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PIINSIDER POWER

A S I A’ S L E A D I N G P O W E R R E P O R T

INDIA COUNTRY FOCUS ‘OVERVIEW & CURRENT STATUS’

MARCH/APRIL 2011

PLUS • Smart Grid developments • Solar Power India

FEATURES INSIDE INCLUDE: Fukushima Crisis, Asia Biomass, Regional Review, Malaysia Oil & Gas


bedruck


welcome well what a start to the year!

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ContaCt us: Editor: Charles Fox Creative Director: Colin Halliday Designer: Francesca Hammond Sales Director: Jacob Gold Business Development: Alec Piercy Account Manager: Sam Thomas Account Executive: Jordan Gardiner Accounts & Customer Service Manager: Katherine Godfrey Managing Director: Sean Stinchcombe sKs Global limited Kingswood House South Road Kingswood Bristol UK BS15 8JF e: info@sks-global.com w: www.pimagazine-asia.com w: www.sks-global.com t: +44 (0) 1179 606452 F: +44 (0) 1179 608126

SKS Global Power Insider Asia magazine is published quarterly and is distributed to senior decision makers throughout Asia and the Pacific. The publishers do not sponsor or otherwise support any substance or service advertised or mentioned in this book; nor is the publisher responsible for the accuracy of any statement in this publication. Copyright: the entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electric, mechanical, photocopying, recording or otherwise without the prior permission of the copyright owner.

we launched our very first roundtable in New Delhi on the 2nd – 3rd of march at the British high commission and also the 5* intercontinental hotel. india is a massive growth market and the Solar energy mission is moving forward at a great pace, but it is not without its problems as we found out. During the discussion covered later in this edition, we heard of allegations of fake projects, massive incompetence in the bidding process and importantly some ideas to move forward and really develop the market for phase 2. i won’t go into too many details here; i can let you read about that later on in this exciting edition. also we continue our snap shot of countries in the region and of course have a look at the effects of the devastating earthquake in Japan and the potential damage at Fukushima. as we go to press, more and more comparisons are being made with chernobyl, we at pimagazine hope that this is simply not the case. in these times, the industry seems to go crazy with scare stories and comparisons with other energy sources; it also brings out the scaremongers, those that seem to like preaching doom and gloom on the Nuclear market. as with any form of energy, there will always be those that scream, shout rant and rave when accidents happen, the facts remain that Japan had an almost flawless Nuclear safety record, that has very clearly changed.

78 than ever for renewable energy, all over the So things are looking stronger region more projects are being approved, smart grid is being hailed as a super answer to many problems, but have the government and retailers considered the consumer, the person that pays? an interesting question to be asked? 56

we have made a few additions to the website; we have now added jobs, tender and video section. if you have any roles you wish to post, send us the details and we will certainly upload them, also please look at our new video page, get to see our events and what people think of them. enjoy the edition, and drop us a line if you have a story or feature you would like us to cover. Thanks, and look forward to hearing from you.

Charles Fox editor

power insider march/april 2011 3


I SHORTEN MY PROJECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES TO PURCHASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET

NEW PV PRODUCT? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS A PPA? HOW DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR MY

? HOW DO I INCREASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE THE PERFORMANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY FUND-

RCE? WHAT ARE BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET BANKABILITY REQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE RIGHT

D INSTALLER? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE EFFECTIVELY? HOW CAN I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I NAVIGATE

H THE SOLAR VALUE CHAIN? WHAT IS THE DIFFERENCE BETWEEN A LEVERAGED OR UNLEVERAGED IRR? WHAT TAX INCENTIVES OR GRANTS ARE AVAILABLE TO ME AT THE LOCAL, STATE,

ERAL LEVEL? WHICH TARGET NICHE MARKET IS RIGHT FOR MY NEW PRODUCT? HOW DO I SHORTEN MY PROJECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES

HASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET FOR MY NEW PV PRODUCT? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS A

W DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR MY PROJECT? HOW DO I INCREASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE THE

MANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY FUNDING SOURCE? WHAT ARE BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET BANK-

EQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE RIGHT QUALIFIED INSTALLER? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE EFFECTIVELY?

N I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I NAVIGATE THROUGH THE SOLAR VALUE CHAIN? WHAT IS THE DIFFERENCE BETWEEN A LEVERAGED OR UNLEVERAGED

AT TAX INCENTIVES OR GRANTS ARE AVAILABLE TO ME AT THE LOCAL, STATE, AND FEDERAL LEVEL? WHICH TARGET NICHE MARKET IS RIGHT FOR MY NEW PRODUCT? HOW DO I SHORTEN

ECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES TO PURCHASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET FOR MY NEW PV

T? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS A PPA? HOW DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR MY PROJECT? HOW

REASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE THE PERFORMANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY FUNDING SOURCE?

E BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET BANKABILITY REQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE RIGHT QUALIFIED

R? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE EFFECTIVELY? HOW CAN I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I NAVIGATE THROUGH

SOLAR

S

N

THE A

DELIVERING CLARITY TO THE SOLAR INDUSTRY…

VALUE CHAIN?

DIFFERENCE

LEVERAGED OR

RAGED IRR? WHAT TAX INCENTIVES OR GRANTS ARE AVAILABLE TO ME AT THE LOCAL, STATE, AND FEDERAL LEVEL? WHICH TARGET NICHE MARKET IS RIGHT FOR MY NEW PRODUCT? HOW

RTEN MY PROJECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES TO PURCHASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET FOR

PV PRODUCT? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS A PPA? HOW DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR MY PROJ-

W DO I INCREASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE THE PERFORMANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY FUNDING

? WHAT ARE BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET BANKABILITY REQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE RIGHT

D INSTALLER? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE EFFECTIVELY? HOW CAN I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I NAVIGATE

H THE SOLAR VALUE CHAIN? WHAT IS THE DIFFERENCE BETWEEN A LEVERAGED OR UNLEVERAGED IRR? WHAT TAX INCENTIVES OR GRANTS ARE AVAILABLE TO ME AT THE LOCAL, STATE,

ERAL LEVEL? WHICH TARGET NICHE MARKET IS RIGHT FOR MY NEW PRODUCT? HOW DO I SHORTEN MY PROJECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES

HASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET FOR MY NEW PV PRODUCT? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS

OW DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR MY PROJECT? HOW DO I INCREASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE

FORMANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY FUNDING SOURCE? WHAT ARE BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET

LITY REQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE RIGHT QUALIFIED INSTALLER? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE

VELY? HOW CAN I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I NAVIGATE THROUGH THE SOLAR VALUE CHAIN? WHAT IS THE DIFFERENCE BETWEEN A LEVERAGED

VERAGED IRR? WHAT TAX INCENTIVES OR GRANTS ARE AVAILABLE TO ME AT THE LOCAL, STATE, AND FEDERAL LEVEL? WHICH TARGET NICHE MARKET IS RIGHT FOR MY NEW PRODUCT?

I SHORTEN MY PROJECT LIFECYCLE? HOW DO I GAIN ACCESS TO MULTIPLE FUNDING SOURCES TO PURCHASE OR FUND PROJECTS? HOW DO I GAIN IMMEDIATE ACCESS TO THE MARKET

NEW PV PRODUCT? WHERE IS THE BEST GEOGRAPHICAL LOCATION FOR MY PROJECT? WHAT IS A PPA? HOW DOES THE ITC AFFECT MY PROJECT? WHICH TECHNOLOGY IS RIGHT FOR

ECT? HOW DO I INCREASE SALES PERFORMANCE WITH LIMITED INVESTMENT? HOW DO I ENSURE THE PERFORMANCE OF MY SYSTEM? HOW DO I KNOW THIS PROJECT IS RIGHT FOR MY

SOURCE? WHAT ARE BALANCE OF SYSTEM COMPONENTS? HOW DOES MY ORGANIZATION MEET BANKABILITY REQUIREMENTS AS A TECHNOLOGY MANUFACTURER? HOW DO I FIND THE

UALIFIED INSTALLER? WHAT FINANCING SOURCES ARE AVAILABLE TO ME? HOW DO I SCALE EFFECTIVELY? HOW CAN I BE SURE I HAVE SELECTED THE RIGHT PROJECT TEAM? HOW DO I

by providing confidence at the crossroad of technology, growth, and project finance

www.scsrenewables.com


CONTENTS 6

News

27

Solar Power in India

12

India Round Table

18

Asia Pacific RE Markets

24

Indonesia Geothermal

26

Fukushima Nuclear Crisis

30

Malaysia Oil & Gas

34

Smart Grid Technology

40

Lubrication Engineers

44

Machine Alignment

50

Events

52

78

56

POWER INSIDER MARCH/APRIL 2011 5


NEWS DESK SWISS COMPANIES EYE USD 2 BILLION RENEWABLE ENERGY MARKET IN INDIA The Indian market potential for Swiss entities that are into renewable energy and water technology areas could reach up to USD 2 billion, according to a Swiss business group official. Many Swiss entities are into the fast-growing clean energy sector and are looking for business opportunities in India. “Market potential that is addressable by Swiss companies could reach up to USD 1-2 billion. (The figure is) Market volume in renewable, solar and water segment technologies,” Cleantech Switzerland’’s President Uwe Krueger told PTI. A Swiss government-sponsored entity, Cleantech Switzerland provides an export platform for Swiss cleantech players. The market for clean energy in India is growing and such projects are estimated to have attracted private investments of around USD 4 billion last year. Without divulging details, Krueger said that now there are projects --

related to water technology areas in India -- -- worth about 20 million Swiss francs in the pipeline. Krueger was here as part of the business delegation that accompanied Swiss Head of the Federal Department of Economic Affairs Johann Schneider-Ammann. He noted that power generation from “decentralised sources” such as wind power turbines and solar farms would provide huge investment potential in countries, including India, especially, in terms of upgrading the existing electricity grids. Cleantech Switzerland has also entered into an agreement with the Confederation of Indian Industry (CII) to explore business opportunities in the clean energy sector for both Indian and Swiss entities. The focus would be on renewable energies and efficiency, water and waste water utilisation and environmental technologies. The agreement was inked between Krueger and S Raghupathy.

COMPANY NEWS FROM AROUND THE WORLD

Greece, India investment pact

Greece and India on Monday signed a protocol for strengthening bilateral cooperation in investments, wrapping up the 6th Joint Greek-Indian Ministerial Committee held in Athens. The two sides also agreed that Deputy Foreign Minister Spyros Kouvelis should

visit New Delhi at the head of a business delegation in the near future. “We want to build up strategic economic cooperation with a dynamically growing economy and this is very significant for Greece, which is in the midst of an effort for outward-looking growth,” Kouvelis said after the end of the commit-

6 MARCH/APRIL 2011 POWER INSIDER

tee meeting. The agreement covers a number of sectors, including renewable energy sources and green technologies; tourism; port development; air and sea transport; science and technology; agriculture; and construction and infrastructure - all areas that are currently growing strongly in India.

According to Indian Minister of State for Commerce and Industry Jyotiraditya Scindia, who co-chaired the meeting with Kouvelis, afterward spoke of “great potential” for promoting trade transactions and investments. He referred to long-standing ties between the two countries since antiquity and invited Kouvelis

to visit India.

Kyocera solar PV on Japanese shopping centre

Kyocera Corporation has installed 960 kW, or 4300 units, of its solar photovoltaic (PV) modules on the roof of the recently opened AEON Itami-Koya shopping centre in Itami City, Hyogo Prefecture, Japan.


ADB forecAsts 8% GDP Growth sri Lanka has made great progress compared to many South Asian countries which are lagging in economic growth, said Chief Economist of the Asian Development Bank (ADB), Dr. Narhari Rao at the launch of Asian Development Outlook (ADO) 2011 on Wednesday. Rao said that Sri Lanka has already achieved much compared to many countries in the region and added that the country is poised for growth in the next two years. ADO, the annual flagship publication of ADB forecasts Sri Lanka’s GDP growth rate to be around eight percent this year following a strong rebound last year which recorded a 7.6 percent growth rate. “We are optimistic that Sri Lanka will achieve an economic growth rate of around eight percent in the next two years”, Rao said. The ADO stated that Sri Lanka could reach eight percent growth provided policy makers focus on fiscal consolidation, reforms to the two State sector energy enterprises, finance sector reforms and maintain a flexible exchange rate. Sri Lanka’s economic growth rate has been around six to seven percent since 2006 except for a slump in 2009 due to the intensity of the conflict and the global financial crisis. According to ADO, Sri Lanka’s economic growth rate is expected to surpass Pakistan, Nepal, Maldives and Bangladesh this year as well as next year. The ADO stated that services and industry will lead growth in 2011. Agriculture is likely to be affected by heavy rains that lashed early this year. Rise in global food and fuel prices triggered by uncertainty in the Middle East and the earthquake in Japan will stoke inflation in emerging economies. Sri Lanka’s annual average inflation rose to six percent early this year from 5.9 percent end last year. The inflation rate is expected to further rise this year due to the increase in world oil prices. The ADO noted that Sri Lanka’s capital market remains under developed and that steps need to be taken to develop infrastructure for the market. “Sri Lanka should create a market for corporate bonds for which it should have good rating agencies, auditors and high transparency”, Rao said. Economist ADB, Hasitha Wickremesinghe said that. A good business environment is important to attract investors and promote businesses. The World Bank’s Doing Business ranks Sri Lanka

the Kyocera solar PV modules are part of a 1.16 Mw system. Kyocera says 126 AeoN shopping centres around Japan have now installed a total of over 10 Mw of its solar PV modules.

