choice: “We selected the H-class gas turbine technology as well as Siemens’ in-house basic engi-neering and project management capabilities in order to construct one of the most competitive power plants in Korea. As the results show, the An-san power plant and the partnership

1 http://www.ifam.fraunhofer.de/de/Bremen/Formgebung_Funktionswerkstoffe/Energie-systemanalyse/Projektdetails/KWK-Potenzial-studie.html

power plant (CCPP) in Irsching, Germany. A third record will be achieved through the extraction of energy for district heating. Never be-fore has it been possible to extract 310 megawatts of thermal energy from a single gas turbine power plant block in combined cycle operation.“Germany is in the middle of an ener-gy transition from fossil and nuclear energy to renewable resources such as solar and wind power. This entails a set of new challenges: During times of low wind or solar radiation and during consumption peaks, you need plants that can be started up fast to compen-sate,” says Rainer Hauenschild, CEO of Siemens Energy Solutions. “The newly built Lausward plant, for example, can be started up in less than 40 minutes.” Nevertheless, many projects for

gas-fired power plants in Germany were put on hold, because they are not as profitable as peak power plants, and now simply serve as a stopgap for fluctuating renewables. For the Lausward plant, the earnings generated by district heating steam will help to make the plant profitable.In a recent study1 the renowned Ger-man Fraunhofer Institute for Manu-facturing Technology and Advanced Materials concludes that CHP account-ed for 20 percent of the German heat market in 2014, and acknowledges the positive ecological effect: In compari-son to “uncombined” power and heat production, Germany’s CHP plants already today save 56 million tonnes of CO2 emissions annually. The analysis also stresses that the technology is economical for industries and urban areas with district heating systems.

Full District Heating Mode830 MW

District Heating310 MW

Electrical Power520 MW

40%+Fuel EfficiencyFuel utilization factor

Electrical Power595 MW

Full Condensing Mode595 MW

fuel utilization

In Full District Heating Mode, the combined cycle power plant achieves a 40 percent higher fuel utilization rate.

with Siemens have proven to be a great success and a benchmark in the IPP market,” he says. Siemens has sold fifteen SGT6-8000H gas turbines to South Korea for eight projects total-ing over 6.3 gigawatts of installed CCPP capacity. Five H-class projects have been completed, while three projects are still under construction.

District Heating in Winter – District Cooling in SummerWhat do you do with heating energy during the warmer seasons? A ground-breaking answer to this question has been found in New York’s Bronx dis-trict. The community is served by a local power plant comprising two SGT-400 gas turbines and an SST-300 steam turbine. Here, it was the con-cept of “trigeneration” – not just of electricity and heating, but notably also of cooling power – that dovetailed with the needs of the community. Besides generating electricity for its 60,000 inhabitants, the Riverbay Co-op City’s Central Plant supplies them with heat in winter – and cools them down during the hot New York summers. This is possible due to “absorption chillers,” which basically function as huge refrigerators: They produce chilled water by heating two different substances that are in thermal equi-librium to separation, then reuniting them through heat removal. The cold water is pumped through the district heating system, which thus becomes

“ The Ansan power plant and the partnership with Siemens have proven to be a great success and a benchmark in the IPP market.” Sung-Taek Seo, Project Manager, POSCO

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gas turbines, it also has customized solutions on offer for smaller custom-ers. An individual CHP plant not only gives factories independence from local suppliers of power and heat – it also turns them from consumers of power into suppliers.In fact, CHP may play the most im-portant role in distributed energy

power stations and local heating facilities, because less fuel needs to be consumed to produce the same amount of useful energy. Reliable and stable supply of power and heat is critical for plant operation in many industries. CHP can increase the re-liability of power supply, preventing unscheduled shutdowns of produc-tion processes due to grid supply issues. Plant loads can be adjusted to suit the customer’s needs; the plant can operate independently or in par-allel with the local electrical grid. A disturbance or failure to supply the required process or heating steam may also lead to production distur-bances or stops, often at very high costs. With a dedicated CHP plant, users take control of their own heat and electricity production. Additional security of supply can be gained by redundancy and/or backup boilers.

Becoming an Energy SupplierWilliam Grant & Sons is the world’s fourth-largest producer of Scotch whisky. As the biggest distiller still in family ownership, Grant’s has been making the “water of life” from grain for nearly 130 years now. Re-cently, it has also become an electric-ity supplier.Prior to the installation of CHP tech-nology at the company’s whisky dis-tillery at Girvan, Scotland, the high energy demand for both process steam and electrical power had been met by large boilers burning heavy fuel oil and by the local electrical pow-er utility, respectively. These consti-tuted a major and rapidly increasing percentage of the company’s total production costs. In 2001, fuel gas became available for the first time at the plant, and the distillery decided to replace the existing boilers with modern gas-fired units and to gener-ate its own electricity and additional steam using a modern, clean, and energy-efficient system.

A package from Siemens, based on the SGT-100 gas turbine, a gas com-pressor, and a heat recovery steam generator, now supplies the distillery with 5.25 megawatts of electricity, as well as process steam at the rate of around 11 tonnes per hour. “This matched our requirements for both heat and electrical power,” explains Distillery Manager Conn Lynch. How-ever, besides covering its entire elec-tricity requirements autonomously, the distillery also feeds around 30 per-cent of the generated output into the local grid network as a revenue-earn-ing commodity.“The global energy market is a rapid-ly changing arena, and with the rise of renewable energy sources, it is be-coming even more complex, turning constant availability of power and grid stability into challenges. The more complex the systems become, the greater the need for flexibility in power generation,” says Rainer Hauenschild. “All around the globe, CHP technology is becoming one of the convincing answers to these challenges.” p

Moritz Gathmann has been reporting as a correspondent from various regions of Europe for German publications since 2004. His work has been published in DER SPIEGEL magazine, Frankfurter Allgemeine Zeitung, and other media.


a district cooling system. “The idea of plants producing electricity and cold water for district cooling systems has high potential for hot regions of the world, for instance India or the Middle Eastern countries,” says Hauenschild. Siemens, however, offers solutions not only for huge refineries or city dis-tricts: With its wide range of steam and

xxxReport

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The USA’s Largest Municipally

Owned Snowmelt SystemTypical Michigan winters have 32 days of snowfall, or

up to 177 centimeters per year. The City of Holland

maintains the USA’s largest municipally owned snow-

melt system. Pipes running through 46,000 square

meters of roads and sidewalks melt 2.5 centimeters

of snow per hour.

CHP plants are efficient generators

of electricity, but also of steam for

district heating, process steam, or

snowmelt systems.

Snowmelt systems prevent the build-up of snow and ice on walk-

ways, patios and roadways. The various types of systems are distinguished by heat source: electric resistance heat, geothermal heat, or heat from a combustion source. Thus,

the surplus heat from the circulating water system of a power

plant can be used in a town snowmelt system.

“ The more complex the systems become, the greater the need for flexibility in power generation.” Rainer Hauenschild CEO, Siemens Energy Solutions

concepts of industrial users. The advantages of distributed power gen-eration systems are high flexibility and security of supply, better load management, and less grid require-ments and grid losses. Cogeneration offers fuel cost savings between 15 and 40 percent compared to separate supplies of power from conventional


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Decentralized Energy


Oil and Gas

veryone is aware of the sharp fall in oil prices that began in mid-2014, and uncertainty

continues to cast a shadow over the prices in the medium term. What seems likely, however, is that oil will remain at more moderate prices until, at least, the next decade. This is driven both by the demand and the supply side. On the demand side, emerging market growth isn’t expected to hit the same pace as it had over the past ten years, when many of those years saw real GDP growth between 6 and 9 percent a year. The IMF forecasts emerging market growth at 4.3 percent this year, 4.7 percent next year and just over 5 percent

E

What do you do when the costs in your industry have doubled over the past couple of years, and then the price you can charge for your product halves in just six months? Welcome to the dilemma faced by developers and operators in the upstream oil and gas sector.

