P&E EU 1

www.ngpowereu.com • Q4 2009

GETTING INTO DEEP WATERGoing offshore pays dividendsfor E.ON’s Michael LewisPAGE 36

BROKEN PROMISESAre the EU’s renewable plansall talk and no action?PAGE 88

GREEN INTELLIGENCEHow ESB is building asmart grid in Ireland PAGE 56

LONG RANGE FORECASTChristian Egal looks at thefuture of wind energy PAGE 100

SHOWDOWNHOW CLOSE ARE WE TO LOSING THE RENEWABLE

ENERGY BATTLE? PAGE 32

SUSTAINABILITY

COVER NG P&E EU1 final:nov09 26/11/09 15:52 Page 1

SEIMENS (DPS) AD:25 June 19/11/09 14:23 Page 1

SEIMENS (DPS) AD:25 June 19/11/09 14:25 Page 2

SENSUS (DPS) AD:25 June 19/11/09 14:26 Page 1

SENSUS (DPS) AD:25 June 19/11/09 14:27 Page 2

SAMI (DPS) AD:25 June 19/11/09 14:19 Page 1

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GES AD:25 June 19/11/09 14:09 Page 18

With the amount of recentmedia coverage surround-ing climate change, you’dbe forgiven for thinkingthat the developed world

is on the cusp of an environmental revolution. Atfirst glance, this appears to be true: the memberstates of the European Union, for example, withtheir long history of concern about energy sus-tainability, have committed to generating 12 per-cent of their electricity from renewable sources by2010 and 20 percent by 2020.

The US, once known mainly for its refusal toratify the Kyoto protocol, has undergone a tree-hugging renaissance since the ObamaAdministration came to power, and is now look-ing to achieve similar goals of 10 percent by 2012and 25 percent by 2025.

But what’s the real story behind these num-bers? The dawn of the year 2010 is nearly upon us,and the EU looks likely to fall short of its 12 percenttarget. The European Commission’s ‘Renewable

plans to expand into more environmentallyfriendly generating sources and cut back on tradi-tional, carbon-producing fuels.

However, the facts show that no matter howambitious the goals, or how media-friendly the in-ternational conferences, it’s not easy to change thebehaviour of individuals and organisations acrossan entire nation, let alone a union of countrieswho are often hard-pressed to agree even on lesscrucial matters.

What’s to be done? There are two choices –giving up, sitting back, and literally watching whilethe world burns. Or pressing ahead, despite the set-backs and challenges. If we truly value the future ofour planet, there’s only one option we can take.

Marie Shields Editor

Energy Progress Report’ concluded earlier this yearthat this was likely to happen, “despite the legisla-tion, recommendations, exhortations and evenlegal proceedings against some member states.”

This conclusion appears to be borne out byfigures from Europe’s Energy Portal, which indi-cate that only 9.2 percent of Europe’s final energyconsumption came from renewable sources in2006, the last year for which confirmed data areavailable.

The US appears to be doing better, despite itsslower start. According to the Energy InformationAdministration, renewable energy accounted foraround 11.1 percent of energy produced in theUnited States in the first half of 2009. Of this fig-ure, 7.4 percent came from conventional hydro-electric power, with only 4.7 percent coming from‘new’ sources such as biomass, geothermal, solarand wind.

Utility companies on both sides of theAtlantic have been enthusiastic in joining the re-newables race, with many announcing their own

“Renewables haven’t had thekind of sustained, predictablesubsidies here in the US thatEurope has had” David Levy,Director, Center for SustainableEnterprise and RegionalCompetitiveness, University ofMassachusetts (Page 32)

“We have the possibility tofundamentally change howelectricity is generated,transported and consumed”Peter O’Shea, Chief InformationOfficer, ESB (Page 56)

“To obtain 20 percent of primaryenergy from renewables by 2020requires a large investment inoffshore technology” MichaelLewis, MD of Europe for Climateand Renewables, E.ON (Page 36)

EDITOR’S NOTE7

Ramping up renewablesHow well are we doing in our quest to generatemore power from sustainable sources?

ED NOTE_nov09 26/11/2009 15:45 Page 7

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BENTLEY AD 2:25 June 19/11/09 14:00 Page 18

78

88

32

36

Leading lightChristine Lins heads up therenewables effort in Europe

CONTENTS11

Setting the standardInge Pierre looks at the importanceof a universal standards-basedmarket for smart grid

Moving offshoreWhy getting into deep water couldbe a good thing for E.ON

Coping with climate chaosEurope and the US struggle to meet their renewable energy targets

CONTENTS_nov09 26/11/2009 15:40 Page 11

OPENTEXT AD 1:25 June 19/11/09 14:13 Page 18

SMART GRID42 A little knowledge is awonderful thingGoogle gives consumers access to their energyusage information

48 The rise of smart metersHow to better manage a rollout programmeaccording to Frank Borchardt

56 Getting smart on the Emerald IslePeter O’Shea on building an intelligent grid inIreland

68 United we standCorne Meeuwis explains the need for a singleEuropean energy market

74 Plugging in to the futureJoao Torres looks at Portugal’s approach tothe smart grid

RENEWABLES82 In the mixRW Energy’s Kevin McCullough outlines thebenefits of a mixed energy portfolio

100 Fair weather ahead Christian Egal of EDF Energy Renewablesanalyses the forecast for wind energy

106 Wind power potentialWeighing up the 2020 renewable target, byChristian Kjaer

52

74

Plugging in to the future

72

Richard Zambuni, Bentley Systems

CONTENTS13

EXECUTIVE INTERVIEW

52 Ralf Christian, Siemens EnergySector59 Bill Yeates, Sensus86 Sunil Tahilramani, MSCSoftware104 Eric Thormann, Power ClimberInternational110 Claus Myllerup, Lloyd’sRegister ODS121 Brad Peterson, SAMI

ASK THE EXPERT

46 Bastian Fischer, Oracle54 Ramon van der Wal, ZestUtilities60 Martin Malos, Sitronics72 Richard Zambuni, BentleySystems122 Adrian Butcher, Open TextCorporation

Gearing up


EWT AD:25 June 19/11/09 14:05 Page 18

106

46

Wind power potential

Bastian Fischer, OracleUnited we stand68

Beijing

112 Helping companies increasetheir energy efficiencyBritish Gas Business’ Kanat Emiroglu outlinesthe changing energy buying habits of hiscorporate customers

118 Energising the futureThe outlook for power plant constructionaround the world

124 Regional focus126 Events128 Photo finish

IN THE BACK

CONTENTS15

INDUSTRY INSIGHT

116 Hans-Joachim Bender, RobertBürkle GmbH

G O L D S P O N S O R

ROUNDTABLE

63 Smart metering With Mark Ossel of Echelon, SimoMakkonen of Process Vision Oy andTailorMade’s Jens Björkman

95 Wind safety With EWT’s Eric Bakker, RicardoMoro of Global Energy Services,Trevor Howes of Orga Aviation BVand Electricon’s Kim Bertelsen


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CREDITS.indd 16CREDITS.indd 16 26/11/09 14:54:5726/11/09 14:54:57

VESTA AD:25 June 24/11/09 11:42 Page 1

UPFRONT18 THE BRIEF

Last January’s

gas dispute disrupted supply

for two weeks

With winter fast approaching, the possibility of a prolonged

cold snap caused by energy short-ages in Europe seems to have been narrowly averted, thanks to a last-minute agreement between Russia and Ukraine.

Last January’s dispute between the two countries over gas exports to Europe disrupted supply for two weeks and left much of the EU without energy during the coldest part of the year. Th e gas began fl ow-ing again once the two sides fi nally came to an uneasy agreement, but Ukraine’s continuing struggles to pay its monthly bills to Russia have been a constant source of concern ever since.

In late November, Russia and Ukraine appeared to have averted a repeat performance of last winter’s gas war aft er a night of talks in the

Crimean resort city of Yalta. Th e agreement was sealed with smiles and handshakes between Prime Ministers Vladimir Putin and Yulia Tymoshenko.

As part of the agreement, Russia made several unexpected concessions to Ukraine, agreeing to increase transit fees paid by Rus-sia’s state gas monopoly Gazprom by an estimated 60 percent, and to lift the tough penalties it could have imposed on Ukraine for not fulfi ll-ing its 2009 purchasing promises. Ukrainian purchases of Russian gas will also be pegged to market rates for the fi rst time.

Ukraine and Russia have had regular disagreements over gas supplies for the past four winters. Russian gas travels west to Europe through Ukraine, so any disruption in supply leaves European coun-tries without essential power, oft en during the coldest winter months.

Th e problem has recently been aggravated by fi erce political dif-ferences between Russia and the former Soviet state of Ukraine, particularly surrounding President Viktor Yushchenko’s insistence on bringing Ukraine into the NATO military alliance.

Th e new agree-ment could signal a victory for Ty-moshenko in her battle with Yush-chenko ahead of January’s Ukrainian presidential elections. Th e two are former allies and led Ukraine’s 2004-05 Orange Revolution that unseated a pro-Moscow leader, but they are now said to despise one another.

Some observers predict that Putin will put Russia’s considerable weight behind Tymoshenko in her battle to succeed Yushchenko in

the upcoming presidential polls. Following the gas accord, Putin insisted he was not trying to infl u-ence Ukraine’s elections, but did off er this praise for Tymoshenko: “She’s a tough negotiator, but we’ve

always been able to agree. Despite the diffi culties,

we have managed to keep all of our com-mitments.”

Before the accord was reached,

Europe had been steeling itself for a

new disruption, with member countries stocking

up on gas reserves to avoid seasonal shortages. It had also agreed upon a formal ‘early warning system’ with Russia that recognises disruption in energy supplies as a permanent threat to Europe’s energy security.

Vladimir Chizhov, Russia’s Ambassador to the EU, said that

AVOIDING A NEW COLD WAR

P&E upfront.indd 18P&E upfront.indd 18 26/11/09 15:41:2726/11/09 15:41:27

UPFRONT19THE BRIEF

Anti-atomic energy activists take part in a rally in front of the Brandenburg Gate in Berlin, Germany.

A student cleans solar panels to maximise energy effi ciency during the US Department of Energy Solar Decathlon in Washington, DC.

A maze of electrial wires above a street in Shanghai. China recently overtook the US as the world’s biggest emitter of CO2.

Swiss Environment Minister Moritz Leuenberger and Turkish Energy Minister Taner Yildiz on their way to the opening ceremony of the International Trade Fair for Renewable Energies in Istanbul, Turkey.

NEWS IN PICTURESthe warning system is “a network of commitments that, of course, includes prompt information of any disruptions to our energy links – be it through technical failures, natural disasters, somebody turn-ing off the supply or diverting the energy fl ow.”

Th e implementation of an early warning system to head off potential disruptions in gas, coal, electricity and oil supplies is an overdue response to last January’s Russia-Ukraine gas war, and recog-nition of the fact that while prices are no longer an issue between Gazprom and Naft ogaz, Ukraine’s dominant role in transiting Rus-sian gas to Europe – along with its economic crisis and internal politi-cal squabbling – makes that coun-try a continuing threat to Europe’s long-term energy security.

Despite the assurances from Putin and Tymoshenko, a rupture in the fragile peace between the two countries remains a distinct possibility, with Ukrainian politics likely to provide the spark in any new energy confl ict.

Naft ogaz’s ability to pay its monthly gas bills in the coming winter months is an open ques-tion, but as Ukraine’s central bank has signifi cant foreign reserves from which the government can conceivably draw upon to help the state-run fi rm pay its bill, the real question is willingness to pay rather than ability.

Ukraine’s political circus is likely to run through heating season, perhaps until March, the earliest that a new president could be inaugurated aft er a probable second round of voting in Febru-ary; and given this likely scenario, Russian-Ukrainian gas sector relations – and, in turn, Europe’s energy security – are likely to be held hostage to this political the-atre until at least then.


UPFRONT20 PROFILE

PROFILE

STEVEN CHU

Nobel Prize winner and experi-mental physicist Steven Chu was named the US Secretary of Energy on January 20, 2009. Known for his research in cooling and trapping atoms with laser light, Chu’s out-standing contribution to science won him the Nobel Prize in Physics in 1997 and hailed his importance on energy matters.

Chu’s current research projects are primarily concerned with the

study of biological systems at the single molecule level, and are based at the Lawrence Berkeley National Laboratory, a Department of En-ergy-funded basic science research institution. As one of six directors, Chu has focused the laboratory’s work on issues of climate change, calling for breakthrough research in energy effi ciency, solar energy and biofuels technology.

It has been his work as a vocal

advocate for greater research into renewable and nuclear energy that has brought him attention from the political fi eld. A member of the Copenhagen Climate Council, Chu has advocated an aggressive set of policies to be endorsed by President Obama for the develop-ment of clean energy sources.

Highlighting the risks of global warming, Chu said: “It is now clear that if we continue on our current path, we run the risk of dramatic disruptive changes to our climate system in the lifetimes of our children and grandchildren.”

Th e development of nuclear power and coal is central to Chu’s research on clean energy sources. He believes that through the cap-ture of carbon dioxide emissions, coal can be refi ned to become a greener source of energy. Th e progression of nuclear energy to become a primary source of power is also high on Chu’s agenda. With the US containing only an esti-mated three percent of the world’s known oil and gas reserves, Chu advocates a nuclear programme, including a department loan programme for new reactors and developing a long-range plan for dealing with nuclear waste.

China is a great concern to the new Administration, and Chu, a Chinese-American, believes the US must take responsibility for providing China with the tech-nology to reduce its energy usage, particularly in its construction work. Th e selection of Chu into the Obama Administration is certainly a smart move. As a sci-entist – rather than a politician, oil tycoon or corporate execu-tive – he can act as an unbiased advisor. His experience thus far leading to his appointment can only position him as an educated selection to the US Cabinet.


UPFRONT21

BULGARIA TO EXPAND WIND POWER CAPACITY

CLEANTECH COUNTRIESRECYCLED FUEL

Denmark

Germany

Sweden

Israel

US

UAE

Canada

China

Switzerland

UK

12345678910

Th e cleantech wave is expected to continue to grow, with some analysts estimating the market to crack US$2 trillion by 2030. Shawn Lesser of Sustainable World Capital examined government mandates, green-collar jobs and entrepreneurial innovation as well as cultural and social drivers, to compile a list of the top 10 cleantech coun-tries from around the world. European countries occupy the top four spots and a total of fi ve positions on the list.

Th e Bulgarian government has outlined plans to expand its wind power output enough to satisfy 13.5 percent of its energy demand by 2020. A directive from the Eu-ropean Union on renewable energy requires member states to expand output from re-newable energy. Wind power for Bulgaria could expand from 330 MW of current capacity to 3000 MW by 2020.

“With installed capacity increasing more

than fi ve-fold in less than two years, Bulgaria is one of the fastest growing markets for wind energy in the world,” said Christian Kjaer, Chief Executive of the European Wind Energy Association.

Th e association said more than 30 percent of new power generation facilities built in the EU in 2008 were wind power farms. Th ere were 20 wind turbines installed in the region every working day last year on average.

Researchers at Sandia National Laboratories have demonstrated a prototype machine that uses energy from the sun to convert water and carbon dioxide into the molecular building blocks that make up transportation fuels. Th eir ‘Sunshine to Petrol’ system could ultimately prove a practical way to recycle CO2 drawn from industrial and power plants into gasoline, diesel and jet fuel, if the process can become at least twice as effi cient as natural photosynthesis.

Th e system had only been validated in a laboratory in small batches until recently, but this autumn the researchers successfully tested a hand-built demonstration machine. Rich Diver, inventor of the device, and a Sandia researcher, said, “Th is is a fi rst-of-its-kind pro-totype we’re evaluating.”

Th e cylindrical metal machine, called the Counter-Rotating-Ring Receiver Reactor Re-cuperator (CR5), relies on concentrated solar heat to trigger a thermo-chemical reaction in an iron-rich composite material.

Source: cleantech.com


UPFRONT22 INTERNATIONAL NEWS

Maldive government offi cials literally took a dive in October to raise awareness about cli-mate change. President Mohammed Nasheed and members of the cabinet staged a meeting six metres under a lagoon to highlight the threat of global warming to the lowest-lying country in the world.

Th e meeting aimed to draw attention to fears that rising sea levels caused by polar ice cap melt could swamp this Indian Ocean archi-pelago within the next 100 years. Th e islands are currently only an average of 2.1 metres above sea level.

Nasheed had already announced plans for a fund to buy a new homeland for his people if the 1192 low-lying coral islands are submerged. He has promised to make the Maldives, with a population of 350,000, the world’s fi rst carbon-neutral nation within a decade.

NEW SOLAR RESOURCES

To help utilities rise to the challenge of adopting solar power at a large scale, the Solar Electric Power Association (SEPA) unveiled a new web portal and database last week at Solar Power International. SEPA says that its new site lets utilities explore options, fi nd resources and think strategically about how their utility peers across the country are moving forward.

Th e site aims to help utilities make business decisions about solar power by providing ‘intel-ligent navigation’ of industry reports, events, online tools and market data that can be fi ltered by technology, application and employee type, SEPA said. Highlights include the Solar Tool-kit, a one-stop window into the site’s technical content.

Th e site also off ers data and maps on the largest solar projects, as well as streaming online webinars from past SEPA events.

BIOFUEL HARMING WATER

A new study by researchers at Rice Univer-sity in Houston, Texas has found that expanded production of crops to produce biofuels could damage water resources. Th e research suggests that policy makers should take into account what they call the ‘water footprint’ when encouraging biofuel development.

Th e study, called Th e Water Footprint of Biofuels: A Drink or Drive Issue?, suggests that by using too much water to produce fuel, we might end up with not enough water to drink or to grow food.

According to the lead author of the study, Pedro Alvarez, Rice University Professor of Civil and Environmental Engineering, the water footprint consists of two elements: “Water short-ages caused by a signifi cant increase in fuel crop irrigation, and increased water pollution from related agro-chemical drainage and increased erosion and so on.”

HITTING THE FLOOR


UPFRONT23INTERNATIONAL NEWS

SOLAR FOCUS

Th e Japanese government has launched a new programme to encourage the purchase of surplus solar electricity. Power companies will now be purchasing the surplus electricity produced by solar power generations in homes, schools and hospitals at a much higher rate.

Starting in April, the utility companies will collect a monthly sub-charge from every household and organisation to cover the rise in costs. However, critics were doubtful about this move and believe it will only weaken customer sentiment.

Th is is the latest in Japan’s attempts to make photovoltaic generation, which produces less carbon emissions than fossil fuels and demon-strates their eff orts to commit to fi ghting global warming.

COAL GASIFICATION

In a bid to develop its clean coal technolo-gies, India is undertaking a collaborative eff ort with Coal India Ltd (CIL) receiving support from its peers. CIL and GAIL (India) Ltd are working together to develop a surface coal gas-ifi cation project at Talcher coalfi eld in Orissa for production of ammonium nitrate and urea.

GAIL had organised a study by Udhe India examining the potential of the project. It was estimated that the project would consume 5000 tons of coal a day to produce 7.76 mscmd of synthesis gas (equivalent to 3000 tons a day of ammonia) to produce 3500 tons of urea a day.

CIL is also working with ONGC for under-ground coal gasifi cation projects. Th e two are working on the development, operation and R&D activities. Th e pilot site at Vastan, Guja-rat, has been obtained and its design has been fi rmed up, and the project is expected to com-mence production next year.

TOKYO MOTOR SHOW

Th e 41st showcasing of innovative concepts and new production cars from the world’s major auto manufacturers took place between Octo-ber 21-November 4. Th e eff ects of the recession were noticeable, with only Lotus, Caterham and Alpina making the journey from Europe. Most notable was the innovative yet cautious approach to plug-in hybrid vehicles (PHUVs).

Toyota displayed its plug-in Prius hybrid, run on lithium-ion battery technology and emitting just 42g/km of CO2 or less. However, remaining cautious of public opinion, the vehicle is due to go on a limited trial next year.

Renault, also exhibiting at the show, has stated that 20 percent of its entire production will be battery electric vehicles by 2012.


UPFRONT24

Capgemini’s European Energy Markets Ob-servatory (EEMO) report states that utilities need to invest more to meet renewable energy goals. Th e economic downturn could prove a turning point for utilities, says the 11th edition of the report, as the sector has been put under pressure from a 3.5 percent drop in electric-ity consumption and a three percent decline in gas demand. To recover their footing, rec-ommends the report, utilities need to put in place a number of measures to restore investor confi dence in the short-term. In the mid-term, utilities must adapt to new EU legislation on climate and energy, and need to strive for more CO2-free generation through renewable energy and nuclear, as well as act on demand-side man-agement by implementing new technology such as smart metering and smart grids.

Deployment of smart meters in the tertiary and residential sectors will help curb power consumption, reduce peak electricity demand and improve grid management, as well as client relationships, it explains. Utilities need to es-tablish their vision and plan for implementing smart grids, which will enable the distribution grid to manage both centralised and decentra-lised generation, as well as intermittent renew-able energy.

Investments in renewable energy have been hit by the economic crisis, with investment dropping to €790 Million in the second half of 2008, a 14 percent decline from the same period in 2007. Th e report also warns that the shift in renewable energy invest-ment could make it a challenge for Europe to meet its goal of sourcing 20 per-cent of its energy from renewable energy by 2020.

Source: Renewable Energy Focus

MORE INVESTMENT NEEDED

Th e world’s largest hydro-electric wave energy device at Orkney in Scotland, UK, was switched on to the national grid on 20th November 2009. First Minister Alex Salmond said the Oyster machine marked a ‘key milestone’ in renewable energy – and announced almost UK£1 million to fund a second generation of the technology.

WAVE ENERGY DEVICE SWITCHED ON

EU ENERGY MIX 2008

Coal: 29%

Gas: 22%

Large hydro: 16%

Nuclear: 16%

Wind: 8%

Fuel oil: 7%

PV: 1%

Other: 1%

Biomass: 0%

Source: EWEA


UPFRONT25

In 2008, more wind power was installed in the EU than any other electricity generating technology. Statistics released by the Euro-pean Wind Energy Association (EWEA) show that 43 percent of all new electricity generating capacity built in the European Union last year was wind energy, exceeding all other technologies, including gas, coal and nuclear power.

A total of 19,651 MW of new power capacity was constructed in the EU last year. Out of this, 8484 MW (43 percent) was wind power; 6932 MW (35 percent) gas; 2495 MW (13 percent) oil; 762 (four per-cent) MW coal; and 473 (two percent) MW hydropower capacity.

For the fi rst time, wind energy is the leading technology in Europe. A total of 64,949 MW of installed wind energy capacity was operating in the EU by the end of 2008, 15 percent higher than in 2007.

WIND LEADS EU POWER SECTOR

Photovoltaic (PV) power is emerging as a major power source due to its numerous environmental and economic benefi ts and proven reliability.

10 REASONS TO SWITCH TO SOLAR

1. Fuel is free: Th e sun is the only resource needed to power solar panels

2. It produces no noise, harmful emissions or polluting gasses: Solar power creates no harmful by-products and actively con-tributes to reducing global warming

3. Systems are safe and highly reliable: Providing over 80 per-cent of the initial power aft er 25 years, photovoltaic power is very reliable in the long-term

4. Energy pay-back of a module is constantly decreasing: Th e time required to produce as much energy as it needs to be manufactured varies between one and a half and three years

5. PV modules can be recycled: Th erefore helping to reduce the energy needed to produce materials in the fi rst place

6. Low maintenance: Solar modules are almost maintenance-free and off er an easy installation

7. It brings electricity to remote rural areas: Th ere are many ap-plications for off -grid systems, especially in developing coun-tries where electricity is not available

8. It can be aesthetically integrated in buildings: Systems can cover roofs and facades to reduce the energy buildings consume

9. It creates thousands of jobs: Th e sector, with average annual growth of 40 percent during the past few years, contributes to the creation of thousands of jobs in Europe

10. It improves security: PV has the potential to play an impor-tant role in improving the security of Europe’s energy supply

FAST FACT

In 2008, wind power delivered production equivalent to

4.2% of the EU’s electricity demand.

Source: epia.org


UPFRONT26 IN MY VIEW

Europe faces unprecedented challenges in energy security, sustainability and competitiveness. Th ese are global problems, which we cannot resolve ourselves. Th is will only happen in the international framework: in international commitments, such as we would like to see reached at Copenhagen on climate change; in bilateral relations, as with Russia; in regional arrangements, as in the Energy Community; and in international agreements, such as the International Partnership for Energy Effi ciency Cooperation.

It is also clear that it does not make sense for individual coun-tries to attempt to resolve these challenges on their own. Th at is why, in March 2007, European heads of state and government agreed unanimously that the EU should, for the fi rst time, come together to follow a comprehensive and clearly targeted energy and climate policy.

Th e new Renewable Energy Directive has been agreed, putting into eff ect the overall target of 20 percent renewable energy in the EU’s energy mix and 10 percent of renewable sources in its transport fuel by 2020 in the form of legally binding obligations on member states.

We all know that the renewables industry is creating thousands of new jobs and creating new business opportunities across Europe. We estimate that achieving the 20 percent renewables target could lead to a net increase in GDP (0.24 percent) and de-liver 2.8 million new jobs in the renewables sector alone.

Energy effi ciency is where local actors, and the public sector, can make a huge diff erence. First, we all, as public servants, owe it to our constituents, Europe’s people, to set the best example and thus demonstrate the potential for greater energy sustain-ability. Second, the way in which public funds are spent sends a strong message to the private sector. Th e investments we make can have a direct infl uence on the oft en much larger investments by private companies. Finally, it is local and regional authorities who have the necessary expertise to understand the needs and expectations of citizens.

Th e need for investment, both public and private, in energy infrastructure over the coming years is enormous, in the range of €2 trillion for the EU alone. I would like to emphasise here the importance of health and safety and worker training in the re-alisation of all such projects. Th e EU has taken the lead in raising the standards of employee protection throughout the continent. And we continue to do so.

From a speech given at the EPSU Congress Brussels, 11 June 2009

ANDRIS PIEBALGS, EUROPEAN COMMISSIONER FOR ENERGY


UPFRONT27

UPFRONT27

EUROPE-WIDE SMART GRID AFFORDABLE

In a study published in Novem-ber, Greenpeace revealed that European power transmission networks could transport 90 percent of renewable energy by the year 2050 at aff ordable sums. Greenpeace said that the cost of strengthening cross-border lines and building new in-terconnections to create smart or super-grids would be small if it were spread over 40 years and split between hundreds of millions of Europeans.

“All together, the proposal would cost around €209 billion,” it said in a press release issued to accompany the report's unveil-ing in Berlin. “Th is would in-crease the cost of every kilowatt hour by 0.15 cents over 40 years, which means for a European household less than €5 a year or 40 cents a month,” it said.

Apart from the cost of preparing grids for new tasks

to better manage erratic sup-plies, there is also concern that over-reliance on wind or solar could leave consumers short of power when the wind does not blow or the sun does not shine.

Th e study compared 30 years of weather data

with European annual demand curves and concluded that there is only a

0.4 percent – or 12 hours a year

– chance that high demand correlates with

low solar and wind generation.Apart from wind and solar, it

also mentioned chances to exploit geothermal and ocean energy, and biomass. “We just need smart grids to put it all together and eff ectively ‘keep the lights on’,” said Greenpeace. Th e €209 bil-lion sum was broken down into €100 billion for 11 new connec-tions inside Europe, €90 billion for new lines to capture Sahara desert solar power, €16 billion for upgrades of direct-current high

voltage lines between Euro-pean countries and €3

billion for alternat-ing-current ones.

Source: reuters.com

There are 12 hours a year

that high demand correlates with

low solar and wind generation

FROM THE VAULT

In the Q1 2009 issue of Power & Energy, Ralph Izzo, CEO of Public Service Enterprise Group, examines the diffi cult state of the US utility industry in rela-tion to the heightened federal focus on reducing greenhouse gas emissions and the recent global fi nancial crisis.

Go to www.nextgenpe.com, click on ‘Previous issues’ in the left column, choose ‘Issue 6, February 2009’ and scroll down to ‘Cover stories’ to read about PSEG Global’s strategic eff orts to face the enormous challenges created by climate change.

FAST FACT

If 140 million smart meters are installed over the next 10 years they could produce a

100 petabytes of information


UPFRONT28


UPFRONT29


UPFRONT30

COMPANY INDEX Q4 2009Companies in this issue are indexed to the fi rst page of the article in which each is mentioned.

Alcatel-Lucent 48

American Wind Energy Association 32, 106

Bentley Systems 10, 72, 73

BP Solar 91

British Gas 112

CASC-CWE 68

Cinterion 8

Conergy 41

Current 77

E.ON 36, 48

Echelon 63, 67

EDF Energy Renewables 100

EDP 74

Electricon 92, 93

EnBW 48

Enel 48

ESB 56

E:SO Global 51

European Commission 106

EPIA 32

European Renewable Energy Council 32, 88

EWT 14, 93, 99

Frost & Sullivan 127

GE Healthcare 31

Global Energy Services 6, 93, 97

IDC 48

Limpet Technology 103

Lloyd’s Register ODS 110, 111

MSC Software 86, 87

MSE 115

Motorola 81

N-ERGIE 48

Open Text Corporation 12, 122, 123

Oracle 46, 47, OBC

Orga Aviation BV 93, 95

Power Climber International 104, 105

Process Vision Oy 62, 63, IBC

Robert Bürkle GmbH 116, 117

RW Energy 82

SAMI 4, 121

Sensus 2, 59

Siemens Energy Sector IFC, 52

Sierra Wireless 45

Sitronics 60, 61

Sol Focus 109

Svensk Energi-Swedenergy 78

TailorMade 63, 65

University of Massachusetts 32

Vestas 17

Zest Utilities 54, 55

A full moon next to a wind energy turbine near Filsum,

Germany. The country is a

leader in installed wind capacity,

with 25 GW.

FAST FACT


GEMDS_Ad_COL:euro 2/2/09 10:26 Page 53

Europe and the United States: both Western, developed economicpowerhouses, and by extension, voracious consumers of energy.Both also chasing ambitious targets for generating a portion of thisenergy from renewable sources: in the US, 10 percent by 2012, ris-ing to 25 percent by 2025; and in Europe, 12 percent by 2010 and

20 percent by 2020. What are the differences that lie under these similarities? And more

importantly, is either region making enough progress to safeguard our en-ergy future? Below, we take a look at the unique challenges faced by eachregion in its struggle to reduce CO2 emissions and produce more sustain-able power.