Cannon Group exhibits composites technologies at

Chinese wind show

at 102 out of 183 countries, stressing the need to eliminate red tape. Asia’s recovery is firm and would continue to expand over the next two years even though high inflation and the need to develop new resources present looming challenges to policy-marker. Country Director ADB Richard Vokes said Asia is leading global recovery and it needs to be less reliant on industrialised countries and added that developing Asia should tackle inflation. Developing Asia is home to two-thirds of the world’s poor and it is they who are most vulnerable

the cannon Group will be showing its latest developments in composites, polyurethane and thermoforming technologies at the china International wind energy exhibition and conference, cwee 2011, being held in shanghai this week. cannon, headquartered

in Italy, will display a range of equipment for the wind energy and other industries, including: • the epoxy DX dosing machines for epoxy resin infusion for large wind turbine blades; • dosing machines for polyurethane inserts to replace the use of balsa

to price increases. Policy-makers must consider preemptive action to curb inflation, the ADO stated.Asia’s growth is driven by the two giants, China and India whose economies are expected to record a growth rate of 9.6 percent and 8.2 percent this year. Vokes said developing Asia should build strong links with non traditional markets to maintain growth and make it inclusive. “Building South-South links is essential to enhance trade and investment in Asia”, he said.

wood; • automated assembly technologies for the production of large composite parts; • compression moulding presses for sMc, GMt and rtM; • the new estrIM (epoxy structural reaction Injection Moulding) tech-

nology, designed for the replacement of conventional rtM processes with fast-demoulding high pressure injection of epoxy resin formulations; and • a range of automatic preformers for the preparation of carbon and glass fibre preforms used for

Power INsIDer march/april 2011 7


news desk JAPAN NuclEAR ScARE bOOSTS RENEWAblES lObby SINGAPORE — A GlObAl ScARE sparked by Japan’s stumbling efforts to contain a nuclear crisis is encouraging promoters of renewable energy, but defenders of atomic power insist it has a long-term future. Until the giant earthquake and tsunami that struck northeastern Japan on March 11 damaged the Fukushima plant, nuclear power was emerging as one of the main choices for countries looking at cleaner, alternative energy options. Because it is free from carbon emissions, atomic power has been held up as a major plank in the battle to fight global warming, and now accounts for about 14 percent of the world’s electricity supply. But daily television images of the struggle to cool down overheated reactors at Fukishima have generated concern in countries that import Japanese food and other products, and reinforced long-held fears over nuclear technology.

“The Fukushima crisis may result in significant changes in energy policy in Asia, reducing plans for nuclear energy and boosting liquefied natural gas and renewables,” said Rajiv Biswas, chief Asia economist at IHS Global Insight. “It will refocus government efforts to boost renewable energy sources including solar, wind and geothermal energy,” the Singapore-based economist said. In cases where democratic governments insist on building nuclear power plants, “the public can force them to reconsider”, he added. Globally, there are more than 440 active commercial nuclear power reactors in 30 countries, producing 377,000 megawatts of electricity, according to the World Nuclear Association. Of 62 reactors currently being built around the world, 40 are in Asia, and 96 of the 158 being planned are also in the region, the association’s

figures show. Samantha Smith, leader for global climate and energy initiative at the environmental group WWF International, which opposes atomic power, said Fukushima has prompted “a resurgence in support for alternatives to nuclear”. She cited the decision of European leaders to carry out “stress tests” for the continent’s nuclear plants, China’s cutting of nuclear power targets and a German moratorium on further operation of older reactors as evidence of the changing mood. In addition, the market values of many companies and utilities involved with, and investing in, nuclear power have dropped, while share prices of some renewable energy firms have risen, she told AFP. “Investing in clean, renewable energy is clearly preferable to the unacceptable human, environmental and financial risks posed by nuclear power,” Smith said. However, Fatih Birol, chief economist of the International Energy Agency (IEA), conversely warned that a slowdown in the growth of nuclear power worldwide will seriously hamper the fight against climate change. Since Fukushima, the IEA modelled the consequences if its earlier projection of 360 gigawatts of additional power from nuclear plants by 2035 is halved to 180 gigawatts, due to the more cautious attitude towards atomic plants. Using coal, natural gas and “renewables” to take up the slack from nuclear energy would result in additional carbon dioxide (CO2) emissions of 500 million tonnes, Birol told AFP by telephone from the IEA’s office in Paris. It will also push up electricity prices -- due to higher demand for coal and gas to compensate for lost nuclear capacity -- and affect global energy security, he said. Ian Hore-Lacy, a spokesman for the World Nuclear Association, said that when the high emotions sparked by Japan’s nuclear crisis calmed down, the world will still need to look for energy sources to meet growing demand, and nuclear power will remain an option. “When all this is sorted, world energy demand will be just the same as last week, the demand for reliable electricity supply will still be on a path to doubling in two decades,” he told AFP. “The options for meeting that demand will be just the same.”

company news from around the world resin impregnation and injection technologies.

Adnan Amin new IRENA Director General

Adnan Amin has been elected as the first Director General of the International Renewable Energy Agency (IRENA). “With Adnan Amin as

Director General, IRENA will get off to a running start,” says Steve Sawyer, Secretary General at the Global Wind Energy council (GWEc). “He has the experience and the knowledge necessary for IRENA to play a key role in transforming the global energy supply into a

8 March/april 2011 POWER INSIDER

system based on clean, renewable energy, thereby building new industries, and consigning the polluting and dangerous technologies of the 19th and 20th centuries to the dustbins in which they belong.” Adnan Amin adds: “In 5 years time, IRENA should be the hallmark in terms

of renewable energy information, technology cooperation and facilitation, setting the standards that will facilitate the uptake of renewable energy globally.”

India aims for 65.2 GW wind by 2020

India could install 65.2 GW of wind power by 2010, ac-

cording to the Indian Wind Energy Outlook 2011 published by the World Institute of Sustainable Energy (WISE), the Indian Wind Turbine Manufacturers Association (IWTMA) and the Global Wind Energy council (GWEc). The report shows installed wind capacity could


HOW TO INCREASE TRADING VOLUME RECS IN INDIA A VERY IMPORTANT DEVELOPMENT IN THE RENEWABLE ENERGY SPACE went mostly unnoticed at most newspapers and websites recently: The launch of a Renewable Energy Certificate (REC) market in India. The much-anticipated RECs were brought to the trading floor at the Power Exchange India Limited (PXIL) and India Energy Exchange (IEX) for first time on March 30, 2011. Here’s a brief overview of the trading session: • A total of 424 non-solar RECs traded on two power exchanges • 274 non-solar RECs - clearing price of Rs 2,225 ($50 USD) per REC - PXIL • 150 non-solar RECs – clearing price of Rs 3,900 ($88 USD per REC – IEX • Major buyers: Reliance Infrastructure and LNJ Bhilwara, distribution companies and industries • National Load Despatch Centre has issued a total 532 RECs till date The next trading session will be on April 27, 2011. The thinking is to have a one-month gap between the trading sessions. While it is understood that the trading activity would be low without a gap, the one-month time period seems high. So, what can be done? One answer is to make the REC a mandatory commodity for utility

reach 160.7 GW by 2030. In 2010, India had 13.1 GW of installed wind capacity. Reaching 65.2 GW of wind by 2020 could attract around US$10.4 billion of annual investment and create 170,000 green collar jobs. “The Indian Government has been committed to ex-

ploiting the country ’s vast renewable energy resources for the last three decades, and the time has now come to elevate this political will to concrete action, both to reap the domestic benefits from renewable energy development, and to build on India’s growing leadership internation-

companies, similar to what we see in the U.S. By passing better targets for emissions reductions and renewable energy development, the RECs become more valuable. Value and volume could be increased through better marketing of the product through print and electronic media. By making environmental sustainability a key driver of discussion, demand for RECs from companies trying to brand themselves will increase. There is a rising awareness among the Indian consumers about environmental issues. But it needs to be brought on par with the level of awareness seen in Europe and America. Finally, the trading data for RECs could be made public for companies buying RECs, allowing those companies to better tout their social and environmental efforts. However, unless there is more support among citizens for these efforts, demand for these RECs among energy suppliers and other corporate entities will not reach their full potential. RECs could be a great tool for Indian companies. But with this market in the early growth phase, there’s still much work to be done to increase volume of trading in the country.

ally in resolving both the energy and climate changes,” says DV Giri, IWTMA Chairman. GM Pillai, Director General of WISE adds: “We look forward to working closely with all stakeholders to strengthen India’s role in driving global wind

power development, and also support the efforts towards developing a comprehensive renewable energy law which would reinforce India’s National Action Plan on Climate Change target of 15% renewable energy by 2020.” POWER INSIDER MARCH/APRIL 2011 9


news desk Wind turbines survive disasters in Japan according to data provided by the Japan Wind poWer association, no wind turbine in Japan was damaged by the recent earthquake and by the tsunami. As of the end of 2010, Japan had a total installed wind capacity of 2304 MW, with 1746 wind turbines. Kamisu offshore wind farm became the first survivor against a tsunami in the world. There are 7 units of 2 MW SUBARU80/2.0 wind turbines on monopile foundations, about 40 m offshore from the coast. Kamisu is located about 300 km from the epicentre of the earthquake, and an about 5 m height tsunami hit this area. But the Kamisu offshore wind farm has survived and is now in operation. Also these results suggest that the anti-earthquake construction design of wind farms in Japan is very reliable. Japan has proven to be a world leader in such so-called ‘battle proof design’. Most of the wind turbines installed in Japan are in operation now. As the electricity is temporarily running short at the Eastern part of Japan, these wind turbines contribute to the national electricity supply. World Wind Energy Association (WWEA) Vice President Prof. Chuichi Arakawa, says: “Now we have to make strong efforts in Japan to focus much more on renewables, especially wind power, for the next road map of energy and environment. Various studies have shown that Japan is blessed with an abundance of wind and other renewable resources which can be used to rebuild and strengthen our country. We need some time to summarize this situation while taking Japanese mentality into account. However, I am confident that Japan will draw the necessary conclusions from the recent incidents and hopefully start to become a renewable energy nation.” WWEA Secretary General Stefan Gsänger, adds: “It will be of crucial importance for Japan, like for any other country, to reduce dangerous impacts of hazardous nuclear power on its citizens and to replace nuclear power as soon as possible by renewable energy sources. The worldwide wind community offers its advice to the Japanese people and government in order to help the country to overcome the terrible disasters and to make the country a global leader in renewable energy technologies.”

china updates Wind figures: 18.9 gW in 2010 china has released updated Wind poWer capacity figures showing the country installed 18.9 GW in 2010, bringing the total to 44.7 GW, compared to previous figures estimating the market to have growtn by 16.5 GW. Figures released by the Global Wind Energy Council (GWEC), the Chinese Renewable Energy Industry Association (CREIA) and the Chinese Wind Energy Association (CWEA), show that China has most definitely overtaken the US as the largest wind power market globally. China’s wind power market has doubled every year between 2005 and 2009, and Chinese wind turbine manufactures are increasing their share in the global wind market, GWEC says. With the updated Chinese figures, the global wind power market grew 38.3 GW, or 24%, to a total of 197 GW. In March, GWEC updated its 2010 Global Wind Report saying the average annual growth rate for the global wind power market could be 18.2% over the next five years, leading to a doubling of global installed wind power to 450 GW by 2015. Annual market additions were expected to reach 60.5 GW, compared to 35.8 GW in 2010.

“China has become the single largest driver for global wind power development in 2010, every second wind turbine that was added anywhere in the world was installed in China,” says GWEC Secretary General Steve Sawyer. Qin Haiyan, Secretary General of CWEA, adds: “The installed capacity of 44.7 GW includes wind turbines which has been grid connected and are delivering electricity, even if they have not yet completed the commissioning and acceptance procedure, which can take several months. This explains the much reported ‘gap’ between installation and grid connection which is often reported from China. In other markets, it is common practice to include all turbines as soon as they are grid connected and producing electricity.” According to figures from Bloomberg New Energy Finance, China invested US$20 billion in wind in 2009, and Chinese investment in the third quarter of 2010 accounted for half of global investment in wind power. 4 of 10 top manufacturers are Chinese CREIA President Li Junfeng, says Chinese wind turbine manufacturers are benefitting from the growth: “The growth of wind power in Chinas has

company news from around the world Gamesa sets up wind turbine materials R&D lab in Singapore

gamesa is setting up a technology laboratory in singapore focusing on materials research and development for wind turbines. the lab will start with

three research projects with nanyang technological unviersity, the national university of singapore and the agency for science, technology and research (a*star). the three projects are: • Wind turbine blade coatings and methods for in-

10 March/april 2011 poWer insider

corporating the materials into gamesa’s manufacturing systems with nanyan technological university; • Methods for monitoring composite materials using embedded sensors and assessing their industrial applications with the na-

tional university of singapore; and • gauging the performance of wind turbine blades’ carbon fibre polymers after nano-reinforcements are incorporated to give added strength with the institute of Materials research and engineering

(iMre), part of a*star and exploring r&d in manufacturing with a*star’s singapore institute of Manufacturing technology (siMtech). gamesa’s chief technology officer, José antonia Malumbres, says: “these agreements offer vast po-


AUSTRALIAN RENEWABLE FUELS BUYS BIODIESEL PRODUCERS LTD

also spurred a boom in domestic manufacturing, and four of the top 10 global wind turbine manufacturers are now Chinese, with Sinovel and Goldwind ranking second and fourth respectively. Domestic manufacturers now supply more than 50% of the equipment used in Chinese wind power projects.” The Chinese Government’s Development Planning of New Energy Industry, predicts 200 GW installed wind capacity by 2020, generating 440 TWh annually and creating revenues of over RMB250bn (~ 28bn/US$38bn). The latest five year plan published this March, aims for an additional 90 GW of wind by 2015.

tential for improving the reliability, efficiency and availability of our wind turbines and, by extension, their cost of energy (COE).” Gamesa plans to cut the cost of energy by 20% through

2013 and by 30% through 2015 by introducing new products and developing new applied technologies, maintenance improvements, etc. By the end of 2011, the Spanish wind turbine manu-

AUSTRALIAN RENEWABLE FUELS LTD (ARW) has finalised the acquisition of Biodiesel Producers Ltd (BPL) for an undisclosed sum. ARW says Australian mineral diesel consumption sits at just 18 billion litres per annum, half of which is imported. Due to the burgeoning mining and long haul transportation industries, the use of diesel is high in Australia. “Biodiesel is a high growth industry and Australia has yet to reach the consumption levels of other countries that see renewable fuels as important from both from an environmental and financial point of view,” says Tom Engelsman, CEO at Australian Renewable Fuels. “This acquisition is critical in consolidating the supply of biodiesel and giving ARW a national footprint, which is critical due to the geographic landscape of Australia. “ARW’s three plants are centrally located to fully realise the potential of growing this market both locally and internationally.” BPL has a plant based in Barnawartha, Victoria, that converts tallow and waste cooking oil into biodiesel. ARW has a wide range of feed stock capacity and is actively researching and developing stocks such as algae, mustard seed, jatropha and pongamia oils as well as other lower cost non-edible feed stocks. “This acquisition is instrumental in ARW’s strategic direction to provide biodiesel Australia-wide, and with our strong relationships with major fuel companies as well as distributors and major mining operations, will ensure that the benefits of the acquisition are realised,” Engelsman says. The BPL facility has a capacity of 60 million litres per annum of biodiesel increasing the capacity for ARW to 150 million litres per annum.

facturer expects to open another four R&D sites in the US, India, the UK and Brazil.