Text: Ward Pincus

through the rest of the decade. Also, China is no longer increasing oil con-sumption at the same pace as it was over the past decades. On the supply side, there is plenty of oil coming into the market over the medium term. As outlined by Hasan Qabazard, OPEC’s Director of Research between 2006 and 2013, non-OPEC suppliers will continue to add to glob-al supplies until the end of the de-cade. US shale oil currently produces just under 5 million barrels per day (bpd), up from less than a million bpd only a few years ago. But despite the price decline, he expects total US shale oil production to grow to 6 mil-lion bpd by 2018/19, when it will then

plateau. Other non-OPEC oil will also contribute to medium-term supply, says Qabazard, who is the Chief Execu-tive Officer of the Kuwait Catalyst Company and also a former Director of the Petroleum Research and Stud-ies Center at the Kuwait Institute for Scientific Research. Longer term, however, both Qabazard and Dubai-based Robin Mills, Head of Consult-ing at Manar Energy, see oil prices rising as global demand continues to grow while non-OPEC production fails to maintain its recent heady pace. OPEC estimated in late 2014 that glob-al energy demand will increase by 60 percent by 2040 compared to 2010 levels, with world oil output projected

The Price of Oil over the Last Five Years

US shale oil production is expected to grow

to 6 million bpd by 2018/19

OPEC estimates that global energy demand will increase

by 60 percent by 2040 compared to 2010 levels

2011 2012 2013 2014 20150

1,000,000

2,000,000

World oil output is projected to

grow from 81.8 million bpd to 99.6 million bpd until 2040

–Volatile

PricesBalanced Response

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Source for all data: www.nasdaq.com/markets/crude-oil.aspx?timeframe=5y, May 2015

30.00

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50.00

59.67

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80.00

90.00

100.00

110.00

Decentralized Energy


to grow from 81.8 million bpd to 99.6 million bpd over the same period. The OPEC study also predicts that the share of oil in the global energy mix will fall from nearly 32 percent to 24.3 percent, while the share of all fossil fuels, including oil, coal and gas, in the global energy mix will decline from 81.6 percent to 78.4 percent.Mills said he is more bullish than the market consensus regarding renewable energy’s ability to take a larger share of the energy mix, but says that fossil fuels will “probably still be the major source” of energy by 2040. This is driven by renewable energy’s technol-ogy mismatches, most notably in transport, Mills says. Furthermore, disruptive technologies such as car-bon capture and storage could change the calculus by making fossil fuels as “clean” as renewables, he says.

Rising Costs in the FieldBut there is another part of the picture that was putting a squeeze on produc-ers long before prices collapsed: the skyrocketing costs associated with drilling and producing oil and natural gas around the world.Energy consultancy IHS studied the return on capital among upstream players and found that it had fallen by more than half between 2000 and 2013, from a 23 percent net income return on net cumulative capital costs in 2000 to an 11 percent return in 2013. That was even as average oil prices tripled from just above US$22 per barrel of oil equivalent to US$63.

As Mills notes, the reasons for the price rise were manifold, including compa-nies losing discipline in the face of high prices, overstretched equipment and qualified mid-career experts in the face of so many projects, more difficult and complex projects, and these complex projects turning out to be even more difficult than expected.

Operators React to Price CollapseThe sharp fall in prices is forcing operators and service companies to address these cost issues more consequently than was required with oil at US$100. The first step being taken by most operators, both nation-al oil companies and international oil companies, are sharp and wide-spread cutbacks in capital spending.This means canceling and delaying nonstrategic investments, retender-ing others and renegotiating fees with suppliers, both because of the need to share the pain of lower prices, and also to capture the gains of falling material prices, which have begun to come down in recent months. BP is halving its exploration activity and slashing capital expenditure by 20 percent; Shell plans to reduce costs by US$15 billion over the next three years, and Statoil is cutting its capital spending for 2015 by 10 percent.In turn, some of the world’s biggest oil field services firms, including Baker Hughes, Schlumberger and Halliburton, are laying off thousands of employees.

Regional ResponsesThe steep drop in oil price is impact-ing all regions, though each in its own way. In the North Sea, there is a big mismatch between current prices and operating costs. That worries Dr. Patrick O’Brien, Chief Executive of the Industry Technology Facilitator (ITF), whose organization is based in Aberdeen. “We are much later in the life of the [North Sea] basin, com-pared to other regions, so the threat is that [with low oil prices] we start to shut down and decommission before we should. […] This should drive people to think how to do things differently.” In North America, there is urgency to bring down costs in the face of lower prices. Qabazard says that the ability of North American unconven-tional producers to leverage technol-ogy and improve system and opera-tional efficiencies to lower costs is already being seen in the declining break-even curve for those fields. Before the oil price collapse, these operators had a break-even point of between US$40 and US$120/barrel, he says, but now, they are report-edly operating at between US$20 and US$70/barrel.In the Middle East, the national oil companies are less exposed to the price drop because they have lower-cost operations, and also generally have a longer time horizon. This means most upstream projects are strategic in nature and not subject to suspension or cancellation,

“ However the oil and gas market develops in the short term, it offers uniquely attractive perspectives over the long term.”Lisa Davis, responsible for Oil & Gas and Member of the Managing Board at Siemens AG

Comprehensive Oil and Gas Portfolio

With its recent acquisition of the Rolls-Royce Energy gas turbine and compressor business, and the announced agreement to acquire Dresser-Rand, Siemens is building a comprehensive portfolio across the entire oil and gas value chain, from power generation, distribution and control systems to field-proven compressors, water processing, automation and control and electric-drive-related products, systems and solutions.

These acquisitions are not only a matter of technology, but also of valuable human capi-tal. “The recent additions to our oil and gas portfolio almost double our pool of talent and create a truly global strategic partner for all of Siemens’ oil and gas customers,” says Lisa Davis.

The agreement to acquire Dresser-Rand will enable Siemens to expand its oil and gas field equipment portfo-lio, including high-pressure field injection and oil recov-ery, gas liquefaction, gas transmission and refinery process equipment. Dresser-Rand also adds additional distributed power generation technologies to the Siemens Oil & Gas solutions, including reciprocating engines that provide power to field equip-ment such as compressors, and micro liquefied natural gas solutions that are ideal for smaller-volume associat-ed gas found in fields such as unconventional shale oil. The acquisition expands the Siemens port-

folio to include high-efficiency, compact aeroderivative gas turbines. Especially at-tractive in offshore applications where costs grow as equipment weight and space in-creases, the lighter, more compact aero-derivative gas turbines offer significant ad-vantages. Furthermore the aeroderivative turbines offer high availability and reliability, delivering operational advantages with short maintenance cycles.

Light and compact: aeroderivative gas turbine.

Looking to expand the port-folio in the oil and gas field equipment.

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Subsea Power Grid Siemens is also leading innovation in the field of subsea power grids for large-scale processing on the sea floor. Currently in the detailed design and test phase, this solution will provide offshore oper-ators with a complete medium-voltage system that includes subsea transformers, subsea switchgear and subsea variable speed drives that are opera-tional to depths of 3,000 meters below sea level. This brings processing closer to the reservoir and mitigates sea-surface platform risks, including those associated with weather.Also incorporating a comprehensive power control and communication system, the solution is designed to deliver long service intervals with exceptional availability, and includes an integrated condition monitoring system to identify and address unplanned downtime issues before they impact operations. Siemens’ recent investments in expanding its port-folio and bringing its expertise to the challenges of the oil and gas sector reflects the company’s commitment to the sector. “We’re now also focus-ing our innovative strength on the oil and gas sec-tor and setting new standards for efficiency and reliability,” says Lisa Davis.

Field Innovation and Technology Advances

One of the most effective ways to reduce costs

in an oil and gas field – whether onshore

or offshore – is to use electric-drive pumps,

compressors and process equipment that is

connected to a power grid and a control system,

instead of diesel-powered mechanical-drive

equipment.