Current statusThe countries of the European Union, regarded by many as the glob-

al leaders in renewable energy development, have a long track record ofenvironmental consciousness. The EU set its target of 12 percent of ener-gy from renewables as long ago as 1997.

The US, by contrast, was known primarily for its refusal to ratify theKyoto protocol under the Bush Administration. However, with the elec-tion of President Obama last year, the US government is once again afriend of the environment. The Bush government gave US$72 billion insubsidies to fossil fuels between 2002 and 2008, with renewables receiv-ing US$29 billion in the same period. Obama and his team must now try

32 www.ngpowereu.com

Marie Shields investigates the efforts being made in Europe and the USto produce more power from renewable energy sources.

COVER STORY

Renewables Ed:16nov 26/11/09 14:48 Page 32

to redress this imbalance, starting with the US$6 billion earmarked forrenewable energy and electric transmission technologies loan guaranteesin the American Recovery and Reinvestment Act.

David Levy, Director of the Center for Sustainable Enterprise andRegional Competitiveness at the University of Massachusetts, Boston,and author of the blog Climate Inc., points out that while renewables havetraditionally been lower on the radar in the US, Americans are also verygood at pushing ahead with an idea once they latch on to it. “I think it’strue that there is some catching up going on,” he says. “There’s a hugeamount of wind power that is now being installed in Texas; andCalifornia is leading in terms of really large-grid, scale solar thermal in-stallations.

“It’s been hard to get financing. Renewables haven’t had the kind ofsustained, predictable subsidies here in the US that Europe has had, andwe lacked a mandatory cap-and-trade system. The European TradingSystem for carbon and national targets provided a clear signal for busi-ness to take renewables seriously. It has been slower here in the US.”

Despite its slower start, the US appears to have already moved ahead ofthe EU in terms of renewable energy consumption. According to the EnergyInformation Administration, renewable energy accounted for around 11.1percent of energy produced in the United States in the first half of 2009. InEurope, meanwhile, figures from Europe’s Energy Portal indicate that 9.2 per-cent of Europe’s final energy consumption came from renewable sources in2006, the last year for which confirmed data are available.

It should be noted, however, that 7.4 percent of the US total came fromconventional hydroelectric power, with only 4.7 percent coming from ‘new’sources such as biomass, geothermal, solar and wind.

As things stand, the EU may not succeed in reaching its original target of12 percent in 2010. In an attempt to address this situation, in 2008 theEuropean Commission released its Renewable Energy Framework Directive,with an even more ambitious target of achieving 20 percent of generationfrom renewables by 2020.

Christine Lins, Secretary General of the European Renewable EnergyCouncil, believes that Europe can meet the 2020 goal: “We are on track, but we

www.ngpowereu.com 33


Wind Energy Potential’, states that in 2020 the amount of electricity thatcould be generated from wind power could be as much as three timesgreater than demand.

Germany, Denmark, Spain, Portugal and Ireland have particularlystrong bases in wind power. Figures from the German Wind EnergyAssociation show that 19,460 wind turbines, with a total capacity of22,247 MW, were installed in the country by the end of 2007, and that39.5 TW of wind electricity were generated during that year, equallingmore than seven percent of Germany’s electricity consumption. As of2009, its installed capacity is 25 GW. Denmark has been vying withGermany for the top spot, with 19.7 percent of electricity production and24.1 percent of capacity in 2007.

The European Wind Energy Information Network puts the annu-al median growth of the European wind power market at 35 percent,with EU member countries contributing about 75 percent of the world’swind power. The wind power market is estimated to have helped create25,000 jobs within the EU.

Wind energy is also starting to take off in the US, according to fig-ures from the American Wind Energy Association, which put installedwind power capacity at the end of the third quarter of 2009 at over31,000 MW, generating enough electricity to power the equivalent ofnearly nine million homes.

The state posting the fastest growth was Arizona, which installed itsfirst utility-scale project. Pennsylvania ranked second in growth with 29 per-cent, followed by Illinois with 22 percent, Wyoming with 21 percent and NewMexico with 20 percent. Texas remains firmly at the head of the pack overall,however, with 8797 MW of operating capacity.

“Wind power installations are up, and that is good news for America'seconomy, environment and energy security,” said AWEA CEO Denise Bodein a statement. “But manufacturing, which has the potential to employ manymore Americans in good, clean energy jobs, remains uncertain. A firm, long-term national commitment to renewable energy is still needed for the US tobecome a wind turbine manufacturing powerhouse.”

AWEA says that since the early July announcement of rules to imple-ment the American Recovery and Reinvestment Act, the wind industry hasseen more than 1600 MW of completed projects, and more than 1700 MW ofconstruction starts, which equates to about US$6.5 billion in new investment.AWEA does not expect the fourth quarter of 2009 to be as strong as the fourthquarter of 2008, since the 5000 MW now under construction is nearly 38 per-cent lower than the 8000 MW under construction at this time last year.

must see some further impetus that this development will really happen. Progressso far has been made by five or six EU member states. The challenge we haveahead of us is to make sure that all 27 member states are being serious about re-newables and developing them to their full potential.”

Lins’ point is that the overall figures mask a large variation between indi-vidual countries. Sweden topped the list of renewable-friendly countries at41.3 percent according to 2006 figures, with Latvia at 31.4 percent, Finland at28.9 percent, Austria at 25.1 percent and Portugal at 21.5 percent. At the bot-tom of the list, Malta generated none of its energy from renewables in 2006,with Luxembourg and the UK not doing much better, at 1 percent and 1.5percent respectively.

Blown awayWind and solar are two main areas of focus for renewables on both sides

of the Atlantic. In Europe, a report by the European Environment Agencyconfirmed that wind power has the potential to meet and even exceed the con-tinent’s energy needs. The report, entitled ‘Europe’s Onshore and Offshore


1. Texas 8797 MW2. Iowa 3053 MW3. California 2787 MW

4. Minnesota 1805 MW5. Oregon 1659 MW

US WIND POWER

“The wind power market isestimated to have helped create25,000 jobs within the EU”

The top five US states in total operating wind capacity:


Sunny daysPhotovoltaic solar power has a strong base in Europe, at least accord-

ing to the European Photovoltaic Industry Association (EPIA). The as-sociation recently commissioned a study on PV power in Europe, ‘SETFor 2020’, from the management consultancy AT Kearney. The studyconcludes that PV power can supply as much as 12 percent of Europe’selectricity needs by 2020, assuming appropriate policy-driven supportand evolution in the set-up and functioning of the electricity distributionsystem.

“The fundamentals of the PV industry are and remain strong,” saidSecretary General of the EPIA Adel El Gammal at the sixth EuropeanPhotovoltaic Industry Forum held in September in Hamburg. “It needs anambitious policy support for the next three to nine years, until photo-voltaic power is able to compete with conventional electricity on price.”

“The US solar energy industry grew to new heights in 2008.” So pro-claims the Solar Energy Industries Association’s report ‘2008 Year in Review’.The report points out that capacity grew by 1265 MW in 2008, up from 1159MW installed in 2007. “This brings the total installed capacity up by 16 per-cent to 9183 MW,” it goes on to say. “Capacity in both photovoltaic (PV) andsolar water heating systems grew at record levels. And while no new concen-trating solar power plants were completed in 2008, projects totalling morethan 6000 MW are in the pipeline, most with signed purchase power agree-ments. Solar pool heating capacity grew at a slower rate than in 2007, reflect-ing conditions in the residential real estate market.”

The growth rate was found to be highest for grid-connected PV electricsystems, with an increase of 58 percent, to a total of792 MW. Domestic PV manufacturing capacityalso increased by 65 percent, with preliminary esti-mates putting the total PV manufacturing capacityat 685 MW per year as of the end of 2008.

Solar thermal power is also growing in theUS. The largest solar thermal generating installa-tion in the world – the Solar Energy GeneratingSystems (SEGS), a group of nine solar thermalpower plants – is located in California’s MojaveDesert. The plants use parabolic trough solartechnology along with natural gas and have acombined generating capacity of 354 MW.

On the European side, the European SolarThermal Industry Federation conducted a study“to provide the European Union and its memberstates with substantiated information on the con-tribution solar thermal can make to the 20 per-cent renewable energy target set by the RESDirective.” Market statistics released by theESTIF show that the solar thermal market in theEU and Switzerland grew by more than 60 per-cent, to 3.3 GW of new capacity.

Despite the positive messages put out byboth sides of the solar energy sector, UMass’s DavidLevy believes the focus is shifting from PV to thermal.He points out that the economic crisis has prompted several countries, includ-ing Germany and Spain, to cut back on subsidies to consumers for the installa-

tion of PV panels – although he also underlines the cyclical nature of such inter-est: “Solar thermal was doing well a few years ago, but then when Luz went bank-

rupt, many people said, ‘We can’t do solar thermal.’” Israel-based Luz Partners were the original

builders of the SEGS solar thermal plants inCalifornia. The company failed in the early 1990safter drastic cuts in federal tax credits to the solarthermal industry.

The way forwardThe US and Europe may both be moving full

steam ahead with wind and solar power, but thereare other areas in which they remain quite farapart. The US, for example, with its long history ofcoal-fired power generation, will not easily give upits dependence on carbon. In Europe, where thecoal lobby is not as strong, carbon capture has amuch weaker focus. By contrast, Europe is farmore advanced in the development of wave power.

In the end, though, it doesn’t really matterwhat the differences or similarities are, or whoachieves their target first. What matters is that we getthere, somehow. Despite all the promises and the in-ternational political conventions, the figures showthat we are not making enough progress, on eitherside of the Atlantic. Following through will be tough– this much is shown by the situation here in the EU,where not even the threat of legal action has suc-

ceeded in galvanising certain member countries into making the necessary cuts.But we can’t back down – the future of our planet depends on it. �


Renewables in EuropeEU countries with the highest share of renewable consumption to gross fi nal energy consumption

Sweden 41.3 %

Latvia 31.4%

Finland 28.9%Austria 25.1%

Portugal 21.5%Denmark 17.2%

Romania 17%Estonia 16.6%Slovenia 15.5%

Lithuania 14.6%Source: www.energy.eu

SOLAR ENERGY SYSTEMS

PhotovoltaicA photovoltaic system uses solar cells to convert light into electricity.It contains multiple components, including cells, mechanical andelectrical connections and mountings and means of regulating and/ormodifying the electrical output. Because each individual cell has a lowvoltage (typically 0.5V), several cells are combined into photovoltaicmodules, which are then connected together into an array.

ThermalSolar thermal technology harnesses solar energy for thermal energy(heat). Solar thermal collectors are defined as low-, medium-, orhigh-temperature. Low-temperature collectors are flat plates gen-erally used to heat swimming pools. Medium-temperature collec-tors are also usually flat plates, but are used for creating hot waterfor residential and commercial use. High-temperature collectorsconcentrate sunlight using mirrors or lenses and are generally usedfor electric power production.


E.ON’s overall strategy to move towards a lower carbongeneration portfolio is a relatively recent phenomenon.Pulling together different elements, one of them being thealready existing renewables business within the E.ONGroup, the company is moving toward more environ-mentally conscious policies. New to the position ofManaging Director of Europe for Climate and

Renewables, Michael Lewis explains how continuing to manage the growththat was already in the portfolio, as well as managing external growthsthrough acquisitions, was vital for the change in company strategy. “It was amajor challenge of integration. Our own people who were in the E.ON Groupwere now moving into a new division, E.ON Climate and Renewables, andwe had to make sure that all functioned properly,” he explains.

“This meant integrating the new people we brought into the group fromNorth America, Spain and Italy, all with different histories, different culturesand nationalities – all of that had to be integrated. Then we had to create anintegrated strategy for the new division and that was based on creating theright strategic focus for both different technologies and geographies.

“We focused on markets where firstly there was sufficient growth wherewe could invest our money, and secondly, they were attractive markets wherewe could get a decent return on our investment. The two major challengeswere integration of people and businesses and focusing strategically on theright technologies, and both of those were huge exercises in our first sixmonths. The final big challenge we had was bringing new centralised func-tions into the organisation.”

CentralisationLewis notes that previously E.ON held renewables businesses in the UK,

the Nordic countries and Germany, all of which worked independently andwere procured separately. Since the inception of the Procurement depart-ment, located in Düsseldorf, all such operations are done in one location anddistributed to the whole of the E.ON Group, allowing for bigger orders andproviding stronger market power and better efficiency with the company’s bigsuppliers, such as Siemens and Vestas.

Offshore construction also became centralised. Being a major part of thecompany’s growth structure, there had previously been offshore projects inthree different countries, each managed independently of each other. Again,Lewis notes how each project separately dealt with the same suppliers, vesselsand skilled people, and so another new department was created in Düsseldorf


Getting into deep water can bean advantage in the renewablesgame, as E.ON's Michael Lewistells Natalie Brandweiner.

THE BIG INTERVIEW

MICHAEL LEWIS_16nov 26/11/2009 14:57 Page 36

OFFSHOREMOVING


case,” he asserts. “We were committed to it from the beginning and that’s beenreflected in the amount of money we’ve invested.

“It isn’t a marketing ploy and that’s reflected in the fact that we only in-vest in projects where we can meet a commercial hurdle, which has alwaysbeen the case. That hasn’t changed because there’s a financial crisis. We al-ways look at what return can we get on a project: does it meet our hurdle rate?Are there better alternatives where we can invest the money?”

Regardless of the rest of the industry’s activities, E.ON is committed toits work in renewables: so far it has invested €4 billion, and will invest at least€6 billion in 2010 in renewable generation plant protection projects. The com-pany recently approved the London Array project and signed an agreementwith Siemens to build a major Danish offshore wind farm for the Rødsand IIwind project. E.ON regards offshore as a very important area for the future ofEuropean Union renewables targets.

Offshore projects“If you look at all the work that has been done to obtain 20 percent of pri-

mary energy from renewables by 2020 or beyond, it requires a large invest-ment in offshore technology. If you look at where we are today, we’ve installedaround 1.5 to 2 gigawatts of total offshore capacity. If we’re going to meet thetarget, we need to get to something like 40 to 50 gigawatts, so that’s a huge in-crease within a period of between 10 to 15 years. That means we’ve got toprove the technology capable of operating in the harsh marine environmentand get the supply chain focused on delivering solutions so we can installthem quickly and efficiently.

to manage the company’s entire offshore portfolio.The final department, Asset Strategy and TechnicalExcellence, was created in order to centralise infor-mation, as well as operations such as the SCADA sys-tem, to create a much more efficient way of orderingthe company’s various data and manage its assets ap-propriately.

Financial crisisFortunately, the initial implementation of

these activities began in the summer of 2007, there-by avoiding the challenges of the financial crisisuntil later. “We had a run-in of around six monthsup until Christmas of 2007 where most of the inte-gration work and the creation of the new depart-ments took place, so we didn’t really start to feel theimpact of the financial crisis until the followingsummer, and in particular, autumn of last year,when Lehman Brothers collapsed,” he explains. “Itprobably hasn’t had a major effect on E.ONClimate and Renewables in the sense that we are abusiness that relies on our financing from our par-ent company and from the balance sheet of theE.ON Group.

“That means we’ve been able to maintain our in-vestment at very high levels; for example, up untilnow we’ve invested €4 billion in the renewables busi-ness since 2007. We will continue to invest another€4 billion up until 2012. Those levels of investment are historically unprece-dented in the E.ON Group for renewables, and in fact, looking forward overthe next three years, a total of one quarter of E.ON’s investment in power gen-eration will be portioned to renewables. To put that into context, if you goback to the summer of 2007, we had 450 megawatts of non-hydro renewables.Today, we have 2200 megawatts.

“By the end of 2010, we’ll have 4000 megawatts, so a tenfold increase on2007, and by 2015, we intend to have 10,000 megawatts; our investment isgoing ahead in spite of the financial crisis. The financial crisis has certainlyimpacted the timing of some investments, because the relative attractivenessof markets has changed. From our perspective, the key issue is not has it af-fected our ability to finance, the key issue is what impact has it had on the eco-nomics of the project. If you get falling demand for gas, falling oil prices,falling power prices, that impacts the attractiveness of the project. We’velooked at the different markets and reappraised where we invest, but in termsof the volume of investment, that hasn’t really changed and won’t changegoing forward. We’re still committed to over a billion a year of investment inrenewables.”

Lewis states that the economic crisis has not necessarily encouraged thecompany to be sharper in its decision-making, for, as he explains, “We’re al-ways absolutely ruthless in deciding whether a project makes a return or notand whether we do it.” He notes that during the company’s initial major moveinto renewables, an external view became dominant that an emphasis ongreen energy was nothing more than a cunning marketing strategy, and thatE.ON itself lacked any true belief in renewable energy. “That was never the


Michael Lewis


“So we’ve built the renewables offshore strategy, which tries to take the eas-ier locations first. It’s a question of the physical nature of the projects, becausethere are varying degrees of offshore. For example, the first project, we did,Scroby Sands in the UK, is a very near shore project – three kilometers from thecoast, relatively shallow water and only five metres deep. That is comparative-ly easy both to install and to operate because of the proximity to the shore, andalso to put the foundations in place because of the relatively shallow water.

“We’re now moving into projects like Rødsand, a much bigger projectthan Scroby Sands, which is generating 207 megawatts as compared to 60megawatts at Scroby Sands. Still in relatively shallow water near Denmark,about five kilometers from the shore and in 10 metre deep water, we can usethe skills we learned at Scroby to build a bigger wind farm with larger turbinesand a bigger capacity. We want to bring the skills we learned at Scroby in theeasier offshore environment to the slightly more difficult and challenging en-vironment at Rødsand and build a much bigger project with a larger numberof foundations and different turbine types.

“We want to prove that we can do this on a large scale and not only atRødsand in Denmark. We also have another project, 180 megawatts in theUK at Robin Rigg in the Solway Firth, again proving that we can install at alarge scale but still in the relatively near shore, shallow water environment.When we’ve mastered those projects and we’ve proved that we can install effi-ciently, that we can get the right vessels to the sites so that we can have a re-duced cycle time and reduce the capital costs, and when we’re happy that theturbines can operate well in that environment, we then intend to move intothe larger far shore, deep water projects; projects outside the 20 metre depthand 20 kilometers from shore and below.

“Those projects will be a bigger challenge both in the installation and inthe operational phase, so we want to learn our trade in the so-called offshore,light projects before we move to the difficult ones. London Array, which was

recently approved, will be the largest offshore project in the world when it’sconstructed. That’s 1000 megawatts, and again, just to put that into context,Scroby Sands is 60 megawatts, a much bigger proposition. It’s about learningthe trade, learning how to build a project of that size and making sure we canoperate it efficiently, and get the high levels of availability that we need tomake it a viable economic proposition. All of our projects so far, not only arethey there to create value in themselves, they’re also part of a learning curveto enable us to get to the larger offshore projects. Before we build those big po-tential projects, we want to make sure we can cope with the easier projects.That’s our offshore strategy; there are still massive challenges there, but it’sabsolutely critical we deliver if we’re to meet the EU targets,” says Lewis.

In order to ensure that E.ON remains a learning organisation, contin-uous audits throughout the projects’ timeline are being conducted: learningto understand the problems and areas for improvement. A sophisticatedmethod of tracking has been created to improve processes and combat thechallenges of health and safety incidents. Cycle time is also assessed usingvarious metrics to compare performance both in the construction and op-erational phases.

E.ON’s centralised offshore construction also allows it to prevent staff at-trition whilst simultaneously ensuring new staff are trained. As Lewis explains,“People are critical to this, and not just our own people who manage the pro-jects, but the crews who work for the contractors and the vessels.”Continuously motivating highly skilled workers is a challenge for almost everyemployer in every industry. In order to keep its employers happy, E.ON pro-vides visibility within its project pipeline, having a number of projects in de-velopment as well as a number in construction, so employers can see thestructure and be moved accordingly. “Younger people can learn their tradeon projects with more experienced project managers, before they can in turnmove on to another project in a structured way, so it’s all about continuity.”


Worldproduction

2008288,000 mw

2007240,000mw

14% increase

280 Gw

119 Gw

96Gw

World

Developing countries

EU-27

UnitedStates40Gw

China76Gw

Germany34Gw

Spain22Gw

India13Gw

Japan8Gw

Renewable electric power capacity

Top 5 renewable power capacity countries

Key:Wind power

Small hydropowerBiomass power

Solar photovoltaic-gridGeothermal power

Solar thermal powerTidal power

Large hydropower

Source: www.ren21.net/globalstatusreport

Mw - Megawatts Gw - Gigawatts

GLOBAL RENEWABLE ENERGY OUTLOOK


increase gigawatt capacity to cope with increasing energy demand, moving toa lower carbon portfolio during the next 20 years and reducing its carbonemissions by 50 percent, making renewables a key feature of the company’sgrowth. E.ON is also upgrading its old fossil-fired plants to become more effi-cient and most importantly it is embracing new technologies, such as the pos-sibility of developing its nuclear business in the UK and upgrading itsgas-fired technology to make it even more efficient.

“Clean coal, according to at least our view, is probably not going to becommercial until after 2020, but we’re doing a lot in the meantime to help de-velop it. We’re doing various pilot studies; we’re building new highly efficientcoal plants as a first step that are carbon capture ready. That means they havethe right plant specification logistics whereby there’s room to install a carboncapture facility when the technology becomes viable. It is a tricky period, wedo have a challenge, but there are clear pathways for how we can get thereusing existing technologies.”

“There are other components,” he adds. “The first one is policy. It’s ahuge challenge to coordinate how the globe responds. It’s not enough forthe UK or even Europe to win the battle; you need a global solution and thatmeans a policy that can effectively limit carbon emissions across the world.The means of reducing carbon emissions will be technological, but the pol-icy has got to be in place first to make sure that those technologies can beapplied.

“The other is a behavioural issue. We shouldn’t underestimate the rolethat changing patterns of energy use and improved energy efficiency will playin solving this problem as well, so there may be solutions looking at demandside management, looking at significantly improving the efficiency of how weuse energy, and those things again will partly be driven by technology, but alsopartly driven by people’s behaviours as well, and what people accept as soci-etal norms. There is a complex interaction between policy, behaviours andtechnology, and we have to win the technological battle. That’s a necessarybut not sufficient condition.”

Lewis views the challenges as threefold: economic, technological and pol-icy. Renewables are still more expensive than conventional generational, tech-nology again raises the issue of cost, as well as the logistical challenges.Although Europe has what is the clearest policy framework of any region inthe world regarding its target on CO2, it doesn’t have a fully joined-up policybetween its members.

“We need to tie together the infrastructure challenge in terms of thegrid, the port facilities we need to build offshore and the supporting tech-nologies of coal and gas. We need to make sure the intermittent renewablescan be efficiently integrated into the grid system. E.ON is playing its role inall of those things through R&D, through to investing in major offshore pro-jects and through to investing in the grid and in conventional fossil fuels,”concludes Lewis. n

TransmissionInnovation is regarded as bringing endless benefits, in any industry, but

is being ahead of the times a viable option given Europe’s transmission dis-tribution network? Will it be able to cope with the move towards renewables?Lewis regards the transmission debate as having two aspects, the first beinghow to connect these multiple projects, and the second being how to trans-mit the energy produced. “We’ll have to create new transmission systems tolink up the sources of demand. The major challenge is offshore – we’ve got tocreate a completely new infrastructure network where it’s never existed be-fore,” explains Lewis.

“The transmission network is not yet in a position where it can cope, butthe good news is we have a number of years to get there, and that means wehave to take a strategic approach to building a transmission network. Weknow where the wind resources are, we know where the offshore wind loca-tions are. These are all set out in government policy by the crown estates; sofor example, for round three where the bulk of the new capacity will be built,we know exactly where they are. If we know where the grid needs to be now,we can start thinking about where the grid needs to be strengthened in the fu-ture, and we can do that on a proactive basis to anticipate capacity coming onrather than waiting for it.

“Wind farms are much more expensive to build than the transmissionnetwork that takes the power away to customers. That means if there is goingto be a slight mismatch, such as if one is built slightly before the other, it’s bet-ter to have the transmission network in place before the wind farms comealong than vice versa because the one costs a lot more than the other. Withsound policy and the right strategic approach, we can get there. The secondissue is integrating wind into the transmission network, and this is all aboutintermittency.

“The good news is you don’t normally get a position where all of the windis not blowing at the same time. You get geographical differences, wherebyone part of the country might be windy or one part of Europe might be windyand another part might have zero wind, but in fact, although wind farms havea load factor of 25 to 30 percent that doesn’t mean the wind is only blowing25 to 35 percent all of the time. That’s an annualised number. They are actu-ally operating for a very large proportion of the time, but just not at full out-put, so you need to ensure that when the wind does drop and there are suddenchanges in output, you have enough of what we call spinning reserve.

“We also need replacement of existing fossil capacity, which we’ll grad-ually fade out over the next few years as various pieces of environmental leg-islation come into play. So the corollary is that we need existing coal-firedcapacity and gas-fired capacity to be replaced, because mostly wind does notprovide a huge amount of capacity. It’s a slightly technical issue: it providesthe energy to displace coal and gas but it doesn’t count very much for ca-pacity because you can’t guarantee it’s going to be there when you mightneed it.

“That means you have to maintain that level of fossil capacity to providethe reserve and spinning reserve. I’ve often heard the argument made by anti-wind campaign: ‘Wind’s useless, it only displaces five to 10 percent of coal.’ Itonly displaces that much capacity, but it displaces a lot more energy, and thatmeans it does significantly reduce CO2 emissions, which is an important dis-tinction,” he says.

Managing the transition period between fossil fuel reduction and theramping up of clean coal technology is a tricky business. E.ON’s strategy is to


“There is a complex interactionbetween policy, behaviours and

technology, and we have to win thetechnological battle”


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Conergy.indd 1Conergy.indd 1 24/11/09 10:20:3524/11/09 10:20:35

What has Google got to do with energy? You maywell ask, but to Jens Redmer, responsible for thesearch engine giant’s new business developmentin Europe, the Middle East and Africa, the an-swer is simple: it revolves around the commod-ity that Google was built on: information.

“It’s a project that was initiated in our Google.org project group, whichis the philanthropic arm of Google,” he explains. “It’s called PowerMeter, andit’s our effort to empower users to get access to information about their indi-vidual power consumption, energy consumption and energy behavior.

“We’ve found that the average consumer does not feel informed abouttheir energy consumption. Many people don’t even know what a kilowatthour is, let alone how that translates to a dollar figure. So we have some cre-ated some pilot agreements with a number of utility companies and devicemanufacturers to allow users to see a small application on their Googlehome page through which they can track what their home is actually usingin energy.”

Redmer cites various studies that have shown that the average user, evenwith only a few behavioural changes, can make substantial savings simply bybeing exposed to what they consume and how they consume every day. Herightly underlines that this can help conserve energy, cut down on CO2 emis-sions, and ultimately help achieve Google’s own goal, which is to organise theworld’s information.

Which is all very well, but what’s in it for the utility companies? If greateraccess to information allows customers to become more energy savvy and cutdown their consumption – by some estimates by between five and 15 percent,won’t this negatively impact on their business?

Redmer disagrees. “I think the main benefit for utility companies thatwork with us on this particular project is that they can engage much, muchdeeper and more frequently than they typically engage with a consumer today.If you take an average utility, it may have a website, it may have an accountsystem so that the average user can log into their price plan to see their billinginformation and their consumption online.

“The average user is very unlikely to go back to that website every day


ENERGYEFFICIENCY

A little knowledge is a wonderful thingJens Redmer explains how Google’s new software application will give consumersgreater access to information about their power usage.

REDMER_16nov 26/11/2009 14:59 Page 42

or even every month. With the application we’vecreated being completely integrated into yourGoogle homepage, you can expose that same userto the utility’s brand name, to the utility’s websiteand also to the user’s energy information every sin-gle day, and eventually multiple times a day be-cause the average user goes to Google multipletimes a day.

“If the utility also has the ability to broadcastmessages right into this gadget, right in front of theeye of their individual consumer, that creates a mar-keting opportunity and a customer engagement op-portunity that today it doesn’t have. So we can makethe user happier because they’re more engaged withtheir energy consumption and we can take the util-ity back to the consumer multiple times a day.

“We believe that this is a great value to the utility. And obviously, there’sa general trend that end-users are becoming much more aware of energy con-sumption, CO2 emissions and all these topics that you hear in about in themedia every day, and we clearly want to create our services to feed into thisdevelopment.”

PartnershipsIn the US, Google has signed on smart meter manufacturer Itron and

eight utilities to offer the PowerMeter web service for monitoring home en-ergy use. Redmer explains that it has plans to expand the service into Europe,and recently launched its first global partnerships. “We are enaged in ongo-ing talks and negotiations with a large number of utilities worldwide, includ-ing in Europe,” he says. “There’s an incredible amount of interest from utilities

to work with this project.” Redmer points out that prior to these external pilots, Google had also per-

formed some internal pilots: a few dozen Google employees were switched onto a PowerMeter application, and a smart meter was installed in each of theirhomes, which has occasionally led to some interesting stories: “One employ-ee found that her base consumption had increased substantially one morn-ing,” Redmer recounts. “She saw that on her iGoogle page in the morningwhen she came to the office, and she got worried.

“She didn’t know where those extra watts had come from, and she gotconcerned. She called her neighbour, and her neighbour opened the door andfound her toaster smoldering in the kitchen. The toaster was stuck and there-fore causing a lot of energy to be wasted. Her story is, ‘PowerMeter saved myapartment.’ Of course, this is not going to happen every day, hopefully. Thereare different anecdotes from all of these testers.”

Redmer also gives the example of the smart meter in his own home,which he installed a few months ago. He discovered that his base consump-tion was at 500 watts, which translates to around €600 or €700 a year. Afterinvestigating, he found that the extra energy was being consumed by his hi-fibeing left on.

“My TV doesn’t have speakers, so I have to connect it to my hi-fi. I’ma lazy person, so I leave my hi-fi on after I switch off my TV. It only con-sumes 80 watts, but 80 watts times 24 hours times 365 days is a lot of money.I calculated it was something between €80 and €100 that I wasted just bybeing lazy.