POWER INSIDER MARCH/APRIL 2011 11


SOLAR POWER INDIA

SOLAR POWER IN INDIA - OVERVIEW AND CURRENT STATUS INDIA POWER SECTOR SNAPSHOT Power is one key pillar of any nation’s infrastructure. India’s power sector has been characterized by a demand-supply gap situation in the last two years.

There are several reasons for this sector’s relatively dismal performance and the consequent power deficit: • Lack of adequate generation capacity • High Transmission and Distribution (T&D) losses • Financial condition of the State Electricity Boards (SEBs) • Rampant power theft • Condition of the equipment • Constrained main plant equipment (Boiler, Turbine, Generator) and manufacturing capacity India’s current power generation capacity stands at 170.2 GW (as at end of Feb 2011). The historical power generation capacity addition has been

By Sean Stinchcombe

12 MARCH/ APRIL 2011 POWER INSIDER

averaging at around 50 percent of the planned target, which has been depicted in Chart 1.1 and Chart 1.2. Chart 1.1 – INDIA POWER GENERATION CAPACITY ADDTION - PLAN V/S ACHIEVED (GW) 2001 - 2010

Chart 1.2 INDIA POWER DEFICIT SCENARIO (PEAK DEFICIT & ENERGY DEFICIT) 30%

Peak Deficit

23% 15%

11.8%

8% 0%

7.5%

13.8%

9.6%

Energy Deficit

16.6%

9.9%

11.8%

12.7%

11.1%

10.1%

FY01-02 FY06-07 FY07-08 FY08-09 FY09-10

Chart 1.2 – Source: India Ministry of Power, Central Electricity Authority (CEA) Source: India Ministry of Power, Central Electricity Authority (CEA)

The Power deficit situation in India has resulted in: • India’s per capita Electricity Consumption


being as low as 700 units, compared to other developed/developing countries. India’s annual per capita electricity consumption in 2009 stood at 700 units, in stark contrast to 2,600 units in China and 2,100 units in Brazil • A significant proportion of population is without access to electricity: > 40 percent of the rural population

CASE FOR RENEWABLE ENERGY IN THE INDIAN MARKET India relies heavily on fossil fuel-based power generation. Power generation capacity from coal contributes approximately 55 percent to the total energy mix. Given the fact that coal-based power generation impacts the environment (CO2 emissions),

and with the increasing focus on climate change, there is a strong case for energy generation from renewable sources (emission-free, clean fuel sources). With the objective of “Power for All by 2012”, aggressive power generation capacity addition plans, augmenting the T&D network and increased share of clean energy, tapping renewable energy sources is one of the key targets being actively pursued by the Government. The relatively high cost of generation through renewable sources (wind, solar etc.) could potentially be offset by the low gestation periods for the projects. Although wind energy has been contributing majorly to the increasing share of renewable energy, solar power, which is still in its infancy in India, is being looked at as another important energy source. The potential for solar energy in India is huge, and tapping of this energy source is slowly gathering

pace here. India has abundant solar resources, as it receives about 3,000 hours of sunshine every year, equivalent to over 5,000 trillion kWh. Moreover, India has a potential of about 20 MW per sq km, and the daily average solar energy incidence over different parts of India is about 4-7 kWh per sq m depending on the location. The advantages of solar power are: • Solar Photovoltaic (PV) is cost-effective, especially for rural areas avoiding huge T&D infrastructure investments • Distributed generation applications • Low labor cost for installation • Instant availability • Mobility and modularity • Low gestation

POWER INSIDER MARCH/ APRIL 2011 13


solar power india THe poLiCY pUsH – iMpeTUs To soLAr power in indiA The initial cost of both types of solar energy systems – (1) Solar PV and (2) Solar thermal is higher, compared to the cost of conventional and other non-conventional energy systems. The estimated unit cost of generation of electricity from solar PV and solar thermal route is in the range of Rs. 12-18 per kWh and Rs. 10-15 per kWh, respectively, in India, which is almost four-five times more expensive than the cost of generation from conventional fossil fuel sources. As has been the case globally, development of solar power in India is heavily dependent on Government policies and incentives. Some key policies that the Government of India has framed for the development of solar energy in the Indian market, including key features, are indicated in Chart 1.3. Of these, the Jawaharlal Nehru National Solar Mission ( JNNSM) has been one of the major landmark initiatives to promote the large-scale development of solar power in India. THe iMpACT oF poLiCY pUsH on soLAr power deVeLopMenT in indiA • The number of companies supplying solar cells and modules in the indian market has increased from 5 and 20, to 15 and 55, respectively, today. The JnnsM mandates use of “Made in india” solar modules for projects to be commissioned under the scheme. in the second phase (2013-2017) of JnnsM, domestic solar cell sourcing could be made mandatory as well. This mandatory requirement is expected to boost the number of solar cells and module suppliers in india. • Manufacturing capacity of solar cells and modules increased from 45 Mw and 80 Mw in 2007, to approx 300 Mw and 950 Mw by the end of 2010. solar pV installations (both off-grid and grid-connected capacity) increased from approximately 132 Mw in 2007, to approximately 417 Mw in 2010. • Contribution of renewable energy (re) to the total energy mix increased from 5.9 percent in 2007 to 9.9 percent in 2010. • The share of solar power increased from a fraction (< 0.1 percent) of the total renewable energy installed capacity in 2007, to ~2 percent in 2010, shown in Chart 1.4. CHArT 1.4 inCreAsinG sHAre oF renewABLe enerGY in THe indiAn power GenerATion CApACiTY FUeL MiX 9.9% 5.9% 1.5%

Renewables

2010 2007

2.7% 2.9% 2.6%

Nuclear

2002

22.1% 26.2% 25.3%

Hydro

65.3% 65.0% 70.6%

Thermal

0%

20%

40%

60%

80%

14 January/ february 2011 power insider

Chart 1.3 – KeY poLiCies For deVeLopMenT oF soLAr power in indiA

Chart 1.3 source – Frost and sullivan

Chart 1.5 source – Frost & sullivan


Chart 1.4 Source - Central Electricity Authority, India Ministry of Power, India Ministry of New and Renewable Energy and Frost & Sullivan estimates

Chart 1.6 Source – News Line; Media Reports; State Electricity Regulatory Commission Chart 1.7 CHALLenGes For ACCeLerATed soLAr power deVeLopMenT in indiA

MAppinG CoMpAnies operATinG in indiA’s soLAr power spACe Considering the solar power ecosystem/value-chain, India has fair number of companies operating across the solar PV chain, except poly-silicon and solar wafers. The solar wafer requirement in India is currently being met through imports. A few companies have announced plans of venturing in the poly-silicon manufacturing space – for example, Reliance Industries, Bhaskar Silicon, and LANCO Solar. In fact, Reliance Industries was the first to announce an integrated solar PV facility to manufacture poly-silicon, wafers, cells, and modules, seeking benefit under the Special Incentive Package Scheme (SIPS) of the Semiconductor policy. The current status of plans of these three companies is yet to be ascertained. (see chart 1.5) proMinenT indiAn sTATes in soLAr power deVeLopMenT Further to launching JNNSM, various states have announced Feed-In-Tariffs (FIT) to promote solar power in India. Grid-connected solar farms are in various stages of development in Gujarat, Rajasthan, Maharashtra, West Bengal, Karnataka, and Tamil Nadu. (see chart 1.6)

Chart 1.7 Source – Frost & Sullivan

CHALLenGes For ACCeLerATed soLAr power deVeLopMenT in indiA Although solar power development in India is gradually witnessing an upward trend, there are some challenges that impact progress. Some key challenges have been highlighted in chart 1.7 ConCLUsion India, over the past couple of years, has been facing a huge power demand-supply gap. With robust economic growth (8 percent) expected over the next couple of years, this gap is going to widen further and it would be hard to keep pace. Therefore, solar power serves as an excellent means to bridge this gap. Electrifying remote locations through grid-connected and off-grid installations can help resolve most infrastructure-related electrification issues. Other advantages of solar power, like low labor cost for installation, low gestation, instant availability, mobility, and modularity make it one of the key energy sources to meet the country’s growing power demand. The industry, academia, and the Government are working in a coordinated manner to ensure that the JNNSM scheme becomes successful and development of solar power occurs in tandem with plans. The intent exists, and it would just be a matter of time before solar power development in India gets on the exponential growth trajectory. Attribute to: Mr. Amol Kotwal, Deputy Director, Energy & Power Systems, South Asia & Middle East, Frost & Sullivan.

power insider march/ april 2011 15


Solar energy interview

Solar EnErgy in india interview with jagat jawa

available in putting up grid connected solar PV Power Stations. However, distributed power generation through solar energy in rural areas would also be a big market segment.

piM: What have been the major developments in solar energy in india in the last 2 years? JJ: The major developments in solar industry in the last 2 years have been introduction of Generation Based Incentive Scheme and announcement of Jawaharlal Nehru National Solar Mission. We feel that the target of achieving 20 MW Grid connected solar power would be achieved by the year 2022 as indicated in the National Solar Mission. piM: in terms of market segments, Which area in india do you see the largest opportunities? JJ: It is felt that largest opportunities would be 16 March/april 2011 power insider

piM: hoW has the recent publicity and initiatives boosted interest in the reneWables sector, especially in regards to solar. JJ: The recent publicity and initiative have contributed immensely to the popularization and use of renewable energy in the country. The Solar Energy has got a big boost from National Solar Mission. piM: solar & Wind are by far the most Well knoWn & Well used in the reneWable sector, but With a backlash in some countries against Wind farms, do you think solar Will have the upper hand. What are the advantages and disadvantages of solar over other technologies? JJ: Yes, we feel that Solar Energy will have upper

hand over wind energy. The main advantages of solar over other technologies are that solar energy is evenly distributed, is available almost 300 days in a year and does not have adverse effect on climate change. The solar energy power packs and power plants can be installed in any geographical locations whereas wind turbines can only be the installed in areas where there is good wind regime. The main disadvantage is that it is comparatively costly because of lesser efficiency of conversion. piM: do you see the recent climate change findings as boosting the use of solar? What factors do you think Will prevent groWth? JJ: The recent climate change findings will certainly boost the use of solar energy. The major factor in the way of growth of solar energy will be availability of funding. piM: What are your predictions for the future groWth of solar energy? What exciting developments do you expect to see?


JJ: We feel there would be lot of manufacturing capacity addition both for solar cells and modules. Even the bigger size inverters which are being imported now, would be produced in the country. The most exciting development would be achieving parity in cost of solar energy with conventional forms of energy. piM: What do you think can be done to ensure high efficiency, reliability and availability in the energy sector JJ: Lot of R & D is required for improving the efficiency of solar cells as also reduction in cost of manufacturing. For the reliability and availability, we have to apply stringent quality controls and also apply best practices. piM: and finally What are your vieWs on india as a market for international companies looking to penetrate the solar market. JJ: We feel India offers huge opportunities for a international companies to establish in the solar market. powerpower insider insider august/september march/april 2010 2011 17


INDIA ROUNDTABLE

INDIA ROUNDTABLE 2nd MARCH 2011

18 MARCH/ APRIL 2011 POWER INSIDER


On the 2nd of March this year Pimagazine and SKS Global embarked on a physical roundtable in New Delhi, India. The objective of the day was too really bringing together the key companies in the solar sector and talk about the problems that have been faced in Indiaâ&#x20AC;&#x2122;s solar mission. Our esteemed panel is listed below; AMOL KOTWAL Deputy Director of Energy & Power Systems at Frost & Sullivan. Amol specialises in monitoring and analysing emerging trends, technologies and market dynamics across the power and energy markets of South Asia & the Middle east

MANUEL RODRIGUEZ Business Development Director Ercam, Mr G Murugesh Head Infinate Ercam India. Ercam and locally known as Infinate Ercam have a specialised goal of providing high level service to the Solar PV market. Currently in the process of establishing manufacturing facilities throughout India, Infinate Ercam are geared to providing EPC, Maintenance and monitoring service to the vast solar infrastructure market. MARCUS LAMSOUGUER CEO AE Photonics â&#x20AC;&#x201C; The largest independent PV distributor in Germany see India as a strong potential market. They have huge experience in solar parks, PV power plants as an EPC. AE Photonics are actively looking for investors and partners in PV plants in India.