Electricity powering the grid can come from a

high-efficiency gas turbine, from a combined

heat and power plant, or even from a combined

renewable and fossil-fueled plant. Operators

benefit most significantly from electrification

through improved reliability and availability,

and thus better field efficiency. Furthermore,

electrification can reduce operating costs

through greater fuel efficiency and the lower

maintenance and operating costs associated

with electrical motors and drives.

And while the initial capital outlay is larger with

electrification, overall capital costs can be lower

because production generally can begin sooner

and is less likely to face start-up delays.

DigitizationWith digitization and automation, operators can collect real-time data on equipment and operations, and also remotely manage the equipment more efficiently. Big data and other analytics help operators cut costs and improve efficiencies by optimizing performance and enabling predictive and preventive maintenance. With sensors and control equip-ment located across the field system, operators require fewer field engineers, something that delivers big cost advantages particularly in offshore and remote fields.Digitization allows for real-time monitoring of wellheads so operators can manage equipment better. For example, through real-time monitor-ing of the mix of fluid, sand, rock and hydrocarbons coming through a wellhead, pumps can be adjusted accordingly to reduce wear and tear, and prevent damage. Another exciting implementation of digitization is to take the extensive experience Siemens has in image processing in fields such as health care and bring them to the visualization of oil and gas reservoirs. It is a key challenge in the exploration and development phase to take the exten-sive information from ultrasound, seismic, core samples and flow data to build a picture of what the subsurface reservoir looks like. Using Siemens software, exploration companies can get a better view of the reservoir in real time or near real time, allowing them to make decisions faster, thereby reducing costs associated with expensive leased rig and other field equipment.

Electromagnetic HeatingFurther out the innovation curve is the Siemens development of electromag-netic heating for use in unconventional heavy oil fields such as those found in Canada and Kuwait. While current tech-nology gets this thick oil moving by using steam, electromagnetic technolo-gy offers a way to unlock much more of a reservoir’s potential, while having a dramatically smaller physical and envi-ronmental footprint that requires no water and avoids the inefficient two-step process of creating heat that then is applied to water to create steam.

“ We’re focusing our innovative strength on setting new standards for efficiency and reliability.” Lisa Davis

Electromagnetic heating can be used to unlock much more of a thick oil reservoir’s potential.

The subsea grid is operational to depths of 3,000 meters below sea level.

Cutting costs through digitization and automation.

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though operators are pushing service companies on price. As Qabazard says, countries such as Saudi Arabia, the United Arab Emirates and Kuwait will continue to invest in production expansion to achieve their strategic goals of having the necessary production capacity onstream to deliver the residual sup-ply to global markets that will be needed once non-OPEC supply pla-teaus in the early 2020s.Gulf operators are concerned about improving the efficiency of fields,

using enhanced oil recovery tech-niques – such as CO2 injection – and extending the service life of field infrastructure.Given these priority areas, operators and service companies can begin cooperating right away to realize systems and solutions enhance-ments. “However the oil and gas market develops in the short term, it offers uniquely attractive perspec-tives over the long term,” says Lisa Davis, responsible for Oil & Gas at Siemens and Member of the Manag-ing Board at Siemens AG.

Solutions to Cut CostsThere are many steps the industry and individual operators can take to bring down costs and increase pro-duction. In addition to adopting new technologies, experts agree that the industry also can bring down costs by managing fields more efficiently, pursuing cross-operator standardiza-tion, and improving field operations efficiency.Mills adds that streamlining the supply chain, implementing better contracting models that create a more collaborative relationship between operators and service com-panies also would help. To help ad-dress the shortage of qualified field engineers, he says better IT, field automation and virtual work could help existing staffers be more productive.Outside of North America, there is a sense that innovation moves more slowly than it could. “You hear a lot about technology that’s out there but that’s not being taken up,” says O’Brien, whose organization, ITF, is comprised of international oil and gas operating and service companies that collaborate on research and development initiatives to address shared technology challenges.Examples of ITF’s work include fundamental research on the basic algorithms for imaging subsurface reservoirs, understanding how cracks grow during hydraulic frac-turing (fracking), and algorithms to more accurately model and pre-dict weather that impacts offshore Australian oil fields.

O’Brien recognizes the huge impera-tive for safety in this industry, given the human, environmental and com-mercial harm from a disaster. But he says this has created a different risk of “overspecifying, overdesigning, overcustomizing.” This not only makes operators and service companies more conservative in adopting new technologies, but it also makes it harder to share lessons learned and to reduce costs through some levels of standardization.Other areas of technology develop-ment that the experts mention include field electrification, the im-plementation of CO2 injection to support enhanced oil recovery, and technologies to unlock the potential of heavy oil and tar sands. O’Brien says that while the sharp drop in prices might be painful today, in the future “we may find ourselves saying it was a good thing because it made us focus on really trying to do things differently. Maybe it will help us achieve more innovation than we’ve had in recent times.” p

Ward Pincus (Dubai) is a Middle East expert who writes on science, technology, health, and business issues for publications in North America, Europe, and the Middle East. He is a former correspondent for the Associated Press (AP) in the United Arab Emirates.

“ We may find ourselves saying that the sharp drop in prices was a good thing because it made us focus on really trying to do things differently. Maybe it will help us achieve more innovation than we’ve had in recent times.” Patrick O’Brien, Chief Executive of the Industry Technology Facilitator (ITF)

“ Better IT, field automation and virtual work could help staffers be more productive.” Robin Mills, Head of Consulting, Manar Energy


Robin Mills, Head of Consulting at Manar Energy.

Hasan Qabazard, Chief Executive Officer of the Kuwait Catalyst Company, and OPEC’s Director of Research between 2006 and 2013.

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Oil and Gas

one are the days when power was supplied by just a few large power plants – when a

limited number of utilities served de-mand, and deterministic generation schemes sufficed to do the job. Today, in the age of distributed energy, ma-ny consumers are producers as well. In the case of industrial enterprises and other large entities, this dual role of the prosumer is especially pro-nounced. To these are added the mil-lions of individual prosumers who feed energy produced by small en-gines, combined heat and power units, wind turbines, and photovolta-ic units into the grid. As a result, en-ergy systems worldwide are experi-encing changes on a previously unknown scale, and a gradual conver-sion of the grid infrastructure is inev-itable. Innovative energy manage-ment therefore ranks as a top priority for utilities as well as for many other players in industry and elsewhere. Take load management, for example. “A lot of generation is fed into the grid at a low voltage level, not at trans-mission level,” says Ralf Christian, CEO of the Siemens Energy Manage-ment Division. “That means, for in-stance, that if you have a photovoltaic unit and clouds pass through, you suddenly lose all generation in that microenvironment, and then – just as suddenly – it comes back again.” This happens to thousands or more units at any given time. Accordingly, low-voltage grids that used to be dis-tribution-only have to be upgraded to include sensors, measurement

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It’s not just utilities that must adapt to the world of distributed energy. Intelligent energy management, the connection of different grids, and innovative storage solutions are issues for almost anyone consuming or producing power.

Text: Marc Engelhardt Illustration: Cajsa Holgersson


Distributed EnergyDistributed Energy

technology, and other elements of a smart grid that enable grid manage-ment at the microlevel. “Management on a large geographic scale is no lon-ger sufficient.”Load management no longer takes place only in the grid, but at the con-suming industries. “In the past, you basically had a substation, and you could fully rely on power being avail-able through the grid all year round, 24/7,” Christian explains. “But today, power prices in countries like Germany or the USA vary, so you start adapting and making choices: when to buy from the grid, when to generate from your own sources, when to try to cut off loads, and eventually, how to manage peak demand.” In California, for example, exceeding a certain threshold during peak hours for just a few minutes can cost a facility as much as the energy consumption for the rest of the month. “If you want to avoid paying these premiums, you re-ally need to be able to manage your power supply process – you have to be able to shift loads from one side to the other or shut off certain consump-tion – and to do that, you need a lot of measurement, sensors, monitoring, and control within your own facility.”

