FUTURE POWER SUPPLEMENT 2015
REgiONAL UPDATE
cABLES
Saudi Arabia SEC awards Duba ISCC contract
Putting to the test Testing techniques for power cables
p04
p20
BiZBRiEFS
cASE STUDY
Oman W채rtsil채 bags MPC power project
Sequencing solution Limiting disruption from outages
p6
p22
PROjEcT FiNANcE
BEYOND BANKS Meeting the funding challenges for power and water projects in the GCC PLUS TOP 10 gcc POWER PROjEcTS
POWERED BY
INTRODUCTION
GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA
PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713 EDITORIAL EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 375 5473 ADVERTISING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 433 2857 SENIOR SALES MANAGER JUNAID RAfIqUE junaid.rafique@cpimediagroup.com +971 4 375 5716 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 DESIGN ART DIRECTOR SIMON COBON CIRCULATION AND PRODUCTION DATABASE AND CIRCULATION MANAGER RAJEESH M rajeesh.nair@cpimediagroup.com +971 4 440 9147 PRODUCTION MANAGER VIPIN V. VIJAY vipin.vijay@cpimediagroup.com +971 4 375 5713 DIGITAL DIGITAL SERVICE MANAGER TRISTAN TROY MAAGMA Published by
REGISTERED AT IMPZ PO BOX 13700, DUBAI, UAE TEL: +971 4 440 9100 fAX: +971 4 447 2409 WWW.CPIMEDIAGROUP.COM A supplement of Infrastructure Middle East
No let up in demand ccording to the World Energy Council (WEC), the GCC will require 100GW of additional power over the next 10 years to meet growing demand. Despite the cautious stance on the investment front, thanks to the sustained decline in oil prices, ‘there is recognition throughout the GCC and the Middle East that infrastructure in relation to power and desalination must continue to be developed using new means of financing that have been underutilised if not unutilised,’ which is the central theme of our cover story on project financing. In fact, a study released by APICORP noted that notwithstanding rapid expansion, power supply in the Arab world has fallen short of needs. To catch up with unmet demand, medium-term capacity growth is expected to accelerate at an average annual growth rate of 8.3% from 2015 to 2019. This will require investments to the tune of $316bn in the MENA region, with 50% of the money going into generation alone. But the study also admits that overall investment climate, project cost, fuel/ feedstock, and funding will determine the extent to which these investments will be realised. This promises to be a very interesting year for the utility sector.
10
Beyond banks 02
A
20 06
Putting to the test
22
Sequencing solution 24
Printed by Printwell Printing press LLC © Copyright 2015 CPI. All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.
Anoop K Menon Editor Infrastructure Middle East anoop.menon@cpimediagroup.com
08 Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
01
regional UPDaTe
ADWEA in July and reached financial close in October 2014.
UAE Dubai Electricity & Water Authority (DEWA) has approved a total budget of $6.23bn for 2015. The budget provides for a number of key projects including expanding the capacities of K-station and M-Station by 500MW and 700MW respectively. Other projects include building 12 new 132kV substations, extending 272km of 132kV cables and implementing smart communication networks. DEWA has allocated $160.63m for water projects including water reservoirs and transmission networks. The utility has assigned $46.64m for implementing new networks and introducing a district meter system to monitor leakage and reduce water losses.
Deadline extension DEWA has moved the clean coal bid submission date to March
Ground-breaking for the $1.5bn Mirfa Independent Water and Power (IWPP) project in Abu Dhabi will take place in February 2015, said the project’s developer GDF Suez. Located 120km from Abu Dhabi, the Mirfa project is the Emirate’s 10th facility to be built under the Public-Private Partnership model. The new
plant will replace an existing 200MW plant, which caters to local demand in Mirfa. When finished, and with the existing and new facilities fully integrated, Mirfa IWPP will have a total power capacity of 1,600MW and a seawater desalination capacity of 238,665 m3/day. GDF Suez signed a 25-year power and water purchase agreement with
Oman Oman Electricity Transmission Company (OETC) has awarded projects worth $228.35m to enhance the efficiency and reliability of the main power network in the Sultanate, said the Times of Oman. The agreements are related to the construction of a new grid station, expansion of a number of existing plants, reinforcement of overhead transmission lines and consultancy services for the construction of new grid stations in several governorates. Galfar Engineering and Construction Company was awarded the tender for the construction of a new grid station at Sohar Free Zone, while Larsen and Toubro (Oman) was awarded the tender for upgrading the Misfah grid station to 400kv.
02
INFRASTRUCTURE MIDDLE EAST
Salalah IWPP Oman has mandated a minimum threshold for desalination plants
In a ministerial decision, reported by the Times of Oman, the Public Authority for Electricity and Water (PAEW) has laid down that all desalination plants must have a production capacity of not less than 10,000m3/day. “Besides, its capacity should be mentioned for seven years in the statement annually,” said Mohammed Future Power Supplement 2015
bin Abdullah Al-Mahrooqi, chairman of the PAEW. The decision also stated that the PAEW should assess the necessary infrastructure to stay connected with the project or the installation, in order to ensure the start of the project at the agreed date and achieving activation of commercial operations before the issuance of the desalination approval.
DEWA has extended the bid deadline for the Hassyan Clean Coal Power Project – Phase I by a further two months. The new bid submission date for the project, to be implemented under the Independent Power Producer (IPP) model, is March 26, 2015. The Hassyan project is a key step in the implementation of the energy diversification strategy, formulated by the Supreme Council of Energy, to introduce clean coalbased electricity generation into Dubai’s energy mix. DEWA released the tender to qualified bidders on July 22, 2014. The first phase of the project has a capacity of 1,200MW and is expected to be operational by 2020.
Oman recently inked three agreements to become a full member of the Gulf Cooperation Council Interconnection Authority (GCCIA). The agreements were signed on behalf of Oman by the President of PAEW Mohammad bin Abdullah Al-Mahrouqi. Oman’s Minister in Charge of Financial Affairs Darwish bin Ismail Al-Baloshi said the GCCIA project will result in more optimal utilisation of natural gas, which is the dominant fuel for power generation in the region. He pointed out that the $1.1bn GCCIA project enhances energy conservation and efficiency of supply, while reducing grid operating costs among GCC countries. Incidentally, MEED had reported earlier that Oman is planning to set up a spot market for electricity by 2020.