“Only this small behavioral change that doesn’t cost any life quality orany level of comfort can save me €100, and I found a couple of other things inmy apartment that I could just switch off or stop doing, or start doing. I’mpretty confident that I can be well above the 15 percent energy savings thatmany studies show the average user can make once they’re exposed to theirenergy consumption.

“That’s a common denominator that we found through all the testers in-ternally so far. It’s probably going to take a while until we find out what theexternal consumers from our utility partners will say, but I’m pretty sure theresults will be much the same.”

“There could be an immense value toutilities working with us and enabling

their users to get more value fromtheir individual energy consumption”

Jens Redmer

The toaster was stuck,causing a lot of energyto be wasted

REDMER_16nov 26/11/2009 14:59 Page 43

pany. Our data centres are among the most efficient data centres in terms ofenergy consumption per computer. Those are things that we want to driveforward, so all these investments, all these pilots, all these projects where weinvest and explore new areas of green technology – directly or indirectly – alsobenefit us as a company.”

When asked what advice he would give to other companies contemplat-ing a similar green path, Redmer cites the fact that the companyoperates with a lot of open standards. “We love open standards,”he says. “We love to set up and create a platform that other de-velopers and other users can use to generate new services, to cre-ate entirely new business models that may be reliant on some ofour services.

“Take Google Maps, for example. Google Maps is a fantas-tic product for the end-user, but it’s also a great product forbusiness-to-business consumers. Many business enterprises

mesh up data from their own databases with it. Some companies use it fortheir backend systems to dispatch large fleets of cars, or to get store finderson their websites.

“We created a platform, a model where a basic set of information and ser-vices are offered, and then other parties can add on their bits and pieces, theirparts of the development, to create even more compelling features and appli-cations for their individual target user groups.” n

Redmer points out that what makes Google the ideal platform for thistype of application is its existing customer base. “If you take into account justhow much reach Google has – 20 percent of the US traffic comes from aniGoogle page – that’s an enormous amount of people who use our services. Ifwe can only get a fraction of those users on such services as energy consump-tion feedback, we can have a massive impact on CO2 emissions worldwide.And that’s also part of our goal for this service.”

TechnologyThe rapid rise of smart networking and meters has raised the question

of how the utilities industry can make better use of ICT. Surely Google, ofall companies, must be well-placed to help the energy sector in its technol-ogy drive.

“We are not really in the smart grid business,” Redmer points out. “We’regood at organising data and working with data. So it’s very unlikely that therewill be a Google smart meter or that there will be a Google device that you canplug onto your living room wall.

“What’s more likely is that there will be additional features added to ser-vices like Google PowerMeter, so that you can for example communicate withyour neighbors, or compare your individual energy consumption to homesthat are of a similar size to yours.

“We can help utilities by adding value where they have to present the in-formation that is created from and measured by smart meters, by displaying

it and visualising it to the end-user. Many utilities we havebeen talking to tell us that they feel forced by reg-

ulatory frameworks to deploy and installphysical display devices in the end-user’s

home, which is a big cost factor.“If you could envision web ser-

vices for those users who may notwant a physical device, that’s also agreat help for utilities because they

can rely on service companies that canvisualise these services. This is where we

could potentially help utilities. It’s not abinary decision, so it’s not that you display

only through Google. The Google PowerMeter so-lution could be an add-on to existing display andvisualisation tools. There could be an immensevalue to utilities working with us and enablingtheir users to get more value from their individ-ual energy consumption.”

PowerMeter is not Google’s only foray intothe future of energy efficiency. The company hasalso invested US$45 million in green energycompanies, including startups and concentratingsolar power, capturing energy from high-altitude wind and enhanced geot-hermal systems.

With its multiple data centres around the world, Google itself is a highenergy consumer. Redmer points to this fact as inspiration for the company’sinterest in conserving energy to save money, and in green technology, thegreen subject in general being one of the key aspects of Google’s operations.

“We want to be a green company,” he says. “We actually are a green com-


Jens Redmer on solving our global warmingcrisis using technology“The technology question around utilities in this currentenvironment is a lot driven by information questions andchallenges. As an information service company, we believewe can bring a lot of value to utilities and other players inthat sector.

“If we can empower users to gain access to moreinformation, if we can enable utilities to provide thatinformation to their own consumers in a better way, that’seven better for the world. We have already set up many thosestructures, a lot of the free APIs and free programminginterfaces that we have with products worldwide, and thosecan help to drive that field as well.”

Jens Redmer is responsible for newbusiness development for Google’sefforts in Europe, the Middle East andAfrica, working with Google productsand engineering teams on incubationexploratory efforts, technology andmetadata licensing, strategicpartners, urgent special projects andalternative distribution for existingand new business initiatives.

Google has invested

US$45 million

in green energycompanies

REDMER_16nov 26/11/2009 14:59 Page 44

SIENNAWIRELESS_AD.indd 70SIENNAWIRELESS_AD.indd 70 24/11/09 10:25:2024/11/09 10:25:20


Utilities are turning towards smart grids to help them respond to a variety of emerging customer and community needs. Howev-

er, many utilities are missing out on the many benefi ts delivered by the smart grid, viewing it simply as a step towards measuring energy consumption and grid monitoring.

In fact, the smart grid is an information revolution that is able to deliver a multitude of benefi ts for every utility department and func-tion, as well as every customer. Utilities that allow just one or two departments to control smart grid design oft en fi nd that their projects fail to deliver optimal return on investment. To make the most of the smart grid and ensure projects are rolled out successfully, utilities need to have strategic executive leadership in place and involve all of their departments in the implementation process. Otherwise, they face the risk of revenue loss, less-than-optimal service delivery and long-term excessive IT costs that can be detrimental to both their business and customer relationships.

Smart grids use computer hardware and soft ware, sensors, controls, and telecom-munications equipment and services to link customers to information that helps them

manage consumption and use energy wisely. Companies are beginning to consider smart grids as a way to reduce costs and increase effi ciencies within their organisations and with customers. Also, due to the widespread interest in reducing the negative impact energy use has on the environment and the Eu-ropean Union’s carbon reduction commitments that require companies to reduce CO2 emissions by 20 percent by 2020, the importance of smart grids has risen.

Th e technology can be used to drive effi ciencies in transmission, distribu-tion and consumption, which means utilities are able to serve customers’ power needs with fewer generating plants, and fewer transmission and distribution assets.

Smart grids help util-ities enhance their cus-tomer service off erings in a number of ways. One

ASK THEEXPERT

of the most signifi cant is enabling customers to identify outages more quickly – smart grid soft ware uses sensors to detect outages and pinpoints this to the exact location, allowing utilities to ensure problems are resolved at every meter location. Additionally, the tech-nology ensures utilities are made aware of the size of the actual outage; they can dispatch the correct team with the required skills to the site to fi x the problem. Furthermore, utili-ties are able to detect potential failures before they’ve even taken place, which means they can resolve issues before customer complaints start rolling in.

Smart grid benefi ts go a step further by enabling utilities to identify illegal attempts to reconnect meters or to use electricity in vacant premises. Th eft s can also be detected by being able to compare fl ows through de-livery assets with billed consumption. In ad-dition, customers with unusually high energy usage can be identifi ed and contacted before they receive a bill. Th is means utility provid-ers can suggest techniques that might help their customers limit their energy consump-tion and can even help customers identify alternative methods of paying bills.

Th e mission of utility companies is changing. Previously, they focused on de-livering reasonably priced energy and water.

Today, they must also ensure sustainable energy use and environmental improvement. Smart grids are key to help-ing utilities achieve this expanded mission. Th ey also help customers reap the full benefi ts of tech-nology by easing costs and delivering a more fl exible, reliable and re-sponsive electricity grid. Justifying its implemen-tation however, requires an understanding of the full benefi ts – benefi ts that can help not only the customer and the utility, but also help society ad-dress some of the world’s most pressing energy and environmental issues.

By Bastian Fischer

Bastian Fischer is Vice President and General Manager for Oracle Utilities’ Global Business Unit EMEA. With extensive experience in the utilities industry, Fischer is a recognised industry executive, regularly speaking on industry innovation and contributing to a variety of thought leadership initiatives. Promoting IT as an enabler of innovation, he leads the Oracle Utilities Unit, setting the focus on strategic projects and providing direction to utility customers.

Making intelligent connections

Oracle.indd 46Oracle.indd 46 26/11/09 14:45:1326/11/09 14:45:13

ORACLE (ED) AD:25 June 24/11/09 11:00 Page 18

Back in April 2009, European politicians voted to roll out smartmeters in every building across the continent by 2022, and setan 80 percent installation target for 2020. The smart metersrelay information about household electricity use and prices

to consumers, who can then alter their habits to cut energy bills byaround 50 percent. Smart meters offer the opportunity tocut costs and improve energy efficiency and the deadlineis certainly achievable, so what’s the catch?

There are some key operational and logisticalchanges that still to be addressed in the move tosmart metering, explains Frank Borchardt, Head ofSmart Metering at EFR, a joint enterprise compris-ing E.ON, N-ERGIE and EnBW. Having previouslyadmitted that a smart meter rollout was much morethan simply hanging meters on walls, Borchardt explainsthat the first logistical challenge is all about managing the pro-gramme in a smooth way, before ensuring an efficient, open and trans-parent pathway of communication. “You need to access all customer’spremises at the same time in order to manage the program in a smoothway – it’s a nightmare if you roll out the meters down the street and halfof the customers aren’t in, because you will not have access to properties

and so on. Then of course you have to operate the meter. Everything frommeter reading to load profiles and status information must be monitored,processed and forwarded; it doesn’t make sense to run a meter that givesyou a wide range of information that can’t be utilised. So, there’s a huge

investment and operation effort necessary in creating a smart me-tering system that functions correctly.”

IDC analyst, Rick Nicholson has pointed out thatthe utilities industry has been talking about smart

grids and meters for some time now and admits thatthe discussion has recently become very much pub-lic property. So has this public awareness changedthe impact on the utilities industry? Borchardt be-

lieves that it has very much so. “When I entered thisbusiness in 2003, providing AMR services to residen-

tial customers was a very strange idea. Two years later theidea had settled a bit and we had a project very much focused

on smart metering – although it was a different experience from mar-ket to market. While we were preparing this in Eastern Europe, my col-leagues from Germany laughed at me and said that they didn’t haveproblems with fraud or unpaid bills so why should they change the net-work operation.”

Frank Borchardt, Head of Smart Metering at EFR, explains how tobetter manage a smart meter rollout programme, the true picture

of costs and the tough implementation and data protection challenges involved.

SMART METERS

The of smart metersrise

Smart meters could

help cut energy bills by up to

50%


FRANK BORCHARDT:16nov 26/11/09 12:00 Page 48

A further two years down the line and the situation changed yet fur-ther as public discussion around energy conservation and cost reductiongrew. “Today utilities are heavily driven by this public opinion and it isaccepted that this is an issue for society – these companies have to posi-tion themselves alongside these issues.”

While many proponents of smart metering have pushed the cost sav-ing advantage, Borchardt believes that although there are indeed a num-ber of cost savings there is more likely to be a reinvestment of costs.While automated processes have reduced outgoing spend, communica-tion and implementing revolutionary interoperational technology hasbumped costs back up. However, Borchardt believes that the shift of costsis simply a necessity: “In certain situations it could be an additional cost,but in that case if it burns money, it burns money – the only thing youcan do is burn your money in the most clever way, by limiting the riskand the losses.”

IntelligenceToday’s smart metering solutions are perfectly designed for meter

data management and communication, essentially with narrow band-width but not for demand response or demand side management.Borchardt believes that there is notnecessarily any need for the data sideto act on demand, although there areissues on the communication side.“The systems are perfect for datamanagement and collection and itcan be downloaded at night, for ex-ample,” he says. “But customers de-mand access to communication.Each customer has got a meter andeach customer must be read andbilled individually. And there arecustomers signed up for contractsand joining demand response ormanagement programmes and needa fast communication infrastructure.For that reason, broadband broad-cast channels down to the customersare designed for fast downstreamcommunications and should be opento the full network of customers.”

Peter Johnson. Vice Presidentfor Utilities at Alcatel-Lucent, has recently said that many problems inutility networks arise from a rapid shift in the demand on the existing in-flexible infrastructure. He believes that intelligence is needed to be inputin networks for real-time communications among network elements andto enable access to millions of meters. While there is no doubt that theutilities industry is looking to make better use of information and com-munication technologies (ICT), Borchardt believes that it is key that util-ity companies consider what they want to achieve through thecommunication.

“It’s like the division between metering and demand response; Iagree that you need much more flexible ITC infrastructure for compa-

nies today, however, I can’t agree that you need real-time communica-tion to all of your meters – what would be the purpose?” he asks. “If therewas a need to access all the meters in real-time that it would be right, butyou don’t want to access all the meters, you want to access your cus-tomers in real-time through a communication channel, not through themeter.”

Bordchardt goes on to explain that the ITC infrastructure needs to beused in a very different way to how utilities are using it today and goes backto his point that the company needs to be clear from the start about whatit is looking achieve. “If they have considered what they want to do thenthey can select the perfect technology to accompany it,” he adds.

Another ITC challenge has been around the new IP networks, whichcurrently present a reliability problem for the industry because they can-not guarantee security for utilities as they are unable to endure end-to-end delays of more than 30 milliseconds. “This is actually very goodquality for this business,” explains Borchardt. “If you compare five yearsago to today then you can see the huge improvement in reliability and inthe speed of communication infrastructure, and the only thing we can do

today is to keep thinking back to these improve-ments. We’ve also been splitting up our

solution. The blueprint for the de-vices, meters, relays and switch-

es will stay the same for say10-15 years if possible but thecommunication technologywill change as frequently asthe telecommunications in-

dustry, so every one to twoyears we’ll see the next genera-

tion of technology. The only thingwe can do to mitigate this and at-tempt to future proof is to beflexible and exchange the com-munications following the speedof innovation in the industry.”

It is not just concernsaround reliability that are issuesfor consumers who remain in-creasingly worried about dataprotection and security.Borchardt explains that the mainconcern is that it becomes crystal

clear for the utility, and anyone else who can access the data, that con-sumption patterns are recorded in a very distinguished way. “Anyone cansee when I wake up, when I switch on the coffee machine, when I go outfor a walk, when I get in, when I switch on my TV,” he explains. “If any-one gets hold of this information it is simple to interpret.”

So what is the interest in different consumption patterns andanalysing the customer’s behaviour? The customer is really the only onewho should have any interest in this data, explains Borchardt, in order tochange behaviour and make cost savings. “I’m not convinced that anyutility company would like to have all this detailed information – they aremaybe interested in the load cuts of the consumer, but they should ask


Smart meter: Fast facts

According to Berg Insight, theinstalled base of electricitymeters in Europe will grow ata compound annual growthrate of 15.6 percent between2008 and 2013 to reach 81.2 mil-lion at the end of the period. Thecompany’s latest research also found:

60 million smart meters will be in place in Europe by 2012

35 percent of Swedish electric meters will be connected tomobile networks

62 percent of consumers planned to save on their power bills bywearing heavier clothing

Nordic countries plan to have five to eight million electricmeters connected to GPRS by 2010



on track to reach its target of 80 percent of householdswith smart meters by 2020. So far, Sweden has becomethe first country in the world to achieve a 100 percentpenetration for smart meters, driven by the country’sdecision to make them mandatory from July 2009.

Italy has also been regarded as a pioneer in smartmetering. Indeed, in the early 2000s Enel, the country’s

biggest utility, started installing smart meters in mosthouseholds so that it could clamp down on theft

and cut off non-payers remotely. Between2000-2005 it connected over 27 million

customers with integrated bi-directionalcommunications, advanced powermeasurement and managementcapabilities, an integrated, software-controllable disconnect switch, and anall solid-state design. Theycommunicate over low voltagepower lines using standards-based

power line technology fromEchelon Corporation to data

concentrators at which pointthey communicate via IP to

Enel's enterprise servers.

Sources: Climatelab.org;telephonyonline.com

has access to. This is the perfect way to secure the data today. Tomorrow,maybe there will different, and better, ways to sure it, but first of all youmust be aware of who wants this data and the best way to provide the in-formation to the recipient.”

With smart metering the first step to a smart grid, Borchardt be-lieves the next step will be providing the consumer with the tools toanalyse himself and shift some load to improve his home, control appli-ances and react to incentives. “We need ways and tools for interactionand that is based on the information you generate from the meter, andbeyond that provide the customer with tools to work with this informa-tion,” he concludes. �

the consumer if they want this information and then it’s the duty of theutility company to provide a secure connection to the customer andshield it against any abuse. I don’t believe that there is any need to use apublic communications channel, it’s much better to use the infrastruc-ture that is already in place for the metering systems – technology likenarrow band PLC, for example.”

The issue first and foremost is how to protect the data from abuse,says Borchardt. “The internet is secure for internet banking and the se-curity mechanisms are extremely efficient, but it does cost money if youwould like to introduce such security mechanisms for millions of meters,even simply shielding the communication on a power line that no-one

EUROPE: A pioneer of smart metersSmart meters have taken off in Europe with the

installed base of smart electricity meters in thecontinent growing at an annual compound rate of 16.2percent between 2008 and 2014, reaching 93.6 millionhomes over those six years, according to Swedishanalyst firm Berg Insight.And based on thislevel of uptake,Europe is


ESO AD:25 June 19/11/09 14:04 Page 18

EXECUTIVEINTERVIEW

Can you give a brief background on Siemens’interest and activities in the smart grid?Ralf Christian. Siemens is the only company thatcan offer everything from generation, through allthe grid elements for transport and distribution, tosmart consumption. Siemens sees the increasingshare of decentralised and renewable energy as agrowing challenge for the electrical grid. In order tomaster these challenges, the grid and its consumersmust become more flexible and interactive.

Therefore, we need to transform today’s gridinto an intelligent network that allows bi-direction-al communication between electricity suppliers andconsumers, and fosters sustainability by providingincentives for the efficient use of green energy.What is needed is an end-to-end infrastructurestarting with generation over transmission and dis-tribution to smart consumption. Siemens’ integrat-ed smart grid portfolio addresses the wholeelectricity chain from generation until consump-tion with innovative, smart products.

What areas of the smart grid are of particularinterest to Siemens?RC. Today’s power grids are already at their limit.

Enormous challenges are facing Europe’s grids ifthey are to meet the climate protection targets –30 percent less CO2 and 20 percent more renew-able energy sources in the grid by the year 2020 –and guarantee a reliable and sustainable energysupply at the same time. Upgrades and invest-ments in traction networks and distribution net-works are an absolute must if a sustainable energysystem is to be achieved.

Power grids operating near capacity todayare coming up against their limits. These were notoriginally designed for the integration of renew-able energies with fluctuating power infeed.Blackouts, such as were experienced in Europe inNovember 2006 and in the US in August 2003,show just how vulnerable our power grids are.The smart grid is one attempt to revitalise gridswhich are at their limit and to make them black-out-proof.

The Siemens approach to the smart grid cen-tres around a new energy grid design with innov-ative management structures. Today’s static gridoperation must become a ‘living’ infrastructure.This means flexible, transparent and fast multi-way communication between all the players in the

electricity market. It must be implemented all theway along the energy conversion chain, fromelectricity generation through to the consumer.The basic requirement: integrated communica-tion standards and new grid intelligence. Wewant to be the outright number one on the smartgrid market in the field of grid intelligence.

What technologies has Siemens developed forthe smart grid and what makes these unique?RC. Smart grids involve the entire electricity pro-duction, distribution and power consumptionchain. We work closely with our customers to ad-dress their individual challenges with tailored so-lutions that incorporate the highest quality,reliability, sustainability and efficiency.

Our advanced energy management systems,for example, can be used as the brain of controlcentres for the transmission grid. Smart substa-tion automation and protection systems can beused as the backbone for a secure transmissiongrid operation. Our asset management systemsand condition monitoring devices are promisingtools to optimise the OpEx and CapEx spendingsof the utility.

Gearing up for the futureRalf Christian of Siemens Energy Sector explains how he is leading the push to meet thechallenges of flexible electrical distribution systems.


Siemens Ed:16nov 26/11/09 15:13 Page 52

Furthermore, our intelligent distributionmanagement systems are the counterpart to theenergy management systems in the distributiongrid. In countries where outages are a frequentproblem, the outage management system is animportant component of distribution manage-ment systems. We provide distribution automa-tion and protection systems; whereas automatedoperation and remote control is state of the art forthe transmission grid, mass deployment of distri-bution automation is just recently becomingmore frequent.

Virtual power plants – a centrally controlledset of small distributed power generation systems– are part of our smart grid solution portfolio, aswell as micro grids. These are still in their infan-cy, but we are already working on suitable solu-tions because there must be optimum gridmanagement between generator and consumer insmall communities without grid access.

Here, there is no backup from a large grid tocompensate for grid fluctuations. For our cus-tomers, we develop smart metering solutions, too– our automated metering and information sys-tem (AMIS) integrates the metering infrastruc-ture with distribution automation. This includesmeter data management, a software tool aggre-gating the meter data. It is a key component forrealising additional functionalities like the use ofmetering data for outage management.

Smart meter integration and enablement al-lows utilities to optimise their business processes.In addition, Siemens also offers billing and cus-tomer care applications, which are key elementsin the area of customer relationship managementfor all market roles: meter reading companies, en-ergy suppliers and distributors. Smart building –energy efficient buildings (clusters) that managedynamically their energy consumption, genera-tion and storage facilities and are enabled to reacton price signals from the grid – are also part ofSiemens’ smart grid portfolio, along with powerelectronics, which is among the ‘actuators’ inpower grid. Systems like HVDC and FACTS en-able actual control of the power flow.

Where are some of the utilities/projects inwhich Siemens smart grid technologies aredeployed?RC. There is, for example, a virtual power plantproject we started together with the German util-ity RWE. Within that project, we gain practicalexperience with virtual power plants from exist-

ing, big decentralised power producers in an in-terconnected supply area.

Another example is a pilot project for real-time measurement and power system dynamicscaused by wind energy generation in the networkof the German utility E.ON. Our AMIS solution,currently being implemented for the Swiss utilityArbon Energie AG, focuses on merging the coretasks of metering and distribution network au-tomation. AMIS provides functions for imple-menting a smart grid among other features.

Another project is a so called decentralisedenergy market place, called E-DEMA, a Germansmart grid pilot and research project from theFederal Ministry of Economics and Technology

in cooperation with several German companiesto establish a smart grid IT infrastructure.

What does Siemens see as the main chal-lenges in rolling out smart grid, and how maythese be overcome?RC. With a view to meeting the challenges connect-ed with the setup and expansion of a smart grid, ourproduct range already includes intelligent solutionsfor reliable energy grids offering environmentalsustainability and economic efficiency.

For decades now, our core business has beenconcerned with making power grids more intelli-gent and consumers more energy efficient. We arethe market leader in the field of power automation,the control technology for power grids, and alreadypossess the relevant expertise. We have been offer-ing intelligent power automation solutions fordecades and have gained in-depth knowledge aboutthe complex correlations of grid operation.

We utilise the latest technologies to ensureenvironmental soundness and energy efficiencyin facilities. Thanks to our comprehensive port-

folio, we are the only company worldwide that iscapable of offering solutions for all sectors of thepower supply market. Our solutions feature thenecessary interoperability and standardisation ca-pability and allow integration of demand andgeneration side.

Where is Siemens focusing its R&D efforts onsmart grid technologies?RC. We operate the world’s largest research anddevelopment network in the field of electricpower engineering. Our R&D locations on gridintelligence are in the US, Germany,Switzerland, Great Britain, Austria, China,India, Brazil and Serbia. Major investments in

research and development, coupled with acqui-sitions and partnerships, have allowed us tostrengthen our position in relation to importantsmart grid technologies.

For grid intelligence, Siemens is the worldmarket leader in control systems for power grids– one of the main pillars of a smart grid. Theseproducts and solutions include programmablegrid controls, such as protection, control andcommunication systems; technical systems forgrid automation, such as electronic data transmis-sion and processing; intelligent operations sup-port; or simulation systems or the keycomponents required for power grids, such asswitching substations and current transformers.Worldwide, we are one of the few companies withthe requisite know-how and technology that arecapable of offering one-stop solutions. �


“We alreadyhave an

extensiveportfolio forsmart grids”

Ralf Christian is CEO of the Power Distribution Divisionwithin the Siemens Energy Sector. Prior to this, he wasthe Head of the High Voltage Division of Siemens’ PowerTransmission and Distribution in Erlangen, Germany.Christian studied Industrial Engineering at the Universityof Karlsruhe, Germany.

Siemens Ed:16nov 26/11/09 15:13 Page 53


companies, helping their customers make opti-mal use of the available technologies. Thesecompanies will need to change the way they lookat a customer and what they need to offer thecustomers.

This will revolutionise the way customers,energy suppliers, new energy service companiesand grid operators need to interact. Even thoughthe technology seems to be able to help in achiev-ing our goals, we believe we won’t come close ifwe don’t focus on the way of involving the cus-tomer as an integral part of the smart grid. Thechanges the energy market and its customersneed to make are huge, but the benefits will beeven greater. n

According to Wikipedia, a smartgrid delivers electricity fromsuppliers to consumers usingdigital technology to control ap-pliances at consumers’ homes to

save energy, reduce cost and increase reliabilityand transparency. Many governments are pro-moting a modernised electricity network such asthis as a way of addressing energy independence,global warming and emergency resilience issues.Increasingly, energy companies are adopting thesmart grid theme and new product developmentis booming. The question we need to ask our-selves is do we believe smart grids will achieve thegoals we set ourselves? Those goals being to re-duce energy consumption (including impact onglobal warming), increase grid reliability (emer-gency resilience) and reduce energy dependency.

Several field tests show that it is possible tomerge a diversity of techniques in such a way thatenergy consumption can be reduced, where agreater understanding of the grid usage is accom-plished, thus allowing grid operators to optimisetheir grids, which should lead to increased grid re-liability at minimum costs. Byreducing energy consumption,one can argue that energy de-pendency will also be reduced.From this point of view, smartgrids will help in achieving thegoals we have set ourselves.

Currently the focus ofsmart grids is for the most parttechnology based. We foresee agreater amount of decentralisedenergy production, and smartmetering will give us the meansto properly monitor energyusage (customer-based) anddistribution grid usage. Smarttechniques make it possible tohook up appliances to smartmeters and make us aware ofand allow us to take control ofour energy consumption.Besides the technology, we can

also count on a green focus that has never beengreater, both for the customer and the industry.Therefore, one could conclude that all the ingre-dients are in place to successfully transform cur-rent ‘dumb’ grids into smart grids in due time.

Why would a customerwant to take part in this?What’s his incentive and will acustomer be able to fully makeuse of the possibilities? In ouropinion, these questions aren’tasked loudly enough. We seethe transformation to smartgrids not as an evolution solelybased on new techniques, butas a revolution based on the in-volvement of customers intheir own energy productionand the way they put this pro-duction to more efficient use.Because of the complexity, cus-tomers will not fulfil their newtasks as efficiently as possible.Help is needed.

This is where supplierscome into play. They will needto transform into advisory

Revolution or evolution?Ramon van der Wal examines the future of smart grid.

ASK THEEXPERT

Ramon van der Wal is ManagingConsultant at Zest Utilities, withover 10 years of experience in theDutch energy market. He wasinvolved in the liberalisation ofthe Dutch energy market and theincorporation of smart meteringinto a new market model. Prior toZest Utilities, he was SeniorBusiness Consultant at Eneco.Van der Wal specialised inEnvironmental BusinessEconomics at the VrijeUniversiteit, Amsterdam.

“Many governments arepromoting a modernisedelectricity network as a

way of addressing energyindependence”

ZEST_image to approve 26/11/2009 15:00 Page 54

ZEST AD:25 June 19/11/09 14:30 Page 1

SMARTGRID

creasingly key to the delivery of EU and national sustainability targets,” it declares. “To achieve those targets, radical change is needed in the design, operation and embedded intelligence of electricity networks.”

Th is is a large undertaking, but as CIO Peter O’Shea explains, the company already had a good base from which to start. “We have invested in a number of diff erent facilities over the years,” he says. “For example, we have a signifi cant investment in SCADA systems already. Some con-sider SCADA to be a precursor to a smart network, while to others it’s part of it, depending upon where on the evolution of control systems an individual utility is.

Ireland’s Electricity Supply Board (ESB) launched a bold new strategy in March of 2008 to become carbon net neutral by 2035. Plans are now coming together to deliver on that strat-egy, including investment in renewable generation and the implementation of smart technologies to develop an intel-ligent grid, coupled with a drive to win the hearts and minds of all ESB staff in pursuit of the sustainability objective.

One of the key challenges is to implement a smart electricity network – indeed ESB’s website pulls no punches on this score: “Electricity net-works are a vital part of our overall economic development, and are in-


GETTING SMART ON THE EMERALD ISLEMarie Shields gets the low-down on ESB’s drive to implement intelligent technologies in pursuit

of its ambitious sustainability strategy.

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Electric vehicle infrastructure to be built

In late October, ESB Chief Executive Padraig McManus, on behalf of Europe’s electricity companies, presented EU Transport Commissioner Antonio Tajani with a declaration designed to pave the way for the widespread introduction of electric vehicles.

Europe’s electricity companies have come together to standardise the apparatus necessary for the recharging of electric vehicles across Europe. Cooperation between the utilities is seen as vital for the rapid introduction of electric vehicles across the continent, allowing motorists in every country to use the same charging system.

ESB is to build the infrastructure required in Ireland for electric vehicles.

Chief executives of the major electricity companies have been discussing how the industry at large can decarbonise power generation. Decarbonised electricity could then be used to fuel the transport sector, which is responsible for a large percentage of CO2 emissions.

The signatories to the declaration confi rmed their determination to cooperate with the various stakeholders towards the development and application of industry pre-standards, until standards have been set by the offi cial standards bodies ISO/IEC.

Presenting the declaration on behalf of the electricity companies, McManus said that the transport sector is currently responsible for 23 percent of total EU carbon dioxide emissions, according to fi gures in the European Commission’s Second Strategic Energy Review.

“We’ve also made an investment in an outage manage-ment system, which together with SCADA, provides our eyes and ears on the network and what’s actually hap-pening on it. We’ve invested in some sensing devices on the network; so we’re somewhere down the line.”

O’Shea does point out that the diffi culty with measuring progress in developing a smart network is the variety of defi nitions that exist around the con-cept. “It’s a subjective question to an extent – you talk to 10 diff erent people about smart networks, and you get 10 diff erent views of what it is.”