The Opportunity of IntegrationEnergy management is thus moving into power-consuming applications as well as into buildings, infrastruc-ture, and industrial processes. “Many of our industry customers, for in-stance, now have to manage their

Managing an Intelligent Energy Future

Fossil Power Plant

Power Station

Power Station

Building Data Center

Pumped Hydro

Storage

Storage

Large-Scale PV Plant

Thermal Storage

Onshore Wind Park

Power Station

Transport

Combined (Cooling) Heat & Power

Private Wind & Solar

Control-lable LV Trans-former

Electric Vehicle Infrastructure

PV Plant

PV Plant

Onshore Wind

Smart Building & Thermal Storage

commercial or industrial facilities, from about half a megawatt-hour up to 20 megawatt-hours of storage.” Moreover, storing energy for meeting shortfalls (or hedging energy costs) is not the only application, Christian explains. “Siestorage is also a great asset for stabilizing and balancing your local grid. For some of our customers, that is actually its more important function.”

Other Storage OptionsAdditional storage capabilities are available if you have the smart grids to use them. Most cities, for instance, have networks for gas and district heating that can be used for storage. In Nuremberg, Germany, not far from the Siemens headquarters, a 70-me-ter water tower was inaugurated in 2014. It basically works like your aver-age water heater plus thermos flask: When there’s a surplus in energy, it’s used to heat up to 33,000 cubic me-ters of water inside the tower, where it then stays hot. That hot water is used to feed into the district heating network when needed. It’s only one of many storage options. “We are pro-viding the technologies that bridge the still separate domains, and that will make the management of your city’s infrastructure more efficient,” Christian explains. In the USA, parked electric cars are used as storage devices as well. The enabling factor for all these cross-sectoral solutions is a smart grid that allows for intelligent energy manage-ment. Operations technology and in-formation technology become one, Christian says. “Information technol-ogy is what we need to get the meter data and the consumer data into the systems so that we can measure con-sumption and draw the necessary conclusions. Automation technology is needed to make the meter data available for outage management and outage measurement in the grids: So this is where these two worlds con-verge.” All of the collected data is stored and analyzed, to the benefit of a stable and efficient power supply.“In the distribution grids, the tech-nologies needed to manage all that data are already available within

Distributed Energy

Siemens,” Christian says. “For an in-dustrial facility, a large building, a hospital, a data center, Siemens can provide data management suites that can be linked with components from building technology. We have all the basic technology to capture data, to do power monitoring, and to collect all the measurements in the energy environment; then we connect them through communication protocols

generation, and then you have to manage load in those cities and prepare for scenarios, even worst-case scenarios.” Christian cites the example of Hurricane Sandy, which knocked out the power supply on the US East Coast in October 2012. “You have to make sure that even in those extreme cases, your power supply is still available, safe, and energy-efficient.”

own nano- or microgrid, depending on their size,” Christian says. If ener-gy is produced within an industrial facility, be it with renewables, diesel engines, or small gas turbines, moni-toring is of the essence, Christian knows. “You need to integrate your generation with your overall facility, with the industrial processes you have, and these need to be tied into building monitoring systems and in-dustrial automation. The integration of that whole environment will create a lot of opportunity for business in the next years to come.” Tasks that, in the past, were handled exclusively by utilities are now taken care of by facility managers. “Think of data centers, which need perfect stability in their power supply: More and more of these facilities will have to generate their own power, and they will face the same problems that utili-ties faced, though on a much smaller scale.” Managing one facility is in-deed very different from managing an entire country’s grid, Christian reckons. “But you still need a large suite of technologies, and that’s where the Siemens Energy Manage-ment Division is especially well posi-tioned.” After recent restructuring, expertise ranging from high to low voltage levels is now combined in one Division, Energy Management. For customers, that means a wide variety of experience from different back-grounds is now available from a sin-gle source. That is also true for one of the great challenges of a distributed energy environment: storage. Because the sun doesn’t always shine and the wind doesn’t always blow, energy can be stored when there’s a surplus so that it can be used in times of need. On the big scale, Italian transmission system operator Terna as well as dis-tribution system operator Enel al-ready use Siemens storage solutions in the southern parts of the country to stabilize the grid and provide an-cillary services for grid operations. On the micro- and nanolevels of the grid, Siemens has developed the Siestorage unit, based on lithium-ion batteries and scaled for facility use. “Siestorage is targeted at large

Energy Management


Ralf Christian

In October 2014, 51-year-old Ralf Christian was appointed CEO of the Siemens Energy Management Division with responsibility, among others, for infrastructure and industry markets, as well as low- and medium-voltage technologies. After graduating with a Master of Science and Business Administra-tion degree from the University of Karlsruhe, Germany, he began working with Siemens as a product manager in 1989. Four years later, he became head of product management and business devel-opment at the Siemens Drives and Products Group.

He was appointed CEO of the Power Distribution Division in 2008; a few years later, in 2011, he became CEO of the Low- and Medium-Voltage business unit.Christian was the president of T&D Europe (the European Associa-tion of the Electricity Transmission and Distribution Equipment and Service Industry) between 2008 and 2014. He has served as a board member of the German Electrical and Electronic Manufacturers’ Association (ZVEI) since 2011 and is the president of its power engi-neering department.

into an overall Siemens building management system.” The same can be provided for industrial pro-cesses. “These are very often linked with energy supply. Again, with products and systems from our dig-ital factory division, we provide the backbone for extracting all that da-ta from the energy system and then use the right protocols to enable these factories to run efficient processes.”

Power for Resilient CitiesCities exemplify the complexity of interacting and communicating grids on different levels. Since a rapidly rising percentage of the world population is moving to cit-ies, more energy is needed there to cover their needs. At the same time, network stability has to be en-sured. But since the energy infra-structures of most big cities are up to 100 years old, it’s hard to see how these goals can be reached. “Again, you need to think on a sig-nificantly larger scale of manage-ment,” Christian says. “As an ener-gy provider, you have to provide choices and be more robust in terms of power generation within buildings or the district. Maybe you will use combined heat and power or photovoltaic units for

But Christian and his team are also working out intelligent solutions for everyday use. One challenge, in cities as well as elsewhere, is to conceal from public view the technical infra-structure, which has always been anything but attractive. “That’s where we come in with very compact medi-um-voltage switchgear designs, sub-station designs, and designs for high-voltage units with a very small footprint. It’s a question of integrat-ing this infrastructure, not just pure beautification.” For instance, in San Francisco some years ago, Siemens designed an additional power link bringing several 100 megawatts of energy to the commercial district. “We took a cable through the Bay that is absolutely invisible; it was simply the best solution,” Christian says. It is just another example of how intel-ligent energy management means thinking everything through, down to the last detail. The world of energy will continue to experience big changes over the next 10 to 15 years, Christian knows – and he is proud to work on the forefront of providing highly innovative solutions for the future. p

Marc Engelhardt reports from Geneva on the UN, international organizations, and business for various media, including Deutschlandfunk and the German News Agency epd.

“ We are providing the technologies that bridge the still separate domains of energy management.”

Ralf Christian has been the CEO of the Siemens Energy Management Division since October 2014.