REGIONAL UPDATE
Bahrain New power projects worth $4bn will be carried out across Bahrain in the next five years, as the country develops its water and electricity networks, said the Gulf Daily News. “We are planning to upgrade the main backbone transmission network to 400kV and the envisaged network will include the construction of three main transmission substations at the voltage of 400kV in Hidd, Umm Al Hassam and Riffa,” said Energy Minister Dr Abdulhussain Mirza adding that the Electricity and Water Authority (EWA) was also upgrading its main distribution networks in Bahrain’s four governorates to further reduce power cuts. “The estimated cost of these projects is $265m. The projects are under construction and will be completed by the end of 2016,” he said. Bahrain is planning to set up a National Renewable Energy Regulatory Authority. The new body, which would be independent from the ministry of energy, would
pave the way for investment in solar power and wind farms. Bahrain has already launched a pilot renewable energy project with a solar power plant producing five megawatts of electricity for Bapco, Awali and the nearby Bahrain University coming online earlier this year. Work on a similar pilot to produce five megawatts of electricity using both solar and wind power is due to commence around the middle of 2015. Bahrain has announced plans for a long-term national strategy to preserve and optimise the country’s water resources. The new water strategy, which aims to ensure sustainable resources and achieve water security, is part of the work plan for 2015-2018. Bahrain is also working on wastewater reuse, with the Ministry of Works awarding Xylem a contract to upgrade a wastewater treatment facility in Manama last year. As a result of the upgrade, the Tubli plant will be the largest ozone wastewater treatment plant in the Middle East. The treated wastewater will be supplied to local agriculture and horticulture sectors.
www.hi-force.com
Green power Bahrain is planning a 5MW pilot combining solar and wind energy
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST 03
regional UPDaTe
Kuwait Kuwait’s Council of Ministers will discuss the new fuel, gas, electricity and water prices contained in a proposal submitted by the Ministry of Finance with a view to rationalise government expenditure, said Annahar daily. Undersecretary at the Ministry Khalifa Hamada confirmed that the ministry has taken steps to limit government expenditure for the rest of the current fiscal and the next budget. For starters, oil revenues will be calculated on the basis of $55- $60/barrel. Kuwait’s oil minister Ali Al-Omair had said earlier that new prices for diesel, kerosene and jet fuel will be introduced in 2015 after the subsidies on these fuels are reduced.
Subsidy cuts Kuwait’s government is keen to rein in its expenditure on fuel subsidies
The Al-Zour North water and power plant will start producing electricity by the middle of 2015, said Adel Al-Roumi, President, Partnerships. Technical Bureau (PTB), Kuwait. He said Kuwait’s first ever public-private partnership (PPP) project has achieved 70% completion rate in just 18 months.
Al-Zour North consists of gasfired combined cycle power plant of 1,500MW and an associated water desalination plant with a capacity of 486,000m³/day. The capacity of Al Zour North accounts for nearly 10% of Kuwait’s installed power generation capacity and around 20% of its installed desalination capacity.
Saudi Arabia The Islamic Development Bank (IDB) has allocated $220m for the Egypt-Saudi electricity interconnection project. The Saudi Council of Ministers approved in April 2014 a MoU for the project, which allows the exchange of electricity up to approximately 3,000MW at off-peak times. A statement issued by IDB said the connection will contribute to the integration of GCCIA grid with the Arab Maghreb area network. The Ministry of Water and Electricity is scheduled to open technical and financial offers for the antenna line for the interconnection project this year. The line is partly funded by the Arab Fund for Economic and Social Development (AFESD) through a $160m soft loan.
04
INFRASTRUCTURE MIDDLE EAST
Rental boom Gas-powered generators are grabbing market share in the Kingdom
According to 6Wresearch, power rental market in Saudi Arabia is projected to grow at a CAGR of 20.3% during 2014-20. The demand-supply gap in offgrid areas, massive infrastructure development and demand from the utilities segment have boosted Saudi Arabia’s power rental market. Easy availability of diesel has pushed the growth of diesel generators on rent in the country; Future Power Supplement 2015
however, in the forecast period, a shift in demand is anticipated towards gas-powered generators. In Saudi Arabia’s power rental market, utilities, oil and gas, industrial and construction applications generated more than 80% of the market revenue in 2013, wherein, eastern, central and western regions contributed significantly to the overall market shares.
The finance and economy affairs committee of Kuwait’s parliament is studying the removal what it calls ‘imposed’ limitations on the Ministry of Electricity and Water.’ The committee noted that the law in its current form bars the ministry from constructing a power station that generates more than 500MW, although the current electricity situation in the country makes it necessary to build power stations that generate more than the aforementioned megawatts. The new amendments, which has the backing of the majority, will give a strong boost to the new housing welfare projects. These projects face technical problems related to their inability to secure electricity supply, due to complications generated by the current law in terms of constructing new power stations.
The Saudi Electricity Company (SEC) has signed a contract with GE to supply equipment for the Kingdom’s first Integrated Solar Combined Cycle (ISCC) plant, near the Red Sea port of Duba in the Tabuk region, said the Arab News. The project is designed to generate up to 550MW from the combined cycle plant; the solar field will supply steam for an additional 50MW. Water and Electricity Minister Abdullah Al-Hussayen said the plant, which is expected to be completed by 2017, would enable Saudi Arabia to export electricity to Egypt, Turkey and Europe. SEC’s chief executive Ziyad Al-Shiha said 25 Saudi engineers and 80 technicians would be trained to run the project, adding that 30-35% of the products used for building the plant would be manufactured in the Kingdom.
New! Sverker 900 Relay and Multifunctional Substation Test System The SVERKER 900 is the engineer’s ultimate toolbox that addresses the increasing need for three-phase testing capability in electrical distribution substations, renewable power generation stations and industrial applications. n Three currents and four voltages n Stand-alone functionality n Rugged and reliable for field use n Generation of 900V and 105A in single phase mode n Secondary and primary testing
Megger Limited Dubai Internet City Dubai, UAE T: 00971 4443 5489 E: mesales@megger.com
www.megger.com
GLOBAL UPDATE
Biz Briefs Altaaqa Global CAT Rental Power, a global provider of temporary power solutions, broke ground at the site of its new headquarters at the Dubai World Central. Located on a 40,000 sqm plot of land, the facility will house the head office, a state-of-theart asset monitoring & control center, a training centre, an equipment servicing centre, and recreational areas – together serving as the hub for the company’s worldwide operations. The groundbreaking ceremony was led by Altaaqa Global Chairman, Fahad Y Zahid, and was attended by company executives, personnel and distinguished guests. Energy Recovery, a leading player in recycling fluid pressure in the oil and gas, chemical and water industries, has bagged a contract to supply its PX Pressure Exchanger technology to the Mirfa desalination project in Abu Dhabi. “As water and energy demand increase around the globe, more countries are looking to our pressure exchange technology to provide cost effective and energy efficient solutions,” said Tom Rooney, Energy Recovery CEO. “As the fourth mega desalination plant in the UAE and the 13th overall, the PX Q300 implementation at Mirfa further validates the technology’s strong performance, track record and OEM preference.” UK based Hi-Force picked up three awards at the prestigious Northamptonshire Business Awards Gala Dinner and Presentation, held at Daventry Court Hotel on December 11, 2014. Hi-Force won in three categories,
06
INFRASTRUCTURE MIDDLE EAST
Global HQ The Dubai office will serve as the hub for Altaaqa’s global operations
namely Training & Development, Creative Innovation and Business of The Year, and Winner of Winners Award to complete the hat trick. Its sister company HES Sales was shortlisted for Long Standing Business of The Year. The prestigious event, organised by Northampton Chronicle & Echo and Northamptonshire Telegraph newspapers and sponsored by Stanair Industrial Doors, in association with the Northamptonshire Chamber of Commerce, recognise the achievements of Northamptonshire based businesses.
be fully operational in late 2016. The contract includes a longterm service and maintenance agreement of 15 years. MPC is a majority-owned subsidiary of Oman Oil Company. “Musandam Power Company has selected an optimal internal combustion engine (ICE) configuration for this project, following a complete prequalification and tendering process, to deliver flexible and sustainable energy to the Musandam Governorate,” said Mohammed Al-Abduwani, the Chairman of the MPC Board.