To help address this issue, ESB Networks is developing a roadmap for smart networks based on their own fi ve ring model. Jerry O’Sullivan, Sustainability and Systems Manager in ESB Networks, explains, “Th e fi ve ring model integrates renewable generation, smart networks, smart meters, connected home and distributed generation and electric vehicles into a clear strategic vision.”

O’Sullivan explains the particular national characteristics with which the strategy must deal: “Ireland has set a target for over 40 percent penetration of renewable generation, which is by its nature intermittent. Coupled with Ireland being an island system, this poses unique challenges when compared with the rest of Western Europe, where there is a larger, integrated system that more closely resembles that in the US.

“Curiously, the Irish system has close on 200,000 km of transmis-sion and distribution networks, which is almost four times the European average per capita – this is due to its dispersed population and provides its own challenges in the development of smart network strategies.”

O’Shea comments that, “Th ese issues are part of the smart network. It’s all about applying IT and telecommunications intelligence to observe these complications, understand them better and work out how the network, the system operator and the consumers will respond in these diff erent cases.”

Building blocksAccording to O’Shea, one of the biggest building blocks for smart

networks is smart meters. In Ireland, installing a system of smart meters means replacing mechanical meters with computerized devices for each of the country’s two million electricity consumers. He describes the vision of having each of these smart meters with two communication channels: one back up to the electricity system to the system control room, and a second channel back into the home to provide information on the status of the electricity devices there.

“Th e overall vision is, from a system perspective, to create a real-time information link between the customer, their appliances and the power stations and wind farms that generate electricity,” O’Shea explains. “Th is link can be extended into the home, even into areas like controlling the charging of electric vehicles.

“Th e information coming through the smart meter will empower the customer through giving them a full understanding of how they’re consuming electricity, and enable them to better control the energy consumption of their appliances, using information broadcast from the smart meter into the home. Th e meter will also have to interact with electric vehicles.”

Th e project relies on the successful joining of the competencies in metrology and network operational

technology with IT and telecommunications tech-nologies. While all major EU countries are consid-ering these issues, Ireland and ESB would appear to be further ahead than most. “Under the aus-pices of the industry regulator CER, we are part-

way through a smart meter pilot program,” says O’Shea. “We have installed around 9000 meters

nationwide in the last nine months.” Th ere are actually two trials running – one on the

technology, to test the meter itself and the various currently available communication technologies to bring the information

back from the meter. “In addition around 6000, consumers with smart

ESB aims to make all its

production net carbon zero by

2035



Evolution of the ESB

1901 - Hydro-electric power fi rst discussed

1903 - Power station built at the Pigeon House for Dublin Corporation’s Electricity Department

1915 - Investigation into the generation of electricity from the Shannon

1918 - More discussions on hydro-electric power

1922 - Foundation of the Irish state

1925 - Electric power station at Ardnacrusha, Co. Clare approved

1927 - Electricity Supply Board established

1937 - Liffey scheme approved

1968 - Turlough Hill construction began

1980s - Aghada Power station in Cork began producing electricity

1987 - Moneypoint generating station commissioned by ESB

“Replacing petrol and diesel with electric vehicles at point of

consumption is our vision for the future”

meters are part of what we call the customer behaviour trials,” he says. “We’ve chosen them using random statistical selection across the coun-try. Th e people who have those meters will be off ered diff erent fi nancial incentives during 2010, and the trial will then look to measure whether their behaviour changes on the back of the fi nancial incentives.”

ESB expects the trial to show which incentives are better, and also whether giving incentives changes behaviour to an extent that the ben-

efi ts can be quantifi ed either by a reduction in carbon output through lower demand, or by reducing overall operating costs for the electricity system because you’ve shift ed demand from one period to another.

Th e trial should allow full quantifi cation of the fi nancial benefi ts of a full smart metering scheme. “One of the key characteristics of the pilot is the involvement of the many stakeholders in it under the leadership of national government and CER, which augurs well for its success,” O’Shea underlines.

ESB, however, does not underestimate the challenge it faces in roll-ing out a state-of-the-art smart metering solution for all its customers in what is still an immature technology, where standards have yet to be developed. Signifi cant challenges also exist around the communications infrastructure, given the population distribution in Ireland.

Building on the good work done to date in the pilots will be key. One of the next steps will be the adaption by the electricity industry in Ireland, under the governance of the CER, of the national functional requirements for the overall smart metering solution.

Sustainable coreIn terms of ESB’s future plans, O’Shea cites the sustainability agenda

that is core to all the company is currently doing. He explains the sustain-ability strategy as having three core elements: fi rstly to get its carbon emis-sions down to net zero by 2035, which requires signifi cant re-engineering of our generation fl eet – replacing existing fossil fuels with renewables and clean fossil technology.

Second on the list is a range of technology-based investments to fun-damentally change how electricity is produced, transported and consumed in Ireland. Chief amongst these are the implementation of smart networks, smart meters and electric vehicles. Th irdly, the company aims to win the hearts and minds of all in ESB in order to change their behaviours.

O’Shea feels there is a long way to go, but a very solid start has been made. “Once that is achieved,” he says, “electricity will be the fuel of choice, because at the point of consumption there is no carbon equation if your production is net carbon zero; of course, this is even further amplifi ed with the advent of electric vehicles.

“If we can implement smart networks to transport electricity in a smarter way; if we can implement smart meters to allow the system oper-

ator and the consumer to better control what they’re doing; and if we can implement electric vehicles and have the smart network overseeing that; then we have the possibility to fundamentally change how electricity is generated, transported and consumed. We would see that as a visionary change in how utilities will operate.”

Peter O’Shea is Chief Information Offi cer for the Electricity Supply Board (ESB), with its head offi ce in Dublin, Ireland.

Jerry O’Sullivan is Sustainability and Systems Manager for ESB Networks.

Evolving smart networks model – the fi ve rings

Evolving Smart Networks Model

Energy fl ow

Information fl ow

Electricity infastructure

IT architecture

Renewables & Clean

Generation

Smart Network

Smart Metering

Connected Home

Distributed Generation & Electric Vehicles



Sensus is often called the technology innovator for smartgrid and AMI initiatives. Why is that? Bill Yeates. Sensus has a foundation of experience and suc-cess from which to lead utilities into the smart grid and AMIera. We have led the North American metering industry fordecades with a demonstrated performance and a proventrack record in reliable products and advancements thatkeeps pace with emerging technologies. We also have themost installed smart grid applications in the world, with fourmillion endpoints and 188 deployments for electric, gas andwater, and more than 200 customers just in North America.

What are the key tools a successful utility needs in asmart grid era?BY. A successful utility will have an AMI system as its smartgrid foundation. The Sensus AMI system, FlexNet, movesoperations beyond meter reading and into demand response,

home area networking and distribution automation, whichallows all devices on the network to communicate. A suc-cessful utility will turn to FlexNet to leverage the best avail-able technology in systems operations and integration,program, customer relationship and installation servicesmanagement, and deployment strategies. Doing so will cre-ate a more reliable grid and optimise energy efficiency, oper-ations and maintenance.

North America is leveraging FlexNet for the smart grid,but what is the environment in Europe? BY. The smart grid is not yet a major factor in Europe, butwith a focus on conservation, the smart grid gets more at-tention every day. Fundamental value propositions varyfrom country to county, with focus ranging from in-homedisplay of energy usage to carbon footprint reduction, to

managing solar energy. European utilities will need the fea-tures and bandwidth that comes with FlexNet in order toachieve an end-to-end smart grid system.

How is Sensus preparing for a European customer?BY. We view our role in Europe as identical to our role in NorthAmerica – to deliver on our technology innovator reputation.We are ready to match FlexNet’s reliability, flexibility and min-imal infrastructure with Europe’s greater focus on resourceconservation for utilities as their core business driver. OurEuropean partnering entities already own spectrum and tow-ers and have experience in wireless network deployment andmanagement. We are modifying our wireless radio technol-ogy to meet European standards, and we are creating stan-dard developer kits so that manufacturers with a wide rangeof equipment needs can interface with the network. This ap-proach will create competition while driving innovation.

How will Sensus be positioned once the smart grid is acommon fixture in the global utility industry?BY. The future is today, as far as Sensus is concerned. We canprovide solutions, directly or through our ecosystem of in-dustry partners, for any utility around the world. One im-mediate solution is FlexNet’s open standard. We’recompatible with any gas meter and with any modern watermeter. Our goal is to give our customers the technology thatallows them to help their consumers have consistent easy ac-cess to information regarding energy usage.

FlexNet will also open doors around the globe for con-sumer education. If we show people how to lower their energyconsumption, whether their motivation is to protect the envi-ronment or save money, then they will do it voluntarily. Time-of-use pricing will eventually be mandated by governments, andtools like the Sensus FlexServer will help with that education.

It will be clear that Sensus supplies solutions to uniquemarket needs around the world in an efficient manner. Wedon’t take our reputation as being the global technology inno-vator lightly. We work every day to offer progressive solutionsand reliable products that allow utilities to operate successfullyon the smart grid. �

EXECUTIVEINTERVIEW

Leveraging the best technologyBill Yeates tells Power & Energy why AMI systems areessential to the development of the smart grid.

Bill Yeates is Executive Vice President of Conservation Solutions forSensus. He joined the company in July 2008 to manage advancedmetering infrastructure (AMI) and advanced meter reading (AMR)technology solutions for electricity, water and gas, and electricitymeter worldwide. He holds a BS in Electrical Engineering and an MBAfrom Louisiana Technical University.

“A successful utility willhave an AMI system as itssmart grid foundation”

Sensus Metering ed:16nov 26/11/09 15:17 Page 59


and power quality issues. Most companies implementing smart metering have not surpassed this stage.

Th e experience from the telecommunication busi-ness, where similar innovations happened in the 1990s, showed that real changes must be done regarding cus-tomer integration, such as introducing new products, new services and fi nding new markets. Th e customers must be the center of atten-tion, not least of all because they are responsible for the ROI necessary to cover CAPEX. But this is not an easy task, as virtually all legacy processes and systems have to be updated.

As most utility distribution is regulated, there are important tasks ahead for governments and market reg-ulators. Most of the costs of innovation have to be paid by grid operators, while all the other market players not necessarily providing capital or other support share the benefi ts. New market rules have to be set defi ning the new requirements and prices for the information and services provided by distributors to other market players.

Utility companies are not used to making large changes and there are very few ICT vendors who can bring to the table the necessary experience, know-how and best practices to ICT solutions. Much can be learned from past changes in the telecommunications business. Th e utility providers need to go for larger and oft en risk-ier projects that focus not only on technical parameters, such as costs, but those that also involve the revenue side and customer integration.

For more information, visit www.sitronics.com

ASK THEEXPERT

There are multiple factors slowing down investments on smart me-tering projects around the world. Upgrading existing infrastructure towards smart metering and smart grids requires huge investments on

the meter and communication network level. Generally, utility companies are conservative and risk-sensitive businesses that are used to operating in slow develop-ing markets with low risks and virtually no competition. What is needed for this initial investment is to see a clear picture of the benefi ts to gain from this innovation. A lot of attention in the past was paid to the technical param-eters of AMM/AMI but without explaining how utility companies can use these new technologies in order to improve their core business.

It is a simpler thing to evaluate the technical per-formance of pilot projects, as they are metering projects managed primarily by technologically oriented meter-ing departments, such as hardware. Solution vendors of smart metering systems are even now mostly oriented towards metering itself, moving from their traditional area of offl ine metering into smart metering, but still focused on the meters and communication rather than on complex, customer-oriented solutions.

From an economic point of view, benefi ts in this case mean a necessary cost reduction or revenue increase. Costs are generated though all the company by primary and secondary (supporting) business processes; while rev-enue is only generated on the company outputs at the end of the primary processes – through customers. Th erefore, some cost reduction can be achieved anywhere in the com-pany wherever technology can be used to do old things in a new way – more effi ciently.

Integration of new technology can bring new benefi ts in new areas. Revenue increases can only be achieved if new services and products for the customers are in-troduced – doing new things. Generally speaking, the quickest benefi t, and requiring virtually no changes in the company, is reducing the costs of manual meter reads through the implementation of automated meter reading (AMR). Further integration deeper into other processes with changes in the distribution area can optimise dis-tribution network investments, reduce power outages

In with the newMartin Malos explains how new technologies can help utilities improve their core business.

Martin Malos is the Sales Manager of utilities development in Sitronics Telecom Solutions, helping its customers gain more advantage from smart metering solutions. He has been involved since the early phases, taking part in the solution design and product and project management for the initial pilot projects and in pre-sales.

“Revenue increases can only be achieved if new services and products for the customers are introduced”

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What is your definition of smart metering? How does it fit into the over-all concept of the smart grid?Simo Makkonen. We see smart metering as a concept for implementing in-frastructure, systems and processes to enhance current end-customer ser-vices and to provide new services and tools for end customers to increasetheir energy consumption awareness, thus helping them in implementingenergy saving activities. Smart metering also will offer utilities better un-derstanding on their energy grid status and usage, as well as the possibil-ity to remotely control end customers’ energy usage, providing tools forenhanced network maintenance and use, and to peak load savings.

We see smart metering as not only a technical, hardware-related issuebut also as a whole concept and its targets needing understanding. By hav-ing this view it would be possible to make feasible decisions on possibleimplementations and needed solutions. In addition, smart metering is alsoclosely related to the other smart discussions such as smart buildings,smart homes and also smart grid, where we are talking on the same tar-gets and possibly also partly on the same infrastructure and solutions.


ROUNDTABLE

The benefits of the gridPower & Energy speaks to three industry experts about the technologies needed for a streamlined metering system.

Jens Björkman is CEO of TailorMade,and has been for the past seven years.During the past 13 years, Björkman hashad many different roles on both thecommercial and technical side of thetelecom and utility software business.Björkman also serves on several boards.

Simo Makkonen is Managing Director ofProcess Vision Oy. Makkonen worked forPöyry, an international consultingcompany, before co-founding ProcessVision Oy. As Managing Director for thelast 16 years, he has expanded thecompany to take a leading position in theenergy data management business.

Mark Ossel is Vice President of Energyand Utility at Echelon and is developing theenergy and utility market for the companyin Western Europe. Ossel is also a boardmember and treasurer of the EnergyServices Network Association and theinternational Networked Energy Servicesusergroup, and is active in internationalstandardisation efforts.

THE PANEL

Smart Grid RT:16nov 26/11/09 15:14 Page 63


Jens Björkman. From a billing point of view, smart metering really takesthe industry to an online mode. It provides opportunities for new prod-ucts to enter the market and enables the possibility of remotely control-ling consumption and load-management. Regarding smart grid, incomparison with the telco market the smart grid would typically allowtwo-way communications for direct triggered provisioning of the devices,such as the meter. In this sense, all smart grids would in the future onlyinvolve meters and networks that enable direct provisioning of the meters.For example, to enable provisioning based on account status for a prepaidbusiness model.

Mark Ossel. Smart metering is too loosely defined, allowing essentially dumbcommunicating meters to claim the mantle of a smart meter. The correct defin-ition of smart metering is that it is a ‘system’ for delivering dramatic improve-ments in utility operations, reliability and customer service by offering detailedusage information, demand metering, detailed power quality data, outage infor-mation, integrated disconnect switch, integrated customer premise interface andflexible billing options. Smart metering systems serve as the key information-gathering source and foundation for a smart grid that helps utilities better man-age their operations, and customers better manage their energy consumption.

Smart metering is an essential part of the smart grid itself and leverages thegrid. Any other sort of smart metering rides on top of the grid, introducing risk,increasing complexity and adding cost. The essential thing about defining smartmetering is that it’s not just about the meter, it’s really about the grid.

What benefits do smart meters provide to both consumers and utilitycompanies?MO. The consumer, and society in general, will benefit from smart meters andthe smart grid, since they provide a way to achieve a decrease in energy usageby raising consumer awareness of the cost and impact of electronic devices inour homes and offices, and the real ‘cost’ of electricity. The combination ofheightened awareness, an ability to track and manage use, and incentives, willgive consumers a sense of energy empowerment that they have never beforeexperienced, and this will be huge.

By using smart meters by our definition, the distribution grid owner(DGO) will have the ability to get more information from the low voltage net-work about both the consumer’s energy use and the grid itself. The best of thesmart meters, those that provide grid intelligence like power quality data,power factor, THD, frequencies and other measurements, will give DGOs bet-ter insight into the grid. A true smart grid will be able to respond to local andsystem-wide inputs, have much more information about broader systemproblems, and more importantly, be able to react to or resolve problems asthey occur.

JB. For consumers, smart metering can increase the awareness of consump-tion levels. For a utility company, it brings completely new possibilities forproduct packaging, which could actually be used to lower the risk within theretail business. It also means that utility companies can create new value-added services for consumers to increase awareness and lower their con-sumption and costs, which in the long run benefits both parties.

SM. Concrete benefit to consumers would be billing based on real-meteredenergy usage compared to the estimate and correction-based approach. In ad-dition, other utility process-related meter data reading, like moving or chang-ing suppliers, should become more straightforward when up-to-date meterdata is available – making these processes easier for consumers. In addition,when consumers get more detailed timely data from their energy usage theirenergy awareness increases, creating a good basis for implementing possibleenergy saving activities.

Utilities would be able to enhance their existing services and create newservices to end customers, making it possible to increase customer loyalty andattract new customers. Having detailed, close to real-time information on cus-tomers’ energy usage, associated with the possibility of controlling customers’energy supply remotely, would provide utilities with tools for peak saving.They can gain savings in energy procurement costs and have better controlover possible additional infrastructure investments.

What types of tools and solutions can utility providers use to streamlinetheir automated metering processes?JB. Within the IT domain it is time to kill the old CIS monolith systems. Thereare several best of breed solutions in the market for MDMS, billing and CRM,which from our point of view are the three main functions of the old CIS. Itis important for the utility companies not to get stuck in their old businessprocesses or try to adjust the old processes and systems to fit with the newbusiness with smart meters and smart grids. To really grasp the opportunitiesof the new infrastructure, utility companies should create a new blueprintbased on the new processes. The most important change that the new sys-tems/solutions must be able to manage is the continuous near real-time flowof meter values through the MDMS and billing systems, as well as the veryhigh data volumes.

It is also very important to be able to act upon the analysis made andchange/create new products and pricing models. The number of prod-ucts offered to the market will increase dramatically because of the dataavailable for customer segmentation as well as the increased competitivelandscape.

“To really grasp the opportunities ofthe new infrastructure, utilitycompanies should create a newblueprint based on the new processes”

Jens Björkman

“We see smart metering as not only atechnical, hardware-related issue butalso as a whole concept, and itstargets needing understanding”

Simo Makkonen


TAILORMADE AD:25 June 19/11/09 14:29 Page 1

metering solutions have been implemented from technical viewpointswithout clear understanding or vision on the new services to be imple-mented on top of the new infrastructure. It seems that some of the im-plemented new metering infrastructures are not ‘smart enough’ to enablenew services and there will be a need for further infrastructure investmentsand upgrade projects in the near future.

We see that in the near future, the focus will change from technical im-plementation issues to the new services and solutions the smart infrastructureshould enable.

JB. The frequency of collecting meter values is likely to increase with new sys-tem capabilities. Remote control for load management is another future op-tion. Also the meter values of water, heating and cooling will increase, whichis a precondition for the future deregulation of these markets. From a billingperspective, this will increase the possibilities to create value-added serviceswith information about consumption cost (not only kwh) and notificationsto increase awareness.

MO. Smart metering will be able to support initiating an automated demandresponse system within all households, which can optimise energy usage andcost for the consumer. It will be the starting point for home automation andwill change the marketing and product offerings of energy retailers and trig-ger real grid management within DNOs.

Smart metering is an essential foundation for a sustainable future,achieved by smart grids, people and government policy. Smart decision-makers will not make purchasing decisions just to comply with Europeandirectives for the sake of compliance or in isolation from the real goal ofa truly smart grid. These will rather be based on a desire to build a grander,smarter grid to better their business, empower and benefit their cus-tomers, and ultimately upon a belief that the right decisions will con-tribute to an improved future for the world. �

MO. First of all, a utility should look for a proven system,and not for just meters or parts of a system. Many utilitieshave a very meter-centric view of the world, and that’sok, because before smart metering came along, that’s allthat was available. However, today they and their cus-tomers are far better served by looking for a system con-sisting of meters, communication infrastructure anddevice management. Utilities need a system that fitstheir architecture independent of communication lay-ers, current available or used technologies, and has theflexibility and interoperability necessary to provide new

services or meet new market demands in the future without rebuilding orre-metering.

One thing to avoid is the trap that meter interoperability is a requirementto make the smart grid work. It is not. A specific, meter-level interoperabilitystandard limits innovation and promotes point solutions that are inherentlyless capable than system solutions to metering. Defining interoperability onlyat the meter with a single technical standard will only raise costs for utilitiesand decrease the benefits to their consumers.

SM. During the smart metering implementation project, depending on theselected implementation approach, utilities would need tools and solutions tocontrol the implementation process – installation, logistics, testing and assetmanagement – and update their related systems with necessary changes ac-cording to the meter installation progress. This would set new requirementsto the existing IT system solutions and applications, especially concerning thecapacity to handle large amounts of data and transactions. Therefore, prior tometer installation projects, it is necessary to analyse existing information sys-tems and applications, and make possible necessary adjustments to the ITlandscape to implement new smart metering capable solutions. These are de-signed and proven to cope with mass meter rollout and other smart meteringprocesses. An example of smart metering proven solutions is the ProcessVision GENERIS product that covers all the key systems and applicationsfrom meter data management and asset management to energy data man-agement, billing and end customer extranet online service portals.

How do you see smart metering developing in the future?SM. Currently, smart metering pilot projects are running in several countriesto evaluate possible technical solutions. In addition, the European Union’s2020 target for end-customer metering has been the driver in severalcountries to set national deadlines for implementing enhanced meteringfor consumers. Common to all these cases has been technical focus. New


“Smart metering is an essentialfoundation for a sustainable future,achieved by smart grids, people andgovernment policy”

Mark Ossel


ECHELON AD:25 June 19/11/09 14:02 Page 18

The Capacity Allocation Service Company for the Central West-European Electricity market (CASC-CWE) is a creation of actionsfollowing the memorandum of understanding (MoU) betweenthe ministry’s regulators, transmission systems operators (TSO),

power exchanges and representatives of the market participants with Belgium,France, Germany, Luxembourg and the Netherlands. Corne Meeuwis is theCEO, the man leading the initiative, and the responsibility for uniting the var-ious regulators proved to be his first challenge upon assuming the role.

He explains that ensuring that each member has the same end solutionin mind involved a multitude of discussions are listening to what was ex-pected by each member also required a vast amount of patience. Meeuwis

notes that there are big differences between the wishes of power ex-changes, and those of market participants, and also between the require-ments from regulators and national governments, and aligning all of thesevarious interests was no easy feat.

“Once you do achieve that, the next phase is setting up a company likethis and introducing all the practical solutions, as well as aligning all the wish-es, desires and requirements and trying to sort it out,” he explains. “And thatis not always easy to do because everybody has their own position and alsoeach country has its own laws and regulations. Getting all the regulators to-gether to agree on the auction rules for example, is quite a big challenge andto be quite honest we still are in that process today.”

UNITED WE STAND


Corne Meeuwis explains why a single market is needed to develop Europe’senergy industry for a greener future.

TRANSMISSION

Meeuwis ED:16nov 26/11/09 14:46 Page 68

Talks of a single European energy market began long before. TheEuropean Union initiated the drive towards a universalised system with TSOslooking at how well they could facilitate this. Relied upon for solving the prob-lems regarding European Energy, the TSOs began their discussions 10 yearsago, but attempting to develop the entire market at once is unattainable –there are just too many issues to solve.

Slowly, they progressed to a state of cooperation. Meeuwis explains thatinitially, there were all manner of bilateral agreements between countries, re-sulting in the discussion of a common market in the central west Europeanregion in 2006. Prior to this three different auction offices were in operation;one national law with one IT system seemed the most viable option.

It was at this time that the MoU emerged. “There you saw the wishes ofpower exchanges and market participants moving toward market coupling asa system. Everything came together in this MoU and was signed in June 2007;it was a natural process where all the discussions of the past seven years cametogether to this one document that was undersigned by everybody.

“Unfortunately, as you often see, everybody was very positive and hope-ful and in the belief that we could achieve all these goals in a very short time.So the timelines set in this MoU, to say the least, were a bit over-ambitious butI can assure everybody that all parties are working really hard to establish thegoals set there. Unfortunately with some delay in respect to timing but we areon the way forward,” says Meeuwis.

Although still only in the start-up stage, liquidity and competition in eachof the markets is expected to increase. “What you see is that the participants forexample trading today on the Dutch/German border are not the same as that aretrading on the German/French border or on the French/Belgium border.

“If you have one auction system, all participants can automatically accessall the auctions on all borders, so where today you have perhaps 20 or 30 par-ticipants per auction office, in the new system we will automatically havearound 80 participants who can easily access them across borders and do theirtrades there. That will increase some competition as it’s made more easy fora market party to say, ‘Well, there can be an interesting deal on a border where



“Today they all use different systems and more or less now by default, butthere is no discussion between the TSOs. In the future there will be one sim-ple system to calculate and if everything goes okay, the outcome should beequal and hopefully that will increase the available capacities for traders.

“The TSOs today get quite a significant incomefrom auctioning these capacities and this money isused in different ways: for some countries the money isused to reinforce the grid and especially on intercon-nectors. That should automatically lead to a situationwhere you have sufficient interconnector capacity butactually the result would no longer be an income fromauctioning transmission capacity. In other countriesthe money is used to lower the grid tariffs but the effectis the same because the moment a TSO lowers its tar-iffs with this income, if they need to do an investmentin cross-border capacity, they spend more money andthen the tariff should go up.

“So it doesn’t make a huge change, except finan-cially. For accounting it is quite a change because in the first situation themoney’s actually more or less outside the books of the TSOs as it’s a sepa-rate pot used to do the investment. Also, in the other situation it’s part ofthe profit and loss account of these TSOs and that can create some discus-sions with market priorities but also with regulators on how the money isspent exactly and whether or not it is used to create additional profits forthis TSO. That’s to the future. That will probably be a situation where theincome for TSOs coming from these explicit auctions will drop significant-ly, due to the fact that additional lines are built.

I usually never trade because it’s too much of a burden to register at this otherauction office. Now I can do it and you know what, I place a bid to see whatcomes of it and if I can I will do my trades there.’

“Another advantage is that the task will be now be designated by theTSOs as being the sole platform to publish all informa-tion regarding cross-border trades in the region. Todaya market party or a large industrial customer has to go toall the individual platforms, view their website informa-tion and then try and combine this. In the new setupthere will be one website with all the information in-volved, so what is going on it becomes more transparent.It’s also easier to check for the market parties and thatmedically increases, in my opinion, liquidity and possi-bilities for parties to do their trades. And because of that,you stimulate competition and for the rest we can do lit-tle more. It’s now up to the market parties to make itwork.”

TSOs remain neutral – there is no competition be-tween market parties or energy traders – they have the capacity available sothat it makes no difference which party uses that capacity. The only stipula-tion, for them is to ensure that the capacity is used. The only question askedof the TSOs is how much availability of capacity they should have, a questionthat has been dominant for some time.

Meeuwis also notes another stipulation of the MoU that TSOs are nowexpected to cooperate more, which is already happening. “Jointly calculatingthe future on the same basis with the same information and hopefully withthe same kind of IT tool,” he explains.


“If you have oneauction system, all

participants canautomaticallyaccess all the

auctions on allborders”


“Also, due to the introduction of market coupling, that will level out pricedifferences between countries and then there will be a new situation creat-ed where TSOs can no longer rely on an additional income – they will haveto look for other resources for their investments. So that could be quite achallenge because then you have to go to your regulator and have to de-fend, for example, the fact that you have to increase your tariffs with a cer-tain percentage in order to build a new power line. Where today thatregulator can say, ‘Okay, but simply use the auction revenues, and there isno additional burden to the end users.’ So that will make a change for theTSO,” he explains.

The operations of the TSOs provide key lessons for other countriesthat are looking to make similar steps in the future. He notes the impor-tance for other countries to adopt a single energy market, and predicts thelikely creation of one organisation covering the whole of Europe. Currentlythe central east region – Germany, Poland, Czech Republic, Slovenia andAustria – are in the process of setting up an auction office like CASC. The

central south regions are also in the midst of discussions for all those coun-tries connected to Italy to be united, but Meeuwis remains hopeful that ifthe number of auction offices can be cut to two or three, then one is also apossibility.

“When it comes to the work that’s done by power exchanges there aremultiple power exchanges dealing with the day’s markets and also focus-ing on intra-day activities, such as how they relate to one another. There isa relationship between all this and perhaps in the future, but then I talkeven further away in the future. There will be simply one organisation deal-ing for the whole of Europe with these kind of issues and doing it all basedon one platform and then you would really have one common market.”

Another driving force for the industry, IDC analyst Ret Nicholson fol-lows on Meeuwis’ comments, asserting that smart metering has long beenan issue within the utilities industry. It is only recently that it has become pub-lic knowledge, and this is what has changed the way the industry responds.Meeuwis notes that the public is becoming increasingly aware of the benefitsof renewables and the need to progress into a carbon-free generation; partic-ularly their interest is in the smart meter and of the windmills that need to bebuilt in Europe.

The challenges facing the industry are in knowing how to manage pub-lic opinion, as well as predicting what the world will look like in 20 years.More so, the investments are needed now for those projects – building a

new overhead power line in Europe is estimated to take a realisation timeof 10 to 15 years.

“If things are going to change significantly, you already have to startinvesting now in the grid to be ready but nobody can tell you what theworld will look like at that time,” says Meeuwis. “Are we going to focusstrongly on building wind farms in the windy areas of Europe and thenconnect them to the hydro power plants of Switzerland and Norway tohave storage there? Is there going to be an electric connection with thenorthern part of Africa so that we can have solar cells there? Is that the mas-ter plan that has to be realised in 20 years from now? If the answer is yes,we have to start investing today.

“Politicians, regulators and also customers will have to be aware thatTSOs will have to spend billions of euros today for a situation that we pre-dict will be there in 20 years but which we cannot guarantee. So you havea high risk on stranded costs and that discussion is really tough, and whatyou see is politicians hesitating to put their money where their mouth is –

it’s tough for them, especially today with the economic crisis. Well nobodywants to say, ‘Well, okay, we allow you to spend €30 billion to create thissuper grid in Europe.’