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Living Energy · No. 11 | December 2014 6968 Living Energy · No. 12 | July 2015

n the wake of the March 2011 accident at the Fukushima No. 1 nuclear power plant, the Japanese government has been rethinking

its energy policies. To this end, it established a commission to discuss Japan’s long-term energy targets, and deliberations began in January 2015.For some 50 years before the Fukushima acci-dent, Japan’s nuclear power industry had moved steadily forward under a supportive national policy. At the time of the 2011 tsunami, Japan’s nuclear power plants had 54 reactors putting out 49 gigawatts of power and meeting roughly 30 percent of the nation’s electricity demand. Japan was then the world’s third-largest producer of nuclear power after France and the USA. Nuclear power was a mainstay in resource-poor Japan, and most Japanese people supported it.The basic national energy plan proposed by the Democratic Party of Japan (DPJ) administration in 2010 foresaw nuclear power accounting for some 50 percent of the national electricity sup-ply by 2030, double the current output at the time. The plan aimed to reduce emissions of greenhouse gases significantly (25 percent be-low 1990 emissions) with zero-emission power sources supplying 70 percent of total needs. In addition to nuclear power, the plan called for 10 percent hydroelectric power and 10 percent other renewables. In short, nuclear power was the key to Japan’s energy policy. One year later,

the Fukushima accident caused an upheaval of the business environment and a reversal of feelings regarding nuclear energy.

A New SituationFirst of all, Japan’s Law on Compensation for Nuclear Damage stipulates that the power com-pany involved in a nuclear accident is wholly responsible and faces unlimited liability. The Tokyo Electric Power Company (TEPCO) was unable to bear the financial burden of cleaning up after the accident, paying compensation, etc., and in July 2012, the company was, in es-sence, nationalized. Even though TEPCO was by far the largest electric power company in Japan with annual revenues of 5 trillion, it could not afford to shoulder this liability.Second, Japanese society became anti-nuclear overnight. Some 160,000 people had to take ref-uge from nuclear fallout, and as the myth of “safe nuclear power” imploded, both the compa-nies and the government agencies involved lost all credibility with the public. After Fukushima, unaffected nuclear power plants continued to operate, but when they shut down for required safety inspections every 13 months, public sen-timent ran so deep that the DPJ administration would not authorize those plants to start up again after the inspections. Thus, May 2012 saw the complete shutdown of Japan’s nuclear power plants.

The Future of Japan’s Energy MixSince the Fukushima nuclear disaster, Japan has been reviewing its energy policies. Whether nuclear energy will remain part of the country’s energy mix depends on whether the government and the nuclear power industry can regain public trust.

Text: Hiroshi Takahashi Illustrations: Pascal Staub

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Third, this nationwide shutdown of nuclear plants threatened the stability of power supply. With zero nuclear power output and peak de-mand rapidly approaching with the summer months, power companies were hard pressed to supply sufficient electricity. In July, the govern-ment allowed the Kansai Electric Power Company to restart two nuclear reactors and operate them under provisional safety regulations, but in the end, due to significant conservation of energy by consumers, there was sufficient sup-ply to meet demand without problems. The Oi nuclear plants operated until September 2013, but no other plants were allowed to restart. As of March 2015, “Zero Nuclear Energy” continues.

to restart in the summer of 2015. Electric compa-nies simply cannot survive without nuclear power plants as base load.

The DPJ’s Innovative Strategy In parallel with short-term electricity supply issues, the DPJ administration began to review the country’s mid- to long-term energy policies in May 2011. They focused on how to deal with the nuclear power industry and began investigat-ing the potential of alternative, renewable en-ergy sources such as wind and solar, even though those power sources were not used widely in Japan at that point. Further, combined cycle pow-er plants and highly efficient gas turbines are among other technologies that play a role in the energy mix.During its many decades in power, the Liberal Democratic Party (LDP) had been a consistent proponent of nuclear energy. When the LDP fell from power in 2009, the DPJ, riding a wave of public popularity, gained the leverage to make major changes in national policies. Still, both ANRE and the industry dragged their feet on measures to reduce dependence on nuclear power and pushed for very conservative action. They maintained that, considering the need for a stable supply of affordable electricity, resource-poor Japan could not turn away from nuclear power.Finally, in September 2012, the DPJ administra-tion announced its Innovative Energy and Environmental Strategy and called for a “nuclear phaseout by the 2030s.” After conducting numerous public opinion polls and hearings, the DPJ concluded that “a majority of the people wants to live in a society without nuclear power.” The government plans called for a combination of hydroelectric power and renewable power sources to supply 30 percent of Japan’s energy needs by 2030. Electric power companies came out against the plan, and the opacity of the nu-clear power industry peaked.Less than three months after announcing the strategy, the DPJ lost the national election, and the LDP returned to power. The administration of Prime Minister Shinzo Abe said it would “rethink from scratch” the Innovative Energy and Environmental Strategy. The administration decided that survival of the nuclear power in-dustry was critical to keeping electricity costs low and spurring an industrial recovery. Still, during the election, the LDP pledged to minimize dependence on nuclear power. The Abe adminis-tration fully appreciates the public’s anti-nuclear sentiment and realizes that reconstruction of Japan’s energy policy must be done over a con-siderable length of time.

The LDP’s Basic Energy Plan 2014The LDP established a new committee of inquiry in March 2013, and started discussions aimed at creating a new basic energy plan. After the party had won the July election, discussions gained momentum, and the committee submitted its proposal in December 2013, leading to the Basic Energy Plan 2014 of April 2014.In that plan, nuclear power was positioned as an “important base-load source of electricity,” and the phrase “restart of nuclear plants” ap-peared in writing. While there was no numeri-cal target stated, the plan became an important step in nuclear power recovery. In contrast, al-most as a footnote to the committee’s statement about the energy supply mix in 2030, the report said the push for renewable energy and hydro-electric energy should “strive to exceed the previous target” of 20 percent. This is in line with “ The Fukushima accident caused

an upheaval of the business envi-ronment and a reversal of feelings regarding nuclear energy.”

Source for all data: IEA Statistics, Electricity Information 2014

Shutting down all the nuclear reactors caused a fourth problem by putting a financial squeeze on power companies. Thermal power stations filled the hole left by the shutdown of nuclear plants, which had accounted for some 30 per-cent of the electric power mix. As a result, ther-mal power production approached 90 percent of the power supply, costs for fossil fuels rose sharply, and electric power companies posted tremendous losses. That led to rate increases and consumer complaints not only about nuclear power plants, but also about the monopolistic structure of the electric power industry itself.In the meantime, nuclear power was largely re-placed by fossil power, mainly gas-powered plants and oil-powered plants. The shift has had a dramatic impact on greenhouse gas emis-sions, which rose 4 percent in 2012 and 1.3 per-cent in 2013, raising Japan’s emissions 10.6 per-cent above the 1990 rate. The International Energy Agency has expressed its concern about the dramatic switch toward fossil fuel and the impact on emissions, and Japan faces a tough road if it is to reduce its greenhouse gas emis-sions by 3.8 percent vis-à-vis 1990 by 2020.In September 2012, the Nuclear Regulatory Authority was newly established by separation from the Agency for National Resources and Energy (ANRE), set new safety regulations, and began inspecting nuclear power plants. The Kyushu Electric Power Company’s Sendai nucle-ar power plant passed inspection and is likely

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the basic plan of 2010, and is a significant re-treat from the DPJ’s Innovative Energy and En-vironmental Strategy.With the Basic Energy Plan 2014 in hand, the Abe administration established commissions to review nuclear power and renewable energy sources, respectively. The first objective is to construct a stable business environment for nuclear power. Merely positioning nuclear power as an “important base-load power source” does not overcome the difficulties to the nuclear power industry posed by the Fukushima accident. For instance, media reports say more stringent safety regulations have already added at least 2.4 trillion in compliance costs. Besides, the new regulations limit nuclear reactors to a service life of 40 years. That will speed up decommissioning and bring additional expenses. It is also clear that the current no-fault, no-limit compensation


Gross electricity generation (2012)Total 1,034 TWh

Average electricity price per household (2013)US$269 per MWh

Population127.6 million

Electricity total final consumption (2012)

7,236 kWh, per capita

923,000,000,000 kWh, JapanCO2 emissions, Japan1,223 Mt, overall fuel combustion, 556 Mt, power sector only

CO2 emissions, per capita9.59 t overall fuel consumption4.44 t, power sector only