Wärtsilä has bagged the contract to supply a 120 MW Smart Power Generation power plant for Musandam Power Company (MPC) in Northern Oman. The plant, delivered on a turn-key basis, is scheduled to
Echun Electronic has appointed Magenta as its authorised representative to promote the former’s entire range of current transformers in the GCC and India. Sunil N Kanal, Director and
Triple treat Hi-Force picked up three awards at Northamptonshire Business Awards
January 2015
CTO at Magenta commented, “Our partnership with Echun greatly increases our penetration into this important market, we are now able to offer our customers a complete Electrical Energy Monitoring solution with Echun’s Current Transformers products including Rogowski Coils which can provide energy monitoring and consumption of each individual device.” Echun manufactures Current Transformers that are UL listed and CE and ROHS compliant with an accuracy of 0.5% making them suitable to be used along with revenue grade energy meters. Bentley has announced it will launch new OpenUtilities products for design and management of utility networks in the region this year. The OpenUtilities product line consists of three offerings: OpenUtilities Map is a desktop GIS for multi-utilities; OpenUtilities Designer is an enterprise-level GIS for large utilities that also includes design workflow management and on-the-fly estimating during intelligent design, and OpenUtilities PowerView is a light GIS visualisation and editing tool suitable for all utilities. Doble Engineering Company will bring its Life of a Transformer Seminar to Dubai from 18-22 January 2015. The conference serves as a leading training seminar on transformers, providing attendees practical information from industry experts and resulting in immediate, measurable impacts on transformer performance and grid reliability. Don Schubert, vice president of Marsh Insurance and Risk Management, will deliver this year’s keynote address. In June, Doble had announced an expanded relationship with National Grid Saudi Arabia.
ADVERTORIAL
FAST-TRACk MAESTRoS Altaaqa Alternative Solutions delivered Saudi Arabia’s biggest single-site IPP in a mere 22 days
A
ltaaqa Alternative Solutions successfully mobilised, installed and commissioned a 95MW temporary power station in the city of Al-Kharj. Taking only 22 days to complete, it is Saudi Arabia’s biggest IPP project in a single site to date. Located near Riyadh with a population of 280,000, Al-Kharj is a rapidly growing city with an increasing demand for power. Altaaqa Alternative Solutions provided generators, each with an output of 1,500kW, that are helping keep the lights on in the city. “Our turnkey power solutions and experienced staff enable us to be involved in all phases of any project, of any scale,” said Emad Mukhalalaty, Managing Director of Altaaqa Alternative Solutions. “This recent achievement wouldn’t have been possible without the dedication and outstanding efforts of our Power Projects
08
INFRASTRUCTURE MIDDLE EAST
team, who ensured we finished a project of such magnitude in the shortest time possible.” Emphasizing the importance of electricity in daily life, Emad continued: “For the residential segment, electricity keeps water and air conditioners running, and other household appliances functioning. It energises infrastructure, businesses, and computers that track activities, bank deposits and medical records. Our livelihood depends on it. If, for some reason, there was no electricity in a bank, a mall or a hospital, disorder would prevail.” Altaaqa has won praise from the Saudi Electric Company (SEC) for its ability to mobilise, install, test and commission power plant capacities of 20-30MW within days, and received recognition with direct project awards. In 2007, Altaaqa was granted its energy sales license from the regulatory Authority and
Future Power Supplement 2015
continues to seek strategic partnerships in IWPP, renewable and cogeneration sectors. The company’s engineered solutions, utility grade protection systems, competent installation and operating staff has contributed to its success in the areas of power generation during periods of high demand to stabilise and strengthen the grid, provide temporary power during planned maintenance or unplanned outages, and peak shaving during high tariff hours to meet production needs. Established in 2004, Altaaqa Alternative Solutions is an environmentally responsible provider of electrical power, water and temperature control solutions serving the dynamic Saudi Arabian market. Exceeding 1.3GW, the company is the largest local supplier of rental generators and is the largest single owner of Caterpillar rental generators in the world.
FUTURE POWER
pRojECT FINANCE
Beyond banks Are debt capital markets the future of power and water project financing in the GCC? conomic diversification and population growth are driving the development of power and water infrastructure in the GCC, making the region one of the fastest growing utility markets worldwide. According to the World Energy Council (WEC), to keep pace with the demand for power, the region’s cumulative investment requirements in power generation will need to be between $0.7-$1.4tn until 2050. Saudi Arabia alone would need $100bn in investments up to 2030 to meet growing demand. The moot question is: where will all this money come from? A panel discussion on the Latest Trends in Project Financing, held at the POWERGEN Middle East conference and exhibition in Abu Dhabi three months ago, deliberated the different aspects of this funding challenge, against the
E
10
INFRASTRUCTURE MIDDLE EAST
backdrop of falling international oil prices and the expected tightening of government spending in response to lower oil revenues. Mark Raymont, Partner, Pinsent Masons, who moderated the discussion, set the context by underlining how the growing demand for power and water over the years have led GCC governments to continually develop their power and water infrastructure. His opening question to fellow panellists
“A financing plan is put together by taking into consideration the market’s capability, capacity and limitations” DUNCAN RITCHIE, CEO, AEQUERO FINANCIAL ADVISORY
Future Power Supplement 2015
on the sources of funds to finance existing and future projects brought out the differences between GCC and rest of the world and the undercurrents in the banking market, which for long, served as the main source of finance for utility projects in the region. Duncan Ritchie, CEO, Aequero Financial Advisory explained that project financing has always been tailored to the characteristics of a particular market. A financing plan is put together by taking into consideration the market’s capability, capacity and limitations together with the opportunities, in terms of whether liquidity would be available to the project in that market. In the case of the GCC, while liquidity is certainly not a problem, experience in putting together or leading project financing definitely is, with international banks being brought in to bridge that deficit. “Project financing in the region has always involved international banks, bringing experience
FUTURE POWER
“What we want to do is recycle bank capital. By paying the banks back some of their loans, we want to generate a sort of revolving market where they can exit after 5-7 years or even shorter tenures” CHARLIE SEYMOUR, FINANCIAL ADVISOR, ADWEA
in leading project finance together with accessing local domestic liquidity,” said Ritchie. In less sophisticated markets with less liquidity in Asia and Africa, project financing tends to involve players like export credit agencies (ECAs) as well as multi-lateral and bilateral development lenders. Charlie Seymour, financial advisor, ADWEA, claimed that for procurers in the region, ADWEA included, liquidity isn’t as much a concern as competitive finance. “We are always looking at competitive procurement to produce cheap power and water tariffs, which is really the lifeblood of a growing economy like Abu Dhabi,” he explained. Historically, ADWEA has been partial to international, regional and local banking markets for funding all its projects, whether green fields or expansions. On average, its projects have borrowed around about 120 basis points over Libor.