He explains that even for a tenant to build their own grid they would needan investment along the lines of €3 billion, which alone doesn’t include thenecessary investments for the super grid and everything related to that.

“If you compare that to the current asset base of this TSO, it almost dou-bles based on the investments that they are now doing. It has a massive im-pact and it will have this impact on all TSOs in Europe. Are you prepared topay twice as much for the high voltage grids compared to what you do todayin order to prepare for this new situation that might occur in 20 years fromnow? That’s a tough question to answer.

“Moving towards a common platform is essential. If there is no commonvision amongst TSOs on how to go forward, you can never achieve the endgoal that there is one common European network/market to run. There isa new organisation set up by the European TSOs for electricity and with-in this TSOs are trying to come to common positions so that they canmatch the requirements of the commission in order to achieve this oneEuropean energy market. In my opinion, it’s simply a prerequisite to cometo this one market.” �


“If there is no common visionon how to go forward, you cannever achieve the end goal thatthere is one common European

network/market to run”

Corne Meeuwis is the CEO of CASC-CWE.


There have been so many innovations in the engineering softwarethat supports power generation, and transmission and distribu-tion that energy utilities have been able to be-come far more efficient in how they manage

the lifecycle of this complex and valuable infrastructure.However, one class of energy utility infrastructure haslagged behind, and that is substations. Substations are im-portant to energy utilities because as you will read below,there are lots of them, and in developed economies a sub-stantial proportion of them are reaching the end of theiruseful operating life – in the US this is estimated to be 40percent of all substations. In developing economies, the de-mand for new electric transmission and distribution infra-structure means that thousands of new substations are beingdesigned and built. For these reasons alone, it is time formould-breaking innovation in the way that substations are designed and en-gineered. Substations need to take a front seat in the changes and improve-ments in efficiency planned by energy utility engineering team managers.

Substations are coming to the fore of the smart grid. We have reached apoint where substations are being replaced or built from scratch, but thosearen’t the only vectors for change. There is a lot of talk about the smart gridand what this means for energy utilities. One thing is for sure, and that is thatsubstations will be critical in achieving the kind of intelligent infrastructurethat the smart grid demands. Transformers will be fitted or retro-fitted withintelligent electronic devices that will constantly monitor performance andallow the substation to be operated optimally. And in a grid that has to bemonitored actively from the point of power generation to the point of service,one thing we can be sure of is that there will be no smart grid without smartinfrastructure data. To a large extent, this already exists for much of the powergeneration and transmission and distribution infrastructure, but for substa-tions it barely exists at all.

The status quoIn many utilities, the majority of the substation engineering documenta-

tion is not even in intelligent digital form. It’s in standardCAD, or drawings organised in books. In other cases, someof the engineering documentation is maintained in a digitalformat, but it is split down the middle between the electri-cal design for protection and control systems and the phys-ical design of the substation. This means that workflows areproblematic because data is in silos, and even creating accu-rate bills of material can be onerous because the process ismostly manual and therefore subject to error. This is un-surprising because until now, there has been no engineer-ing tool for substation design that can unify the electricaland physical design environments.

It is time for a new paradigm in substation design. Itwas precisely this state of affairs that led to Bentley developing BentleySubstation V8i. This is the first and only product to allow engineers to executeboth the electrical systems and the physical design in a single environment. Thenet outcome is that substations can be designed 30 percent faster, bills of ma-terials can be produced more than 60 percent faster, and the informationmodel can be used to support the substation across its lifecycle from design,construction, energising, to operation and ultimately decommissioning.

Bentley’s solution for substations includes interoperable products forsite/civil design, structural analysis and detailing for steel and concretestructures, and document conversion and image management. This is a so-lution that is being adopted now by forward-looking utilities around theworld, including Iberdrola Engineering and Construction, a majorCanadian utility, and others. This solution is not only useful for energyutility owner-operators, but also for EPCs and rail owner-operators thatdesign and manage substation infrastructure. Substations will no longer bethe neglected class of infrastructure for utilities; they will be designed andoperated using 21st century technology. �

21st century substation design


Richard Zambuni explains the need for substation re-design to support the grid.

ASK THEEXPERT

“It is time for a new paradigm insubstation design”

Richard Zambuni is the Global Marketing Director of Bentley Systems. He has spent allof his career in marketing and the last 15 years in hi-tech marketing, living andworking in the US and Europe. Zambuni has covered a broad range of technology, fromnetwork hardware to telecommunications inventory and provisioning software, togeospatial and infrastructure engineering software.

For more information, please visit www.bentley.com/substationPE

BENTLEY (ATE):16nov 26/11/09 11:34 Page 72

BENTLEY AD 1:25 June 19/11/09 13:58 Page 18

Plugging in to the future


Rapid shifts in demand, soaring energy costs and the need for greater operational efficiencyare placing huge pressures on existing utility networks. Joao Torres looks at whether

Portugal’s approach to the smart grid provides the blueprint for a brighter future.

INSIDESTORY

JoaoTorres ed:16nov 26/11/09 14:43 Page 74

The energy and utility industry has been talking about thedevelopment of the smart grid for years – from the earlydays of smart metering through to today’s vision of the in-telligent utility. But now, thanks to a rising acknowledge-ment of the importance of energy efficiency and the needto modify our power consumption behaviours, the discus-

sion has moved very much into the public domain. And according to JoaoTorres, President and CEO of Portuguese energy giant EDP, this has only in-creased pressure on the industry to respond.

“We feel the pressure, for sure,” he says. “We have been working on im-proving organisational efficiency and quality of service for a number of years,and for the last 10-15 years we have been working under strong regulatoryguidelines as well, so pressure is nothing new; however, we now feel we needto build a new utility, using technology to go forward with more automationin the grid. Consumers want to know how they use their energy, so it’s timeto look to implement smart grids as a priority.”

Of course, it’s not easy, and Torres concedes that there are a number ofchallenges still to be addressed. “We have some work on standardisation todo, and we need to discover who will provide the investment,” he says. “Wefeel that the distribution system operator (DSO) can lead the movement, butthere are a number of other stakeholders that can also realise significant ben-efits from this, and so we need to communicate this better. Weneed to explain exactly what smart grids are, the benefits as wellas the costs, in such a way that we can get everyone looking atthe challenges to generate a common vision.”

Portugal is one of Europe’s leading practitioners of smartgrid thinking, and EDP has led the way with its innovativeInovGrid project. Instead of resisting change, the electrical dis-tribution operator chose to anticipate the inevitable technolog-ical revolution in smart grids – which will be widespread inEuropean Union countries over the next few years – and em-brace the concept. InovGrid promises to reduce clients’ electrical bills byabout 20 percent and, even with the lost revenue potential taken into account,Torres believes the net result will be positive because it will ultimately allow asignificant decrease in network maintenance costs, as well as reduce techni-cal and commercial losses.

The rollout is still at a relatively early stage but is progressing rapidly –the utility expects to have 200,000 smart meters installed by the end of 2010 –and Torres believes the benefits will be wide-ranging. The project addressesthree key issues, the first being micro-generation. The Portuguese govern-ment has pushed forward a big programme of micro-generation in recentyears, and while EDP has been at the forefront of this movement to date – over2000 micro-generators have come onto the network in the last year alone –Torres feels that in the future the only way to increase the micro-generationcapacity is through the implementation of smart grids. “Smart grid equip-ment, automation and information and communication technologies canprovide the control you need to be able to manage that micro-generation atthe local level,” he says. “That’s a significant issue for us, so this is the firstquestion we want to solve with InovGrid.”

The next issue surrounds automation of the grid. “This is the main ad-vantage of the smart grid,” he says. “We need to know what’s happening inthe grid. We need to increase the quality of service, so we need to be able tosolve the problems we have faster. We need to know how the equipment is

performing, not least because we have a problem with an aging infrastructureand in order to make better investment decisions we need better informationabout where to invest – this transformer or that substation or this line or thatinterrupter.”

The third issue is that of smart metering – and not just using metering tobetter collect usage readings. “It’s using smart metering in such a way that wecan give more power to the consumer,” explains Torres. “And in this instance,power means information – information about pricing, about usage, aboutefficiency. Of course, there are some other benefits too; if the regulation candesign a new rule for the market, the supplier can make a new model of tar-iffs for weekends or nights or for daytime consumption. There are also bene-fits to us as a provider of the grid with costs of our own – smart meters meanwe have no readings to do. We have some control of our grid in a way. Wecan decide better how we work on it. So there are a number of benefits.”

Torres feels there are a number of stakeholders that could take advantageof the smart grid paradigm, from the DSO to energy suppliers to consumers.In addition, he sees the implementation of the smart grid having a beneficialimpact on the economy in general – an invaluable stimulus given the currentclimate. “I think it could have a noticeable economic effect because it createsnew actors,” he says. “It creates new ways of working and there is some activ-ity in the economy that this concept of smart grids can help promote.”

And while challenges exist around getting the public and private sectorsto work together effectively, Torres feels the early signs are positive. “So farwe’ve worked with the government every step of the way, and they’ve beenvery positive about this initiative,” he says. “We are also speaking with our reg-ulator and are currently in the field testing the technology pilot in small townsand in rural environments. By the beginning of next year, we hope to roll thatout to a further 50,000 consumers.” EDP’s management team expects that ifall goes according to plan, the whole country will be benefiting from this newtechnology by 2014 – six years ahead of the deadline announced by Brusselsrecently under its European SmartGrids Technology Platform initiative thataims to have all electrical networks operating under this model by 2020.

“I think that all DSOs must be prepared to run this way,” he confirms.“However, we need standardisation of processes and technologies; with theright level of standardisation we can build a common platform by working to-gether. We have contacts with a lot of DSOs in Europe and I think we aregoing well in this regard. Even at the level of the European Commission inBrussels we are making some good progress, as they recognise that the smartgrid is an important strategy. So it’s time to stand together to build a commonvision and work on that with the European Commission and the regulators.”

Indeed, Brussels sees the development of the smart grid as fundamentalto the future development of a globally competitive Europe, and the conceptof the intelligent utility is emblematic of the faith the EU is placing in the


“With the right level of standardisationwe can build a common platform byworking together”


to work with remote teams. So it’s a different company to the one it was yearsago, and we need to explain and communicate that.”

As such, Torres believes maintaining and improving internal communica-tion is fundamental to the future success of the firm. “It’s not easy, but when Ilook to the past and what we have achieved over that time – the changes we haveimplemented during the last 20-25 years – I remain extremely positive about thefuture,” he says. “Aligning the right technologies and skills is key, and I have a lotof confidence in the ability of our people to deal with that. As long as we contin-ue to invest in our people, we can solve the technical challenges for sure.” �

power of information and communication technologies. Putting intelligenceinto networks for real-time communications among network elements, whileat the same time accessing millions of meters, is key to the industry’s devel-opment. “It’s a big challenge, but the only way to improve is to increase theuse of ICT,” asserts Torres. “That is the main question: how to increase to theright level of ICT, to deal with rising volumes of information, to decide whichinformation is really important. We need to organise our information better,and organise the company in a different way because with the increase in tech-nology we are now generating a lot more information. We must choose theright information to decide the investment, to make operational decisions, toanswer questions from consumers, from regulators, from government insti-tutions. So in fact ICT will be critical for our company and for all DSOs alike.”

Even so, Torres concludes with a reminder that technology is only asgood as the people who use it, and that the human side to the smart grid trans-formation cannot be forgotten in the rush to embrace new solutions and tech-nological advances. “We always talk about technology, but people are still themost important part in this,” he says. “The staffing demographic has changeda lot during the last few years as technology has become more ubiquitous. Ithink the sector is now seen as much more sexy; it’s not so traditional, and Ifeel that young people are looking at EDP in a different light. They want towork with us because smart grids offer a different approach to the future. I re-ceive a lot of proposals from young engineers that want to work withInovGrid because they understand it’s different. It’s a new utility, as I said.This is good because we need different people for the future.

“But we need to bridge the transition from the older employees, becausethey have a lot of knowledge about the industry that is incredibly valuable,”he continues. “We can’t let them leave the industry without preparing prop-erly for it. They have an important role to play in building the future andtransferring information to the younger generation of workers.

“You’re talking about creating a whole new business model, and I thinkinevitably there will be some resistance to change,” he explains, adding thatthe battle for hearts and minds is often one of the most challenging parts ofany large technology rollout. “There is always reticence when you try tochange anything. For instance, we are now working with a new workforcemanagement tool and have more than 2000 of our technicians working withit, but training and communicating the value and the importance of chang-ing the ways of working is a challenge. We also need to prepare our managers


InovGridEDP believes the energy paradigm of the future will bebased on renewable energies and on the efficient use ofdistribution networks that will have smart searchmanagement mechanisms built in. Consumers will be moreinformed and participative being that they can also play arole as energy producers (through micro-generation).

In each consumer/producer’s house, there will be a so-called Energy Box, the true brain of the domesticmanagement of electricity. Other than being a two-waytelemetry system – measuring the energy that is consumedand the energy that is introduced through micro-generation– this system will allow the consumer to have a moreeffective participation in domestic energy consumption. Forinstance, the consumer will be able to subscribe to newtariffs (benefiting from plans with advantageous price plansat certain hours of the day or week, or even benefiting fromthe subscription of prepaid packages). This is a useful optionfor a second house, for instance.

The Energy Box will work as a local network thatprovides web services, house automation and that facilitatesthe intelligent management of consumption (systemdemand control) of electrical equipment. Through remotetelemetry, the suppliers will measure the energy correctlyand provide information to users throughout the day.

Joao Torres is President and CEO of EDP.


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Inge Pierre has an interesting philosophy: “Money doesn’t make the world go ’round, standards do.” As Head of European Aff airs at Svensk Energi-Swedenergy, reasserting the importance of standards is his priority, especially overcoming the problem of standards being considered ‘boring’. Th ere is oft en no understanding that they can be something good, he stresses, even if they provide benefi ts to the wider public; he cites the example of universal plug appliances across European

countries, and the convenience this off ers. However, he is fully aware of the diffi culty of conveying the importance of standards.

“For the industry there are all kind of benefi ts you can provide and smart metering is one of them,” he explains. “With standards, you don’t install diff erent appliances in diff erent countries or even worse, diff er-

ent appliances with diff erent features in the same countries. Th ey all work together because aft er all, when you expand it with more and more equipment, if they cannot work together in the system, that’s not good for the business.”

Th e traditional model of an integrated, state owned, monopoly power generation and transmission planning is completely disappearing. Th e challenge now is to ensure security of supply; Pierre’s belief is that given the liberalised market, security of supply comes more or less naturally. “Th e fi rst step towards having security of supply is to have a liberalised market and let the market work. Th at’s the number one priority.

“I deal with gas supply; we have had some gas crisies and the com-missioner is anxious to get emergency plans for the whole of Europe. You can have plans showing what you should do in an emergency situation, but if you have a market that works, that’s the best way to get security of

Setting the standardInge Pierre talks to Power & Energy about the importance of a universal standards-based market for the success of the European smart grid.


FEATURE INTERVIEW

Pierre.indd Sec1:78Pierre.indd Sec1:78 26/11/09 15:04:1926/11/09 15:04:19

supply. You must also let all kind of options live side by side. You should not rule out any kind of energy sources.”

Fluidity of options, having a market that works and the right pricing is the combination that Pierre believes will ensure companies invest in diff erent technologies and increase the security of supply. In certain areas of Europe, the market is very lib-eralised and works incredibly well, in other areas this is not the case. Pierre supports the European Commission’s desire for a Europe-wide liberalised market, but acknowledges that an instantaneous universal system is hugely unlikely. Instead, the commis-sion is looking to introduce regional markets – understanding the devel-opments needed to sustain regional markets before a single system.

“Th at’s the way to go, and we see that development when it comes to electricity,” he explains. “We see the same when it comes to gas as well – you start with regional markets. If you look at gas in the Iberian Peninsula, the market is being coordi-nated, so Portugal and Spain will have a common gas market within one year, hopefully.”

So how do standards bodies cope with the tough economic times? Does that put more pressure on them to get it right or on the industry bodies to adopt standards more quickly?

Pierre explains that it is the tough times that force companies to adopt fast solutions. “You want things to happen quick, and you want also to make sure that the investments you make now are not outdated rather soon, so you have to look for stable solutions. If you have standards involved, that gives some more stability, hopefully, if it’s done correctly, but even here you have to know that people have diff erent views of the role of standards, absolutely. Some countries think that they should de-velop their own procedures, their own practices and not have a standard. Some other countries are more interested in standards, so it varies quite a lot from country to country,” he says.

Th e same is true of energy sources, Europe can’t choose one single energy source – it’s just not viable – so getting the mix right and com-municating the reasons for that mix is essential. Succesful management of the transition period whilst green technologies may still be another fi ve years away is critical. Knowing the energy industry solutions and developing them takes time, explains Pierre.

“It’s diffi cult to be patient, but people have to be. If we look at the sea cells technology, we have this task to build demonstration plants. Th e commission would like us to build 12 demonstration plants by 2015. Hopefully that will be managed and some pilot plants are already being built or already in operation, such as the Schwarze Pumpe that Vattenfall has built, but it’s going to take time to develop the technology, and that’s what we have to communicate – it’s not a quick fi x.

“It won’t be around next year. We might have some demonstration plants by 2015, but commercially, it won’t be ready until 2020 or 2025. Look at windmills: we started in Sweden to begin some demonstration plants in the beginning of the 1980s, and it’s been during the last fi ve to 10 years that this technology has really taken off ; the fi rst planning for demonstration plants took place 30 years ago,” he explains.

Th is is only one of Svensk Energi-Swedenergy’s carbon-reducing strategies. As well as its windmill operations, the company also has a project with General Electric for 2050; Pierre explains that it is a project that demon-strates how an almost total carbon-free electricity production system could be ready by this time.

“Of course we would see major improvements much before that, such as the sea cells technology, which might be commercially available by 2025, and we would see a gradually improved situation all the time, but unfortunately it takes quite a long time. We will have to realise that, and what we have to realise also is that unless the economic situation changes dra-matically, the power plants we built fi ve years ago will still be in operation 30 years down the road.

“Normally you use a power plant for 30 or 40 years, then you can make some gradual improve-ments during its lifetime. We have to respect that

it takes quite a long time, but the eff ort has been there for some time, and if you look at the development of the electricity production, we have reduced emissions quite a lot in the past 20 years. Look at the UK: we


“Th e fi rst step towards having

security of supply is to have a liberalised market and let the

market work”



for improving the network, liberalisation of the electricity market being one of them. “To have one European market means that we need more interconnections, that’s for sure,” he explains.

“If you look at the past when countries more or less fi xed their own supply of electricity by themselves, the need for interconnections was not that great. Now we are seeing the need for them, especially with the addition of renewable sources because you need to have more intercon-nections. You need to have a stronger network because sometimes the wind blows and sometimes it doesn’t, and still the demand for electricity remains the same.

“People don’t turn off their lights because it’s not a windy day – people want to have their lights on all the time, so that increases pressure to have a network that can cope with this variation of the production that we have not seen in the past. Adding to this we have the chang-ing demand because of plug-in hybrids that would change the pattern as well, so we see a much bigger need to improve the networks.

“We have some work going on already with plug-in hybrids: Vatten-fall signed an agreement with Volvo some weeks ago to develop plug-in hybrids. Vattenfall is not going to get into the development of cars, but development of the contacts – the plugs –so you have the standards for that for the whole of Europe, hopefully the whole world.

“It’s not only the plugs that need development, it’s also the billing system. If you take your car and go from Sweden through Denmark into Germany, you must be able to plug in, fi rst of all, but then also to get charged for the electricity that you load into your car. We take it for granted that you can go through Europe and fi ll your car up with gasoline and use your credit card. We have to have the same system for electrical cars.”

Pierre believes that moving towards a common platform is essential. He acknowledges the diff ering countries and their various views, noting the benefi ts of having more similar equipment or standards so that even if the equipment is diff erent, they can still cope. However, creating a univer-sal structure will provide big challenges for all involved – companies can’t operate on their own; government intervention is also needed. Private

enterprises are going to need government funding, standards and regulations.

“One challenge is that you make the general public – the consumers – aware of the possibili-ties and potential for smart grids, because other-wise we could have a situation where these smart meters measure the amount of electricity that you consume and your bill is a little bit better than the previous bills because it’s accurate consumption or the estimated consumption. But for the normal consumer, they receive the bill and perhaps under-stand it a little bit better than in the past, but just

pay it and that’s that. You must have some incentives for the consumers to use the potential of this smart grid; diff erent rates for day and night can encourage people to make these peak savings. In most cases, you don’t really have those incentives, and that’s the challenge, to make the consumers aware of the possibilities and the potential of smart grid.”

Inge Pierre is Head of European Affairs at Svensk Energi-Swedenergy.

have a seen a major change from coal-fi red to gas-fi red power plantss and already that has reduced CO2 emissions down to half, sulphur and oxide more so.

“Sometimes in the debate you’ll get the feeling that suddenly the world has woken up and now we are talking about sea cells technology and environmental issues. I have to remind people that we have talked about that for quite a long time and a lot of actions have been taken already in the past. Perhaps not in the kind of dramatic way that regular people in the street notice it, but if you’re in the business, you would know that we have changed a lot already, going back 15, even 20 years.

“Public awareness adds in a way, so it’s easier for people to become aware of the changes. Of course you’re always, as all businesses, looking for the most profi table way to produce electricity. Th at’s the way we all have to act to try to reduce cost and fi nd the best solution,” says Pierre.

Public awareness is not the only challenge. Europe’s transmission and distribution network may not be able to cope with next genera-tion micro-generators or be able to link renewable sources from point of generation to point of use. Pierre notes that there are many reasons

“To have one European market means

that we need more interconnections”


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For a long time, RW Energy’s (RWE) growth in the renewables market was limited entirely to the UK, the business model was matured and honed over several years, but it wasn’t until cer-tain changes were introduced within the company’s executive

board in Germany that trends were shift ed. Predominantly the company had been what Kevin McCullough explains as, “A very carbon-heavy player within the energy sector,” but in order to stay on top, the company quickly recognised the changing times and the need to move away from its traditional carbon-based technologies.

“Th e decision was taken with the introduction of our new group Chief Executive, Juergen Grossman, to up the game in renewables,” says McCullough. “We had a very solid base on which to build that from RWE npower renewables in the UK and the role has been to try and extend that throughout Europe, and to build it slightly diff erently from jurisdic-tion to jurisdiction. Th e business we have in Spain is a diff erent business model to the one we have in Italy, Poland and the UK, but it was impor-tant to take that experience and knowhow and grow it.”

Th e company wasted no time in moving quickly. RWE and West-phalia-Lippe Agricultural Association signed a cooperation agreement for biogas, and a deal was struck with REpower Systems on a framework agreement on the supply of 250 off shore wind energy units for the Nor-dsee 1 project. McCullough notes that fast innovation is the key to suc-cess in such implementations. “If you are going to stick to what you’ve always done, you’ll stay doing what you’ve always done. Th at market will decrease because others will eat away at it; because we were a little later than most of our competitors in getting into large volume renewables, we had to make some fairly bold moves quickly,” he says.

“A typical example was the formation of a strong partnership agree-ment with one of the major wind turbine manufacturers globally– we secured a contract with REpower Systems for up to 250 fi ve- or six-mega-watt turbines that we could deploy in a range of off shore projects around Europe. Once all of the 250 turbines are procured and paid for, the value of that project is in excess of US$2 billion.

“We commit to that contract with terms and conditions that we can live with so that we can be fl exible when projects come to fruition. We can apply those turbines into those projects and therefore move quickly, and that gives us a very real market advantage, as well as giving us a credible voice with the many politicians that we speak to in an individual country jurisdiction. It’s one thing to say that you’re going to develop large-scale, off shore wind in particular, but a gigawatt of off shore is likely

to cost in excess of €2.5 to €3 billion, so it’s not for the fainthearted. You have to show that you are really committed and have the means to back that commitment up. Th ose framework agreements and getting them ready in place quickly is fundamentally important,” he says.

Offshore projectsMcCullough adds that there have only been minimalist lifestyle

changes towards energy, and current policies of low carbon and low price are highly ambitious: renewables involve typically expensive tech-nologies and skimming on the cost involved will see the continuation of energy sourced from fossil fuels. He notes how onshore wind is now be-ginning to fi nd parity with gas and coal turbine plants, whereas off shore wind still remains in a diff erent league.

“It’s at least 50 percent more expensive than onshore wind in pure capital of cost because of the amount of infrastructure that sits beneath the waves, but then when you look at the life of an asset 50 to 150 kilo-meters from shore, it’s a square area the geographical size of the city of London. To maintain that over 20 years’ lifespan is signifi cantly diff erent from simply driving to a turbine in a fi eld or in a valley that you can gain access to, so we’re beginning to learn the full lifecycle cost. If we want a

GREENENERGY

IN THE MIXSpringboarding from the Radlinger Group, RW Energy has upped the renewables game. COO Kevin McCullough explains the industry’s need for a mixed energy portfolio to actualise carbon-emitting targets.

McCULLOUGH ED P.indd 82McCULLOUGH ED P.indd 82 26/11/09 15:07:1726/11/09 15:07:17


low carbon economy we all must ultimately fi nd a means for society to pay for this low carbon economy. It will be a combination of the types that we have to charge but balanced in a way that we have support for those schemes not yet directly competitive, such as off shore wind, so we can encourage them to be brought on, and therefore we have a balance to our portfolio.”

RWE is participating in the British Off shore Wind Accelerator Ini-tiative, launched by the Carbon Trust, and is one of the original utilities to begin building commercially viable, off shore wind farms. In 2003, the company built North Hoyle, which has continued to operate since then and is regarded as the best performing off shore wind farm in British waters. According to McCullough, the company’s technical availability is at around 90 percent, making it signifi cantly more advanced than that of RWE’s competition and proving its expertise – to the Carbon Trust and Off shore Wind Accelerator Program – to develop innovative new products.

Combining innovative products with cost reductions is highly important. Th e company is currently developing ways to lower produc-tion prices and make the supply chain in the manufacturing pro-

cess more effi cient, for both its onshore and off shore activities. Working alongside the Carbon Trust, RWE is developing how electricity is to be taken from those wind farms and deployed into the national grid, simul-taneously learning how these operations can be made cheaper.

However, the company has not been secretive of its fi ndings, opting to share the developments with the industry rather than remaining pre-cious of the intellectual property that has been created. “We have to be a little sensitive on some of the information regarding the commerciality of any particular project, but it’s in our interest to share information about how we maintain our assets, how we benchmark our assets – how do we know that we’re actually the best in something that we do without shar-ing that information? We’re very active about sharing the basic concepts of good practice, such as health and safety initiatives and maintenance philosophy,” explains McCullough.

“If we and all our competitors did that in complete isolation then UK, PLC and EU players would take a lot longer to see the benefi ts due to the parochial nature that that would support. We don’t believe in that, we want to open our doors. Th e North Hoyle project is a classic example

of this: most of the round one off shore wind projects have had

“When you look at things like carbon capture and storage with

sequestration, they have the potential to be very viable, but

only on a project by project basis”



full public visibility, partly because they were initially funded by a capital grant. For the fi rst early years of their life we had to be very transparent with that learning experience, and that’s a philosophy that we should try to extend where we can, so that as we go further off shore and develop bigger projects, we share that information, allowing the sector to benefi t. Ultimately, that benefi ts us. We can build more wind, hydro and biomass projects and for less money. Th at is in my interest, and it ultimately will be in the consumers’ interest.”

Energy mixConsumer interest is fast catching onto the global emphasis of green

energy, and understanding how to provide a mix of energy types and getting that mix right for its consumers is an issue facing nearly all utilities worldwide. McCullough discusses how the company is administering these choices and points to the example of the large combustion plant directive in the UK, which is placing pres-sure on the energy gap – the capacity of generation ability and the level of demand at any one time.

“We have the Magnox fl eets shutting down now,” he explains. “Th e AGR’s will follow, and at any point in time today we have investment decisions to make to replace some of those assets that will be aff ected by schemes like that. We have to do it in a way with the best knowledge that we have available at any given time, but we try to spread the risk so that we’re not putting all of our eggs in one basket.

“We see real strength in playing as an energy generator portfolio as opposed to a single party player. With the technology that’s available today, I don’t believe in a world that is 100 percent renewable backed, nor do I believe in a world that’s 100 percent nuclear, coal or anything else. When you look at things like carbon capture and storage with seques-tration they have the potential to be very viable projects, but only on a project-by-project basis.

“Not only does that take very high effi ciency coal plants close to 50 thermal effi ciency, but by adopting the technology to strip out the carbon dioxide, it reduces our thermal effi ciency closer to 30 again. Th en you also have the sustainability issue of taking that CO2 and transporting it vast distances, with all of the steel pipe work, infrastructure and compression plants, and storing it for somewhere between 30 and 100 years. However, with the climate change dilemma you have to ask whether a wholesale basis for every coal plant is sustainable, so the answer is not completely CCS; it’s not completely nuclear. It has to be a selection of these technolo-gies so that we can make the best of everything we have available and stop trying to fi nd this silver bullet that frankly, in my experience of 25 years in the energy sector, doesn’t exist,” he says.

Whether Europe’s transmission and dis-tribution network is strong enough to cope with the rise of micro-generators and the transmission of renewable energy from point of generation to point of use remains to be seen. McCullough believes the network to be suffi cient to cope with a large penetration of renewable energy, and not only that but also to successfully distribute energy. Smaller scale energy is made in a more distributed nature via combined heat, power plants and generation, be it micro, domestic or small business scale. He notes the example of Ger-many, which has historically been a centre of large points of generations, similar to that

in the UK. Th ey already have 23,000 megawatts of wind installed, and although there are numerous complaints from the system grid operators regarding managing the base load environments, McCullough does not see the diffi culty as impossible.

“It means that we have to actually adapt to how we think about a new form of rules as to how we regulate and manage the grid,” he explains. “When you look at 23,000 megawatts installed in Germany and look at the very signifi cant percentage of penetration that is in the market, then look at markets like the UK that are down in the single digit percents and very low numbers at that, there’s a vast amount of room to go at before we really run into problems. Will we run into problems? We might, but let’s actually make the progress towards that hurdle rather than starting and stopping before we get there. We can’t continue doing nothing.”