Coal303 TWh

Oil181 TWh

Gas397 TWh

Nuclear16 TWh

Hydro84 TWh

Renewables53 TWh


EssayEssay

and renewable power. The subcommittee is to submit its final report sometime in June 2015, but the government made its proposal in late April. That proposal puts nuclear power sources at 20 to 22 percent, renewable power sources in-cluding hydroelectric power at 22 to 24 percent, and the remaining 55 percent would come from thermal power sources. To ensure a stable power supply and to hold elec-tricity charges down, base-load power sources (nuclear, hydroelectric, thermal power, etc.) need to account for some 60 percent of the whole. Further, to keep electric power rates down, nuclear power, which is alleged to have the low-est running cost, needs to supply about 20 per-cent. While emphasizing the need for nuclear power generation, the subcommittee points out the high initial cost of renewables, and further says that the fluctuating nature of renewable supplies would entail even higher costs to deal with that fluctuation. Therefore, the renewable power supply percentage target is lower than those of many other advanced countries.These estimates are most likely in agreement with the LDP government’s thinking. In other words, the ANRE officials chose the committee members based on the desired results. But it re-mains unclear whether the nuclear power sup-ply can reach 20 percent of the whole.Therefore, the mix of power sources forecast for 15 years from now corresponds to the govern-ment’s wish list. Undoubtedly, the electric pow-er establishment is aiming for that target as well, but the fundamental problems facing the nuclear power industry cannot be eliminated with a few support programs.

The Future of the Nuclear Power IndustryThe key issue is that people have lost trust in the nuclear power industry. Four years after the Fukushima accident, there is no sign of the industry regaining that trust. Opinion polls sug-gest that 10 percent of the people don’t want the plants to start up again, while 50 percent support phasing out nuclear power over time, and there is no hint that these numbers will go down. After three national elections, the LDP still enjoys high approval ratings, but those ratings don’t translate into support for its energy policies. The Abe administration wants to take its time in getting the nuclear power industry going again, but opinion polls still show at least half of the citizenry is against restarting any nuclear plants. It is highly likely that restarting of the nuclear plants will begin in 2015, but if the government makes even the smallest mistake, the citizenry’s anti-nuclear sentiment may very well explode.

requirements entail a risk no private electric power company can afford.Thus, the mid-term adjustments proposed by the commission in December 2014 included proposals to support nuclear power companies, such as adopting the “contracts of difference” system used in Britain, in which the government guarantees higher electricity rates and compen-sates the supplier when consumer rates go lower. When a reactor is decommissioned, expenses remaining on the books should be written off as an extraordinary loss, but the accounting

EducationHiroshi Takahashi has a BA in law and a PhD in social science from the University of Tokyo as well as an MA in law and diplomacy from the Fletcher School at Tufts Uni-versity in the USA.

CareerTakahashi became a Profes-sor at Tsuru University in 2015, where he teaches public ad-ministration and policy stud-ies. Tsuru University is a public university in the City of Tsuru, a historic town located at the southeastern foot of Mount Fuji in Yamanashi Prefecture. Taka-hashi’s recent research topics include electricity market reform and renewable energy policy. He started his career at Sony

Corporation in 1993, served as Deputy Director of the IT Policy Office of the Cabinet Secretariat in 2000, and worked as an Assis-tant Professor at the University of Tokyo in 2007. While he was a Research Fellow at Fujitsu Research Institute from 2009 to 2015, he became a member of the Advisory Panel for the Basic Energy Plan as well as for Power System Reform at the Ministry of Economy, Trade and Industry. Takahashi was also a Special Adviser to Osaka City and Osaka Prefecture, and to the Cabinet Office. He wrote many books about Japan’s contemporary politics and energy policy in-cluding Electric Power Market Liberalization, published by Nikkei Publishing Inc. in 2011.

Hiroshi Takahashi

“ The fundamental problems facing the nuclear power industry cannot be eliminated with a few support programs.” rules were changed to allow the loss to be

amortized, which means it would ultimately be made up from electricity rates.

Rolling Back RenewablesThe next goal is to shift the deployment of renew-able energy sources into low gear. In July 2012, Japan adopted a feed-in tariff (FiT) system that obliged utilities to purchase power from renew-able sources at a fixed price, which is similar to the German system. In the two following years, generation capacity of renewable power sources (not including hydroelectricity) grew from 20 to 32 gigawatts. Some 90 percent of that growth comes from solar cells, which have a very short lead time, and many more installations are wait-ing for grid connection. As the FiT for solar is high, and as the growth in variable generation sources may threaten the stability of supply, measures to slow down their deployment were demanded, especially by those who support nu-clear power.The government responded with a lower FiT for solar power and revised the power supply rules. In other words, it clarified that photovol-taic and wind power are subordinate to the base load, which is nuclear. It also set an upper limit on grid connections, and if that limit is exceed-ed, curtailment will be permitted without com-pensation. Before that, the rules said that if cur-tailment exceeded 30 days per year, the power company that controlled the grid had to com-pensate the renewable power provider. With this rule no longer in effect, power companies need not worry about stable power supply nor about paying compensation for curtailment. On the other hand, new companies coming into the re-newables business face a greater risk of power sales declining.

The Outlook for Japan’s Power Mix Target in 2030In January 2015, as mentioned above, the LDP government set up the Long-Term Energy Supply and Demand Outlook Subcommit-tee, which initiated discussions on numerical targets for each power source, based on the findings of the above commissions on nuclear

Second, even if the plants are restarted, it won’t be easy for nuclear power to deliver even 20 per-cent of the power supply. As nuclear plants must principally be decommissioned after 40 years as stipulated under the law, by the end of 2030, there will be no more than 18 active reactors putting out 19 gigawatts. Even if all of them op-erate at the capacity factor of 70 percent, they will produce some 116 terawatt-hours, about 11.6 percent of Japan’s total annual power con-sumption of 1,000 terawatt-hours. Even if overall power consumption could be reduced by 20 per-cent due to conservation efforts, power from nuclear plants would account for only 14.5 per-cent of the total. Further, the number of nuclear plants will probably fall to nine in 2040, with a combined output of 10 gigawatts due to addi-tional decommissioning. So unless new plants are built, the nuclear power industry will be-come unsustainable. A more realistic target for nuclear power would appear to be around 10 per-cent in 2030.

Public Opinion: the Unknown QuantityStill, the Abe administration will certainly main-tain that nuclear power should supply 20 per-cent of total power needs, and it will announce that decision in the summer of 2015. On the surface, the decision is billed as one necessitat-ed by climate change and the need to set a nu-merical target for reducing greenhouse gases. A more important factor, however, is the need to create a favorable environment for nuclear pow-er. This will require many different kinds of support systems, and ratepayers are certain to bear the cost of those systems. That said, retail will be completely deregulated in 2016, and it is anybody’s guess how the public will view these energy policies. Will putting nuclear energy first slow down the introduction of renewable energy and the development of smart cities?Considering the public’s mood, the strategy seems to be to move ahead with no sense of haste; at some point, the population will sud-denly be faced with a fait accompli. The energy policy of the Abe administration appears to be so realistic and well considered that the nuclear industry, which the government believes to be indispensable, may be revivable. But that will not happen in full view of the public, and it may turn out to be a short-term approach. Will the government be able to convince the citizens that the nuclear industry is absolutely necessary? Can the government, nuclear power, and the electric power companies regain public trust? That is what will ultimately determine what energy policies Japan needs in the middle to long term. p


p. 8 Cover Story – Energy Efficiencyrmi.org (Rocky Mountain Institute) siemens.com/sustainable-energy

p. 18 Transmission and Regulationpjm.compplelectric.comsiemens.com/energy/hvdc

p. 26 Energy and Developmenttnb.com.mysarawakenergy.com.my pln.co.id/eng (Perusahaan Listrik Negara, PLN)

p. 32 Offshore Wind Power Innovations dongenergy.delondonarray.comsiemens.com/windsiemens.com/energy/grid-access-solutions

p. 38 Service Operation Vessel – Offshore Service for Wind Poweresvagt.comampelmann.nlsiemens.com/energy/sov

p. 46 Energy Management siemens.com/energy-management

p. 50 Combined Heat and Power ifam.fraunhofer.deposco.comsiemens.com/record-breaking-power-plant

p. 56 Oil and Gasopec.orgoil-itf.comkcckw.com siemens.com/oil-and-gas

p. 68 Essay Japantepco.co.jp/enkyuden.co.jp/en enecho.meti.go.jp/en

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Living EnergyDirectory In Short