Stefano Terranova, head of acquisitions, investments & financial advisory, SAMEA Region, GDF Suez added that even during difficult times, there has always been sufficient capital in the region’s project financing market to close power and water projects. “Even a year and a half after the crisis, when things got really tough, we continued to access the project finance market, closing on average a couple of deals a year,” he said. In many cases, local banks stepped in to fill the void left by retreating international banks. Referring to Ritchie’s point about project financing tailored to market characteristics, Terranova pointed out that in Saudi Arabia, local financing is sufficient to fund projects of any size, with external financing accessed mainly for long-term dollars. In Oman too, local banks have played a prominent role though the amounts are much smaller than in Saudi Arabia. In Abu Dhabi, local banks largely shunned project finance deals for a few years, though in recent times, they are coming back into the market, a great example being the $500m of senior debt they committed to the Mirfa IWPP last year. “There has been tremendous growth in the maturity of the local institutions,” said Terranova. “The sophistication of some of the local banks that participate in long term financing are pretty much on par with international players.” Seymour agreed that local banks can be as sophisticated as international banks when it comes to looking at risks. “Local banks look at capital and capital discipline in the same way as international banks,” he explained. “They have to be very careful they don’t fall into a problem if the markets were to turn.” BOND pERSpECTIVES
According to Seymour, the bank market’s role as a source of cheap liquidity is expected to change “fairly dramatically” as Basel III and post-financial crisis regulations kick in, resulting in “liquidity becoming priced higher as these constraints start to bite.” “At the moment, banks have to generate business to keep the lights on,” he continued. “But putting out funds for the long term,
particularly in US dollars for 20 year plus tenures or the initial life of the infrastructure is going to be a thing of the past.” The future, he continued, lies in debt capital markets, where funds could be raised for long tenors at good prices, with ADWEA’s Shuweihat S2 refinancing setting a template for the region. In fact, from the standpoint of incorporating debt capital market solutions into complex financing structures, ADWEA’s success with Shuweihat S2 sets a strong precedent for the future. The transaction involved issuing $825m in project bonds for the development of Shuweihat S2 IWPP in July 2013, effectively launching the first tradable power project bond in the GCC. “What we want to do is recycle bank capital,” explained Seymour. “By paying the banks back some of their loans, we want to generate a sort of revolving market where they can exit after 5-7 years or even shorter tenures.” Shuweihat S2 also marked the first time that long-term take-and-hold investors from the US put their money into the region. “They needed time to get comfortable with the fact that jurisdictional risk here is no more or less than anywhere else in the world,” explained Seymour. “In fact, projects in Abu Dhabi are as good as a sovereign risk, with perhaps a little bit of operational risk. As relationships build up with these investors, we are going to see the same thing we saw with the bank market – cheaper prices. Once the bonds start trading positively, benchmarks are set and prices come down. In the future, I see banks looking at the short end of the curve while capital markets look at maturities with longer tenors.” “The fact that the S2 bond was taken mostly by the US long-term investors is a very positive development,” added Terranova. “Their views will hopefully sow the seeds of understanding for local institutional investors. In the Middle East too, you have pension funds and insurance companies that will need long-term assets.” While S2 represents an important step towards the development of a project bonds market in the region, an equally important development was ADWEA announcing the option of mini-perm financing for Mirfa IWPP. A mini-perm is a short-term project
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
11
FUTURE POWER
finance structure, which prepares the project for refinancing at a later stage. According to Terranova, this is an important step because instead of relying on banking liquidity alone, procurers like ADWEA are looking at a future where a project is initially financed during the construction period with short term funding from the banks, and once up and running, refinanced with long term bonds. “There needs to be a yield curve built up over time and Abu Dhabi is leading the region,” noted Seymour. “In the local market of the future, as pension funds and insurance markets develop and a yield curve is built up, we will have dirham tranches. We don’t have dirham tranches on long-term projects yet as they are highly laddered and the banks want the interest rate risk to be taken away. Swapping from floating rate to fixed rate is an important risk component and it is difficult, at this point of time, to know fixed rate price of dirhams. The market is very illiquid once you get beyond a few years.” Ritchie too praised ADWEA’s proactive approach in terms of building a project financing template for the future through bond refinancing. He continued: “Sometimes local banks can hit prudential limits in terms of single borrower or single risk by lending to one particular off-taker. So recycling of capital and access to capital market is a very important step. At the same time, the procurer needs to think through how refinancing is going to be provided for within the project tariff documentation. Additionally, there needs to be some balance in terms of sharing the benefits of refinancing to incentivise the asset operator. Of course, they cannot absorb all the benefits of the procurer but obviously some benefits can be shared.” Terranova added that tendering authorities too will have to think more upfront about sharing the upsides and dealing with the assumptions in the bid. FLExIBILITY HOLDS THE kEY
Seymour noted that there is a huge need to make documentation far more flexible from the perspective of refinancing and recycling of capital, adding that the main obstruction to refinancing are, paradoxically, the banks themselves though they have the most to gain from recycling their capital instead of holding on to a price that may no longer be competitive. He continued: “However, debt capital markets are totally different because they lock into a fixed rate yield for a fixed period of time. If someone pays them back, that’s fine but they still want to make the whole of their original
12
INFRASTRUCTURE MIDDLE EAST
“Their (US investors) views will hopefully sow the seeds of understanding for local institutional investors. In the Middle East too, you have pension funds and insurance companies that need long-term assets.” STEFANO TERRANOVA, HEAD OF ACQUISITIONS, INVESTMENTS & FINANCIAL ADVISORY, SAMEA REGION, GDF SUEZ
INSURING THE DEAL Mark Quinn, Director, ACE Insurance Management on whether it is easier or difficult in the GCC to meet demands in relation to protection and risk allocation The risks are the same, and given that finance companies are risk averse, one of the mechanisms to offset that risk is to buy insurance. One of the issues is that through the standard contract to protect the assets, which is also protecting the loan, we get asked to add in notices of assignment so that financing company has the opportunity to get the money in case of a major loss. We look at these to protect the validity of the contract and to make sure that they don’t give us more risk or exposure than we are expected to take on. At the same time, where it makes sense to approve, we can accept that clause within the contract. The other side is that we also provide trade credit risk, protecting the loan itself by insurance or by an insurance back up. We treat each one mutually independent of each other - we have specialists looking at one part of it which would be the trade credit risk; we have specialists looking at the operational risk, day-to-day asset protection, and also protecting other parts of it, the liability and other kind of bolt-on insurance coverages that we give.