HARESH PATEL SCS Renewable specialise in helping developers make the right technology, design and service partners that helps attract investment. Haresh is Indian and is very passionate about bringing renewable energy to his home country

JK MEHTA Regional Director World energy Council. JK is an energy specialist across a broad spectrum of energy issues. JK has a strong focus and expertise surrounding poverty alleviation through energy and has some strong views on developing energy in India JAGAT JAIN Director General of Solar energy society of India. A massively respected decision maker in the Indian Solar market. Jagat plays a key role liaising in government and on local issues to ensure policy and tariffs are understood and adopted throughout the region

POWER INSIDER MARCH/ APRIL2011 19


india roundtable The roundtable looked at many issues relating to the solar power sector in India and went on for around 2.5 hours, so given the space in the publication; we do not have enough space here to cover all of the issues, so we have condensed the main topics of conversation and covered the best conversations here. If you would like a copy of the DVD, please send a stamped reply envelope with a Cheque for £5 made payable SKS Global Limited. Our address is on the home page as in the front cover next to the editor’s note. Our next event is scheduled for the 1011th of May in Sydney. Please contact our team for more information on +44 1179606452. The round table was opened by SKS Managing Director Sean Stinchcombe who took the time to welcome everyone and introduced the panel to the audience. Amol Kotwal the regional director of Frost & Sullivan proceeded to give an in depth presentation on the current state of the Indian market, we have published exerts from that presentation later in the magazine. The presentation really opened the floor up for the first batch of questions on the market. Funding The first question raised was “There is currently a huge demand for solar power in India, but there appears to be a lack of funding for the projects, what is the current problem and what are the banks doing to look at this” Ashwani Sehgal CEO Alpex Solar said” we are in a highly capital intensive market. The leading companies in the market like Indosolar and Moser Baer have cumulative losses in the market, so this makes banks slightly uneasy to lend further money, often they are wary of lending into the solar market Arun malla Regional Director Wartsila Said “so again, if the banks are wary of lending to the market, what is being done to put fears at ease? The panel agreed that they couldn’t talk on behalf of the government, but Amol Kotwal said it was in fact high time that the banks and government their act together regarding funding. There are a huge wealth of projects in the region but without the $ to complete them. There were questions again raised about the IFC (International Finance Corporation) and also the WB (World Bank) and the role they were playing, it was agreed that they were funding

20 March/ april 2011 power inSider

some areas but were still looking at the projects from a balance sheet perspective. This is a current concern for the funding of projects in India, the way the banks lend, we don’t believe that this is an Indian issue per say, currently it is global. Shiv Shukla President Abengoa Solar said that he was recently in a meeting where there were again discussions on funding of the 30 projects from phase 1 of the India solar mission. “the government are trying to establish a fund, they are talking with the ADB and AEIC on support for funding packages. Essentially there are lots of efforts going on, however at present the main problem is the current economic situation. The banks want to see the full business model; they want to see how they are going to make their money back, what is the return. Another issue is the modules. Lots of these modules, come from China. There is a lack of faith regarding the quality and performance of these modules. There is a question mark over Chinese quality. Gathering the audience reaction, the Indian people feel that Chinese modules are no good. That they will last 2-3 years and not the term of the project, 20-15 years. So from a banks perspective, why would they loan money for a project that they need repaying over

25 years that is only going to last 2-3 years. Scare stories of what happened in Spain were raised Marco Lamsouguer CEO AE Photonics Said “ I am sorry, but I have to completely disagree with you. This year AE Photonics will be installing 250MW of panels throughout Europe. As a distributor, the Chinese panels that we use and supply is of a far superior quality than many people care to realise. They have been extensively quality checked and tested to very high standards. It is simply not true that Chinese players provide cheap, low quality technology. If you go back to the Spanish situation, it was the world’s hottest market in 2008. Because of the demand, there were no high quality panels around, so many suppliers bought and installed third level quality panels, made by Chinese woman with wooden teeth by hand. Due to the government tariffs it was a get rich quick market for suppliers, quality was the last thing thought of at the time. This is simply the reason why there is miss education regarding the quality of Chinese Solar panels Ashwani Sehgal CEO Alpex Solar “I believe that the majority of the Power projects were sanctioned to lots of politically connected people, those looking t make a quick buck! Over half of the projects on paper were simply un workable, yet were still allocated, so what are you to think”? There was a lot of agreement form members of the panel and audience that corruption is still rife in the market. In fact, the week of the event, the Indian Anti corruption Minister was arrested and charged with corruption dating back to the 90’s, so I can understand their concerns. Amol Kotwal Frost & Sullivan “there were many smaller companies that were awarded these tenders that had simply placed the lowest bid. They had no interest in running the project; they simply won the tender and then sold that tender at a premium, just to make some money” Jagat Jain – Director India Solar Energy Society “Lots of efforts have been made for the fixing of the tariff ’s to ensure transparency. I don’t agree that only politically connected people won the contract. Everyone was able to bid. It was transparent. What was clear was the tenders were awarded based on cost. We approached the government, the government


said their hands were tied, what way do you want us to go? There was no pre qualification process, which there should have been. From these comment’s it was mentioned that for Phase 2, the first 500 MW should be given to the bigger companies through the tender process, companies like TataBP and Moser Baer. This can then become the bench mark. Then of course the process should be opened up to the smaller companies. This is food for thought for the next round of tenders due in a few months I believe. Moving on and after much discussion from the whole audience, Amol Kotwal directed questions back to the Panel; Amol Kotwal Frost & Sullivan so Marco, can ask, what is your strategy for the Indian market being an international supplier? Marco Lamsouguer CEO AE Photonics well at present we are in the process of opening AE Photonics India. It will be made of 3 separate entities. 1 is a Chinese manufacturer, 1 is AE Photonics international and 1 will be Tamrag Group, our local experts. We will bring our skilled German staff to India, they will train the staff to our standards of quality and expectations. Ashwani sehgal CEO Alpex Solar But I have a question for you Marco. To bid for the Solar mission projects, you must have modules that are made in India? Marco Lamsouguer CEO AE Photonics Well that is correct sir, but we will not be bidding for these tenders from the Solar Mission, we will focus only on the private sector so for us it is not a problem. The conversation very quickly moved onto the early conversation of quality and efficiency, and

now was the time for another of the panellists to add their contribution; Manuel rodriguez CEO Ercam “we are approaching the market in a slightly different approach. Our product helps the overall profitability of the project. We offer the full service of product, construction and management. Our trackers are doing very well in Spain and can do even better in Rajasthan and Gujarat, where there are high concentrations of sun. Using our systems, you can increase your overall yield by around 35% of generated energy using a tracker. Using or implementing our system ensures that you can increase profitability which is good for the developer, owner and funder. The conversation changed track slightly and talk moved to Spain and also Germany and what India could learn from mistakes made. Would the model work in India, there was a lot of animated debate about the cost variance in these countries and how people pay for energy in India differs from that of other countries. After this we broke for much needed coffee and further networking and many participants carried on the discussions whilst having a coffee. It was certainly a challenge to get people to walk away

from these discussions to come back in for the second part of the roundtable. After a brief summary, Amol Kotwal again took hold of proceedings and started the next batch of questions for the panel. Amol Kotwal Frost & Sullivan “So if I can ask, what are the incentives for inverter or tracker suppliers is the government looking at developing the local industry”? Jagat Jain DG Solar Energy Society India “at present the government are not incentivising supply. But this is certainly an area where many of our members are lobbying for this. Many companies are indeed setting up their own manufacturing capabilities. Amol Kotwal Frost &Sullivan “so if I can ask the panel, from an international perspective, what are the entry barriers for an international epc in solar in India” Vijay Menon Manager Moser Baer “one of the first things anyone looks at is cost, and then efficiency” Manuel Rodriguez CEO Ercam “ But there is a big difference between efficiencies. In the case of the solar tracker, there is a big difference between a manual or automatic tracker. Manual seasonal tracking will see an increase of around 7%. Automatic sun tracking can give you increased efficiencies of around 35%.This would be based on a 10% increase in the initial construction cost of the project. The payback of this 10% is 18 months. It is as simple as that! So why are we not installing these massively if they are so efficient? Simple, bankability. So the banks ask the module manufacturer for warranties, the tracker company also have to be sure that their technology will last

power insider March/ april2011 21


india roundtable

the duration of the project and warrant against this. There are very few companies that will do this. It comes to the longevity of the design, ensuring that the will last 20 years, reliability and functionality during the life cycle and longevity of the system. Ashwani Sehgal CEO Alpex “so you mentioned earlier that your system would be suited to areas like Rajasthan and Gujarat. Rajasthan is essentially the desert, its very dusty and corrodes many things. So would you be confident of your technology lasting 20 Years? Manuel Rodriguez CEO Ercam Yes it would be no problem. The moving parts contain no grease or oil, they are high tensile plastic so they do not dry out or break. Davide Marro Asst Manager Moser Baer “ can I ask are you planning on just importing everything into India or are you planning on setting a factory up here”? Manue Rodriguez CEO Ercam “yes, we are looking at manufacturing here. We will be considering using India as a manufacturing base

22 March/ april 2011 PoweR inSiDeR

when we go into the America’s market. We have 2 big customers in India. They want 2 prototype farms. We are installing them, a 250KW as a demo to prove the technology. We will then build a second demo unit in Chennai. We feel we have to show all potential clients that the unit works” The conversation continued un abated, looking at PPA’s, covering old ground of funding, tender allocation and what India should be doing to move forward and what has been learnt in the first phase of allocations. It was at this point we heard from the representative of India’s largest solar company; Anil Patni Director Moser Baer India’s largest solar company. “we have all been crying over spilt milk with regards to the allocation of the first phase of the solar mission. Bidding on tariffs following tenders, not knowing what will happen next? For example, 30 projects on a list, everyone can see that over half are fraud projects. So going forward, the next allocations will be a few months from now, if everything goes according to plan. Credit to the ministry, the first year of the plan has run as expected. So let’s assume phase 2 goes according to plan and also goes well. Maybe in May or June when the tenders are announced they say 290 MW of projects to bid for. I talk to the officials; I ask them “how do I sell this”? The question we should now be asking is, how do we prevent things happening that happened before? Can we give the government a prescription? An idea we had is to advise the authorities to say, you go for the bids, to have all of the qualified bidders in place, so those who have passed a pre tender qualification. So this stops rogue companies bidding then selling the tender on. So the government should do this. The government need to stop looking at the tender process for the smallest cost. All that happens is the decision is made on price, and not one company will offer you the same price. They should get 30-40 companies to submit their prices and take an average

of all of these to set a fair and manageable price for tender so everyone has the fairest chance of winning tenders and importantly fulfilling them. By doing things this way, ensure that the government can arrive at the true market value. This then eliminates those that are just trying to push the market down and win on price not quality. This statement certainly made a lot of sense, and offers a real way of running these tenders for the Indian government. It makes sense on market and political levels. It stops rock bottom pricing where no one really wins, it starts a market guideline, but this is something that must be implemented before the bidding actually happens. It then ensures that developers are happy to run the project for 20-25 years and not look t sell at an early stage as they would lose too much money, the elimination of the price war in India is the best thing for the solar market. One thing is certain, big changes need to happen if Indian companies are to keep their heads above afloat, especially that they all dove headfirst into the funding pool and last round of funding, some will drown for sure, but who will be throwing the lifeline. Time and lobbying will tell, but the Indian government needs to listen to the industry and put forward a set bidding or market average. What companies can work to and ensure that all projects are indeed viable. We learnt a lot in during our time in New Delhi and heard more from the sector than we had for a long time. Bringing people together is certainly a way to change markets, discuss pitfalls and move forward collectively. We are planning a return soon, to see what phase 2 brings? One statement I would like to end on was one stated by AE Photonics CEO Marco Lamsouguer; “This is about one important thing, a green future for us all” I couldn’t have agreed more, and what a way to close this coverage of our roundtable.



ASIA PACIFIC

ASIA PACIFIC WIND, SOLAR AND BIOMASS MARKETS TO BURN BRIGHT IN 2011 The Asia Pacific renewable energy (RE) markets especially wind, solar and biomass power projects are expected to continue its high growth trajectory and fare significantly well in 2011 because of the continued support from the government in the form of incentives, achievable numerical RE targets, and launch of industry specific programs.

24 MARCH/ APRIL 2011 POWER INSIDER


According to Frost & Sullivan’s Asia Pacific Program Manager for the Energy & Power Systems Practice, Suchitra Sriram, the existing ‘adder’ policy for RE generated power in Thailand, and the on-going discussions in Malaysia and the Philippines to introduce an effective feed-in-tariff policy in 2011 are likely to be one of the major driving factors for renewed interest in this sector. She adds, “Unlike Southeast Asia, there is a strong government commitment in North Asian countries to promote and increase the RE contribution in the country’s overall electricity mix. Hence, from time to time, RE policies and targets are revised to facilitate ease of doing business as well as to aggressively stimulate growth.” The Australian RE market will continue to grow with the revised Renewable Energy Target (RET) stipulating 20.0% contribution of RE towards electricity mix by 2020 which was passed by the Federal government in August 2009. “This landmark bill is expected to attract investments of up to USD16.8 billion in various RE technologies, apart from creating more than 25,000 jobs in this sector alone. Moreover, this bill is considered to be a great starting point to encourage companies,” says Suchitra. In terms of industry specifics, Asia Pacific’s RE market growth in 2011 will be largely driven by centralized large-scale plants in areas of wind, solar PV and biomass power. This is more pronounced in countries such as Thailand, Vietnam, South Korea and The Philippines. The Asia Pacific wind power market is estimated to grow from 5,806 MW in 2010 to 7,553 MW in 2011 mainly driven by projects in Australia, Thailand, and the Philippines. The interest of the project developers is shifting toward developing large-scale projects where the capacity of the wind turbines used are above 2 MW. In terms of revenue, the market size is estimated at USD3.89 billion in 2011, doubling the market size in 2010. “Investments in the wind power market which was centered on Australia, Japan and the Philippines a few years back, now has competition from new emerging markets in Southeast Asia such as Thailand and Vietnam, and also from Taiwan because of the identification of high wind potential in those countries,” Suchitra commented.