The growth of onshore wind energy generation continues across North America with new orders for wind turbines in the US states of Kansas, Texas, and Oklahoma as well as in the Canadian province of Ontario. NJR Clean Energy Ventures recently awarded Siemens a contract to supply 21 SWT-2.3-108 wind turbines, each with a power rating of 2.3 megawatts and a rotor diameter of 108 meters, for its 48-megawatt Alexander wind project in Kansas. In Texas, Pattern Energy Group LP awarded Siemens a contract to supply and install 87 SWT-2.3-108 turbines for the 200-megawatt Logan’s Gap wind project. Apex Clean Energy awarded Siemens an order for 130 SWT-2.3-108 tur-bines with a total capacity of 299 megawatts in Oklahoma.

Wind Power

Prevailing Wind for North America

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Links to other websites: Living Energy contains links to other websites. Siemens is not responsible for the privacy practices or the content of other websites.

In addition, Grand Bend Wind Limited Partnership award-ed Siemens a contract to supply, install, and commission 40 SWT-3.2-113 direct-drive turbines in Ontario.This year, Siemens also introduced its first turbine specifically designed to meet the needs of customers in the Americas, where low and medium wind speeds prevail. The SWT-2.3-120 will be built in the USA, with serial production beginning in 2017. “With the SWT-2.3-120, we have been able to achieve an industry-leading capacity factor of over 60 percent for a nearly 10 percent improvement in AEP (annual energy produc-tion) under design conditions,” says Markus Tacke, CEO of the Siemens Wind Power and Renewables Division. “ The SWT-2.3-120 offers excellent returns on investment for years to come.”

The Kay Wind project in Oklahoma is proof that onshore wind energy is going from strength to strength in North America.


In Short

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The new clean air compact AC switchgear for wind turbine installation.

Offshore

Clean Air Compact AC SwitchgearThe new generation of offshore wind power plants – operating to answer the ever-growing energy demand – increasingly use high voltage within the wind turbine network to decrease the current and therefore the cable losses. This is where com-pact, environmentally friendly high-voltage switchgear can make a prime contribution.By using vacuum interrupters and Siemens’ clean air technology, the insulation for the new 66-kilovolt gas-insulated switchgear (GIS) is fluorinated greenhouse gas-free. The clean air is compressed up to the operation pressure into the single switch-gear gas compartment, consisting of a vacuum circuit breaker, disconnectors and earthing switches. Based on decades of proven component technology, the com-pact and maintenance-free GIS solution is designed for offshore wind turbine instal-lations and thus contributes to fully environmentally compatible wind power.

Bjæverskov substation was the latest to be fitted with a synchronous condenser solution.

Every year, Dubai’s population grows by about 100,000 people, a pace that saw the emirate’s population double over the past decade to more than 2.2 million. Tourist visits are also seeing a steady increase – up 8 percent in 2014 to more than 13 million a year – with 20 million as the target by 2020. In addition, Dubai is expected to host 25 million visitors for World Expo 2020, and planners are busy preparing the appropriate infrastructure.Ensuring sufficient and reliable access to electricity is therefore crucial to Dubai’s plans to further solidify its position as an international business and leisure hub. The government-owned utility Dubai Electricity and Water Authority (DEWA) is responsible for building sustainable systems for the production, transmission, and distribution of electricity and water in the region.To help Dubai power its next wave of growth, DEWA has selected Siemens to build a new high-efficiency 700-megawatt combined cycle power plant at the Jebel Ali Station complex. Once operational in the second quarter of 2018, the Siemens addition will give the Jebel Ali Station complex a total capacity of 2,760 megawatts. The Siemens turnkey solution includes two F-class gas turbines, two heat recovery steam generators supplied by NEM, three Siemens generators, a Siemens back-pressure steam turbine, and a Siemens instrumentation and control system. DEWA says the Siemens expansion will significantly increase the plant’s thermal efficiency.

Turnkey Power

A 700-MW Power Boost for a Growing Dubai

Dubai’s population is growing steadily, consuming an ever-increasing amount of electricity.

R&D

New Clean Energy Test Center

Siemens recently commissioned a new Clean Energy Center that is a €100 million investment toward the development of more efficient and flexible gas turbines.The test center, which sits on a 36,000-square-meter site in Ludwigsfelde near Berlin, allows Siemens to analyze and optimize combustion processes in gas turbines under real-world conditions. The goal is to boost the efficiency of gas turbines even further while assessing the feasibility of their use with new gaseous and liquid fuels. “Our highly efficient gas turbine and combined cycle power plants are marked by their high degree of availability and flexibility and their low emissions,” says Christopher Steinwachs, Head of the business segment Large Gas Turbines within the Siemens Power and Gas Division. “In our new Berlin test center we can conduct more intensive research into burner technology independently of external test facilities, which enables us to be even more innovative.”

At this Siemens-owned facility in Germany, the company will be studying the combustion processes in gas turbines.

Denmark is a champion of wind energy. In 2014, wind turbines generated as much as 39.1 percent of its electricity, with renewables accounting for more than 52 percent of the energy consumption. And the Danish govern-ment is aiming even higher: By 2020, half of its power is to be generated from wind energy. However, increasing the share of renewables poses a challenge to grid stability.This is why Energinet.dk, which owns the Dan-ish electricity and gas transmission system, placed three orders with Siemens for turnkey delivery of synchronous condenser solutions for the Bjæverskov, Fraugde, and Herslev substations. They were handed over to the customer earlier this year, the last one in Bjæverskov in May 2015. Each synchronous condenser solution can deliver more than 900 megavolt-amperes of short-circuit power and +215 /–150 megavolt-amperes of reactive power. “These are important projects for Energinet.dk – in order to stabilize the trans-mission network in Denmark, and to support higher wind power generation in our country,” states Jakob Søbye, Head of substations at Energinet.dk. Synchronous condenser solutions have recently been reintroduced worldwide to support transmission systems with short-circuit power, reactive power, and inertia.

Power Transmission

Synchronous Con-denser Solutions for Denmark

Software

Upgraded Control System Optimizes Human- Machine Interface

Power plant operators have an upgraded tool to help maximize efficiency and availability with the launch of the newly released SPPA-T3000 R7.2 control system. The upgraded control system will be part of all of Siemens’ new power generation solutions and can be integrat-ed with existing systems. It has an en-hanced ergonomic design with a clearly arranged display of all vital functions. During a shift changeover, operators receive an up-to-date overview of the condition of the plant, alarm messages, as well as the shift schedule and the available resources. The “Diagnostic Recommended” function reports the smallest unexpected changes in condi-tions, and a single mouse click allows operators to perform a rapid root-cause analysis to maximize availability.

The control system’s interface features a com-prehensive overview of all vital functions.

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In ShortIn Short


Combined Cycle Power Plant

Record Efficiency in Record TimeA growing economy has pushed energy demand higher in and around Samsun, Turkey, a busy port on the Black Sea, and the completion of the nation’s most efficient fossil-fired power plant will help meet that demand for years to come.In March 2015, independent power production company Cengiz Enerji completed its installation of a Siemens SGT5-8000H gas turbine – the world’s most powerful gas turbine, with a gross power output of 400 megawatts – as well as an SST5-5000 steam turbine for an installed capacity of 600 megawatts. The combined cycle power plant reaches an efficiency level of 61 percent, a new record for the 50-hertz market, and was completed two months ahead of schedule in a record con-struction time of just 23 months.The SGT5-8000H gas turbine in Samsun is one of 16 H-class gas turbines currently in commercial operation worldwide, the fleet has achieved more than 170,000 cumulative

Cengiz Enerji’s Samsun power plant was completed two months ahead of schedule.