2010 will see the extension of carbon-reducing emission targets, not only in utility companies but almost every other industry, but will this communication of energy politics, together with healthy performance in that scheme, actually be a competitive advantage to the utilities? “Th e aviation industry and the automotive industry are already using their carbon footprint or their sustainability impact very cleverly to competitive advantage,” says McCullough. He sees no reason as to why this could not be practically applied in a smaller environment and on a much smaller scale. “Clearly, if you have multiples of messages being given by individual businesses, then you have the potential to confuse or even create an apathy amongst the customer base where the message is repeated, so oft en it becomes diluted and we’re already beginning to see something like climate change fatigue.

“Th e aviation industry and the automotive

industry are already using their carbon footprint or their sustainability impact very cleverly to

competitive advantage”

Kevin McCullough is COO of RW Energy.



thinking about system loads and demand fl ows. Th ere has to be because of the interconnectivity of those grids. You are seeing an increasing amount of discussion, via the EU Commission, to harmonise the way we think about energy fl ows and services, and that clearly enters the wires business, and the transmission and distribution network operators.

“We’re not currently near a tipping point; it’s more tight in areas like onshore Germany where you have quite a mixed portfolio already and in order to actually go to the next stage there, you need to go off shore and do something else. Other countries, including the UK, have headroom to utilise the grid infrastructure that we currently have. Do we have to reinvent or rethink the rules to do that? Yes, we do.

“We have to be more innovative, but we can still do much more than we’re doing at the moment with the limitations of the transmission and distribution systems that we have, so we’re a long way from being at a tip-ping point where you have to think more radically. Again, if you waited for every single answer before you did anything, mankind wouldn’t progress. We have our part to play in this, we need to take steps along the road, and we can do it. We’ve got a lot of headroom, and we’ve got some clever people around that can actually help us work out the next stage of solutions as we take steps.”

“People struggle to know how to react to it. Businesses are selling themselves now, trying to diff erentiate themselves, to be better at manag-ing that aspect of their business than their next competitor, but already there’s the critical path that always follows the euphoric, ‘Yeah, we get it. We get it. Let’s do something about it,’ and then apathy sets in, and we have this green wash.

“Communication’s absolutely key. Again, take the heralded new nuclear building in the UK that the country absolutely needs, and look at the legacy that nuclear suff ered. Nuclear was born out of the Cold War, it was eff ectively built for weapons grade plutonium with heat as a huge byproduct that some clever people thought we can build energy from. And of course more clever uses of that nuclear technology became civil nuclear reactors. But when they were built, the whole paradigm of why they were put there was completely diff erent from those reactors that we’re actually thinking about building today, which are designed to be decommissioned, designed for very long asset lives, designed for a commercial environment, as opposed to being retrofi tted, and emerged over a very clumsy period of time. Yet the legacy of the PR eff ect has been enormous and is still there, so getting that message right in terms of communication is fundamentally important, and whilst we’ve learned that lesson, we still meet pockets of resistance.

“We always will. We’ll always have the NIMBY’s and BANANA’s – the ‘not in my backyards’ and the ‘build absolutely nothing anywhere near anything’ brigade – and unfortunately if we all had a nation full of BANANA’s where would we be? So we need to be a little bit more forward thinking than that,” he says.

Th e solution to this problem is education. Consumers need to be continually educated, as do the utilities that serve them, for as Mc-Cullough explains, “Our consumers are our lifeblood and you ignore your consumer at your absolute peril. We’re living in an age now where the consumer has never been as informed as they are today, everything from the internet to the ability to actually swap a supplier when the needs of that supply service agreement are not met. No longer do we have cap-tive audiences, and that’s a good thing, especially for competition. It’s a good thing for keeping our service practices sharp – most of the time we get that right in the utility sector. Sure, we’re still seen as the big, bad utility guys, but it is a transition period, and the winners will be the ones who can really turn that model around and link with the consumer so that it becomes a partnership and a relationship.”

However, he is not oblivious to the diffi culties in the current regu-lated environment. RWE’s domestic consumers are only compelled to retain their relationship with the utility for 28 days, during which time the company must help to encourage money saving on energy bills and es-tablish a consumer desire to continue the relationship into the long term. Th e relationship between the utility and the consumer is tentative, and long-term status is built with trust, which in McCullough’s view is done by providing “excellent customer service, which is what we strive for.”

So how exactly is Europe to move forward on renewables in a cohesive manner and what is the importance of a common policy? McCullough notes the commonality already seen throughout continental Europe, due to the region’s very close connectivity. “We have some connectivity by the channel links into France and the like, but it’s a more crucial issue in continental Europe than it is in the UK. Th ere is already a lot of common



What are the pressures currently facing the energy sector that are driving design and simulation requirements?Sunil Tahilramani. Today, globally there is an increased focus on the impact of energy consumption on the environment. This focus, along with the fl uctuations in the price of crude oil and natural gas, has increased investments in the development and implementation of clean, renewable energy technologies such as solar and wind energies.

Worldwide there has been a rapid growth in wind turbine installations, which has been fuelled by government incentives, such as tax credits for clean energy initiatives. In just the US alone, wind power provided 42 percent (8500 MW) of all new generating capacity added in 2008, up from around two percent in 2004. Solid future growth has been forecast for the renewable wind energy industry.

The increasing pace of growth has put pressure on turbine designers and manufac-turers to come up with innovative and reliable designs. Wind turbine designers are moving towards larger rotor diameter and blades to get very high output per turbine and avoid component failures, to increase effi ciency and reduce downtime.

Components like the gearbox have been known for high failure rate defaulting in fi ve-10 years or even less. Turbines are designed for a lifetime of at least 20 years or 120,000 operating hours, during which they must reli-ably withstand a wide variety of stresses and

environmental conditions. There is a need to innovate and reduce the amount of physical tests, which are not only time-consuming and expensive due to their trial and error ap-proach, but are possible only in a very limited way due to the size of wind turbines. As a result, numerical simulation is becoming a mission critical process.

More research and development is taking place around alternative energy initiatives. What effect does this have on energy com-panies? How does an increased focus on design/simulation positively affect manu-facturers in this sector?ST. With increased research and development around alternative energy initiatives, energy manufacturers are trying to reduce ownership cost and provide reliability to their customers. In the case of wind energy, with the increasing size of the turbine, it must sustain dynamic forces caused by the turbulence and maintain structural integrity under high loads. Custom-ers are investigating offshore sites, which pose the added challenge of operating under extreme conditions while maintaining design life of up to 20 years.

With an increased focus on simulation, manufacturers can overcome the numerous challenges related to the creation of ever more powerful systems. Companies can tackle the engineering challenges by performing design iterations virtually with high accuracy and reduce the cost of prototypes, which is height-

EXECUTIVEINTERVIEW

ened due to the limited yearly production rates of the turbines.

How does software that can simulate com-plex mechanical systems help companies to meet and overcome these challenges?ST. With software, such as the ones provided by MSC Software, that can simulate complex mechanical systems, designers can perform a full wind turbine study, including the effects of control systems. Real-life behaviour of com-ponents and assemblies such as rotor blades, bearings, gearboxes and power trains can be accurately understood by subjecting them to different loads and boundary conditions in a virtual environment.

Structural analysis for towers, nacelle, hub, foundation and other elements helps understand the capability to sustain variable thrust forces and ability to maintain structural integrity. Companies can accurately perform the aero-dynamic loads calculation and predict the life of the individual components and the system through fatigue prediction for ground as well as offshore structures.

How do you see the sector developing in the future – which advances in design/simula-tion will become increasingly signifi cant to the industry?ST. The renewable energy industry is in a growth phase, with continuing investments and we will continue to see more innovations through an increased focus on research and development. For example, in terms of gearbox, we are likely to see the movement from a traditional three-stage gearbox to direct-drive technology with integrated gearbox and generator and advanced gear designs. There will be a heightened inter-action between disciplines such as structures and dynamics, and performance, safety and reliability of products will greatly infl uenced by the interactions between these disciplines.

In terms of simulation, we will see leverag-ing solutions that offer interactive analysis for coupled engineering physics such as motion-structures, systems and controls; multi-physics, such as electromagnetic; and more.

A blueprint for innovationSunil Tahilramani explains how an increased focus on design is streamlining the wind turbine industry.

Sunil Tahilramani is Product and Industry Marketing Manager at MSC Software. Prior to this position, he worked in roles of pre-sales, technical support and consulting. His background includes a Masters degree in Mechanical Engineering with an emphasis on Multibody Dynamics and FEA. He is currently pursuing his MBA at the University of Michigan.

MSC Software.indd 86MSC Software.indd 86 26/11/09 14:59:0926/11/09 14:59:09

MSC AD:25 June 19/11/09 14:10 Page 18


RENEWABLES

Lins ed:16nov 26/11/09 14:45 Page 88

According to Christine Lins, Secretary General of the EuropeanRenewable Energy Council (EREC), Europe is already well on itsway to achieving the ambitious goal of having 20 percent of its en-ergy generated by renewable sources by 2020. “We have exceeded

10 percent of renewable energy in final energy consumption within the EuropeanUnion,” she says. “We are on track, and we believe that with the RenewableEnergy Framework Directive, which was adopted in May 2009 but was only re-cently published, we will see further impetus that this development will happen.

“Much of the development in renewables at the moment is coming fromcertain countries, such as Germany, Spain, Denmark,France, Italy and Sweden. However, there is a lot of po-tential in the other member states and we attach a lotof hope to the national renewable energy action plansthat countries have to submit to the EuropeanCommission by June 2010.

“This is one of the major outlines in the renewablesdirective, that countries by June next year have to comeup with strategies outlining how they foresee reachingtheir binding national renewable energy targets. These ac-tion plans will provide the stability and framework formaking sure that the objectives are achieved.”

The aggressive pursuit of a renewable energy policycan have other benefits apart from the obvious environ-mental ones: job creation, for example. Lins points outthat Germany, which has had a strong record of promot-ing renewables for a number of years, is benefiting notonly in terms of energy share from renewables but also interms of new employment opportunities.

“There are around 450,000 people employed in therenewable industry sector in Europe,” she says. “Out ofthese, probably 285,000 are employed in Germany. Thisshows that the renewables industry is a factor for growthand sustainable development.

“We also see more and more big companies fromvarious industries investing in renewables, because in the long-term their operat-ing costs are lower and more predictable than those of conventional fuels.Together with energy efficiency, investment in renewables is something we alsosee when analysing different businesses.”

Getting smartAlong with renewables, another main factor in the energy efficiency/envi-

ronmental sustainability equation is modernising electricity grids to make themmore ‘intelligent’. To this end, EREC runs a project called the Thematic Networkon ICT solutions, which aims to foster and promote the large-scale integration of


L E A D I N G L I G H TMarie Shields talks to Christine Lins about the progress Europe has made

towards reaching its renewable energy goals.

domestic and distributed micro-generation, and to promote an improvement inenergy efficiency through the implementation of a novel ICT solution into localsmart power grids.

“Very clearly, the rapid deployment of renewables will require some changesin power grid infrastructures,” Lins explains. “Decentralised generation needs tobe taken up, and this means not only looking into the most feasible technical so-lutions, but also looking at non-technical barriers, because we know that often thelack of information about distributed generation is one of the main reasons util-ities can still be resistant to adopting these technologies.

“There is another project in decentralised genera-tion, called MASSIG, in which we elaborate marketingconcepts and technological approaches on how to bestsell electricity generation by distributed generation inthe power range of up to several hundred kilowatts.Thefocus is on renewables and small co-generation in theseprojects.”

When it comes to environmental sustainability,EREC isn’t afraid to put its money where its mouth is. ItsBrussels headquarters building, Renewable Energy House,is a showcase for the latest smart energy technologies. Thecouncil has completely refurbished the 140-year-oldbuilding and has equipped it with a series of energy effi-ciency and renewable energy measures.

“One hundred percent of our heating and coolingcomes from renewables,” Lins points out proudly. “Alarge part of the electricity is generated onsite throughphotovoltaics and the rest is bought as green electricityfrom the grid. This is an example which, in the frameworkof the New4Old project, we are trying to duplicate allaround Europe in both the private and public sectors.Everyone is welcome to come and have a look at howthese technologies were integrated into the building.”

Challenging timesLins believes there is a lot at stake in the European power sector. “We are

confronted with the fact that much of the current power generation capacityneeds to be refurbished in the next few years. We need to get these decisionsright, and the way we take them now will influence our attitude towards en-ergy for the next 10-20 years.

“Renewables are the fastest growing new installed power generation capac-ity. More than half of the newly installed capacity in 2008 was renewables, with57 percent from wind, photovoltaics and hydro together, followed by natural gas.

“It is going to be a challenge to increase the percentage of renewables inthe electricity grid. There we will need to collaborate closely with utilities,

“More long term, avery high percentage

of 80-100 percentrenewable energy

share in final energyconsumption can be

envisaged”

Lins ed:16nov 26/11/09 14:45 Page 89

GSOs and so forth. Another challenge is to make sure that renewables areproperly used in houses on a large scale basis, so that the buildings of tomor-row on the one hand respect energy efficiency standards to a maximum, andon the other hand meet a large percentage of their energy needs from renew-able energy sources.

“It is also key that the renewables directive is properly implemented andthat we put in place ambitious national renewable energy action plans. All thisis something that we are quite intensively working on.There are also other important aspects; for example, thetraining of installers for renewable energy installations iscrucial, so that the installations are of high quality andgenerate the desired output.”

Of course, Europe is not alone in its drive towardsgreater energy efficiency and sustainability – the US, nottraditionally known for its forward-thinking energy poli-cies, is also forging ahead, thanks to the renewed interestgenerated by the election of a more environment-orient-ed government.

The consensus seems to be that while the European renewable energy indus-try is ahead of its American counterpart, the US could make up this disparity in arelatively short time – a view with which Lins concurs: “The Americans are catch-ing up, because there is now a lot of political ambition, and we all know that if thingsstart moving in the US they move rather quickly. It’s going to be a challenge for theEuropean industry to keep up, but we see this as a very positive competition.”

New developmentsIn terms of the future, Lins points to the binding commitment given by the

27 heads of state that by 2020, 20 percent – or one-fifth – of Europe’s final ener-gy consumption will be generated by renewable energy. EREC’s aim is that this20 percent renewable energy will result in 33-40 percent of electricity coming fromrenewables by 2020, to about 25 percent renewable share in heating and cooling,and then 10 percent renewables in transport, most of this coming from biofuels.


Project MASSIG Market Access for Smaller Size Intelligent Electricity Generation

ObjectiveTo develop and evaluate alternative marketing concepts for

electricity from small and medium-sized distributedgeneration/RES-E.

PhilosophyThe system of our electrical energy supply is changing: while

in the past electricity has been provided by large centralisedpower plants using conventional energy resources, more and

more environmentally friendly and renewabletechnologies like wind power or photovoltaicsare contributing to our energy mix.

The liberalisation of the energy markets inEurope and the unbundling of the formerintegral power companies offers the chance forsmaller investors and market players to engagein power production. One condition for this,however, is that these investments bring areasonable income for the owners.

BenefitsGuidelines, action plans and decision-making tools for

owners/investors of smaller DG/RES-E for entering bigelectricity markets.

Partners• Badenova WÄRMEPLUS GmbH & Co. KG, Germany• EMD, Denmark• The University of Manchester, Great Britain• European Renewable Energy Council, Belgium• Technical University of Lodz, Poland• Energy Economics Group, Vienna University of Technology,

Austria

450,000 people work in the

European renewableenergy sector today

Christine Lins is Secretary General of the European Renewable Energy Council.

“This is something that we think is absolutely feasible,” Lins says. “We willdo everything to make this happen. And I think we can go far beyond. We are cur-rently starting the discussion in Europe about the perspective of 2050. More long-term, there is communication coming out of the European Commission that avery high percentage of 80-100 percent renewable energy share in final energyconsumption can be envisaged.

“We expect a rapid increase in turnover figures. At the moment, theEuropean renewable energy industry has an annual turnover of about €45 bil-lion. We expect this to grow exponentially, and coupled with this will be thecreation of a significant number of jobs. We have around 450,000 peopleworking in the sector today; this figure is estimated to rise to two million by2020. The sector offers good prospects for sustainable economic development,and the desired sustainable recovery of the economy, which we all need.” �

New4OldThe New4Old project is committed to significantly contribute torenewable energy sources and the rational use of energy marketpenetration through a two-fold approach:

• The creation of a network of renewable energy houses (REH),which will serve as focal points for the sustainable energypolicy discussion in EU member states and contribute to thecommercialisation of renewable energy source (RES) andrational use of energy (RUE) equipments.

• Capacity building among architects and planners throughguidelines and training activities in the field of buildingintegration of renewable energy and energy efficiency intohistoric buildings.

Inspired by the success of the REH in Brussels, it is theintention of this project to lay the ground for the creation ofpublicly accessible REH projects, which will serve as a base forfurther stimulation of the market replication of RES and RUEtechnologies in the respective countries.

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ELECTRICON AD:25 June 19/11/09 14:03 Page 18


How can wind farms be protected against lightning and direct strikes?Kim Bertelsen. Each individual wind turbine in a wind farm has to have an integrated lightning protection system, which can effi ciently intercept the direct lightning strike. Th is lightning protection system should conform to the IEC61400-24 standard including air termination systems, down conduction and earthing systems. All systems and sub-systems in the protection chain must be tested and verifi ed to prove suffi cient protection.

Damages to structural parts, such as blades and main bearing as well as power and control equipment, must be limited. Th e entire route of the lightning current should be determined by the engineers – and not be just coincidental. A lightning protection system should not only pro-tect against the direct eff ect of lightning, but also the indirect eff ect protection should be thought into the design in the early stages.

Special focus must be on systems that have an infl uence on turbine control and are installed in zones where the lightning impact is high. Th is is especially true in wind sensors, blade sensors and pitch-systems, which must have increased protection installed. Th e lifetime of all protection measures must be considered since replacement and repair will always

be costly. Regular maintenance is necessary, but components with a long lifetime should be preferred.

Trevor Howes. As our obstacle light systems are one of the very few products that are mounted outside and on top of the nacelle, these are amongst the fi rst products to be exposed to the eff ects of lightning dis-charges. Aft er conducting extensive tests on simulation apparatus, and

confi rmed through the experience of having thou-sands of obstacle light systems operating worldwide, we have designed our products to ensure that the direct and residual eff ects of lightning discharges are safely managed outside the obstacle lights rather than passing to the electrical ground through the obstacle light system, which will oft en cause critical failure. Th is does require that the obstacle light systems are properly bonded to a primary ground path during in-stallation – without that it’s impossible to be sure that the obstacle light system is not going to be damaged,

which, if that happens, leaves the wind turbine without the required air safety marking warnings.

Eric Bakker. Lightning still is one of the most common reasons for the catastrophic failure of a wind turbine. Since it is impossible to avoid light-

Keeping our wind energy secure

Power & Energy talks to four industry experts about the challenges of safety for onshore and offshore wind farms. With EWT’s Eric Bakker,

Ricardo Moro of Global Energy Services, Trevor Howes of Orga Aviation BV and Electricon’s Kim Bertelsen.

Special focus must be on systems that

have an infl uence on turbine controlKim Bertelsen

ROUNDTABLE

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ning striking the turbine, well-designed protection is a necessity for wind tur-bines. Th e lightning protection systems have improved signifi cantly and EWT off ers both an active and a passive system for its customers. Th e passive system consists of several lightning receptors and a metal tip on each turbine blade, which will guide over-voltage and currents adequately to the ground in case of a lightning strike, minimising damage to humans and equipment. In addition to this, the control system of the wind turbine and vulnerable electronic parts are well protected in order to avoid damage, but also to make sure that essential signals will not be disturbed.

Th e active system predicts and detects lightning in the vicinity of the wind park, a technique currently used at airports and golf courses. Th e wind park will be switched off when lightning has been detected within a set range. In this way, further damage to the turbine and its environment will be prevented in those rare cases that a lightning strike couldn’t be defused by the passive system. Th is system is primarily used at sites where wind turbines are co-located with very sensitive installations like refi neries.

Ricardo Moro. Wind turbines have three lightning protection systems, one in each blade. It consists of a metal piece in the blade tip, which is connected to a cable that extends from that metal piece to the ground in order to conduct the electrical discharge as safely as possible. Th e substation is protected by a light-ning rod more or less as any conventional building. Apart from this, all electri-cal components, mainly the transformers, are designed and manufactured with an isolation level, which is part of the product specifi cation.

What are the differing challenges between onshore and offshore wind farm safety?RM. Th e main challenges in off shore wind farm safety are those related to ac-cessibility – there is no 100 percent safe way to access a wind turbine. Th e usual way is to carry technicians on a boat from the coast to the turbine. Depending on the distance and the sea conditions, this trip can lead to tiredness and sick-ness. When the boat is close to the turbine, there is a risk in the manoeuvre of transferring those from the boat to the turbine. Th is operation can only be done when currents and wave levels allow for it – less than two metre waves.

Many eff orts are taking place in order to develop safer access methods, but an optimum solution has not been found yet. When the sea is rough and boat access is impossible, a helicopter can be used to transfer the technicians from the coast to the turbine. In this case, the helicopter unloads the tech upon a plat-form situated on top of the nacelle. Th ere is an obvious risk factor in this opera-tion. Th is leads to higher demands with respect to training – fi rst aid, personal survival techniques, fi re prevention, fi re fi ghting and helicopter rescue – and PPE – survival suit, locator beacons.

KB. Th e main diff erence is that an off shore wind farm has limited and costly accessibility. In case of a minor failure to an electrical component – possibly

Trevor Howes is General Business Manager at Orga Aviation BV, responsible for Orga Aviation’s activities as a leading provider of obstacle marking systems worldwide. He has 30 years’ experience of advanced technology manufacturing companies, with previous R&D, manufacturing and commercial roles in the lithium battery and photovoltaic industries before joining Orga 15 years ago.

Eric Bakker has been CEO of EWT since April 2009, joining the company from BP Alternative Energy where he was President of Wind Power Europe, Middle East and Africa. At BP he has been responsible for the development of over 700 MW of wind energy and two M&A transactions leading to one of the largest wind development portfolios in the US.

Ricardo Moro is Chief Executive Offi cer at Global Energy Services, an independent services provider to the energy sector and world leader in the wind market, with 4400 employees active in Europe, North America and North Africa. He is an industrial engineer and has over 20 years’ experience in the renewable energy sector, both in manufacturing and in service activities.

Kim Bertelsen is the owner of Electricon and a lightning protection expert. He has worked with lightning protection and system reliability for more than 16 years, the last 10 years in the wind turbine industry. Bertelsen is participating in the Danish National Committee of the IEC and has a seat in the International IEC PT 24 group responsible for wind turbine lightning protection.

THE PANEL

“Lightning still is one of the most common reasons for the catastrophic failure of a wind turbine”Eric Bakker


ORGA AD:25 June 19/11/09 14:15 Page 18


the gearbox, will therefore lead to a signifi cant reduction of downtime and operational costs. Other advantages of this technology are higher yields and improved manufacturability, which all contribute to best-in-class cost per kWh levels. As one of the few wind turbine manufacturers in the world, EWT has an extensive track record with this direct drive technol-ogy and is applying it in all its turbine models (750 kW, 900 kW and most recently its 2 MW).

RM. It is part of the OEM activity to improve designs for higher reliability, by the right selection of materials and the best product design. Computer-based design and simulation is the basic tool in this stage. Test procedures and test rigs are developed to ensure the quality of the components, such as blades, gearboxes and generators. With respect to testing the whole tur-bine, prototypes are installed in the fi eld and closely supervised in order to detect any signifi cant problem. Ideally, prototypes are tested for a signifi -cant period of time prior to start up of serial production.

Th ere are two types of maintenance technologies. Predictive main-tenance is one – there is a range of monitoring techniques that show whether a turbine is work-ing in proper conditions, mainly vibration and temperature monitoring, but also noise or ex-tensometry techniques. Each turbine has its own signature and whenever any of the parameters go out of range, it indicates that a component needs to be replaced or adjusted.

Preventive maintenance is another – the tur-bine manuals describe the kind of routine con-trols and maintenance actions that are required. By properly following such indications, the maintenance company can minimise downtime

due to unexpected failures. With the proper statistical tools, it is possible to optimise the frequency and scope of those maintenance actions.

KB. By using modern technology in air termination and surge protection – and especially by using new methods in test and verifi cation – it can be ensured that the turbine remains operational during and aft er a direct lightning strike to the wind turbine structure. Surges and over-voltages, due to lightning strikes or internal switching, are the most common source of isolation breakdown in electrical machines and systems. Such infl uences can be limited by using modern technology.

Th ere is an increasing demand to use standard ‘off the shelf ’ industrial equipment, but such equipment is normally not designed to withstand the electromagnetic environments in a wind turbine application. Special re-quirements and environmental zoning must be defi ned to secure adequate equipment immunity against radiated and conducted disturbances.

TH.As turbine heights increase, the potential risk of such structures to air traffi c also rises. Already today’s larger turbines are penetrating the 150 m low fl ying air space where the taller broadcast towers were previously the only remote structures encountered by pilots. As a result of the increased hazard presented by wind farms deploying large numbers of these tur-bines, national and international civil aviation regulations may mandate the use of high intensity obstacle light systems. Recent developments in

destroyed by lightning or over-voltages – the consequential repair costs and downtime losses will be way out of proportion compared to the cost of an effi cient and innovative protection solution.

Th e lightning strike density – number of lightning fl ashes – is depen-dent on local weather conditions. Th ere are areas in the world where the turbine will experience several hundred direct strikes during its lifetime. It is not a matter of ‘if ’ but ‘how many times’ the wind turbine is aff ected by lightning. Th e safety of personnel staying in the off shore wind turbine during a thunderstorm must be considered. For onshore sites, the normal procedure is to leave the wind turbine, but when working off shore such fast evacuation is not an option. A safe location inside the turbine must be defi ned, where service personnel can stay until the thunderstorm warn-ing is over.

TH. For us the issue of safety relates to the ongoing reliable operation of the obstacle light systems. Th ese systems are used to provide the neces-sary visual marking of the wind farm to any air traffi c that may be op-erating in the vicinity, oft en low fl ying emergency services. Without these, the pilots are deprived of their visual cue and at nighttime are essentially fl ying blind. As Orga has been supplying obstacle-marking systems to the off shore oil and gas indus-tries worldwide for more than 30 years, we have brought experience, knowledge and expertise into our product designs. Th e probability that access to the obstacle light system is restricted by weather conditions and access costs means that we need to design obstacle light systems with high avail-ability times and work closely with our customers to ensure correct installation so that the air safety marking systems withstand the operating conditions encountered in off -shore environments.

EB. In off shore parks, the safety situation is much more challenging due to waves, rougher weather conditions and limited accessibility of the turbines. Even though the industry has made tremendous progress on safety, the track record is still signifi cantly poorer than the incident levels acceptable in the oil and gas industry. Th e off shore wind industry should therefore tap into the expertise of sub-contractors, many from the oil and gas industry, to improve the safety record of the industry.

However, signifi cant improvements can also be made on safety in onshore wind. Keeping the pressure on is key for the reputation of the industry. Within EWT, for example, project managers are incentivised to deliver projects without safety incidents, and strict procedures are in place to help prevent those.

How can technologies ensure turbine reliability and keep costs low?EB. Turbine technology is key to long-term reliability and wind park eco-nomics. Gearboxes are especially critical in this respect. Research (DEWI) shows that 30 percent of the downtime of a wind turbine is due to issues with gearboxes. Also in terms of costs over the lifetime of the turbine, an additional 10 percent of the original capex needs to be budgeted to overhaul gearboxes. Applying direct drive technology, which eliminates

“It is part of the OEM activity to

improve designs for higher reliability”

Ricardo Moro


GES AD:25 June 19/11/09 14:09 Page 18


EB. Th e number of installed wind turbines is rising rapidly, driven by societal pressure to cut down green-house gas emissions and reduce energy dependency. Th e challenge will be to integrate those large numbers of turbines in the existing infrastructure, since many of the transmission networks are congested. One way to cope with this is to connect turbines to the weaker

distribution networks. To do so, turbine power characteristics need to support those networks. Th e full capacity synchronous generator from the EWT DirectWind turbine has those characteristics and can therefore be integrated relatively well in weak grids. Obviously, national governments need to come up with a well-coordinated plan to upgrade the national grids as well, but that will take several years.

KB. Wind turbines are constantly increasing in size and complexity. Th e wind turbines are counted on as power plants in the overall power production planning. If a sudden small interruption occurs it cannot be tolerated that the turbine is disconnected – leaving the grid on its own. Th e modern wind turbine has to stay connected also during a thunder-storm – and this can no longer be claimed as force majeur. It is decided that these machines should be running out there and this demands the same approach to lightning protection as well that given to conventional onshore power plants.

technology mean that we are now developing high intensity obstacle light systems with long life solid state LED light sources to provide reliable and low maintenance systems with high availability, rather than incorporating the xenon strobe light sources that have been the only choice until now. Th ese type of developments show how a specialist company, such as Orga Aviation, can support the wind industry by developing products with high product reliability for increased safety, and with lower maintenance re-quirements whilst meeting the more demanding regulatory requirements, resulting from the use of larger turbines.

How is wind energy expanding and what is needed to cope with the increasing demand?TH. As larger numbers of turbines are installed, and as these turbines are increasing in height, the visual impact of the turbines, and specifi cally of the safety marking obstacle light systems, oft en becomes an issue in the community impact assessment. Th e regulations governing the type and intensity of obstacle lights required are based on those needed under worst-case visual fl ying conditions, and diff er from country to country. To help solve some of the apparent confl ict between adequate safety marking and visual impact, the time is already here when an industry-led interaction with the civil aviation regulatory community is overdue. Consideration of how to incorporate the possibilities today’s technology brings to enable us to operate the obstacle light systems at settings that are applicable to the ambient fl ying conditions, and even with consideration of the detection of air traffi c in the vicinity of the wind farm, would help to overcome many perceived objections.

RM. Europe tends to reduce growth. Th ere will be an increasing number of re-powering projects in wind farms that were constructed 10-15 years ago, which consist of replacing old turbines with new ones that provide much higher output. Th e US, China and India are the new high growth markets. Th e develop-ment of the US market is conditioned to the successful implementation of Obama’s plan for renewables.