She continues, “So far, most of the wind power projects have been developed through private sector investment. However, realizing the huge untapped potential in the region as well as to diversify their portfolio mix, many leading utilities in Asia Pacific have initiated plans to invest in wind power plants.” The Asia Pacific solar PV systems market is estimated to grow from 4,624 MW in 2010 to 6,509 MW in 2011. In terms of revenue, the market size is expected to increase from USD10.05 billion in 2010 to USD13.81 billion in 2011, posting an annual growth rate of 37.4%. Main markets include Japan, Thailand, Australia, Malaysia and South Korea. Most of the projects that have been proposed and under construction are grid connected ones driven by the existing ‘feed-in-tariff ’ policy and other industry-specific incentives from the government. “Almost 1 GW of solar PV was installed in Japan during 2010. The market outlook looks very positive and is expected to post another 1 GW in 2011. Besides Japan, this RE technology is expected to gain considerable traction throughout the Asia Pacific region and is expected to double its capacity additions in 2011 due to high resource availability, declining prices, and introduction of favorable solar credits and incentives,” says Suchitra.

She adds, “Moreover, the customers’ appetite for this modular technology remains strong especially in countries such as Japan, Australia, South Korea, and Thailand that have feed-in-tariff (FIT) and other rebates. There were several large-scale grid connected solar power plants that were announced in 2010 from leading project developers that are expected to come online in 2011.” Other RE technologies that hold potential in Southeast Asia include biomass power generation as there is abundant resource availability at low costs and an increasing demand for onsite power from mill owners. It is estimated that only 3,000 MW has been utilised so far out of the total potential of 56,000 MW in the region. “With support from the government in the form of FIT, and tax incentives, this RE technology holds considerable market growth in the region. Encouraging foreign ownership of power plants with less than 10 MW capacities will boost this underutilized industry,” Suchitra says. On the other hand, geothermal power generation continues to attract investments in Indonesia and The Philippines, but the market growth rate is expected to be moderate between 5 and 8 percent. Suchitra adds, “According to the second 10,000 MW crash program introduced by the government of Indonesia, geothermal power generation has been accorded high priority. But its success remains to be seen as some of the projects have not been able to get environmental clearances and faces opposition from environmental groups as they are to be developed in forest reserves.” MediA ConTACT: Donna Jeremiah Corporate Communications – Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications – Asia Pacific P: +603 6204 5910 E: carrie.low@frost.com Frost & Sullivan power insider March/ april2011 25


INDONESIA GEOTHERMAL

INDONESIAN GEOTHERMAL MARKET HEATS UP IN 2011 Amongst all the renewable energy (RE) technologies, geothermal power and small hydropower attracted private sector investments in Indonesia during 2010 and is likely to hold investors’ attention during 2011.

According to Frost & Sullivan’s Asia Pacific Program Manager for the Energy & Power Systems Practice, Suchitra Sriram, Indonesia seems to have realized the urgent need to adopt RE technologies to meet its electricity demand of about 7.0% p.a. She adds, “The Indonesian government is therefore offering tax incentives for RE project developers. They have also signed a major Memorandum of Understanding with General Electric Company for the joint development of RE projects in Indonesia. As a result, the RE market growth is expected to be slightly better during 2011.” 26 MARCH/ APRIL 2011 POWER INSIDER

Still, Indonesia lags behind its Southeast Asian counterparts in the widespread acceptance and deployment of various RE technologies except geothermal power. Though the country has abundant RE resources and the government has incorporated renewable energy targets into the National Energy Management Blueprint 2005-2025, sluggish implementation has restricted market penetration of fastest growing technologies such as wind, solar PV power and bioenergy in the country during 2010. Indonesia is highly dependent on thermal power plants. Low-cost fuels are vastly available and have a huge generation capacity can bridge its growing electricity demand-supply gap. The Indonesian


government aims to reach a capacity of 9500MW in the geothermal market by 2025. In terms of industry specifics, geothermal power generation continues to attract investments in Indonesia, but the market growth rate is expected to be moderate between 8.0 and 10.0% due to the slow pace of development. Suchitra adds, “According to the second 10,000 MW crash program introduced by the government of Indonesia, geothermal power generation has been accorded high priority. But its success remains to be seen as some of the projects have not been able to get environmental clearances and faces opposition from environmental groups as reservoirs have been identified in forest areas.” In Southeast Asia, Indonesia’s market

attractiveness for RE technologies is expected to be low especially for wind and solar PV power in 2011 as there are no regulatory framework and policies such as ‘feed-in-tariff ’ to attract private sector participation in the industry. “Moreover, the impact of declining prices of these technologies has not been felt in Indonesia because of weak demand. This is largely attributed to the highly subsidized electricity that is supplied to end users in urban areas. Hence, wind and solar PV power continue to generate interest only for rural and remote area electrification in areas that are not connected by the utility grid,” says Suchitra. Growth of the small hydropower market is likely to remain stable at 8.0% during 2011 as they are largely installed to provide electricity in rural and remote areas, and in islands where grid extension is economically and technically unviable.

“Despite immense potential to develop biomass power, several industry challenges such as lack of credit, logistics issues in transporting fuel, limited incentives, and low awareness are expected to restrict market penetration of this technology. The market growth rate for biomass is projected at less than 10.0% during 2011,” Suchitra concludes. MediA ConTACT: Donna Jeremiah Corporate Communications – Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications – Asia Pacific P: +603 6204 5910 E: carrie.low@frost.com Frost & Sullivan power insider march/ april 2011 27


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JAPAN NUCLEAR POWER

WILL GAS BENEFIT FROM JAPAN’S NUCLEAR CRISIS?

30 MARCH/ APRIL 2011 POWER INSIDER


The ongoing crisis at the Fukushima nuclear power complex in Japan has definitely not helped the nuclear industry, which was in a resurgent mode. It is a huge public relations disaster for the entire nuclear industry at the very least, even as the workers are racing against time to bring the situation under control. Countries around the world had chalked up policies to introduce nuclear as a fuel mix option. Now, some countries including Germany and Switzerland are either shutting down old nuclear plants or putting on hold further developments. Still, many other countries including USA, Italy, Poland and Indonesia have vowed to go ahead with their plans. In this fast changing scenario, natural gas seems to be emerging as the beneficiary. Natural gas demand strengthened on the prospects of increased LNG cargoes to Japan. This demand increase is more likely to be long term rather than short term. The half a dozen or so nuclear power plants shut down in Japan will be supplemented by natural gas and coal fired power plants. Judging by the scale of devastation, it appears that the shut down nuclear plants will be out of action for at least 3 years, if not for ever. We are likely to see prices for both coal and natural gas increasing in the short term and then continue to be higher than current price levels for the longer term. Japan is the world’s biggest importer of LNG and sources almost 70% of its annual LNG imports from Australia, Indonesia, Malaysia and Brunei. Even before the Japan disaster, natural gas prices were forecast to rise to $5 to $6 MMBTU by 2012 due to increasing demand. With the recent events driving up demand even higher, we could see natural gas surpassing those figures in 2012. Diversion of gas supplies from regular customers in Europe to Japan is bound to drive up gas prices in Europe. Qatar for example, is set to supply the

extra demand for LNG from Japan giving anxious moments to customers in Europe who now will not have a cushion in case demand increases. Qatar supplied around 12% of Japan’s total LNG imports in 2009. Supply of LNG from Qatar to Japan is set to double in 2012 compared to 2009 levels to offset the loss of nuclear power. Apart from conventional sources of gas, unconventional sources such as coal seam gas and shale gas can be exploited to meet growing gas demand. The coal seam gas projects in Indonesia and Australia would probably get the much needed shot in the arm after the Japan incidents. The coal seam gas industry has also got some bad press regarding their environmental impact. However, the adverse impact of the CSG industry on the community pales in comparison to the immediate impact that a nuclear power disaster can have. Most of the CSG to LNG projects in Australia

are now much more likely to see the light of the day. This article was authored by Ravi Krishnaswamy, Vice President and Subramanya Bettadapura, Associate Director of Energy & Power Systems Practice, Asia Pacific, Frost & Sullivan. ContaCt: Donna Jeremiah Corporate Communications – Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Jessie Loh Corporate Communications – Asia Pacific P: +65 6890 0942 F: +65 6890 0988 E: jessie.loh@frost.com

power insider March/ april2011 31


NUCLEAR POWER

WILL THE FUKUSHIMA CRISIS PUT A QUESTION MARK ON THE RESURGENCE OF NUCLEAR POWER? 32 MARCH/APRIL 2011 POWER INSIDER


THE DISASTER IN JAPAN WILL MOST LIKELY SHIFT THE FOCUS TO OTHER BASE LOAD TECHNOLOGIES LIKE HYDRO AND CLEAN COAL. MORE SPECIFICALLY, DEVELOPMENT OF CLEAN COAL TECHNOLOGIES LIKE CARBON CAPTURE AND SEQUESTRATION (CCS) AND INTEGRATED GASIFICATION COMBINED CYCLE (IGCC) WILL GET A BOOST.

T

he explosions at the first, second and third reactors at Japan’s Fukushima Daiichi nuclear complex, following the failure of cooling system & build up of hydrogen, due to earthquake and Tsunami last Friday, has again brought to focus the future of nuclear power, stoked anxiety among the nuclear industry & investors, and raised serious concerns among countries which are planning for nuclear power. The Japanese government has assured the public and international community that the health danger from the release of radioactive steam that was released is quite low. The thick containment wall seems to be intact at the moment. Still it is unclear whether there is indeed a melt down and if so what the potential impacts are on health, environment and future of the industry. Japan’s nuclear power sector has held an impeccable safety record for several decades. In fact, advocates of nuclear power (as clean energy) have always cited Japan, which sits in the pacific ring of fire with several major and minor tremors every year, as a role model for safety. Japan, on its part, developed a strong nuclear power value chain with capabilities ranging from design, manufacturing, construction, operation and maintenance. The incident in Japan will have wider ramifications and may raise several questions: Were the authorities in Japan slow to react or were they overwhelmed by the scale of the disaster that happened too fast? Was the reactor and the nuclear complex designed to withstand an earthquake of magnitude 9 and above? Was the relicensing done with adequate analysis of safeguards considering worst case scenarios, especially for a very old reactor? IMPACT ON NUCLEAR INDUSTRY The fear of global warming and desperate need to

add clean base load capacity had resulted in a nuclear renaissance of sorts during the last few years. Fifty six nuclear reactors were under construction as of 2010, with the Asia Pacific region including China, India, Korea, and Taiwan accounting for more than half of this capacity. Several other countries in oil rich Middle East, fast growing South & Southeast Asia and mature North America and Europe had developed serious plans for new or additional nuclear power capacity. This meant the future and fortunes of some of the giants in this sector like Areva, HitachiGE, Toshiba-Westinghouse looked very bright. Other global players including Korea’s Doosan, Russia’s Rosatom were hoping to ride on government to government agreements. Will the Fukushima disaster put a big question mark on the nuclear resurgence and global nuclear industry? With events still unfolding it is very difficult to assess the potential impact on the industry in the long term. But the following could be the near term impact: Review of safety processes – All the nuclear plants currently under operation, whether they are in earthquake-prone zones or not, are likely to resort to a more comprehensive review of plant safety processes. More risk scenarios are likely to be factored in. The International Atomic Energy Agency (IAEA) is likely to play a larger role in this. Insurance Costs – Whatever the outcome, the insurance costs for all things nuclear are set to rise. This will eventually have an impact on electricity costs. Country Nuclear Plans – There is likely to be immediate reaction from some countries. Germany has already announced a suspension of three months of its plans to extend the lives of nuclear power plants. Some countries may also announce reviews of its nuclear power policy, if the crisis in Japan affects global public perception adversely. Stock Market – Nuclear stocks are likely to take a hit in Japan and around the world. General Electric, the

supplier of reactors in Fukushima has already seen a significant drop. But the news that the potential liability of hardware suppliers is limited, will offer some reprieve. Public Perception - Public perception of nuclear power is likely to suffer, at least in the short term. This means governments around the world will have to make their public relations machinery work over time or postpone some critical decisions regarding nuclear power, till the dust settles. Alternate Energy Technologies – The disaster in Japan will most likely shift the focus to other base load technologies like hydro and clean coal. More specifically, development of clean coal technologies like Carbon Capture and Sequestration (CCS) and Integrated Gasification Combined Cycle (IGCC) will get a boost. Combined cycle power plants will also likely benefit. Several of the players in the nuclear sector like GE, Hitachi and Doosan are also dominant suppliers of these alternate energy technologies. We have seen the nuclear power industry come back after the Three Mile and Chrenobyl disasters, albeit after a long road to recovery. If Japanese authorities manage to contain the damage and instill public confidence, then it is very likely that the Fukushima nuclear plant and the global nuclear industry would have weathered the worst crisis in recent history. If for some reason, the situation gets out of control in Fukushima, then one can expect a bumpy ride for the nuclear industry, at least in the short to medium term future. This crisis will offer some critical lessons for the industry and help it to enhance the safety features for design, operation and maintenance. The cost of building and operating a nuclear power plant may increase significantly, but nuclear power is not expected to disappear from the energy basket. This article was authored by Ravi Krishnaswamy, Vice President, Energy & Power Systems Practice, Asia Pacific, Frost & Sullivan. POWER INSIDER MARCH/APRIL 2011 33


MAlAySIA OIl ANd GAS

Tax IncenTIves To BoosT InvesTmenTs In malaysIan oIl & Gas IndusTry Singapore, 7 February 2011 – In 2011, the Malaysian Oil & Gas industry will see more strategic collaboration in joint venture developments with fellow ASEAN countries, acquisition of proven or marginal fields, rapid investments in new technology to tap into new oil and gas boundaries, and Enhanced Oil Recovery (EOR) to improve on the nation’s reserves recovery ratio and reservoir management practices.