Reactive Power

Rewarding Wind Turbines at No WindWind turbines tend to cost money rather than generate revenue if there is no wind: When the rotor blades stand still, a wind turbine consumes active and reactive power from the grid to keep its electrical components on standby. Further revenue losses, however, may occur in contrasting conditions: If there is too much wind, grid operators will restrict wind turbines’ generating capacity in an effort to feed less wind power into the grid. A strategy to optimize wind farm operation is to keep the blades turning, even if the grid gave the zero-percent signal, to produce enough power to supply the wind turbine’s electrical components. In addition, a new feature in Siemens’ SCADA (supervisory control and data acquisition) system, called “Reactive Power at No Wind,” uses a full-load frequency converter as a phase shifter and makes it possible to supply reactive power to the grid under circumstances of no wind or curbed generation. A growing number of countries currently allow wind farm owners to earn money by supplying reactive power exceeding the minimum requirements: Australia, Canada, Chile, Germany, India, Ireland, Japan, the Nether-lands, New Zealand, Spain, the UK, and some states in the USA. “Reactive Power at No Wind” not only opens up new sources of revenue, the supply of reactive power also contrib-utes to stabilizing the grid. Moreover, by avoiding complete standstill, a turbine can run much more evenly, thus minimizing the wear on both mechan-ical and power generating technology. Besides the welcome effect on operating costs, maintenance costs are also lowered, and the life span of a turbines extended by using this new technology.

Optimized wind farm operation saves costs and even generates revenue in conditions that require curbed generation.

The year 2015 marks the occasion when two of Europe’s major countries and players on the European energy market, France and Spain, will be connected by a new high-voltage direct-current link (HVDC transmission). This power link will double the capacity for energy exchange between two major energy producers and consumers, while marking a major step toward a functional European energy market.The power link connects neighborhoods in the French town of Perpignan with those of the Spanish town of Figueres, 65 kilometers away. Siemens constructed the power converter stations for the HVDC link, with the capacity to transmit 2,000 megawatts in both directions. The direction can be reversed instantly (or, to be more exact, in about one-sixth of a second). In both converter stations, alternating current is converted into direct current and vice versa. The power converters operate independently of the grid voltage. This provides for a high level of stability in the transmission system and, consequently, a high level of reliability for power customers.What purpose do these conversions serve? In short: energy efficiency through the increase of capacity of transmission between France and Spain. Over long distances, direct-current transmission means lower loss of energy in distribution. With Siemens’ new converter technology, capacity has been increased to 1,000 megawatts, and restarts after power outages can be speeded up considerably.The new power line was built by Inelfe, a joint venture between the French and the Spanish energy companies RTE and REE.

Market Integration

Toward a European Energy Market

Decentralized Power Generation

Clearer Skies Ahead for Malta

The island nation of Malta in the sunny Mediterranean has long relied on imported heavy fuel oil for its power generation, but the construction of a 200-megawatt power plant fed by liquefied natural gas promises to usher in clearer skies while meeting half of the nation’s energy needs. Electrogas Malta recently awarded Siemens a contract for the turnkey construction of a combined cycle power plant that is based on three SGT-800 gas turbines, three heat recovery steam generators and one SST-900 steam turbine. “The project is highly driven by the need for reliable, low-cost generation and cleaner air,” says Michael Kunz, Project Coordinator at Electrogas Malta. “ Siemens’ high-performance equipment, which operates with high effi-ciency and low emissions, even in part-load operation, has proven to be the solution that best fits our needs. When the new plant is in operation, the levels of air pollutants and the rate of fuel consumption for overall power production in Malta will be reduced considerably.”

The new power plant will be located at the existing Delimara power station near the city of Marsaxlokk in southeastern Malta.

The SGT-800 gas turbine com-bines a robust, reliable design with high effi-ciency and low emissions.

With Siemens’ new converter technology, capacity has been increased to 1,000 megawatts.

The HVDC link between France and Spain marks a major step toward a functional European energy market.

operating hours and 72 of the H-class gas turbines have al-ready been sold worldwide. The Samsun power plant is de-signed for 200 starts per year and can power up to full load in less than 30 minutes after a downtime of eight hours. “We are pleased that Cengiz Enerji’s Samsun plant was able to take up commercial operation two months ahead of schedule, thanks to our cooperation with Siemens,” says Ömer Mafa, CEO of Cengiz. “The excellent cooperation between our two companies in the implementation phase was instrumental in achieving this. This new plant is the perfect complement to our power plant fleet.”

Trade Shows and Conferences

siemens.com/energy/tradeshows

POWER-GEN Africa,

15–17, Cape Town, South Africa

2015

July

POWER-GEN Asia 01–03, Bangkok, Thailand

10th German Energy Conference 08–09, Munich, Germany

Offshore Europe 08–11, Aberdeen, Scotland, UK

VGB Congress Power Plants 09–10, Vienna, Austria

44th Turbomachinery & 31st Pump Symposium 14–17, Houston, Texas, USA

Husum Wind 2015 15–18, Husum, Germany

2015

Sep

Handelsblatt Annual Conference “Renewable Energies 2015” 25–27, Berlin, Germany

Aug2015

POWER-GEN Middle East 04–06, Abu Dhabi,

United Arab Emirates

CanWEA 05–07, Toronto, Canada

Renewable UK 2015 06–08, Liverpool, UK

SPE Kuwait Oil & Gas Show and Conference 11–14, Kuwait, Kuwait

Rugrid Electro 2015 19–22, Moscow, Russia

OTC Brasil 2015 27–29, Rio de Janeiro, Brazil

Oct 2015

European Utility Week 03–05, Vienna, Austria

ADIPEC 2015 09–12, Abu Dhabi,

United Arab Emirates

Sulphur 2015 09–12, Toronto, Canada

EWEA 2015 17–20, Paris, France

Nov2015

POWER-GEN International 08–10, Las Vegas, USADec

2015

Spotlight

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Remote Diagnostics Cut Cost of Wind Energy

The trend of locating wind farms in extreme environments like deserts or offshore highlights the role of diagnostics in reducing the operations and maintenance costs of wind power. At the Siemens Remote Diagnostic Center for wind turbines in Brande, Denmark, diagnostic experts monitor the global fleet of 9,300 installed turbines (both on- and offshore) around the clock, watching for signals of erratic turbine behavior.One of multiple proactive aspects is vibration diagnostics, in which each turbine’s unique “vibration fingerprint” is compared with its actual vibration patterns to detect irregularities that can indicate the potential for fast- or slow-developing damage. More than 34,000 data analyses are currently performed each year that can predict more than 98 percent of all gear-tooth cracks as well as damage to the gearbox, generator, or the main bearings.“In 85 percent of cases where the turbine has stopped by itself, we can restart it remotely and get it temporarily up and running again,” says Merete Hoe, the head of the Remote Diagnostic Center. “At the same time, we give diagnostic advice on how to fix the problem permanently the next time they do go out to the turbine,” she adds. “As a result, customers achieve lower operation and maintenance costs, longer productive periods, and a greater ability to plan service.”

Merete Hoe is the Head of the Siemens Remote Diagnostic Center in Brande, Denmark. As such, she is responsible for more than 150 diagnostics specialists globally. Siemens Service Renewables has been offering vibration diagnostics and other monitoring services since 1998.

Remote detection of irregularities at the Siemens center can save costs and enhance productivity.

E50001-G100-M199-X-4A00

Findus at

siemens.com/living-energy

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