Favourable legislation is needed. In order to develop wind energy gen-eration, laws and regulations must be passed that incentivise investment in this kind of plant and permit the construction of wind farms in certain areas. Credit availability is also important. Th e current lack of credit avail-able is reducing the number of projects under development. Not only small investors but also main utilities are slowing down their wind new projects. In some regions, a more robust grid is necessary in order to evacuate the additional energy coming from new wind farms. Th is kind of investment normally requires a long administrative process, which delays the devel-opment of new wind energy plants. Finally, wind predictability is key in order to facilitate integration into the overall electrical system. Contrary to other generation systems, it is diffi cult to make short-term predictions about the energy production that a wind farm will generate. Predictability is a requisite by the electrical authority of each country in order to properly plan the energy generation mix at any time.

“As larger numbers of turbines are

installed the visual impact oft en

becomes an issue”Trevor Howes


EWT AD:25 June 19/11/09 14:05 Page 18


RENEWABLES

When EDF Energy and EDF Energy Nouvelles announced their part-nership to form EDF Energy Re-newables in June 2008 it underlined a growing consensus that the indus-try needs to get serious about de-veloping alternative power sources.

Furthermore, the new company’s establishment in the UK refl ects the country’s massive potential as a generator of wind energy. As an island nation, the surrounding seas off er access to one of the most abundant supplies of reliable wind anywhere in the world. When we meet up with CEO Christian Egal in EDF’s central London offi ce, the UK’s suitability is something he is extremely keen to stress. “Renewable energy is grow-ing everywhere in the world. But in this country the mix is diff erent,” he says. “Wind energy has had huge growth for fi ve years, but what is specifi c to the UK is that Great Britain is an island so we can take ad-vantage of this location with all the renewable energy linked to the sea. Off shore wind is defi nitely the main renewables potential in the UK, as well as wave and tidal energies, which are as well very promising. But those are still at the latest development phase.”

Plans for UK wind energy can only be described as ambitious. Th ere is currently about 8GW of installed or planned capacity in place. Th e UK government’s strategic energy assessment recently reported that British seas could eventually supply a further 25GW of power, enough to serve the needs of all the country’s homes. But while there exist tremendous possibilities, actually realising them will require a great degree of eff ort. “It’s a huge challenge,” Egal agrees. “Nobody has ever built a wind farm

100 kilometres off the coast in the North Sea. It will be diffi cult but what is absolutely fantastic in this business is that everybody is very confi dent in the capability of the supply chain and the players to de-liver.” Obviously, the costs associated with such a huge project present diffi culties of their own. Installing turbines that far off the coast, even in the comparatively shallow North Sea, is a far more logistically trying

operation than sitting them onshore. Farm sites are picked for their exposure to wind, which means they must be built in oft en very dif-fi cult conditions. Building off shore takes twice as long and costs twice as much as a similar project on land. But according to Egal, the UK Crown Estate’s plans are helping to mitigate this problem by targeting huge capacity. Th is encourages all the major players to get involved and creates signifi cant economies of scale. “If you were to put one turbine in the North Sea, it would never happen,” Egal says. “If you want to put 500 or 1000 wind turbines there, that is much more achievable.”

Building the wind farms is far from being the only challenge. Get-ting the power they generate to where it is needed also requires some new thinking. “One of the other challenges is the grid,” Egal continues. “How to connect it has to be a large-scale approach rather than an individual approach for a single wind farm. Maybe in the long-term perspective it

Christian Egal, CEO of EDF Energy Renewables, tells Huw Thomas that the forecast for wind energy is extremely good.

Fair weather ahead

“Renewable energy is growing everywhere in the world. But in this country the mix is diff erent”

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will be a European approach because if we build a wind farm for the UK in the North Sea, it could also be connected to Sweden or Denmark. Maybe we’ll see in the next decades a power grid all over Europe, based on off shore wind farms located all over the seas?” Th is vision of an inte-grated European power infrastructure is one that crops up regularly in talks with those in the industry. Given the speed and effi ciency that nor-mally characterises major pan-European projects, you would be forgiven for thinking such a future remains a long way off . While Egal concedes that it remains a huge undertaking, his confi dence that it is achievable is infectious. As far as he is concerned, renewable energy, and specifi cally wind, is an idea whose time has come. “Its very exciting,” he says. “Wind energy is the most dynamic industry all over the world, even in this very tricky period it is still growing.”

Counting the costWhile there is no argument that Europe desperately needs new

sources of power if it is to remain successful, critics of renewable energy contend that it is simply not cost eff ective without massive government subsidies. So can renewables ever off er value for money?

“It’s a complex approach,” Egal admits. “Renewable energy all across the world is still supported by public subsidy. Th e schemes that the countries select are diff erent. Th e Renewables Obligation Certifi ca-tion (ROC) mechanism is specifi c in the UK, but in every country there are mechanisms that make renewable investment possible. Because of the current energy market there is no possibility to make a renewable asset profi table. We are not far away, not at all. For example, last year, when the market price was not particularly high, it was at the level where it was much higher than the cost of renewable energy. But to make the operator decide on the investment they need a certain level of visibility on the long-term. So all renewable energies are, lets say, incentivised by public schemes, which make the investment possible. Th e principle of renewable energy is that it starts from public, government willingness, worldwide European and country willingness to do it, and each country provides to the operators the appropriate scheme to make it happen. So is the mechanism proposed to the operator in the UK enough to be profi t-able? Yes. If it was no, there wouldn’t be any capacity, so it is profi table. Of course, there are some projects that are more profi table than others, and it’s down to a professional approach to make the diff erence.”

While this makes a certain amount of sense, it doesn’t answer the question of whether renewable energy will ever be able to stand on its own two feet. Th e current system allows the power companies to stay in the black, but only on the back of government and consumer support. Will renewable energy ever be able to compete on a level playing fi eld? “I would say yes,” replies Egal. “Th e ROC mechanism is providing some additional revenues to renewable energy up to a certain level of achieve-ment. If the global target is reached, the ROC mechanism will stop. Currently the principle target is to achieve nine percent of power from renewables. Th e actual value is four percent. So the ROC mechanism is there to incentivise the utilities to deliver some renewable energy up to a certain level of achievement and when the end target is reached, the public support will stop. It’s logical.”

It is only natural that renewable energy is initially going to cost more than traditional sources of power. While coal and gas have a massive

For those about to ROCFor now the Renewables Obligation Certifi cate (ROC) remains the key incentive for supplies to provide more power from renewable sources. Implemented by the UK energy regulator Ofgem, the system sets annual targets for companies penalising those who fail to hit them and rewarding those who do. Implemented in 2002, the initial target was to achieve a three percent proportion of energy from renewable sources. By 2012, this fi gure should reach 10.4 percent, with a further annual rise of one percent for the following fi ve years. The system is currently undergoing examination in the wake of a public consultation and its future shape is yet to be decided.

installed base, wind and the like are eff ectively starting from scratch. If we are serious about our commitment to getting more and more of our energy from renewable sources, these short-term costs are something that we will just have to bear. In any case, as traditional sources such as oil and gas start to dwindle and become harder to access, the market may make renewable energy considerably more competitive.

Unfortunately the current economic climate is particularly un-friendly. Sources of funding are tight and in many areas there seems little appetite for any investment that isn’t going to quickly bring big returns. Nonetheless, Egal is clear that EDF Energy Renewables remains on track to hit its targets. “It does have some impact, but more on the short-term period,” he says. “We have to deliver a gigawatt by 2012, so we have to be

very attentive to the whole capability to invest in this wind farm in this diffi cult period. If we speak about the next phase to deliver even by 2015 or 2020, it’s another story. Th at will require a huge amount of money, but we can hope that it will be aft er the crisis that we are facing now. I am not saying it will be easy, it will be billions and billions of euros to invest in these facilities. As you know EDF as a whole has some other projects as well, so it is challenging.”

Further alternativesTh ough EDF Energy Renewables’ principal focus is on wind power,

due to its comparative maturity and the UK’s geographical suitability, it is also exploring other potential avenues. “We are looking at wave and tidal technologies, which are not as mature as wind energy, even off shore,” says Egal. “We rely on the R&D department within EDF, we are looking at wave technologies as well. We are very attentive and we are following feedback on this work. Our business is to invest in modern technologies with good profi tability, so it could happen in the next two or three years.” Solar power also remains in contention. Th ough the UK isn’t known for its warm weather, solar energy’s success in the not particularly sunny Germany demonstrates that, as technology improves and becomes less expensive, it does have a part to play in Europe’s renewable future.

But from a UK perspective, it is wind that is going to provide the big gains. Wind is one of the most well-established renewable energy sources and has developed rapidly over the past few decades. “Wind technolo-gies are improving every year,” Egal confi rms. “It is amazing because we



have now some that are 160 meters in diameter that generate 6MW. If you look at a wind turbine only 20 years ago, they were only 15 or so metres in diameter and generated only 50KW. Who would’ve imagined 10 years ago that we could build and install some 6MW wind turbine? As an example, EDF Energy Nouvelles, part of EDF Energy Group, has stakes with other partners in a wind farm of 30MW capacity with just six wind turbines. It is based 30 kilometres off shore and each wind turbine has a rotor diameter of 126 meters.”

And the technology is still developing. Egal tells us about projects working towards turbines able to produce 10MW and turbines based on fl oating platforms that can exploit the wind in deep-sea locations. With the huge capacity of today’s turbines it is not technology that is holding the more widespread adoption of wind power back. Rather it is outside factors that limit its large-scale implementation. Th e afore-mentioned issues with the grid are a major stumbling block, the lack of high power transmission lines making it extremely diffi cult to get energy from the remote areas where it is generated to the urban centres where it is most needed. Additionally, the UK planning process can throw plenty of obstacles in the path of speedy expansion. “To develop wind energy is really a very long-track with a lot of hurdles and par-ticularly in this country,” Egal confi rms. “Th e planning system is very long-track, but I think it more or less always happens. And if we have an ambitious target, within a certain amount of time, you have to take into account certain diffi culties. But I would rather have a slow plan-

ning process where you generally get permission rather than a quick one where you do not.”

On the whole though, Egal seems optimistic about the potential for wind and other renewable energy, both in the UK and across the world. “When we look at the overall capacity we have 120,000MW installed all over the world,” he says. “Last year, for example, we installed more wind energy than gas or coal. Wind energy has developed more in European countries and the US than in developing countries, but if you look at the possibility of wind farms in China for example, there is no limit.”

Th at is not to say we should expect to see a major uptake of renewable energy in the developing world all that soon. Egal sees it as a responsibility of those in more affl uent nations to keep working on the problem until it can become aff ordable for everybody. “I think the fair approach has been taken by the European countries but renewables remain more expensive than coal, gas and so on,” he says. “European countries and the US are paying to make these technologies as profi table as the other technologies in the near future. Can we really ask the developing counties to pay for these technologies? I don’t think so, and I think we recognise that and that we have to pay this premium. Climate change, which is the basis of these developments, has given us huge responsibilities across Europe, so I think it is a very fair approach for us to pay for the fi rst stages of the development and allow others to take advantage of these developments when it is more fi nancially viable. In terms of the possibility to implement wind energy in these countries, it could happen very quickly. It’s just about timing.”

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640kW

750kW

1250kW

1670kW

1670kW2000kW

3000kW

A mighty windTurbine technology has come a long way in a comparatively short time. Today’s biggest models are more than fi ve times as big and 25 time more powerful than their earliest ancestors.


LIMPET TECH AD:25 June 25/11/09 15:31 Page 1

Why is finding and keeping good technicians such a challenge? Eric Thormann. The wind energy industry installed nearly 20 GW in new ca-pacity in 2007, representing a nearly US$40 billion global industry. New ca-pacity additions will exceed 25 GW this year, with that number expected tonearly double over the next 10 years. Driving this growth is investment by theworld’s leading utilities and energy companies, including Iberdrola, EDF,E.ON, Vattenfall, BP and others as they strive to diversify their portfolios, re-spond to public policy and address climate concerns. This growth has been aboon to ailing industrial sectors in Europe and North America, but especial-ly to the local rural economies where wind projects are located. Among thewider range of economic impacts generated by the wind industry, variousstudies have shown that every 100 MW installed creates, after construction,five to10 long-term plant jobs and twice as many non-plant jobs.

These ‘green collar’ jobs include trained turbine technicians, utility andtransmission services, and various subcontractors to ensure the ongoing op-eration and maintenance (O&M) of the utility-scale wind plants that repre-sent the industry’s future. Work includes performing inspection, preventativemaintenance and repair on the internals, blades, hubs and towers of today’sturbines. Turbine availability and energy output is fundamentally linked totechnicians working safely and productively at elevation.

Wind plant O&M service providers face growing challenges as turbineshave grown larger in recent years, now reaching up to 160 m tall, which in-clude increased employee attrition and mounting employee healthcare costsassociated with repetitive manual climbing fatigue.

What is the cost of technician attrition?ET. Turbine technicians receive over 200 hours of training and cost up to$20,000 to replace when all hiring, training and contingency costs are tallied.Annual technician attrition ranges from 25 to 33 percent industry-wide, withcertain locales approaching 50 percent. Take the case of the US, where pro-jections call for over 15,000 turbine technicians by 2020. Replacement costsalone could reach US$70 million at current attrition rates.

How can you maximise technician retention?ET. The mission of Power Climber Wind is to help manage O&M costs andmaximise profitability of wind assets. By providing a range of powered accesssolutions for work processes both inside and outside wind turbines for morethan 10 years, Power Climber Wind helps improve the safety and productiv-

ity of wind turbine maintenance personnel. The benefits arelower attrition, lower health costs and fewer climbing andfatigue related injuries, as well as reduced exposure to fallsor stoppages.

What does Power Climber bring in terms of safety?ET. The key words of the wind power industry are safety, re-liability and performances. There is a conscious effort onsafety during erection as well as during the maintenance ofthe turbines. Access to the sites is highly regulated. Safetytraining and personal protection equipment is mandatory.

Power Climber is a key contributor to the safety mix.Our access solutions, SHERPA service lifts and IBEX climbassist system, as well as solutions for blade and tower access,enable wind turbine maintenance and repair service teamsto perform their tasks with increased productivity and safe-ty. The taller the tower, the more critical the need to accessthe nacelle safely and rapidly, and the more Power Climberaccess solutions provide answers for that need. n

Meeting personnel challenges


Eric Thormann explains how turbine technicians represent the industry’s future.

EXECUTIVEINTERVIEW

Eric Thormann joined SafeWorksin January 2008 as ManagingDirector of Power ClimberInternational. Thormann wasmost recently VP, After SalesServices for Trane Europe. Healso held management roleswith Carrier, Volvo and UnionCarbide. He holds a Masters inBusiness Administration fromthe University of Hartford, inConnecticut, US.

“There is a conscious effort on safetyduring erection as well as during

maintenance of the turbines”

POWER CLIMBER_co proof 26/11/2009 14:58 Page 104

POWER CLIMBER AD:25 June 19/11/09 14:15 Page 18

The European Union has seta binding target of 20 per-cent of its energy supply tocome from wind and otherrenewable sources by 2020.In order to achieve this 20percent energy target,

more than one-third of the European electricaldemand would have to come from renewables,with wind power expected to deliver 12-14 per-cent. So how realistic is this target? ChristianKjaer, Chief Executive of the European WindEnergy Association (EWEA) believes that this ispossible. “To reach the targets set out by theEuropean union we would have to increase totalwind power capacity in Europe by 9.5 gigawattsper year over the next 12 years. Given that we in-creased wind power capacity by 8.5 gigawatts lastyear, it’s not an ambitious aspiration,” he ex-plains. It is quite clear that wind energy will takethe lion’s share of the energy target that theEuropean Union has set, but the target also callsfor hydro resources and biomass to be fully utilised. “I would say it’s certain-ly achievable to reach 20 percent renewables although whether we meet theprojections for biomass remains to be seen. It’s all down to how effectively themembers are going to implement renewables – that’s the big question mark,”adds Kjaer.

While it is widely believed that the development of wind energy acrossEurope is limited by existing power infrastructure Kjaer believes that this isnot a hugely limiting factor in regard to the physical grid. “We do have somerestrictions if we look at certain regions of Europe. There are regions in Spainwhere you get 40-50 percent of the electricity coming from wind, so there arecertainly limitations on how much you can expand there unless you do some-thing with the internal infrastructure of the grid itself,” he explains.

ChallengesChallenges do remain in terms of how the grid is operated. Kjaer believes

that it is vital to start putting together plans that allow investors to invest innew infrastructure, as projects take an extended amount of time to get ontrack. “We certainly need to change operations and look at the way we oper-ate our grid if we want to meet the 2020 renewable target. There is no ques-tion that the biggest challenge over the next 10 years is grid infrastructure. Thegrid is already a limiting factor because of course we don’t have electricity in-

frastructure offshore. We need to start planning to prevent this becoming achallenge in the future,” says Kjaer. “In short there are limitations, certainlyoffshore with the lack of grid, but we need to stop and put in place measuresthat concentrate on companies investing and building in the sector. There aresome institutional problems with this, such as a lack of funding, but we sim-ply haven’t invested enough in our infrastructure for decades now and thatneeds to change if we want to make a dramatic change in the way we get ourenergy in the future.”

While offshore wind is more expensive due to the sky-high costs of foun-dations and the grid that needs to be built offshore, it will always provide alarger wind resource. Kjaer hopes that as more economies of scale are intro-duced to the system and that wind turbines are mass-produced, offshore willbe recognised for the stronger resource that it is. “The offshore market inEurope is more or less at the level that we were in 1992 and 1993 onshore, sowe haven’t even come close to reaping the benefits and getting the cost re-ductions down in the same way as onshore in the last 20 years,” he says. “Inorder to do that we need economies of scale and that’s why it’s so importantthat you have some companies that are focusing very heavily on this, includ-ing in the UK, Germany and Norway, as well as France. But again offshore in-frastructure is a much more imminent issue to solve compared to onshorebecause there aren’t any grids.”

WIND POWER POTENTIAL


Will European Union wind power reach the tough renewable targets it has been setfor 2020? Christian Kjaer, CEO of the European Wind Energy Association, tells HuwThomas why and how it just could.

RENEWABLEENERGY

KJAER_16nov 26/11/2009 14:56 Page 106

Kjaer goes on to explain that the benefit of improving offshore grids isthat it is possible to build interconnections between countries that means itwould be possible to improve the electricity and tracing of electricity over theborders of Europe, giving consumers the cheapest electricity possible. By plan-ning infrastructure investment it will benefit in terms of maximising the ex-change between various member states as well as putting the infrastructurewhere there are offshore wind resources or weight power resources and im-prove the functioning of the internal electricity market while meeting targetsfor renewables. “What we do in terms of offshore infrastructure is extremelyimportant, and here we are in need of faster action than onshore in terms ofnew infrastructure. We need to figure out structures that allow us to makesmart plans in how we build electricity infrastructure offshore at a bilateral orregional country level. It’s very much a similar challenge that we’re standingin front of as when we were building the oil and gas infrastructure. We wouldlike for that planning to be a bit more international in nature, and a bit morecoordinated among individual European countries than we saw with oil andgas because it makes sense in terms of electricity markets.”

There is no doubt that grid infrastructure is going to be the most impor-tant issue to work on in the next decade, along with the development of thepower market and a much higher degree of interconnection between theEuropean member states. While it will be possible to learn something from

the onshore infrastructure for increasing offshore wind farms, particularlyaround grid development, Kjaer believes that from an infrastructure per-spective we in Europe have never much cared about what happens on theother side of the border, which means it may well be harder to do so this timearound. “Don’t repeat what we’ve done onshore because there needs to be co-operation in terms of infrastructure planning,” advises Kjaer. “Let’s not repeatthe nationalistic approach that we have taken on for the last 100 years of on-shore when we planned grids. Instead it’s even more important that we co-operate as the benefits of offshore are that much higher.”

Power generationAs Europe looks to expand both onshore and offshore wind generation

capacity it becomes clear that wind alone cannot be responsible for all of ourpower generation because of the variable nature of wind power. So how exacta proportion of European energy can be realistically generated by wind? Kjaerbelieves it depends on how big an integrated power system it is possible toconstruct, so the amount of wind energy put into the system at a Europeanlevel depends on how integrated the European grid system turns out to be. Ofcourse the bigger the geographical area, the more firm power is generatedfrom wind energy so there is a huge benefit in the geographical dispersion ofwind energy. However, in order to get that geographical dispersion it means


United Kingdom 39% 590,80 MW Denmark 28% 409,15 MW Netherlands 17% 246,80 MW Sweden 9% 133,30 MW Belgium 2% 30,00 MW Ireland 1% 25,20 MW Finland 2% 24,00 MW Germany 1% 12,00 MW

TOTAL 1,471,33 MW

Sweden

Netherlands

FinlandGermanyIreland

Denmark

BelgiumUnited Kingdom

OPERATIONAL OFFSHORE WIND FARMS

Annual installation

Annual installation (Ref. scenario)

0

20,000

40,000

60,000

80,000

100,000

120,000

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2002 2004 2006 2008 2010 2020 2030

Cumulative installation

Cumulative installation (Ref. scenario)

CU

MU

LATIV

E

AN

NU

AL

OFFSHORE WIND MARKET DEVELOPMENT IN THEEU UP TO 2008 AND EWEA’S SCENARIOS UP TO2030 (MW)

“We simply haven’t invested enoughin our infrastructure for decades nowand that needs to change if we want

to make a dramatic change in theway we get our energy in the future”

KJAER_16nov 26/11/2009 14:56 Page 107

mass, wind, large hydro, small hydro or geothermal, but it requires a completechange in our way of thinking about operating systems and requires that westart utilising that.”

Indeed, Kjaer believes that there are no technical barriers to wind ener-gy producing 25-40 percent of Europe’s electricity. He highlights Denmark ashaving plans to use wind power alone to generate 50 percent of its electricityby 2020, and of course if that’s possible in a small geographical area likeDenmark why shouldn’t it be possible Europe wide. “In reality there are notechnical barriers to having half of Europe’s electricity supplied by wind en-ergy, but that will be beyond 2020, when we expect to be on target and see be-tween 14 and 19 percent of our energy coming from here. By 2030 I see windenergy will provide at least a quarter of our electricity and I think there’s stillquite a long way to go in terms of increasing wind energies,” explains Kjaer.

ProgressIn terms of moving forward, Kjaer explains that the key projects currently

underway in the European wind energy space are extremely interesting andthat the sector is learning a great deal from these developments. He also pointsto Eastern Europe as an interesting area, with Romania, Bulgaria and Polandin particular getting serious about renewable energy. “The speed at which theconditions have been put in place to attract investors in great,” says Kjaer. “It’sinteresting to see how these countries have approached the whole debateabout the renewables directive, putting in place measures in terms of grid ac-cess and payment frameworks.”

So how does Kjaer envisage the wind energy space progressing in thefuture as Europe reaches its 2020 deadline? “It’s a truly interesting time,”replies Kjaer, “because we have come from a past in which we actually did-n’t need more new electricity generating capacity. We actually had excesscapacity until a few years ago, which is no longer the case because we areshutting down old power plants and have to build new ones. What theEuropean Commission is saying is that between now and 2020 we have tobuild approximately 350,000 megawatts of new electricity generating ca-pacity, which is equal to 50 percent of all capacity that’s currently runningin the European Union.”

Kjaer explains that the interesting element over the next 12 years will beseeing where that capacity will come from – where wind will be in relation toits main competitors in terms of new electricity generating capacity. “If welook at investments over the last 10 years, Europe has really been investing inwind power and gas, and I think it will be really interesting to see how windenergy compares in terms of cost with building a new gas fired power plant,”he says. Kjaer sees three elements that are very much in wind energy’s favour.Firstly is that it is quicker to build a wind farm than a new coal or gas firedpower plant. Second is the fact that from 2013 coal and gas power plants willhave to pay for every ton of CO2 that is emitted. And third is that with a coalor gas fired plant it is vital to take into account future fuel prices in order tounderstand the cost of operations. “One of the main benefits of wind poweris that the cost of carbon and fuel prices will be zero over the next 20 years ofoperation, whereas you can’t guarantee that for coal and gas fired plants, youjust don’t know what fuel and carbon prices will be.

“The competition over the next 12 years will be who gets to build those350,000 megawatts that we need in the European Union and it will be betweencoal, gas and wind energy and with the current outlook for fuel prices, windenergy looks like an increasingly attractive investment.” n

that the grid has to have the same sort of dimensions, which is why intercon-nections are so valuable because a more interconnected grid means that vari-ability becomes irrelevant. “This is why we believe that the infrastructure is soimportant, and it’s not only about integrating wind energy but also about im-proving competition in the electricity market.”

Kjaer goes on to say that while no-one is suggesting that wind energyshould provide 100 percent of all European Union power, if it is well inte-grated and utilised it could have a large segment of the electricity market. “Ifwe used the enormous hydro resources that we have in Norway or Sweden forexample, which complements wind energy extremely well, I have no doubtthat we can have a system based on 100 percent renewable electricity, be it bio-


Some of the many benefits associated with windpower include:

Economic growth and job creation: In 2008, the value of windturbines installed in Europe was €11 billion. In 2020, theannual market for wind energy in the EU is expected to reach€17 billion. About 160,000 people in the EU were in windenergy-related employment in 2008. The wind industry couldcreate up to 368,000 new jobs in the EU from 2000 to 2020.

Cleaning up the environment: Europe’s 65 gigawatts (GW) ofwind power installed by the end of 2008 will annually avoid108 million tones of CO2 – the equivalent of taking over 50million cars off the road, This also translates into an annualCO2 cost of about €2.4 billion.

Energy independence: Europe now imports more than half itsenergy, a figure that is expected to climb to 70 percent in thenext 20 to 30 years. The European wind industry’s installedcapacity of 65 GW is enough to provide power for theequivalent of 35 million average EU households. Wind energyallowed EU nations to avoid paying fuel costs of €5.4 billionslast year.

WIND BENEFITS

KJAER_16nov 26/11/2009 14:56 Page 108

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What’s changed in the power and energyindustry in terms of renewable energysources?Claus Myllerup. A lot of things have changed,but one of the most important aspects is thescale of production. The technology concern-ing renewable energy is still a fairly youngtechnology if you compare it to say the oil andgas industry. Twenty years of development isnot a long time, and even less when you con-sider the rapid changes in market structurethat have happened over the last few years.Some countries have great experience withwind power, but others have gone directlyfrom small scale production to major energyconglomerates setting up entire wind andsolar farms.

How is mass-scale production of renew-able energy a technical challenge?CM. Let’s use the wind power industry as anexample. A wind turbine is an extremelycomplex piece of machinery. Getting the fullreturn on investment from it means under-standing its individual elements, but the trulycrucial part is understanding how these partsoperate together. The energy produced by awind turbine is less stable than that producedby a regular power plant. When it transfers tothe grid, the grid reacts by sending smalltorque fluctuations back into the wind tur-bine, which affects the shaft speed at the gen-erator and consequently the power output,and so on.

These are the factors that influence theoperability of a single turbine; add to that the factors of setting up 50 of them,as is the case with the new wind farms. Here you also have to consider the vari-ations in load; some turbines may experience more load than others due totheir positions. And wind turbines are being considered for very arduous lo-cations with complex sea bed challenges or extreme weather conditions.

And how does this affect the market structure?CM. The increase in demand has naturally led to an increase in supply, withnew manufacturers pushing the competition for quick and efficient solu-

tions. Technologically this means that theroad from idea to construction is muchshorter and there is less time to correct the in-evitable teething troubles. This calls for a lot oftroubleshooting later on. Economically, thenew market structure means that there arehuge sums of money invested in these prod-ucts, both from a supplier point of view andan energy producer point of view. This is agood thing. This means that both suppliersand producers have highly skilled techni-cians working together to perfect thisnew technology. But it also means thatthere is so much at stake for both partieswhen a piece of machinery breaks down, itmay be impossible to work out a solutionwithout an independent technical expertassessment.

Where do we go from here?CM. I think it’s important to remember thatdespite the technical challenges, mass pro-duction of renewable energy is in fact takinginnovation to a whole new level. We are see-ing amazing progress in renewable energy so-lutions that would otherwise have takendecades to reach. New challenges require newskills, and the change in market structure hasstrengthened the collaboration between uni-versities and companies in terms of research.We also see an increased exchange of knowl-edge and experience between industries andacross disciplines.

There is a strong political focus on de-creasing the impact energy consumption has

on our planet. At the same time, we have a responsibility to expand the ac-cessibility of energy to give emerging economies a chance to develop their in-dustries and institutions. The only way of combining these two goals isthrough continuous technological and economical investment in renewableenergy solutions. n

When green goes global


Claus Myllerup analyses the challenges facing energy producersin an increasingly energy hungry world.

EXECUTIVEINTERVIEW

Claus M. Myllerup is Managing Director of Lloyd’s Register ODS, technical investigationand analysis. With 20 years of experience, Myllerup has served as Chairman for theAmerican Society of Mechanical Engineers’ International Gas Turbine Institute Conferenceand is an external lecturer at the Technical University of Denmark. He has a PhD inmechanical engineering.

“We are seeing amazingprogress in renewable

energy solutions that wouldotherwise have taken

decades to reach”

ODS_16nov 26/11/2009 14:57 Page 110

ODS AD:25 June 19/11/09 14:11 Page 18

CORPORATEENERGY

Kanat Emiroglu, recently appointed Managing Director of British Gas Business, tells Power & Energy how volatile market conditions have

transformed the way European companies buy energy.

HELPING COMPANIES

ENERGY EFFICIENCYINCREASE THEIR


Kanat Emiroglu British Gas.indd Sec1:112Kanat Emiroglu British Gas.indd Sec1:112 26/11/09 14:42:0426/11/09 14:42:04

In your previous role you were Director of the SME division at British Gas Business. Was this role good preparation for the role of Manag-ing Director?Kanat Emiroglu. Small and medium-sized enterprises are a big part of British Gas business; they’re two thirds of our customers and more than half of our revenue and profi ts. So in terms of business dynamics I was very familiar with the business and its strategic, operational issues. But on the other side it’s a little bit diff erent when the buck stops with you. Th ere’s more senior management interaction and maybe a little bit more political awareness is needed. So there are quite a few new things coming to the agenda.