This is in conjunction with the Malaysian government’s announcement of its Economic Transformation Programme (ETP) in its 12th Malaysia Plan and the unveiling of Petronas’ new Board of Directors (BOD). According to Frost & Sullivan Asia Pacific Program Manager of Energy & Power Systems Practice Razeen Khalid, the newly restructured BOD and management committee of Petronas consists of more leaders familiar with the industry and will bring more focus to exploration, development and production activities in the market. “The Malaysian governments has also announced revisions in its Petroleum Income Tax Act, with

34 March/ april 2011 power insider

new tax exclusion incentives to be given to domestic investments in order to attract investments into the oil & gas sector,” adds Razeen He continues, “This incentive is expected to bring in foreign investments for the capital intensive deepwater projects as well as attract private investors for smaller, marginal field initiatives.” With mixed results in their foreign investments over the decade, it is expected that Petronas will refocus and strategize for more domestic investments both in greenfield developments and brownfield enhancement activities. Razeen says, “Malaysia’s rising economy brings the nation closer to

being a net importer of oil, putting a need for bigger reserves discovery. In view of this, the Government and Petronas have aligned a capital expenditure allocation of approximately RM40 billion for 2011. This huge domestic investment will benefit local oil and gas service providers and contractors of all sizes.” Investments in new technology will also be crucial to tap into the un-worked deepwater, high temperature and high pressure boundaries of domestic fields. A staggering RM13 billion will be invested in 2011 on exploration and development efforts on 4 deepwater projects, mainly the GumusutKakap, Kebabangan, Malikai and Jangas fields.


power insider march/ april 2011 35


Malaysia oil and gas The Malaysian government has also chalked out ambitious plans to develop Malaysia as the regional oilfield services hub. This is expected to increase domestic and foreign investment into this sector with many private sector participants having shown interest in this sector. Currently, the Malaysian oilfield services and equipment market is estimated to be around RM2 billion annually. Razeen adds, “Malaysia’s offshore producing fields are more mature than those of its Southeast Asian neighbors such as Brunei, Indonesia, Thailand and Vietnam. This translates to more opportunities for Joint Development Agreements or Production Sharing Agreements (PSA) in Exploration and Developments, Asset Commissioning and Asset Management for various Offshore Support Services, all of which will continue to drive growth of this sector and make Malaysia stand out as the Regional Oilfield Services Hub. The recent PSA between Petronas and Brunei National Petroleum Company is a good start to the year.” Brownfield services and Marine support services will also continue to be high growth subsectors with an estimated RM2 billion worth of contracts in offshore maintenance and marine provisions up for grabs. Another subsector attracting a lot of interest is decommissioning services. “Of the 900 odd offshore structures in the Asia Pacific region, around 600 of these are over 20 years old. Decommissioning is new to the region and many countries, including Malaysia are developing their own regulation for decommissioning. The opportunities for service providers are enormous going by the costs involved for decommissioning. While the average cost to plug and abandon a well is estimated to be USD750,000, the average cost to decommission a platform is USD2.5 million,” Razeen says. 2011 will also see emphasis on Enhanced Oil Recovery (EOR) activities. Currently, Malaysia’s average recovery ratio of approximately 23% is far from the industry leaders’ 42-45% range. A recovery ratio of 23% means that for every 100 barrels of oil

36 March/ april 2011 power insider

in the ground, only 23 barrels are brought to the ground while the remaining 77 barrels remain yet to be recovered. A big push in reservoir management initiatives is certainly underway. “While the typical primary and secondary recovery methods such as facility upgrades, de-bottlenecking, pipeline optimization works, well production enhancements, acid stimulations, side-track drilling and more prudent reservoir management still go on, EOR activities in the form of concerted efforts in gas, water, microbial, and chemical injection methods, together with thermal recovery solutions will increase the recovery ratio, that is, the total extraction from the reservoir of the producing fields,” says Razeen. He continues, “Exxonmobil Exploration and Production Inc. (EMEPMI) leads these effort via its estimated RM6.5 Billion Tapis Rejuvenation project on 7 of its shallow water, brownfield developments with an estimated 20 Million barrels of oil equivalent reserves to be added. EOR projects of a massive scale similar to this have never been done in Malaysia, so this is an encouraging start.” Another area that is likely to see a spate of

investments is the development of marginal fields. Under the economic transformation program, the Malaysian government has indicated that developing marginal fields will be a priority. A significant portion of Malaysian hydrocarbon reserves are locked in small fields with less than 30 million barrels of recoverable hydrocarbons. With increasing oil prices and innovative solutions, these fields can be exploited economically. Development of marginal fields will continue to gather momentum during 2011. MediA ConTACT: Donna Jeremiah Corporate Communications – Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications – Asia Pacific P: +603 6204 5910 E: carrie.low@frost.com


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grand hyatt singapore

Grand Hyatt SinGapore empHaSizeS enerGy SavinGS Commitment at openinG • GE’s Fuel-Flexible Technology Converts Readily Available Syngas into Energy for Singapore Hotel • Hyatt Applies Innovative, Inexpensive Ways to Use Natural Resources Already Available SINGAPORE—February 22, 2011—As part of the Grand Hyatt Singapore’s energy-saving initiative, GE (NYSE: GE) has successfully turned readily available synthetic gas (syngas) into useful energy at the hotel, which is celebrating its opening today. GE’s fuel-flexible Jenbacher gas engine uses gas from the town’s gas pipeline to create electricity for the Grand Hyatt. The project is the first of its kind in the world and part of GE’s broader strategy to invest in resource-rich regions and to respond more quickly to customer needs. The project also helps support Singapore’s environmental and energy efficiency goals to meet growing needs from population increases. “Our management is very committed to efficient energy, and therefore looked for an innovative, inexpensive way to use resources we already had available to us, such as the syngas pipeline that crosses our property,” said Ivan Leong, Director of Engineering Grand Hyatt Singapore. “We were impressed with GE’s ability to take on the challenge of creating technology that helps us to meet increasing energy consumption needs and addresses pressing environmental challenges at the same time.” In this one-of-a-kind project, GE provided a Jenbacher JMS 320 gas engine for the combined heat, cooling and power plant at the Grand Hyatt. GE designed the engine to use the syngas on site, which has a high content of hydrogen, but at the same time low methane content. The syngas, which is unique to this region, is considered to be a waste gas from the nearby crude oil refinery. It is replacing fossil energy resources, like oil and electrical power, which reduces the impact on the environment. This project is further evidence of how the Grand Hyatt Singapore, which has long been recognized as a leader in sustainable business practices, has combined innovation and technology to create projects that reduce environmental impact. “This was a unique project that required us to develop an innovative solution to meet our customer’s needs. The result is an engine that expands the uses of syngas into power generation, which is a technology that could be used by similar businesses,” said Prady Iyyanki, CEO—gas engines for GE Power & Water. “This is another example of how GE’s fuel-flexible Jenbacher technology provides customers with a solution to recycle more of their own waste gases to reduce their energy costs while improving the environment and local energy reliability and is further evidence of GE’s commitment to build innovative solutions to today’s environmental challenges while 38 March/ april 2011 poWER INSIdER

driving economic growth.” The syngas used in the project requires careful treatment, and the highest safety standards need to be met. To meet these standards, a comprehensive nitrogen flushing system as well as a comprehensive safety system for the gas valve train had to be installed. GE’s Jenbacher J320 gas engine provides power output of 587 kilowatts with NOx emissions of below 500 mg/Nm3. It was sold to the TriGen Specialist Solution Integrator for the Grant Hyatt—CNA Group Ltd. through Navigat Energy, an authorized distributor in Indonesia for GE’s Jenbacher gas engines. Navigat delivers reliable energy to its customers on a turnkey basis by offering small- and medium-sized power plants outfitted with GE’s Jenbacher gas engines, all of which have the capability to operate with diverse gases—from natural gas to alternative gases, including biogas and landfill gas—and are available in a wide range of power outputs. The Grand Hyatt Singapore opening continues a series of recent actions in GE’s energy business over the past several months aimed at growing its overall presence in the conversion of gases and in the energy space in general. Earlier this month, GE announced that the first coal-bed-methane-to-energy project in Russia celebrated its grand opening at Kuzbasskaya Energosetevaya Compania’s Talda site, located near Kemerovo. A Jenbacher gas engine from GE uses the gas to provide electricity, which is ultimately

sold to the grid. On November 5, 2010, GE announced that it signed a memorandum of understanding with Indonesia’s leading coal bed methane company, Ephindo, to develop a pilot power generation plant that will tap into the country’s vast reserves of coal methane gas to produce electricity using cleaner burning power generation technology. The project will use GE’s Jenbacher gas engine technology. AboUT GE GE (NYSE: GE) is an advanced technology, services and finance company taking on the world’s toughest challenges. Dedicated to innovation in energy, health, transportation and infrastructure, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company’s Web site at www.ge.com. GE serves the energy sector by developing and deploying technology that helps make efficient use of natural resources. With more than 90,000 global employees and 2010 revenues of $38 billion, GE Energy www.ge.com/energy is one of the world’s leading suppliers of power generation and energy delivery technologies. The businesses that comprise GE Energy—GE Power & Water, GE Energy Services and GE Oil & Gas—work together to provide integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels.

Left to Right: Mr. Chris Conway, Hotel Manager of Grand Hyatt Singapore, Mr. Willi Goldschmidt, Chief Executive officer of Navigat Energy, dr Christoph Leitl, president of the Austrian Chamber of Commerce, dr. Heinz Fischer, Austrian Federal president and dr. Kenji Uenishi, Region president, GE Energy, Asia pacific


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SMART GRIDS

WIDESPREAD DEPLOYMENT OF SMART GRIDS IS CRITICAL FOR A SECURE, COST-EFFECTIVE AND CLEAN ENERGY FUTURE Smart Grids Technology Roadmap’ shows how use of smart grid technologies can be expanded, identifies goals that must be met PARIS, 04 APRIL 2011 - A new report from the International Energy Agency (IEA) says the widespread deployment of “smart grids” – networks that monitor and manage the transport of electricity from all generation sources to meet the varying electricity demands of end users – is crucial to achieving a more secure and sustainable energy future. With current trends in the supply and use of energy becoming increasingly untenable – economically, environmentally and socially – the IEA believes smart grids can play a significant role in enabling nearly all clean energy technologies, including renewables, electric vehicles and energy efficiency. The report, Smart Grids Technology Roadmap, provides a consensus view from more than 200 government, industry, academia and consumer representatives on the current status of smart grid technologies, and charts a course for expanding their use from today to 2050. This report is the latest in the IEAŒs series of technology roadmaps

40 MARCH/ APRIL 2011 POWER INSIDER

to guide governments and industry on the actions and milestones needed to achieve the potential for the full set of clean energy technologies. A KEY ENABLING TECHNOLOGY As well as addressing current concerns with existing electricity systems, such as ageing infrastructure and increasing peak demand, smart grids are an important element for expanding the use of a number of low-carbon technologies, such as electric vehicles. But governments need to multiply their efforts. “We need to see a much more aggressive investment in large-scale regional pilots in order to deploy smart grids at the scale they are needed,” said IEA Executive Director Nobuo Tanaka, speaking at the launch in Paris on 4 April. “In addition to funding regional pilots, governments need to establish clear and consistent policies, regulations and plans for electricity systems that will


POWER INSIDER MARCH/ APRIL 2011 41


SmART GRIdS allow innovative investment in smart grids. It will also be vital to gain greater public engagement. This can be done by educating all relevant stakeholders – but especially customers and consumers – about the need for smart grids and the benefits they can offer.” deploying in developing countries The report recommends that smart grids play a critical role in the deployment of new electricity infrastructure in developing countries and emerging economies. As well as enabling more efficient operations, grids can also help to keep downward pressure on the cost of electricity, the report says. It also outlines the potential for smart grids in rural areas of developing countries further down the line. “Small „remote‟ systems – not connected to a centralised electricity infrastructure and initially employed as a cost-effected approach to rural electrification – could later be connected easily to a national or regional infrastructure, ” says David Elzinga, the report‟s author and an Energy Technology Policy analyst at the IEA. The report adds that smart grids could be used to get electricity to sparsely populated areas by enabling a transition from simple, one-off approaches to electrification (e.g. battery-based household electrification) to community grids that can then connect to national and regional grids. collaboration is vital While many countries have plans to develop smart grids, the report argues that there is a need for increased co-ordination to enable countries to share lessons they have learned on a global basis. The report recommends greater international collaboration in sharing experiences of pilot programmes and in leveraging national investments in the development of required technology. It also stresses a need to develop common standards between countries that will help optimise and accelerate both the development and deployment of necessary technology while at the same time, reduce costs for all stakeholders; namely governments, industry, and the public. “Major international collaboration is needed to expand research, development, demonstration