Future Power Supplement 2015
investment. The quid pro quo is that they are happy to pass the management of the assets to the experts – the utilities or the operators – as they are not interested in micro management.” Seymour also doubted whether risk sharing rules and regulations would work in the region, pointing out that incentives and motivations change over time. He said: “One of the key issues when it comes to rules and regulations governing short term refinancing or capital recycling is that one doesn’t know how things are going to develop. From the government’s perspective, it is not acceptable to have critical infrastructure run by operators who have got no motivation or skill left in the game. That’s why we don’t have a sort of percentage risk share between the shareholder and the procurer. With ADWEA owning 60% of all the IWPP projects in Abu Dhabi, the government has a say during refinancing. It wants to be able to tell the project company – hold on, the situation is such we want you to benefit shareholders but we also want to benefit and reduce the cost to the sector.” Ritchie added: “It is very difficult to look at refinancing when you are putting a bid together. You have effectively 6-12 months for financial close, and 24-30 months of construction for a gas project and longer, if it is coal-fired. You are looking at refinancing 2-3 years into operation so you are effectively trying to predict in your bid assumptions the take-out refinancing 5-6 years into the future.” According to Ritchie, one approach to understanding the impact of refinancing, when pricing the bid, would be to prepare a base case in terms of how the bid would look with refinancing 2-3 years after commercial operations, run a financial model to see what everybody gets, switch it back and assume the refinancing doesn’t take place. “You can measure the downside risk to equity and assess whether that is something you want to be aggressive on in terms of your assumptions for your bid development,” he said. “With the possibility that you are taking some downside risk, you can offer potentially a better tariff on that basis.” Towards the conclusion of the discussion, Seymour said that structures that allow debt capital market players to become involved in the tendering stage rather than the postCOD stage should be worked upon. “There must be lots of reasons why they can’t fund construction, inability to analyse contractor credits being one of them but I think smart people can get over that hurdle,” he concluded.
Abstract Submissions Close: Friday 23 January 2015
CONFERENCE&EXHIBITION
4-6OCT2015 ABU DHABI NATIONAL EXHIBITION CENTRE
SHARING TECHNOLOGY INNOVATION SPEAKER, EXHIBIT & SPONSOR OPPORTUNITIES NOW AVAILABLE Speakers, exhibitors and sponsors are invited to participate at the 13th annual POWER-GEN Middle East conference and exhibition to be held in Abu Dhabi, UAE from 4-6 October 2015. Don’t miss this once a year opportunity to expand your personal profile and company’s presence in the Abu Dhabi and wider Middle East marketplace which is experiencing impressive growth and vitality. You will also have the chance to present new ideas and technologies and showcase your company’s equipment and services to over 3,000 attendees including customers, partners, industry experts, suppliers and end users from around 80 countries around the globe.
Register now at www.power-gen-middleeast.com
EVENT ORGANIZERS:
PRESENTED BY:
SUPPORTED BY:
SPEAKER ENQUIRIES: Mathilde Sueur Senior Conference Manager T: +44 (0)1992 656 634 E: mathildes@pennwell.com BOOTH & SPONSORSHIP BOOKINGS: Feraye Gurel Business Development DirectorInternational Events T:+ 90 (0) 532 612 77 17 E: ferayeg@pennwell.com
SUPPORTING ASSOCIATION:
CO-LOCATED WITH:
ADVERTORIAL
Rwanda Power Plant
EyE oN AFRICA Waleed Isaac, Managing Director, SES Smart Energy Solutions speaks to Infrastructure ME on the demand for Temporary power across the Middle East and Africa
E
nergy demand is still on the rise in the Middle East with utilities struggling to meet demand,” says Waleed Isaac, Managing director, SES Smart Energy Solutions, which provides fast track turnkey temporary power solutions to help bridge the power supply gap across the Middle East, Africa and South East Asia regions. Temporary power in the Middle East, he points out, is based around two demands: temporary power for construction and events, and industrial power for large scale industries and utilities. SES has identified increased construction activity in UAE, Qatar and Saudi Arabia and to cater to that, it has expanded depots and teams in UAE, Qatar and Saudi Arabia. SES provided power to several prestigious events in 2014 including Dubai Jazz Festival and Muscat festival. In 2015, SES is also providing the same turnkey power solutions to Dubai Jazz festival 2015 and Muscat Festival 2015. The main Middle East markets for utility-
14
INFRASTRUCTURE MIDDLE EAST
scale power are in Saudi Arabia, Oman and Iraq; however, with these countries developing their electricity infrastructure, the need for large scale power has been gradually decreasing. “Large scale utility rental power is showing less demand due to the fact that utilities in countries such as Saudi Arabia and Oman, are improving their transmission and distribution coverage to remote areas,” says Isaac. “This network expansion has shifted the demand for temporary power from long term isolated projects to short term peak shaving applications.” However countries like Yemen, Iraq, Egypt and the Levant region continue to struggle to develop their grid network leading to increased dependence on distributed power. In 2014, one of the company’s milestone projects in peak shaving applications was the installation of a 52MW power plant in Arar City, Saudi Arabia to support Saudi Electricity Company’s (SEC) grid during summer peak load surge. Also an Omani utility awarded SES a 10MW contract for installing multiples of one
Future Power Supplement 2015
megawatt diesel gensets connected to step-up medium voltage transformers and medium voltage switchgear to supply power to an isolated grid in Oman. In Africa, SES was awarded through a competitive bidding process, a project for the supply of 24MW power generation capacity to Rwanda Electric Utility, EUCL. SES provided full operation and maintenance services for the power plants, which delivered continuous output to the customer. “Our presence in the UAE, Saudi Arabia, Qatar, Oman, Iraq, Yemen, Rwanda, Kenya and Nigeria markets with full-fledged operations helps us cater to customer needs with short response times,” says Isaac. “SES specialises in providing off grid remote applications as turnkey solutions. We supply turnkey diesel and gas rental solutions with voltages.” SES moved into 2015 with several awards in the region and abroad, securing long term projects in Saudi Arabia, Qatar, Rwanda and Nigeria, peak shaving projects in Saudi Arabia, and isolated power plant projects in Oman.
Customized Energy Solutions Turnkey Power Rental Solutions MV/LV Distribution Solutions Power Management Solutions Fuel Management Solutions
Genset & Power Plant Rentals 50KW to 100MW
Quality, Availability & Reliability SES SMART Energy Solutions FZCO T +971 4 886 2066 F +971 4 886 2067 E sales@sesrent.com P.O. Box 18051, Jebel Ali Free Zone, Dubai, United Arab Emirates
www.sesrent.com
TEN gcc powEr proJEcTS
GCC POwer PROJECTS According to APICORP, over the next five years, the MENA region will have to invest $316bn in new power projects to satisfy growing demand. We list the key GCC power projects to keep an eye out for during the first half of 2015 16
INFRASTRUCTURE MIDDLE EAST
Future Power Supplement 2015
HASSyAN CLEAN-CoAL PowER PRojECT PHASE 1
Owner: Dubai Electricity & Water Authority (DEWA) Budget: $4bn Progress: EPC evaluation The 1,200MW Hassyan project will produce electricity using clean coal and is based on the Independent Power Producer (IPP) model. Among 17 qualification documents received, eight developers were qualified to submit their bids. Last month, in response to requests received from bidders, DEWA extended the bid deadline to March 26, 2015. DEWA has announced that it will not only buy the electricity produced by the plant, but also be the biggest partner in the project. The first phase is expected to be operational by 2020. The Hassyan project is being implemented as part of the Dubai Integrated Energy Strategy 2030, which aims to diversify the energy mix to include 71% from gas, 12% from nuclear power, 12% from clean coal, and 5% from solar power.