How will you be working with business customers to help them in-crease their energy effi ciency?KE. We have six vision statements. Th e most important one is that we provide complete energy solutions. What we mean by that is an underly-ing belief that fi ve or 10 years from now nobody in the business world is going to buy energy only as a commodity because it’s such a volatile expensive commodity that infl uences businesses’ competitive advantage in their own markets. It’s going to have to be managed.

We know from our own data that companies that use energy solu-tions and actually think about energy effi ciency over time and with a little bit of profi table investment can reduce their energy bills by 30 per-cent, through some behavioural changes and some small investment.

We can give plenty of advice on energy saving stuff such as how to use their heater, their freezer, their lighting and what to do about peak time. But advice is cheap. So what else can they do? Th ere are a lot of new technologies in the energy solutions area that allow companies to track and monitor their energy usage. If companies get smarter they can, if they have multiple sites across the country, learn which site are the most energy effi cient and compare that to the worst ones. How have volatile energy prices and government regulation af-fected companies?KE. For almost a generation, since the mid-1970s, energy has been relatively fl at priced, and in general low priced, and so not a volatile commodity. Th is was partly because the UK was surrounded by energy sources in terms of oil and gas. Th e North Sea fi nds helped them; and the market here was relatively stable, which is why a lot of companies didn’t spend time on this issue as a cost item. Either it was predictable or it was small.

But that has changed – since 2004 we have been an importing coun-try. For gas, we depend on quite far away places and so the price is highly volatile. You can pick two gas prices in the UK that are 10 times diff erent on a daily basis, so companies need to manage their energy much better.

Th e second aspect aff ecting companies is regulation. Both govern-ments and the public have become much more aware of what the use of excessive energy does to our climate and to our energy security. Th ere’s a plethora of regulations, trading schemes and penalties or incentives that businesses need to be aware of. If they operate in a vacuum and just ignore the energy area, especially if they are energy intensive, they could be hurt.

A recent survey by British Gas found that 54 percent of companies admit to delaying paying energy bills because of the economic downturn. How big a problem is this?KE. Th is is a big problem in the industry: we’re writing off a huge amount of money that is not paid to us as a debt charge in our accounts. We’re trying to reduce that, because for us that’s money taken out of our exist-ing customers, so issue number one is that it’s costly. Issue number two is that people who do pay their bills pay them a bit later. So in addition to the recession we have a credit crunch, which means that liquidity is lower and that causes us to use more capital. We will eventually get that money but we do need to use more capital and the amount we use in today’s markets is charged at higher rates.

We have introduced something called SAVE (Small business Advice and Value Expertise) because we thought that instead of robotically col-lecting debt from SMEs we would listen to them and understand what cash fl ow problems they are facing and develop whatever we can to al-leviate those problems to fi nd win/win solutions.

Th is also involves giving advice on energy consumption reduction and giving out energy saver packs to inspire them to use less energy. Th ere’s an online assessment tool called energy savings report, which goes into the specifi cs of that business and makes recommendations. We give legal advice and access to lawyers for SMEs that are not aware of some of their rights. Th ere is a government program called the Prompt Payment Initiative that helps SMEs get paid by their own suppliers. Finally, we write payment plans: instead of insisting that somebody pays 100 percent of the money on day zero, we try to spread it over time for businesses with rea-sonable credit ratings, so that we don’t have to squeeze them too much.

How much money is British Gas Business losing through non-pay-ment of energy bills?KE. Th is would be competitive information so I can’t give you the number, but it’s quite high. It’s high enough to be one of the top three things in my management team’s agenda throughout the year – it’s always in the top three. Th is is especially the case for SMEs, and less of an issue in the corporate world where credit ratings are more followed and bills are paid much quicker. In the SME space we see quite a lot of write-off s.

How does the service you provide to large corporate companies compare to that provided to SME customers?

“Both governments and the public have become much more aware of

what the use of excessive energy does to our climate and to our energy

security”



KE. If you measure by sites, we have 900,000 SMEs and 150,000 corpo-rate sites. Each SME has 1.2 sites. Corporates have roughly 10 to 15 sites. Some of them have 5-10,000 sites with us. Some have only two or three so it’s quite a wide portfolio and we serve them quite diff erently as a result.

If you are a residential customer who calls British Gas you get put through to a call centre where a random customer service agent will answer the call. In the SME sector you have an account manager, so when you call it will be your account manager you deal with. He picks up the call 50 percent of the time otherwise its one of his nine team colleagues. In the corporate world you go up one level again and you are served by hubs.

Th ese are not just groups of customer service agents in a team but also other multi-disciplinary agents sitting with the customer service agents, including a debt expert, a billing expert, a technology expert and an energy solutions expert. Th e object being that we want to get to 100 percent fi rst time resolution for corporate clients. In the SME world we’re talking to a business owner, an entrepreneur. Th ey have much less time, they value their time more in terms of pounds per hour, they ask profes-sional questions and we need to train our people up to that standard. In the corporate world you are usually talking to a buyer whose job it is to buy energy so again it goes up by one notch.

How competitive is the UK energy market currently and how chal-lenging is it to retain customers in this environment?KE. In the corporate world you have to bid for customers almost every year now. Th ere used to be two or three year deals but because of the capital allocation and diffi cult trading environment around energy, most com-panies are now off ering just one year deals and we have reduced our terms also on average from two to probably around 1.6. So every year there’s a bidding for that. It’s quite competitive.

In the SME market also, prices for business energy change every day depending on what the market curve does. Last year, which was an espe-cially volatile year for energy, the wholesale curve went up or down on average by four percent every week. A weekly price change is much higher than our margins, so you have to get pricing absolutely right. And the competition is to the last percentage point.

It’s also important for companies to know when to buy the energy. If you were buying it, for instance, in the summer of 2008 when the prices had reached peak levels and you signed a two or three year contract, then you would be using energy at a quite expensive time. It’s unfortunate to have bought at that peak.

What are the biggest challenges you will be tackling in the year ahead?KE. It is a challenge to deal with the volatility and the debt in this envi-ronment. But I wouldn’t call it unmanageable. I think the challenge for me is more to continue to grow our business, British Gas Business is a very successful part of Centrica, our parent company. It has the highest employer engagement results and it has grown its customer satisfac-tion every year for the last four years. It has grown its revenues and its profi ts and the number of sites has grown.

British Gas Business has also made successful acquisitions and integrated them. One thing that I personally want to crack is achieving

excellence in serving multi-sites: for customers like a big supermarket chain, to be able to serve them in a way they couldn’t imagine before in energy. We have already better customer satisfaction in multi-sites and we’re get-ting even more specialised in other areas and getting the right technologies.

How do you serve compa-nies with multi-sites cur-rently?KE. Imagine yourself as the buyer of energy in a company like Boots or McDonalds. We come to you and we say we are

going to install smart meters in your 5000 sites across the UK. And that will also include sub-meters that measure diff erent parts of your store using diff erent parts of energy. Th ree months on we can show you charts showing which of your 5000 sites use energy the most effi ciently.

Secondly, we can show you some insights into how you do heating, freezing or lighting in energy use versus competitors in your industry. Th irdly, we can show you peak versus base usage and that can really in-fl uence the way you use energy. And fourthly, we can talk about clusters you have where you could produce your own energy such as micro CHP systems. Our aim is to become 21st century energy sellers.

Kanat Emiroglu is Managing Director of British Gas Business.



MSE_AD.indd Sec1:116MSE_AD.indd Sec1:116 24/11/09 10:27:3024/11/09 10:27:30


INDUSTRYINSIGHT

TRENDS IN SOLAR MODULE PRODUCTIONBy Hans-Joachim Bender

In 2005, Robert Bürkle’s research and development team began to examine the lamination process and the materials used in solar module production. Th e company was aware that a multi-opening lamination line would be the way to go for high-volume solar

module production, in order to meet the high capacity requirements and the need for reduced production cost per module.

Bürkle had the experience and know-how necessary to build a high-volume multi-opening lamination line for solar module encapsulation due to its experience in building multi-opening lamination lines for other industries. In 2007, aft er two years of research and development, the company presented the Ypsator at the photovoltaic show in Milan.

With this lamination line, high volume production can be realised on a small footprint. Its multi-opening lamination systems can be ad-justed to customers’ capacity requirements by changing the number of

Hans-Joachim Bender is Managing Director, Managing Partner and Speaker of the Management Board for Robert Bürkle GmbH, Freudenstadt. Bender studied mechanical engineering and was Factory Manager of Degussa (now called Evonik) and Managing Director of Badische Maschinenfabrik Durlach GmbH (BMD) before coming to Bürkle. In October 2009 he was awarded the enterprise medal of Baden-Württemberg.

openings. Using steel heating platens in combination with thermal oil heating systems, Bürkle lamination lines ensure a homogeneous temper-ature distribution over the entire useful lamination area. Depending on their size, two, three or four solar modules can be laminated per open-ing, or up to 40 modules per cycle can be processed with a 10-opening Ypsator line.

Lamination linesBürkle has supplied and commissioned 20 multi-opening lamina-

tion lines since the market launch at the end of 2007. Th is corresponds to the capacity of more than 80 traditional single-opening laminators.

In addition to the Ypsator multi-opening lamination line, Bürkle also off ers the e.a.sy-Lam single-opening lamination line for module encapsulation. Since the beginning of 2008, nearly 20 lines have been supplied to solar module manufacturers. Bürkle has supplied laminating lines for crystalline cell solar modules and thin fi lm (glass-glass) solar modules to module manufacturers in Europe, North America and Asia.

New processes Th e company has also developed the 3-Step Process, which revolu-

tionised the lamination process. It permits a higher production capacity with considerably reduced cycle times, as well as the production of new materials due to the high fl exibility of the concept and the selection of parameters.

Th e 3-Step Process is available for crystalline solar cell modules as well as thin fi lm (glass-glass) solar modules. For crystalline solar mod-ules, two vacuum laminators are arranged aft er each other, followed by a cooling unit. For glass-glass thin fi lm solar modules, the fi rst step is a vacuum laminator followed by a hydraulic hot press and a cooling press. In the hydraulic hot press, the glass-glass modules are heated under pres-sure from both sides. In the cooling press, the modules are cooled down under pressure from both sides.

Due to the uniform heating and cooling from both sides, the inter-nal stress of the laminated modules is reduced, which minimizes glass breakage. Th e symmetric heating in the second step provides laminated solar modules with uniform and high gel-content. Th e modules can be immediately processed, due to the uniform temperature of the solar module aft er cooling.

Additional productsTh e German manufacturer has enlarged its production portfolio

and off ers transport and handling equipment and intermediate storage units/buff er racks, as well as complete lines for the so-called back-end of the module production for thin-fi lm technology. Th is comprises cru-cial components from its own development and production, such as foil uncoiling and foil lay-up, pairing and the automatic setting of junction boxes – just to name a few components.

For more information, please visit www.buerkle-gmbh.com

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With the high level of media prominence given tothe United Nations Climate ChangeConference, all eyes are now firmly focused onenergy policy. The need to balance the securityof our energy future with the growing need formore efficient, sustainable and environmentally

friendly energy sources has never been greater. A more diverse energy supply – one consisting of fossil fuels, as well as

biofuels, wind, solar and nuclear – has been heralded as the answer to bothenergy security and environmental issues. But whatever energy path we de-cide to follow, the fact remains that demand will soon outstrip supply. Weneed to make the most of traditional fossil fuels while investing in cutting edgeresearch to develop sustainable sources. Another priority is the need to reduceour dependence on foreign sources of energy, such as imported oil.

One way to achieve this is to build new nuclear plants. Although new nu-clear is the subject of some controversy due to lingering concerns about the dis-

posal of radioactive waste, many governments are pushing ahead regardless. In November, the British government approved 10 new sites for nuclear

power stations in England and Wales, calling nuclear power a “proven andreliable” energy source that will help the UK reduce its carbon emissions andbecome more energy-independent. Only a year after the government lifted amoratorium on the building of new nuclear plants, Energy Secretary EdMiliband called nuclear one of the “trinity” of future fuel options, along withrenewables and clean coal.

The new construction may be essential to replace Britain’s aging nuclearinfrastructure, with some existing stations needing to be decommissioned asearly as 2030, leading to concerns about potential energy shortages.

Construction is due to start in 2012 on two new nuclear reactors atSizewell on the Suffolk coast. Following the acquisition of British Energy,French power giant EDF Energy plans to build to reactors generating 1600MW, which together with another plant in Somerset, could supply 13 percentof the country's electricity.

The region’s business leaders are keen to ensure that local companiesbenefit from the employment and other opportunities offered by the multi-billion-pound development. Work on the existing Sizewell B power station,which was commissioned and built between 1987 and 1995, involved 2000suppliers, half of which were from East Anglia.

The outlook for power plantconstruction in a range of energysectors. By Stacey Sheppard

CONSTRUCTION

ENERGISINGTHE FUTURE

POWER GENERATION P&Eeu1:4August 26/11/09 15:28 Page 118


The UK is not the only European country to see new nuclear construc-tion. As of September 2009 there is a total of 196 nuclear power plant unitswith an installed electric net capacity of 169,711 MW in operation in Europeand 17 units with 14,710 MW were under construction in six countries. In2008, France held the top position in terms of electricity generated by nuclearenergy, with a share of 76.2 percent, followed by Lithuania with 72.9 percent,the Slovakian Republic with 54.4 percent, Belgium with 53.8 percent andSweden with 42 percent.

Coal power generation is also on the increase in Europe. In 2008, Italy’smajor electricity producer, Enel, announced that it would convert its massivepower plant from oil to coal and increase the percentage of its power gener-ated by coal to 50 percent. Italy’s total reliance on coal is predicted to rise from14 percent to 33 percent over the next five years. European countries are ex-pected to put into operation about 50 coal-fired plants over the same period,which are expected to be in use for the next five decades.

New directionsAcross the ocean, the North American power sector also finds itself at a

crossroads. The impact of the financial recession and a vastly greener agenda

from the new administration are enhancing the downwardtrend in generating plant development costs, uncoveringopportunities in some fuel sources and sounding alarmbells for others.

According to the Energy InformationAdministration’s (EIA) Annual Energy Outlook 2009,electricity demand is set to increase by 26 percent from2007 to 2030, or by an average of 1.0 percent per year.Estimates also show that coal will continue to provide thelargest share of energy for US electricity generation, withonly a modest decrease from 49 percent in 2007 to 47 per-cent in 2030. As of June 2009, 36 new coal plants are per-mitted, under construction or near construction in theUS, with 47 more announced.

Concerns about greenhouse gas emissions are predict-ed to have little effect on construction of new capacity fu-elled by natural gas, the generation of which is set toincrease to 21 percent in 2027, before dropping to 20 per-cent in 2030 – about the same level as in 2007.

EIA’s outlook also sees the generation from nuclearpower in the US increasing by 13 percent from 2007 to2030, as additional units and upgrades at existing units willincrease overall capacity and generation. The nuclear shareof total generation will decrease, however, from 19 percentin 2007 to 18 percent in 2030.

Renewable generation on the other hand is predictedto increase by more than 100 percent from 2007 to 2030, bywhich time it will account for 14 percent of total generation.

As electricity demand grows and 30 GW of existingcapacity is retired, 259 GW of new generating capacitywill be needed between 2007 and 2030. If we are to be-lieve EIA’s predictions then the majority of this new ca-pacity will be in the form of renewable generation andcoal-fired power plants.

However, it is difficult to attach too much weight to these predictions,particularly regarding the development of new coal-fired power plants. A re-cent report by the National Energy Technology Laboratory (NETL) entitledTracking New Coal-Fired Power Plants, states that experience has shown thatpublic announcements of new coal-fired power plant developments do notprovide an accurate representation of actual new operating power plants. It isnot unusual for projects that have been announced to then be cancelled be-fore or during the permitting stage.

Figures from NETL state that actual plant capacity, commissioned since2000, has been far less than new capacity announced; the year 2002 report ofannouncements reflected a schedule of over 36,000 MW to be installed by2007, whereas only 4500MW (12 percent) were achieved.

According to the Earth Policy Institute, since the beginning of 2007, 95proposed coal-fired power plants have been cancelled or postponed in theUnited States – 59 in 2007, 24 in 2008, and at least 12 in the first three monthsof 2009. This covers nearly half of the 200 or so US coal-fired power plantsthat have been proposed for construction since 2000.

There are many reasons why delays and cancellations occur. Firstly thecost of building a new power plant is astronomical. According to Cambridge

NUCLEAR POWER PLANTS IN EUROPE

BelgiumBulgariaCzech RepuplicFinlandFranceGermanyHungaryLithuaniaNetherlandsRomaniaTotal

726459174112103

582419063634269663,26020,470185911854821300102,616

-2-11-----4

-1906-16001600-----5,106

Country Number Net capacity Number Net capacity IN OPERATION UNDER CONSTRUCTION

MWe MWe



ond largest provider of electricity in Canada, with a generating capacityof 27 GW.

Western Europe generates about 22 percent of the total world demandfor hydroelectricity, although most practical hydroelectric resources have al-ready been exploited there, and little further development is expected. France,Norway and Sweden account for more than half of the total hydroelectricityconsumption in the region. Demand for renewable energy in Western Europeis expected to grow to 7.6 quadrillion BTU by 2015, an increase of more than1.8 percent per year. �

Energy Research Associates (CERA) the costs of building new power plantshave more than doubled since 2000. The latest IHS CERA Power CapitalCosts Index (PCCI) shows that the cost of new power plant construction inNorth America has risen 130 percent from 2000 to 2008. During this period,cost increases could be partly explained by rising prices for commodities suchas steel, nickel and copper, as well as supply issues and longer delivery times.

Issues arose due to the lack of skilled engineers in the workforce as olderworkers retired and were not replaced. This resulted in shortages in plant de-sign teams and delays to scheduled construction. This further increased thelikelihood of cancellations, which are more prevalentas prospects of fulfilling all projects in the queue be-come impractical.

The NETL points out that delays and cancella-tions have also been attributed to regulatory uncer-tainty regarding climate change. There are hopes thatthe Copenhagen Climate Change Conference inDecember will help clear up some concerns sur-rounding environmental regulations, but this is by nomeans certain. Since the US went into recession, thecost of developing power plants has declined some-what, so many of the obstacles that stood in the wayof new construction have now been, creating new op-portunities for increases in capacity.

RenewablesConsumption of hydroelectricity and other re-

newable energy sources combined is expected to bebetween 37 and 47 quadrillion BTU in 2010.Renewable energy sources are projected to accountfor nine percent of the total world energy consump-tion in 2010. Hydroelectricity, while remaining aminor factor in terms of world energy consumption,is important regionally.

The consumption of renewables in the US is ex-pected to grow more slowly than the rest of the world,at two percent per year over the period 1990-2010,with most of this growth coming from renewablesources other than hydroelectricity.

In Canada, nearly two-thirds of the homes inthe province of Quebec are run entirely on elec-tricity, most of which is supplied by hydropower.The provincial utility, Hydro Quebec, is the sec-

“Western Europegenerates about 22 percentof the total world demandfor hydroelectricity”


The power game


What are the asset management challenges facing companies within theutilities sector today?Brad Peterson. The biggest drivers of change are redeveloping our distrib-ution grid, the public demand and legislation supporting green energy, andthe inevitable inflation of the US dollar. Once we come out of the econom-ic downturn, our generating capacity and grid performance will once againtake centre stage. Grid failures will have the public agitating for network sta-bility and flexibility. Carbon credit trading will change the face of energyconsumption within the next 10 years. Some of our heaviest electricity con-suming industries will move offshore as countries not participating in theaccord will take up the price of conforming to carbon reduction. This inturn will take us to a point of reality; whether keeping our job base is moreimportant than the concerns over nuclear safety and nuclear waste storage.

We will continue to see a move towards innovation in energy, spurred bythe decline of the US dollar due to our excess spending and fiscal irresponsibili-ty. It is likely that gasoline will be US$10-20 per gallon and energy efficiency willbecome a serious matter for homes, business, industry and transportation as liq-uid fuels rise in price. Being prepared for changes in price, fuel, taxation and reg-ulation will be the ultimate challenge. Energy leadership often foresees newtrends, but turning the ship to face the new waves is one culture change too far.

How can SAMI help utilities face future dislocations?BP. SAMI is in the business ofchanging the performance cultureof organisations. We bring a set ofvery specialised tools to create plansfor the future, engage the workforceto design and implement thechanges, and to measure the results,all within a two-year window. OurAscend program encompasses aunique model, process and toolsthat embed the behavioural changenecessary to guarantee consistentand sustainable success. We under-stand what’s necessary to bring thebest possible results within an or-ganisation; the right practices, be-haviours and managing system. Our methods work 100 percent of the time.

By utilising our unique Ascend model, process and tools and our un-matched depth of experience, the result is consistent and sustainable success.

What makes SAMI’s methods and models different from other firms?BP. SAMI has had a development pattern that’s very different than other firms.I come from a background of hard sciences and behavioural psychology, so ourbuilding blocks include a deep knowledge of what practices work on an every-

day basis and how to capture human nature for changing the work culture.SAMI’s methodology has been time tested and utilised in many industries, al-ways achieving the results promised.

How do you see the area of asset management developing in the energysector in the future?BP. The greatest challenge to power companies in the future will be change andflexibility, as well as a dramatically inflated dollar, great restrictions and costsassociated with fossil fuels and CO2 taxes and disruption in demand as energycosts drive all segments towards conservation. Massive investments in trans-mission infrastructure, likely without adequate regulatory guarantees of recov-ery and loss of base load due to green energy sources and required cycling, willalso create challenges.

The winners will be those companies that can adapt – changing directionand skills in years rather than decades. They will be the companies who under-stand that behaviours drive a culture. By empowering their workforce withmethods to improve their work lives, they can adapt to their new culture fasterthan the competition. The winners will not only need to change, but to do so ata faster pace. Flexibility will be the new mantra. �

EXECUTIVEINTERVIEW

Brad Peterson explains how new behaviourscreate an effective performance culture.

S. Bradley Peterson is SAMI’s founder. He keynotes conferences on asset managementaround the globe and is sought after as a speaker and advisor to companies looking toimprove results. Peterson is a visionary whose combination of industry expertise andbehavioural psychology enables clients to achieve a performance culture.

SAMI (ATE):16nov 26/11/09 13:38 Page 121


ASK THEEXPERT

If there’s one word that’s creating a ‘buzz’ of excitementand challenge in utilities throughout the developedworld, it’s ‘smart’, the next transformational step fortwo core components of the utilities business model –

the grid and metering.Smart metering and the smart grid are both recognised

as having profound implications for the industry, in terms ofenergy efficiency, customer service (marketing and customeracquisition) and cross-border energy management and trad-ing – these topics are widely and imaginatively discussedthroughout the industry.

What seems less discussed is the topic of what to do withthe sheer volume of data generated, how to place it in thehands of all who need it and how to manage the exponentialchange in the volumes of historic data. At Open Text, we seesome critical questions emerging and believe electronicarchiving will provide some of the key answers – and cru-cially, that the history of our experience demonstrates that.So, to those questions.

How can we cost-effectively maintain records for thehugely expanded level or scale of meter readings? Where endcustomers are involved, how and in what media will wechoose to present metering data? If on the web, how can weassure performant, controlled access to relevant data in a cus-tomer service, or self-service, environment? We must alsomaintain such records to support the broader relationshipwith the customer and make them accessible in the broadercustomer information context. If we provide such access tocustomers, how can we assure security of data, and of sys-tems? And if all this means investing in new systems, do westill have the cost burden of legacy systems, for the historicdata they hold?

Let’s see how an enterprise archive might address suchquestions. Firstly, scale is one of the ‘specialist subjects’ of theelectronic archive, with proven capability to handle trulyhuge data volumes. It can also do so ‘intelligently’, optimis-ing the balance between performance of access and storagecosts, according to your business policies, but without dis-crete day-to-day activity by your organisation.

Secondly, it’s possible to ‘render’ data from pure datasources in customer and employee-friendly formats. Someutilities have already made this capability their strategy for e-billing, with reduced costs and better customer service. So for

them, the presentation of meter reading information mayrepresent extended leverage of an existing platform, not acompletely new environment.

Of course, in a customer service environment, such dataneeds to be accessed rapidly, yet securely. So thirdly, by plac-ing information in the archive, access permission can becarefully controlled and access is made to the archive, not tothe metering systems that feed it – ensuring electronic secu-rity for the metering environment. Customers and customeradvisors see exactly the same information, so discussionsabout it are easier.

Fourthly, where customer meter readings are con-cerned, they may need to be made available in the broadercustomer context of bills, enquiries (through whatever chan-nel) and special package contracts – even complaints.

Finally, the archive can be used to hold and make acces-sible data from legacy systems, delivering cost savings by al-lowing such systems to be decommissioned.

Smart metering represents a bold step into the future.For utilities, which must manage risks as intensively as assets,it may be comforting that utility companies across Europehave been using Open Text archiving for years, for e-billing,SAP data archiving, customer relationship management,legacy systems decommissioning and more – supportingmulti-channel customer relations in particular. So for our ex-isting customers, smart metering may present opportunitiesto further leverage existing data.

We believe the smart new world of utilities will comenot just to benefit from electronic archiving but to dependupon it, and we look forward to ever more dialogue with like-minded managers in this transforming industry. n

Answering critical questions for the smart metering challenge.By Adrian Butcher

Adrian Butcher is Director, Value Engineering, EMEA for Open TextCorporation. With management experience in a broad range ofindustries and processes, including many of relevance to utilities,Butcher leads a function dedicated to helping customers explore,discover and quantify the business value of Open Text solutions insupporting core business processes, reducing cost and supportingcorporate compliance obligations.

Archiving in the new ‘smart’world of utilities

“Smart metering and the smart grid areboth recognised as having profoundimplications for the industry”

OPEN TEXT_16nov 26/11/2009 14:58 Page 122

OPENTEXT AD 2:25 June 19/11/09 14:14 Page 18

REGIONAL FOCUS124

Located in Central Europe, Germany holds 82 million inhabit-ants and is the largest populated state within the European Union. A country known for its environmental consciousness, it is committed to the Kyoto protocol and other green treaties

to support low emission standards, recycling and the use of renewable energy. Th e government strongly endorses such environmental principles with a large number of emission reducing initiatives, and as a result, the overall emissions of the country are falling.

Since 1990, Germany has reduced its greenhouse gas emissions by almost 20 percent, and has nearly achieved the targets outlined in the Kyoto protocol of a 21 percent reduction by 2012. Th e country claimed second place in the global Climate Change Performance Index in 2008, which it has done through an increase in energy and resource effi ciency, whilst simultaneously developing renewable energies and raw material; making green both the supply and demand requirements upon energy in the state.

However, fossil fuels still remain the backbone of its energy infra-structure; petroleum takes a 36 percent share in the overall energy intake, followed closely by natural gas and coal. Nuclear power is gradually being phased out following a ‘nuclear consensus’ between the government and electric utilities in 2002.

Germaneffi ciencyA champion of greener, cleaner fuel – Germany is the leader in Europe’s renewable race.

Green focusGermany has pledged that almost a third of its energy will come from green sources by 2020. At a press conference in Berlin on February 12, 2009, Matthias Machnig, a senior offi cial in Germany’s Environment Ministry, advised that the state will generate 30 percent of energy from renewables, maintaining its position as head of the EU in renewable sources.

This new target places it on schedule for reaching its long-term aim of supplying half of its energy demand with wind, sun and other sources of natural energy by 2050.

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www.nextgenpe.com 125

REGIONAL FOCUS125

Green city guide: Freiburg im BreisgauA stronghold for the German Green Party, Freiburg has been imple-

menting and extending carbon-reducing initiatives since the early 1970s. Cycle lanes have been established, the city’s train network improved and the entire city centre turned into a pedestrian zone. In 1991, a fl at-rate Regional Environment Card was launched, off ering unlimited use of public transport in the city.

Freiburg is mostly recognised as being Germany’s ‘Solar City’, fol-lowing its heavy investments in renewables. Currently, almost fi ve per-cent of the city’s electricity comes from sustainable energy sources.

German energy statistics

Coal production 28,018,000 tons

Nuclear electricity generation 162.3 terawatt-hours

Oil imports 2,600,000 barrels per day

Electric power consumption 579,979,000,000 kWh

Stats taken from http://www.nationmaster.com/country/gm-germany/ene-energy

Berliner Verkehrsbetriebe (BVG)

Freiburg, Germany

Green city guide: BerlinTh e capital city, Berlin boasts a population of 3.4

million, and as the centre of the Berlin-Brandenburg metropolitan area, is leading the way with green initia-tives. When travelling through the city, cars must meet strict emission standards, which are proposed to become even more stringent in 2010. Only cars displaying green badges will be permitted in these central areas. Berlin’s public transport system, Berliner Verkehrsbetriebe, or BVG as it’s known, is highly effi cient.

For a green stay when in Berlin, head to Martim Hotel Berlin and Maritim Prorate Hotel. Th e Maritim Hotel chain has extensive policies focusing on the environment and energy conservation, ensuring all heating to be done on energy friendly natural gas or district heating. In certain places, the hotels produce their own energy via thermal power stations or solar collectors.

Th e seat of the German Parliament, the Bund-estag, is located in Berlin. A synthesis of pre-and post-war architecture, the historic dome most recently went green, and now runs completely on renewable energy from wind, water and solar sources.

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INTERNATIONAL EVENTS126

World Future Energy SummitJan. 18 – Jan. 21, 2010Abu Dhabi, United Arab Emirates www.worldfutureenergysummit.com

Solar Power Generation USAJan. 20 – Jan. 21, 2010Las Vegas, USwww.neforum.cn

4th China New Energy International Forum & ExpoJan. 20 – Jan. 22, 2010Beijing, China www.neforum.cn

PV Power Plants 2010Jan. 25 – Jan. 26, 2010Prague, Czech Republicwww.solarpraxis.de

ENERGY INDABA 2010Feb. 24 – Feb. 26, 2010Sandton, South Africawww.energyafricaexpo.com

6th International Congress on Energy Effi ciency and Renewable Energy Sources for South East EuropeApr. 14 – Apr. 16, 2010Sofi a, Bulgariawww.viaexpo.com

Las Vegas

Prague Sofi a Beijing

A round-up of international conferences and events in the energy sector.

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PHOTO FINISH128

The fi rst racing car made out of carrots, soy, potatoes and jute at the Valencia Street Circuit in Valencia, Spain.

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