42 March/ april 2011 power insider

and deployment investment in all areas of smart grids – but especially in the development of standards, policies, regulations and business models,” says Mr Elzinga. what is a smart grid? While there are different interpretations, the IEA defines a smart grid as an electricity network that uses digital and other advanced technologies to monitor and manage the transport of electricity from all generation sources to meet the varying electricity demands of end users. Smart grids co-ordinate the needs and capabilities of all generators, grid operators, end users and electricity market stakeholders to operate all parts of the system as efficiently as possible, minimising costs and environmental impacts while maximising system reliability, resilience and stability. about the iea The International Energy Agency (IEA) is an

autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing authoritative and unbiased research, statistics, analysis and recommendations. For further information, or to request a free copy of the Smart Grids Technology Roadmap, please send a request by email to IEAPressOffice@iea.org. Smart Grids Technology Roadmap pp. 48 Visit us on the Web at: http://www.iea.org/journalists/index.asp


H U LT É N R E K L A M B Y R Å

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LubrIcaTIon EngInEErS

Often OverlOOked, lubricants can Help lOwer energy cOnsumptiOn

Written by John Sander Vice President of Technology, Lubrication Engineers, Inc. 44 March/ april 2011 power insider


AbstrAct It is a simple fact: Better lubrication can lead to dramatic energy savings and an improved bottom line. This ought to interest any plant manager who is looking for ways to reduce operating costs, and is especially significant at a time when stricter government regulations are in direct contradiction to reducing costs. Lubrication reliability is the solution. This paper will describe how manufacturing plants can use lubrication reliability best practices to reduce their energy consumption, emissions and operating costs – all at the same time.

associated with an object’s position.

introduction Energy usage is a cornerstone of today’s society. Economic development and improved standards of living both rely upon the availability of energy. According to The Outlook for Energy: A View to 2030 by Exxon Mobil, energy usage per person varies dramatically around the world but equates to an average of 200,000 Btu a day, which is 15 billion Btu per second. (1) This same study points out that each person has direct and indirect energy demands. Direct demand of energy is the energy that drives their personal vehicles and operates their homes, while indirect demand is the energy that heats and cools buildings, generates power, produces goods and services, and provides mass transportation of goods and people. As the lesser developed parts of the world modernize, their needs for energy will grow, resulting in increased costs for fuel worldwide. Along with this, many of the world’s governments are passing stricter laws regulating clean air and water, toxic waste, pesticides, endangered species and more. These factors – combined with a struggling economy – result in a challenge for plant operations managers, which is to reduce operating costs. Often, this means doing more with less. One way to reduce operating costs is to reduce energy consumption. Upgrading plant equipment to take advantage of newer, more energy-efficient technologies can reduce energy costs. Unfortunately, in a challenging economic environment capital may not be available for plant upgrades. Simple changes in habits can also create considerable savings. One such change is improving the lubrication reliability program. According to Peter Thorpe, product application specialist at Shell South Africa, “From a cost point of view alone, lubricant costs are negligible when compared to energy costs, even before the production efficiencies of high-performance lubricants are factored in.” (2) Electric utility bills generally dwarf maintenance and lubricant costs. All three are part of any manufacturing operation. So, while controlling or reducing maintenance and lubricant costs is important, reducing electric utility usage is critical. This paper will show that tremendous opportunities exist to use an improved lubrication reliability program to decrease plant energy costs, thereby increasing profitability.

(3)

Table 1: Forms of Energy Chemical Nuclear Radiant (light) Thermal Sound Electrical Mechanical (kinetic/potential)

Energy often transforms from one form to another for an end-use purpose. For example, oil when combusted contains chemical energy that converts to thermal energy, then to electrical energy or mechanical energy. energy for work During conversions from one form of energy to another, some useable energy is lost. These energy losses can be extremely costly to society. The science of physics reveals that lubrication can play a role in reducing energy losses by reducing friction. Society uses many automated tools to perform everyday activities, often called work. These tools frequently include many moving parts to accomplish the chore they are designed to perform. It turns out that work and kinetic energy – also called the energy of motion – are directly related. In 1687, Sir Isaac Newton published his laws of motion in Principia Mathematica. With these laws, Newton determined that the mathematical expression for kinetic energy (K) is: K = ½ mv2 (where m is a mass and v is a velocity that the mass is moved) So, it can be stated that it takes energy to move an object. The laws of physics also state that work is the force required to move an object a certain distance as shown in equation (b). Work is also equal to the change in kinetic energy, indicated in equation (c). W = F∆x (where F is a force and ∆x is the change in position) W = ∆K ET = Wm + WF (where Wm is the work to move the machine and WF is the work required to overcome friction) So, physics shows that reduced friction would result in less energy needed to complete the desired work. Placed between two moving surfaces, a lubricant decreases the coefficient of friction. Naturally, this would also mean the more a lubricant decreases friction, the less energy the lubricated machine consumes.

LubricAnt formuLAtion bAsics It has been said that “Oil’s oil … just pour it in,” but this statement is far from the truth. Simply described, a lubricant is composed of a base fluid and additives. However, many lubricant suppliers formulate their lubricants according to unique recipes intended for specific purposes. The following is a primer on the basic types of lubricants and the specific ingredientdriven categories. Table 2: Lubricant Types

Automotive (Transportation) Industrial (Factories) Heavy-duty diesel engine oils Compressors Passenger car engine oils Bearings Automatic transmission fluids Gear boxes Aviation engine oils Hydraulics Mobile hydraulic Turbines Differential fluids Chains/wire ropes Torque fluids Slideways Chassis lubricants (grease) Grease Each of the above lubricant types are usually broken down into narrower descriptions based upon the product formulation chemistry. Table 3 lists the categories and the additive types that dictate the categorical description. These descriptions are extremely simplified, as there are various base fluid types and even more additive types. Each formula category has its strengths and weaknesses and should be chosen based upon the needs of the application type. (See Table 2.) Table 3: Lubricant Categories by Ingredient Category Ingredients described Mineral oil Base fluid derived from refined crude oil Synthetic Synthesized base fluids such as: PAO, esters, PIB, PAG and more R&O (rust & Contains rust and oxidation inhibioxidation) tion additives AW (antiContains wear-reducing additives wear) EP (extreme Contains extreme pressure wear repressure) ducing additives Multigrade Contains viscosity index improving additives DI (detergent Contains detergent, dispersant, oxiinhibitor) dation, wear, anti-corrosion additives Others Defoamants, emulsifiers, demulsifiers, pour point depressants, thickeners

It becomes obvious that lubricant formulations can be rather complex. When searching for the best lubricant to minimize energy loss due to friction, it is often a case of “you get what you pay for.” In other words, an inexpensively priced lubricant does not necessarily provide maximum lubrication performance. As such, they may require a higher amount of energy consumption, sometimes at higher costs than with a more expensive, better-performing

sources of energy There are various forms of energy, as illustrated in Table 1. Note: Mechanical energy is further broken down into two types – kinetic energy, which is the energy of motion, and potential energy, which is power insider march/ april 2011 45


lubrication engineers lubricant. However, just buying an expensive lubricant does not ensure maximum lubricant performance and energy savings. The lubricant must be the right one for the application and must be properly maintained in order for it to provide maximum performance. This means proper storage and handling, filtration, oil analysis, training and more. All electro-mechanical equipment requires periodic maintenance to operate at peak efficiency and minimize unscheduled downtime. Inadequate maintenance can increase energy consumption. It also can lead to high operating temperatures, poor moisture control, excessive contamination and unsafe working environments. Depending on the equipment, maintenance may include the addition or replacement of filters and fluids, inspections, adjustments and repairs. (4) So, how does the end-user know what to do? The answer is to find a lubrication partner that can help develop a comprehensive lubrication reliability program that includes lubricant selection, protection and maintenance. This partner could be a consultant, but it could also be a lubricant manufacturer that offers customized, comprehensive solutions, including lubricants and all of the related lubrication reliability products. Lubricants and energy savings It is possible to measure energy savings in a variety of ways, including production output, temperature changes or electrical reduction, all mentioned below. Another measurement is fuel consumption. production output When we use equipment to perform work, it is possible to evaluate the equipment’s energy efficiency by recording its production output. For example, if a machine is capable of producing a certain number of parts in a given amount of time and the lubricant is changed, resulting in a higher volume of parts being produced in the same amount of time, then the machine has become more energy efficient. One must be careful when using this technique to ensure that nothing changed in the process except the lubricant. This can be overcome by using a larger number of test units or evaluating productivity over a longer amount of time. temperature changes Monitoring temperature changes is another way to optimize lubrication program performance. Increased friction in a piece of moving equipment results in higher operating temperatures. Friction is a result of metal-to-metal contact that occurs between two opposing surfaces moving relative to one another. Even between highly machined surfaces, under microscopic view, asperity contact occurs. The greater the amount of contact, the greater the amount of friction. As a result, more energy is required to move the surfaces relative to one another. This friction results in higher electrical power costs. Lubricants can reduce that friction. Therefore, when friction is reduced, less electricity is required to drive a gearbox, compressor, pump or other piece of equipment. Sometimes, the bulk oil temperature is monitored in a piece of operating equipment. Another technique for evaluating lubrication performance 46 March/ april 2011 power insider

is thermography, which involves using infrared detection equipment to look for “hot spots” on a piece of equipment that could result from insufficient lubrication, improper lubricant selection or faulty operating parts. In any of these cases, higher temperatures result in wasted energy. It is important, however, to account for ambient environmental temperatures when performing this type of energy efficiency study. Obviously, a piece of equipment will run hotter on hot days than on cold days. Case Study: A knitting plant in Hendersonville, N.C., was experiencing overheating problems in its Champion TWT-07 reciprocating compressor while using the recommended commercial grade lubricant. Even after changing to several synthetic products, it still experienced lubricant foaming and overheating. After changing to ashless AW mineral compressor oil, the plant experienced an immediate drop in temperature of 15°F (8°C). Even after three months of continued service, the plant maintained this temperature drop. This study illustrates that certain equipment can have its own lubricant appetite. Just because a fluid is synthetic does not necessarily mean that it is always the best recommendation for every piece of equipment. eLectricaL reduction When most think about energy consumption, they immediately think about electrical consumption. Tracking electrical consumption is a highly reliable way to evaluate improvements in plant energy use. In fact, various companies have been able to document improvements in electrical energy efficiency related to their lubrication programs. Typically, companies that upgrade their lubricants and reliability practices have been able to document a 5 to 15 percent reduction in power requirements, more than enough to pay for a better-performing lubricant. Average documented savings were 15 percent in gearboxes, 12 percent in air compressors and 4 percent in electric motors. (5) Typical Savings with 5% Amperage Reduction Electric Motor Type of Operation 40hrs/week Continuous (hp rating) 10 $74 $297 50 $372 $1,487 100 $746 $2,986 200 $1,493 $5,472 *$0.10 kwh Electricity Rate

Electric motors power most plant machinery, including gearboxes, compressors, refrigeration systems, pumps, hydraulic systems, and ball mills. Kilowatts (kW) are the common unit for measuring electricity. The following equation can determine the amount of electricity used by an electric motor: kW = V/1000 x A x 1.73 (where V is volts and

A is amperes) Both are common metric measurements of electrical current measured using a voltmeter or ammeter. For a three-phase motor, 1.73 is a standard factor. Data logging equipment is available that allows one to measure and collect data for either amperes, volts or both. Yet, most electrical consumers pay for electricity by kilowatt-hour (kWh) per month. The following formula is commonly used to determine the electrical charge per month (ECM): ECM = kW x h x EC (where h is hours of service and EC is the electrical charge) Air compressors are an excellent source for energy savings. Compressed air is one of the most expensive uses of energy in a manufacturing plant, and approximately 70 percent of all manufacturers have a compressed air system. These systems power a variety of equipment, including machine tools, material handling and separation equipment, and spray painting equipment. According to the U.S. Department of Energy (DOE), compressed air systems in the U.S. account for 10 percent of all electricity and roughly 16 percent of U.S. industrial motor system energy use. This adds up to $1.5 billion per year in energy costs and 5 percent in emissions. Energy audits conducted by the DOE suggest that more than 50 percent of compressed air systems at industrial facilities have significant energy conservation opportunities. (6) Following are manufacturing case studies in which lubricant changes in air compressors and other plant equipment helped manufacturers reduce their electrical consumption. Case Study: A western New York glass and ceramics manufacturer had instituted a program to reduce electricity consumption. The manufacturer targeted its Ingersoll-Rand ESH reciprocating compressor, driven by a 440-volt, 75-hp motor, because this piece of equipment operated at peak capacity 24 hours per day, seven days a week. At the start of the experiment, when the compressor contained the OEM-specified synthetic oil, the average baseline reading was 89 amps. A week after draining the oil, cleaning the compressor and refilling with a high-performance branded synthetic oil, the manufacturer again collected data and found that the average reading had dropped to 82 amps. Knowing that it was using six fewer amps, applying equations (f ) and (g), and knowing that the energy charge was $0.10/kWh, the manufacturer was able to calculate annual monetary savings due lubricant-related electrical efficiency improvements. kW = 6 amps x 440 volts/1,000 x 1.73 = 4.57 ECM = 4.57 kW x 8,760 h/yr x $0.10 = $4,003/yr Data collection continued for an entire year, and the new, lower amperage remained unchanged. Valve maintenance was performed at the same intervals as with the previous oil, and this revealed the source of the energy savings. The valves were no longer covered with sticky carbon-varnish build-up, as they had been with the OEM oil, and the new oil appeared to deteriorate less. The manufacturer learned that not all synthetic lubricants are equal. Case Study: A South Dakota wastewater treatment plant was interested in reducing operating expenses by using higher quality lubricants to achieve extended drain service and


lubrication engineers possible energy savings in three Spencer 50-hp rotary blowers, which were part of a biological contactor system. The average electrical reading was 50 amps on each of the blowers while using the current lubricant. After changing to a highperformance lubricant, the average dropped to 38 amps. Based upon electrical rates at that time, the estimated yearly savings was $2,968 per blower, or $8,904 total for all three. ConClusion Today, there are various reasons to reduce energy consumption, such as conserving natural resources, reducing emissions and improving profitability. Governments and corporate management alike are looking for ways to reduce energy consumption. Indirect energy use, more commonly called industrial use, is greater in all regions of the world than direct or personal use. That makes industry the largest consumer of energy and, therefore, the greatest source of potential reductions. Energy use can be measured through production output, temperature changes and electrical consumption. It is possible to make dramatic gains in energy efficiency by reducing friction, and one of the best ways to do that is to employ good lubrication practices, including the use of high-performance lubricants and the adoption of lubrication reliability best practices. The key to success is finding a lubricant company that not only can provide the right high-performance lubricants for the applications but also can recommend reliability solutions that will further reduce friction and maximize the efficiency of equipment.