TEN gcc powEr proJEcTS
yANbU PowER & DESALINATIoN PLANT PRojECT – PHASE 3
Owner: SWCC Budget: $4bn Progress: Under construction The project involves the construction of an oil-fired power plant with capacity of 3,100 MW and a desalination plant with capacity of 550,000 m3/day in Yanbu. Doosan was awarded the $1bn desalination package while a consortium of Al-Toukhi Company for Industry, Trading & Contracting, Samsung Engineering and Shanghai Electric was awarded the $3bn power plant package. The project is due to enter commercial operation in 2016. France’s Alstom is supplying the equipment for 5x620 MW including steam turbines and generators, supercritical boilers, electrostatic precipitators and flue gas desulphurisation system. In April 2014, US’ Foster Wheeler was awarded the contract to supply five steam condensers and 30 feed-water heaters for the project.
FACILITy D IwPP PLANT
SALALAH 2 IPP
Owner: Kahramaa Budget: $3bn Progress: Invitation to bid Facility D is a new Independent Water & Power Plant (IWPP), which will produce 2,400MW of power and 545,520 m3/day of water. The facility will feature both thermal and membrane desalination. According to Global Water Intelligence (GWI), it will be the first privately financed power and water project in Qatar to involve outside developers since the Ras Laffan C plant, which reached financial close in 2009. Out of the six pre-qualified bidders, only three remain – Marubeni, Mitsubishi and GDF Suez . The client is currently conducting tender clarification meetings with the bidders. The consortium led by Mitsubishi is the lowest bidder while the highest bid is from GDF Suez. The project is slated to start operation by April 2018.
Owner: OPWP Budget: $1.5bn Progress: RFP stage OPWP has sent Request for Proposals (RFP) to shortlisted companies to develop the Salalah 2 Independent Power Project (IPP) on BuildOwn-Operate (BOO) basis. The RFP has gone out to four groups comprising Saudi Arabia’s ACWA Power and Japan’s Mitsui; France’s EDF; Japan’s Sojitz and South Korea’s KEPCO. Bids are under evaluation with an award expected in Q12015. The project will have an installed capacity of 300–400MW and will be based on combined cycle gas turbine (CCGT) technology. It will be located near the site of an existing power plant in Raysut, owned and operated by Dhofar Generating Company (DGC). The successful bidder will have to acquire the assets of DGC, comprising a 273MW capacity gas-fired plant, which was commissioned in 2003. OPWP hopes to conclude the tender by the end of the year and start the project in 2015 so that it can be completed by early 2018.
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
17
TEN gcc powEr proJEcTS
INDEPENDENT PowER PLANTS PRojECT - 2
AL DUR PowER PLANT PRojECT - PHASE 2
Owner: Oman Power and Water Procurement Company (OPWP) Budget: $1.5bn Progress: RFQ stage
Owner: Electricity and Water Authority (EWA) Budget: $1.5bn Progress: Under planning
Through this project, OPWP plans to add new power generation capacity of approximately 2,600 MW to the Main Interconnected System (MIS) of Oman. The project, which will be developed as an Independent Power Project (IPP) is likely to be located across two sites. OPWP has launched Request for Qualification (RFQ), ahead of the launch of a competitive tender for one or more licenses. Part of the capacity will go onstream by 2017, while the full project will be ready by 2018. Fichtner Consulting has been appointed as the technical consultant, with DLA Piper as the legal consultant and Project Financing Solutions (UK) as the financing consultant.
18
INFRASTRUCTURE MIDDLE EAST
Al Dur Power Project Phase 2 will be a combined cycle power plant with a capacity of 1,300MW-1,500 MW. EWA is evaluating whether Phase 2 should be built on EPC basis or as Public-Private-Partnership (PPP) basis. Also, no decision has been taken on the desalination component. According to MEED, the plant is planned to be commissioned between 2017 and 2019. Phase 1, which was officially inaugurated in 2012 and cost $2.1bn, was set up as a PPP, and is currently, the largest independent power and water desalination plant in the Kingdom, producing 1,234 MW of power and 48 MIGD of water. Bahrain’s annual electricity consumption stands at 3,000 MW (with a production capacity of 4,000 MW) and is growing at the rate of 7-10% per annum.
Future Power Supplement 2015
INTEgRATED SoLAR CoMbINED-CyCLE PowER PLANT PRojECT - TAbUk
Owner: Saudi Electricity Company (SEC) Budget: $1.20bn Progress: EPC stage The ‘Green Duba’ Integrated Solar Combined Cycle Plant will be built near the Red Sea port of Dhuba in the Tabuk region. The project is designed to generate up to 550 MW from the combined cycle plant, while the solar field will supply steam for an additional 50MW. The project will generate the equivalent power needed to supply around 600,000 homes for a year. GE has been awarded a contract to supply two F-class gas turbines; steam turbine; generators; heat recovery steam generators (HRSG); condenser; boiler feed pumps; Mark VIe distributed control system and a long-term service agreement for the project. The estimated cost of construction works for this landmark project is $670m.
TEN gcc powEr proJEcTS
UMM AL HAUL PowER & DESALINATIoN PLANT PRojECT
NooR 1 PHoTovoLTAIC SoLAR PowER PLANT PRojECT
MoHAMMED bIN RASHID AL MAkToUM SoLAR PARk - PHASE 2
Owner: Qatar Electricity & Water Company (QEWC) Budget: $800m Progress: Invitation to bid
Owner: Masdar Budget: $600m Progress: Expressions of Interest (EOI) stage
Owner: DEWA Budget: TBA Progress: Review of bids
The project involves the construction of a power generation and seawater desalination plant with an installed capacity of 2,400MW of power and 130MIGD of water. The plant will start production mid-2017 and meet Qatar’s power needs beyond 2020. Four companies had expressed interest to participate in the bidding proces. Though the main contract was expected to be awarded in December 2014, the client is yet to make any announcement. Qatar currently has a power surplus of close to 2,000MW out of its total capacity of 8,700MW. Consumption is estimated at 6,800MW but rising demand due to a growing population and major infrastructure projects could soon close the capacity-surplus gap.
Noor 1 project will be located to the east of Al Ain city in Al-Aflaj. Unlike concentrated solar power technology (used in Shams 1), the Noor 1 project will use the photovoltaic (PV) technology which can directly convert the sunlight into electricity. In July 2011, the client had prequalified 14 companies for the EPC contract. However, the project was put on hold and revived in October 2014, with Masdar inviting Expressions of Interest (EoI) for the EPC contract. According to Middle East Tenders, more than 40 companies have submitted EoIs for the project. So far no intimation has come from the client regarding the RFP stage. Masdar had claimed that half of the modules for Noor 1 will be sourced from Masdar PV.
DEWA is reviewing bids for the 100MW Phase 2 of the Mohammed bin Rashid Al Maktoum Solar Park. The utility received 49 qualification documents in response to its request for qualifications, which was released in May 2014. DEWA shortlisted 24 developers for the second phase, and 10 bidders were chosen after opening the bids in November 2014. The bids are being reviewed according to the criteria developed by the advisory committee that oversees the project. According to The National, ACWA Power has bid an 5.98 US cents/kWh (much lower than in Brazil and India), followed by the consortium of Fotowatio Renewables and Abdul Latif Jameel Energy at 6.13 US cents/ kWh. The second phase is based on PV technology and is expected to be operational by 2017.
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
19
FUTURE POWER
CABLES
Putting to the test
Clive Pink, Product manager, Megger deliberates the most popular test techniques for power cables
any techniques are available for assessing the condition of underground power cables and for diagnosing faults that occur on these cables, but these techniques are often presented as alternatives that compete with each other. This is unfortunate and misleading as, in reality, the various techniques are complementary. Faults on underground cables are a major concern for every organisation involved in the transmission and distribution of electrical power. Such faults can have consequences that are extremely costly and disruptive, so it’s not surprising that there is strong demand for test equipment that can provide accurate information about the condition of cables and also assist in the rapid location of faults.
M
20
INFRASTRUCTURE MIDDLE EAST
A first thought might well be that this test equipment should energise the cable at power frequency – after all, in this way it would be subjected to stresses that closely resemble those it experiences when in service. There is, however, a problem. Cables are highly capacitive which means that if they are to be energised continuously at power frequency during testing, the test set must be capable of supplying a large amount of reactive power. A test set capable of doing this necessarily has to be physically large, heavy and expensive. For this reason, power frequency
testing of cables is not commonly used. One potential alternative is dc insulation resistance testing, and this has many benefits. Suitable test equipment is compact, lightweight, moderately priced and relatively easy to use. Typically performed at 5 kV or 10 kV, dc insulation resistance tests take just a few minutes to carry out and, in addition to quickly revealing major faults, they give a valuable indication of the overall condition of the cable. This is a very useful guide when deciding whether the cable is fit for immediate return to service, or whether it should be tested further using other techniques.
“dc insulation resistance testing is a valid technique for determining which cables are most at risk of failure and, therefore, in need of further analysis” CLIVE PINK, PRODUCT MANAGER, MEGGER
Future Power Supplement 2015
FUTURE POWER
VLF testing takes longer to perform than dc insulation resistance testing, but it will reliably uncover a wider range of cable problems and will enable the majority of “dubious” cables to be confidently classified CLIVE PINK, PRODUCT MANAGER, MEGGER
STUDy NOTES
A recently published article (Charles Q Su and C R Li, IEEE Electrical Insulation Magazine, January/February 2013) describes how, during a five-year study, dc insulation testing was used to decide which of a group of 6.6 kV cables operated by a Chinese utility should be further tested using the VLF and OWTS techniques described later in this article. Only 5% of the cables in the study were selected for testing with these techniques, but the failure rate across the whole group of cables was nevertheless reduced by over 30%. This clearly shows that dc insulation resistance testing is a valid technique for determining which cables are most at risk of failure and, therefore, in need of further analysis. To get the best from dc insulation resistance testing it is important to choose the right test set. A critical characteristic is test current
capability, as an instrument that can only supply a small current will take a long time to charge the cable under test, particularly if it is a long cable, and this will unnecessarily prolong the testing time. Market leading instruments will typically supply 3 mA to 6 mA short circuit current. As a rule of thumb, this will mean that capacitive loads like cables take 2.5 seconds or less per microfarad to charge to 5 kV. In many medium, high and extra high voltage substations, noise immunity and filtering is a desirable feature. The best instruments are capable of accommodating between 3 mA and 8 mA of noise, and filter the output in real-time to provide stable measurements. Finally, the test set’s power source should not be neglected. As mains power may not be readily available in locations where cable testing must be carried out, a test set with an internal rechargeable battery – ideally a rapid-recharge Li-ion type – is greatly to be preferred. While dc insulation resistance testing at modest voltages is, as we have seen, an invaluable and convenient first-line tool for assessing cable condition, there are some cases where further study is needed. These tests most usually take the form of insulation withstand testing at voltages higher than the nominal working voltage of the cable under test. In fact, in many countries withstand testing before new cables are put into service is obligatory, as it is part of the relevant standard. Because of the risk of cable damage, dc testing at these higher voltages is no longer widely used, having been supplanted by ac very low frequency (VLF) testing, usually performed at a frequency of 0.1 Hz. VLF TESTS ExPLAINED
VLF test sets are divided into two groups – those that apply a sine wave to the cable under test, and those that use a cosine rectangular (CR) waveform. Both types produce useful and reliable results, but it is worth noting that CR test sets are usually smaller and lighter than similarly rated sine wave equivalents, and that some users prefer the CR waveform as its rise and fall times are very similar to those of a power frequency sine wave. VLF insulation withstand tests at 0.1 Hz usually involve applying a test voltage of three
times the nominal working voltage to the cable for 15 minutes or, in the case of aged cables, one hour. VLF testing therefore takes longer to perform than dc insulation resistance testing, but it will reliably uncover a wider range of cable problems and will enable the majority of “dubious” cables to be confidently classified as either good for return to service or susceptible to imminent failure. Even after VLF testing, some subtle problems may remain hidden, and detecting these is the role of partial discharge (PD) analysis. This involves coupling a high ac test voltage to the cable under test and using a sensitive detector to look for the characteristic signals produced by PD events. Since research has shown that PD testing at VLF using sine wave voltages does not give good results, an alternative method of providing an ac test voltage for the cable is needed. This typically takes the form of damped ac (DAC) voltage. This works by connecting an inductor in series with the cable under test, then charging the cable from a high-voltage dc source. When the cable is charged, a high-speed solid-state switch connects the inductor in parallel with the capacitance of the cable to form a resonant circuit. As a result, damped oscillations at approximately power frequency are set up in the cable, and these provide the test voltage. Although it is one of the more recent additions to the family of cable test techniques, PD analysis using DAC voltages is rapidly growing in popularity. It is already included in standards for cable commissioning in Spain and the Netherlands, and is also recommended in Germany. In this short article it has only been possible to briefly consider three of the most popular and most useful test techniques for power cables – dc insulation resistance testing, VLF testing and PD analysis using DAC voltages. As we have seen each of these techniques has its own merits and shortcomings. The key factor to bear in mind, therefore, is that cable test techniques are not competitive – none is universally “better” than the others – which means that the best and fastest results will always be obtained by matching the test method to the application in hand and, where necessary, being ready to use more than one method of testing.
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
21
FUTURE POWER
CASE STUDY
Sequencing solution
Lucy Electric’s customised distribution electrical system protects the Beech water treatment plant from disruptions caused by power outages
utton and East Surrey Water (S&ESW) is a water-only company serving customers in East Surrey, parts of West Sussex, West Kent and South London in the United Kingdom. Its supply area covers 835 sq km, much of it rural and supplies drinking water to approximately 670,000 consumers in 282,000 properties. To improve resilience and customer service, S&ESW has been undertaking a significant
S 22
INFRASTRUCTURE MIDDLE EAST
“This is the kind of project that we excel at. The complicated nature of the project, including the lack of remote mobile signal, meant that we had to develop something truly tailored for S&ESW” JOHN GRIFFITHS, CEO, LUCY ELECTRIC
Future Power Supplement 2015
modernisation project to ensure the Bough Beech Water Treatment plant was equipped to meet the future needs of the region. S&ESW therefore asked Lucy Electric, a global leader in switching, protection and automation solutions for medium and low voltage electrical distribution systems, to develop a bespoke solution to protect the treatment plant in case of a power outage and to improve stability and limit disruption. S&ESW wanted to protect the plant from any potential disruption caused by loss of power from the regional supplier or during routine maintenance. Due to the remote location, there
FUTURE POWER
IdEaL SWITCHING TImINGS, IN SECONdS 250
200
150
100
50
1A
2A
3A
to be brought in to recalibrate the switches. This was both expensive, and would create a period of downtime for the treatment plant, which has obvious negative ramifications. Under normal circumstances, Lucy Electric would use its expertise to develop a remote automation solution. However, to further complicate the nature of the project there is little mobile coverage in the area around the treatment plant, so a traditional automation solution was not an effective option. Lucy Electric therefore developed a solution that required an upgrade to the physical switchgear equipment plus a bespoke switchover programme that would prevent the switches from tripping in the case of an outage. A new 11kv Ring Main Unit (RMUs) as well as new switchgear, all designed and manufactured by Lucy Electric, were installed to the site. Existing switchgear and electrical distribution equipment were retrofitted so that each of the substations was now supported by two RMUs and one control box. This ensured that the equipment was better able to cope with the bespoke sequencing programme Lucy Electric developed to allow for the transformers to undergo a staged reenergisation of the ring in case of a power outage. TImEd SEqUENCE
was only one connection into the treatment plant, therefore if power was lost on site for any reason, the plant would have to rely on the local generator to create electricity. The site already had its own generators in place, and when the supply from the local electricity supplier is lost then the site automatically switches over. However, bringing the seven onsite transformers online at the same time would create a current/power inrush problem for the generators and cause them to trip out. This meant that in the case of a poweroutage, a specialist electrician would have
The new sequence was designed to run through three substations and six switches in total; however, due to the lack of mobile reception, there was no possibility of direct communications to the control room from the switches. To resolve the problem, upon sensing the loss of the 11kv supply, the switches are automatically opened and remain open until the 11kv supply has been restored. Once restored, all of the circuit breakers close in a timed sequence to re-energise the network. Due to the lack of a single control room, once the circuit breakers are tripped, they each go through
1B
2B
3B
a pre-programmed countdown procedure so that the circuits close at a pre-determined phase, allowing voltage to grow at a controlled pace. Once the automation sequence is started, all switches should have operated after 225 seconds (3min 45 seconds). This has been proven to repower the circuit, without any further disruption. Lucy Electric also ensured that the on-site RTUs were fitted with high temperature batteries to ensure that they lasted their full 10 year life, as any temperature over 25oC may cause premature failure of the battery (which is supplying the protection). Also a battery and AC mains monitoring indication was added and connected back to the control centre to inform of issues with a particular RTU, thereby allowing the controllers to predict issues ahead of any problem occurring. Lucy Electric’s innovative bespoke sequencing system and products provides S&ESW with added piece of mind that the water treatment plant will be able to continue operation during times of maintenance or external power outage. This ensures public safety and protected revenues for the client. An S&ESW spokesperson says: “Lucy Electric’s product range and sequencing solutions have ensured that we can stay operational with a minimum impact in the case of an external fault. This gives us piece of mind and will also save costs. The ability of the Lucy Electric team to come up with such an innovative and effective solution has made a significant difference to our business.” Lucy Electric CEO, John Griffiths added: “This is the kind of project that we excel at. The complicated nature of the project, including the lack of remote mobile signal, meant that we had to develop something truly tailored for S&ESW. Our technical expertise and our capacity to produce bespoke equipment for our clients mean that we have developed an innovative and effective solution for S&ESW.”
Future Power Supplement 2015
INFRASTRUCTURE MIDDLE EAST
23
DIARY
Mark your diary... Saudi WaTEr and PoWEr ForuM 12–14 JanuarY, 2015 riYadH The 2015 edition also marks the 10th anniversary celebrations of SWPF, an annual forum and exhibition for water and power stakeholders in the Kingdom of Saudi Arabia. The event is held under the patronage of the Ministry of Water & Electricity. Contact: Chris Hugall Tel: +44 20 7978 0084 Email: chugall@ thecwcgroup.com www.ksawpf.com MiddLE EaST ELECTriCiTY 2-4 MarCH, 2015
HAPPENING IN 2015
POWER-GEN MIDDLE EAST 4-6 October, 2015, Abu Dhabi enowned for providing up-to-date information about the latest technological developments in the power industry, POWER-GEN Middle East has become a must attend event for professionals and decision makers in the power industry For the 13th year, this renowned forum will bring together a range of experts involved in every aspect of the business of power generation from policy makers, project developers, financiers, engineers, suppliers and operators in a forum that offers valuable networking and information exchange. POWER-GEN Middle East attracts delegates and attendees from 69 countries across the Middle East and North Africa (MENA) region and around the world. The event’s conference segment features presentations, case studies and panel discussions presented by over 150 eminent speakers and chairs representing more than 20 countries. In 2014, there were 20 conference sessions covering everything
R
24
INFRASTRUCTURE MIDDLE EAST
from planning UAE’s power and water future to developing MENA’s changing fuel landscape and independent power & water projects along with fuel flexibility as well as improving plant and power system efficiency and plant technology case studies. The exhibition segment showcases innovative and cutting-edge products and equipment by leading regional and international companies. Last year saw 106 exhibitors from 30 countries participating in the event. Another major attraction is the technical tours of power and water facilities in the host country. POWER-GEN Middle East is colocated with WaterWorld Middle East to provide a comprehensive power and water event, all under one roof, at the Abu Dhabi National Exhibition Centre (ADNEC). The Advisory Board of POWER-GEN Middle East is now accepting abstracts for the conference.
duBai Middle East Electricity is the largest gathering of power professionals in the world with exhibitors showcasing products from over 120 countries across the globe. Contact: rahul rawat Tel: 971 4 407 2470 Email: rahul.rawat@informa.com www.middleeastelectricity.com WETEx 2015 21-23 aPriL, 2015 duBai The 17th edition of Water, Energy, Technology, and Environment Exhibition (WETEX), to he held at the Dubai International Convention and Exhibition Centre (DICEC), presents the latest developments in water, energy and the environment in the Middle East. Contact: General Enquiries Tel: +971 4 515 1460
Contact: Mathilde Sueur Tel: +44 1992 656 634 Email: mathildes@pennwell.com www.power-gen-middleeast.com
Future Power Supplement 2015
Email: sales_general@wetex.ae www.wetex.ae
More power in your process automation. Accurate and reliable process measurement is crucial to optimal control of power plants. Benefit from Endress+Hauser’s experience and technology know-how as a major global supplier of process automation to power plants worldwide. We understand your goals of 24/7 operation, running plants safely and reliably. We work closely with power plants worldwide helping them address issues of spiraling maintenance costs, stricter environmental compliance and minimizing downtime.
Endress+Hauser Instruments International AG Middle East Support Center 7WB, Office 2100
Dubai Airport Free Zone P.O. Box 293828 Dubai United Arab Emirates
Phone +971 4 253 51 00 Fax +971 4 609 18 11 info@ae.endress.com www.endress.com