48 March/ april 2011 power insider

referenCes exxonMobil corp., outlook for energy: a View to 2030, December 2009. 25 Degrees in africa, “correct lubricants save ample energy,” accessed March 24, 2010, www.25degrees.net/index.php?option=com_ zine&view=article&id=239:correct-lubricants-saveample-energy&itemid=81 Hinrichs, roger and Kleinbach, Merlin, energy: its use and the environment, Thomsen brooks/cole

corp., 2006 u.s. Department of energy, “compressed air tip sheet #6,” august 2004. lubrication engineers, inc., ZaP flyer, www.le-inc. com/documents/Zap_Flyer.pdf. u.s. Department of energy, “energy efficiency and renewable energy,” accessed april 1, 2010, www1. eere.energy.gov/industry/bestpractices/compressed_air_ ma.html www.le-inc.com




 

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machine alignment

machine alignment by Robin Samuels

Critically aligned machinery such as high speed rotating equipment and reciprocating engines form the foundation and core of Asiaâ&#x20AC;&#x2122;s distributed, stand alone and grid connected power generating portfolio. Their reliability is an absolute key factor in the day to day function of civilisations throughout Asia. Uninterrupted operation under strenuous and intense conditions depends heavily on all components performing to their maximum capacity. As input fuel prices continue to rise at an unprecedented rate, end users are constantly seeking ways to reduce costs through an increase of performance, efficiency and prolonged life of equipment. Maintenance can be an unnecessary expense in more ways than one, through downtimes, parts replacement and service charges. Wear in certain components is inevitable, deterioration through time can sometimes be unavoidable, but life expectancy, to a certain extent, can be assisted in the 50 March/ april 2011 power insider

initial stages of implementation, through efficient and accurate alignment. Misalignment during installation and maintenance is an area often considered one of the most significant in component failure. As a rule misalignment is generally caused by inadequate measurement techniques, with the slightest miscalculation evident after a period of time. Imperfect foundations and their degradation are also considered a factor in misalignment problems. Ensuring that all elements of a system are positioned correctly is critical to a well functioning device. Mounting discrepancies can ultimately heavily reduce the life time of bearings, seals and couplings. Essentially it can be a catalyst for higher energy consumption, abnormal levels of noise and vibrations whilst presenting excessive stress in machine parts. This will undoubtedly lead to costly down time.

Precision alignment is an umbrella term for various alignment services. These include laser bore alignment services, turbine alignment services, and optical alignment services. Techniques using laser, dial indicators, 3D and dynamic measurement technology can ultimately prevent devastating failures to key elements. The following is a concise rundown on how each of these services can help a manufacturing and installation entity Laser bore alignment involves the use of a laser tracker. This is a portable measurement system that relies on a laser beam to accurately measure and inspect in a spherical (360°) volume of up to 200 feet. A premier laser tracker combined with expert alignment experience allows the manifest to measure and inspect any object necessary. By using laser tracker technology they eliminate human error in measurement data. That means measuring any size part, any


apparatus moving or stationary, any machinery installation, and removal. Therefore, an end user can be confident that their investment is operating properly. This measuring allows for corrective action to be taken to ensure the machines overall, and parts individually, are operating efficiently. Quality laser bore alignment contributes to cost savings. Machine and part problems are dealt with before they become too big. This results in pre-emptive maintenance. Up-to-date maintenance essentially means, less maintenance expense, less expense means more profits, which contributes to the overall financial health of the power generator. Frequent measurements of bearing positions and line bores are critical in the operation diesel and gas engines. Industrial alignment services providers committed to expert precision measurement use laser trackers of the utmost reliability and repeatable accuracy. They implement laser tracker technology with proven experience in the field of optical alignment. Their focus is to keep current on innovations in dimensional metrology. Dimensional metrology is the science of calibrating and using physical measurement equipment to quantify the physical size of or distance from any given object. Itâ&#x20AC;&#x2122;s important that the contracted precision alignment services provider has years of operating experience. They must also have the ability to integrate the laser tracker into dimensional measurement. This expertise and experience ensures a company is receiving proper inspection and measuring of their machinery A capable alignment services provider has the ability to combine the laser tracker in measurement

Quality laser bore alignment contributes to cost savings. machine and part problems are dealt with before they become too big. means, less maintenance expense, less expense means more profits technology with their experience in turbine alignment. This applies to steam, gas, and hydro turbine alignment. A good service provider develops and uses an alignment technique that can complete a tops-on or tops-off 18 station inspection of a three bearing gas turbine, in approximately three hours. This process speeds up overall inspection time and the alignment process. It eliminates human error in measurement data. In addition, it lessens the impact of thermal movement on the alignment process. The design of the inspection process is to provide superior measurement data. This includes the bore centre location, concentricity, radial distances, and axial distances. Accurate turbine diaphragm alignment is vital in performance and is not as simple as lining up all of the diaphragm bottom halves against a common reference line. To perform a correct diaphragm alignment it takes a lot of information, calculations, and time. If you plan properly, use the correct techniques, and technology; you will save time on the diaphragm alignment process and have a virtually rub free start-up. This can shave days to weeks off of your shut down and

cause your turbine to operate more efficiently, thus saving lost production and ultimately increasing turbine output. Key factors to take into account during installation of high speed rotating machinery and reciprocating engines include consideration of vertical and horizontal alignment, straightness and concentricity of the device but also thermal growth in operation. Due to the high temperatures involved with the operation of turbines and engines, a degree of thermal growth will always be expected, and provisions must be made for this with calculations using strain gauges, dial indicators and dynamic measuring techniques during installation. Laser bore alignment and other industrial alignment services are essentially a safeguard against premature equipment wear and breakdowns. These services ensure that electricity generators new or existing machinery, is performing to the maximum of its capabilities whether in continuous, prime time, stand by or emergency operation. When they are, a generator betters their chances for the provision of stability in electricity supply to the end user throughout Asia and the Pacific.

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power insider march/ april 2011 51


EvEnts listing May 2011 5 May - 7 May

HydroVision india Pragati Maidan, New Dehli, India, India. organisers: PennWell email: attendingpgica@pennwell.com UrL: www.hydrovisionindia.com 5 May - 7 May

power Gen india & CentraL asia Pragati Maidan, New Dehli, India, India. organisers: PennWell email: attendingpgica@pennwell.com UrL: www.power-genindia.com 9 May - 13 May

1st internationaL syMposiUM on innoVation in tHe pHospHate indUstry Palmeraie Golf Palace, Marrakech, MarrakechTensift-Al Haouz, Morocco. organisers: OCP Group email: info@symphos.com UrL: www.symphos.com 9 May - 10 May

Cranes MiddLe east - Co-LoCated witH GCC HeaVy Lift and transport for oiL and Gas Abu Dhabi, United Arab Emirates. organisers: Arena International Events Group email: events@arena-international.com UrL: www.arena-international.com/cranes11 10 May - 11 May

aUstraLia sMart enerGy sUMMit 2011 Sydney Australia organisers: SKS Global Limited email: gold@sks-global.com UrL: www.pimagazine-asia.com

10 May - 11 May

aUstraLia Gas/LnG sUMMit 2011 Sydney Australia organisers: SKS Global Limited email: sam@sks-global.com UrL: www.pimagazine-asia.com 10 May - 11 May

aUstraLia soLar sUMMit 2011 Sydney Australia organisers: SKS Global Limited email: alec@sks-global.com UrL: www.pimagazine-asia.com 10 May - 11 May

aUstraLia wind sUMMit 2011 Sydney Australia organisers: SKS Global Limited email: jordan@sks-global.com UrL: www.pimagazine-asia.com

Centre, Cairo, Egypt. . organisers: The CWC Group email: pgilbert@thecwcgroup.com UrL: www.intergasegypt.com 11 May - 12 May

nUCLear serViCes and sUppLy CHain TBC, United Kingdom. organisers: SMi Group Ltdl email: kskeates@smi-online.co.uk UrL: www.smi-online.co.uk/events 15 May - 17 May

wepower Dhahran International Exhibition Centre, Dhahran, Eastern Province, Saudi Arabia. organisers: BME Global Ltd/DIEC email: mark@bme-global.com UrL: www.wepower-sa.com 17 May - 20 May

10 May - 11 May

GCC HeaVy Lift and transport for oiL and Gas - Co-LoCated witH Cranes MiddLe east Abu Dhabi, United Arab Emirates. organisers: Arena International Events Group email: kate.czech@arena-international.com UrL: www.arena-international.com/heavylift2011 10 May - 12 May

o&M and LifeCyCLe ManaGeMent strateGies for CCGt power pLants Crowne Plaza Hotel, Birmingham, West Midlands, United Kingdom. organisers: T.A. Cook email: j.haggan@tacook.com UrL: www.tacook.com/CCGT 10 May - 12 May

interGas Vi Cairo International Convention and Exhibition

tia 2011: inside tHe network Gaylord Texan, Grapevine, TX, USA. organisers: Telecommunications Industry Association email: mmelsop@tiaonline.org UrL: www.tia2011.org 23 May - 25 May

worLd LnG series: aMeriCas sUMMit Marriott Riverwalk, San Antonio, Texas, USA. organisers: The CWC Group email: tforbes@thecwcgroup.com UrL: www.lngamericas.cwclng.com June 2011 1 JUn - 2 JUn

sMart Grid teCHnoLoGy 2011 ConferenCe CRoWNE PlAzA, SAN JoSE, CA, USA.

organisers: Smart Grid Update email: bhecht@smartgridupdate.com UrL: www.smartgridupdate.com 6 JUn - 10 JUn

19tH eUropean BioMass ConferenCe and exHiBition ICC - INTERNATIoNAl CoNGRESS CENTER BERlIN, BERlIN, GERMANy.

organisers: WIP-Renewable Energies with the international supp email: biomass.conference@etaflorence.it UrL: www.conference-biomass.com 7 JUn - 9 JUn

LaB afriCa 2011 The Dome, Johannesburg, South Africa. organisers: Orbes Media email: ncornelia@orbes.co.za UrL: www.labafricaonline.co.za 7 JUn - 9 JUn

niGeria oiL and Gas teCHnoLoGy EKo EXPo CENTER, VICToRIA ISlAND, lAGoS, NIGERIA. 52 March/april 2011 power insider


EvEnts listing Organisers: The CWC Group Email: amoulds@thecwcgroup.com URL: www.cwcnogtech.com 7 JUn - 9 JUn

nUcLEaR POwER EUROPE Fiera Milano, Milan, Italy. Organisers: PennWell Email: attendingnpe@pennwell.com URL: www.nuclearpower-europe.com 7 JUn - 9 JUn

POwER GEn EUROPE 2011 Fiera Milano, Milan, Italy. Organisers: PennWell Email: attendingpge@pennwell.com URL: www.powergeneurope.com 7 JUn - 8 JUn

wORLd XTL11 SUmmiT London BrIdge HILton, London, engLand, UnIted KIngdoM.

Organisers: The CWC Group Email: amatkevich@thecwcgroup.com URL: www.cwcxtl.com

Organisers: AEE Email: ashley@aeecenter.org URL: www.energyevent.com

transcorp Hilton, abuja, nigeria. Organisers: West Africa Email: otonye@expowestafrica.com URL: www.expowestafrica.com

15 JUn - 16 JUn

nUcLEaR indUSTRy FORUm

23 JUn - 24 JUn

HILton toWer BrIdge, London, UnIted

UnmannEd SySTEmS aSia 2011

mininG amERicaS SUmmiT 2011

KIngdoM.

ParKroyaL on BeacH road, sIngaPore,

renaIssance denver HoteL, denver,

Organisers: Marketforce Email: conferences@marketforce.eu.com URL: www.marketforce.eu.com

sIngaPore.

13 JUn - 14 JUn

coLorado, Usa.

Organisers: World Trade Group Email: power@adsale.com.hk EmaiL: larry.allen@wtgevents.com URL: www.miningamericas.com

20 JUn - 23 JUn

ShaLE GaS wORLd aSia 2011 tBc, BeIjIng, BeIjIng, cHIna.

14 JUn - 17 JUn

Sdimi 2011 - SUSTainabLE dEvELOPmEnT in ThE minERaLS indUSTRy rWtH aachen University, aachen, nrW, germany. Organisers: Institute of Mining Engineering I Email: aims@bbk1.rwth-aachen.de URL: www.aims.rwth-aachen.de 15 JUn - 16 JUn

wEST cOaST EnERGy manaGEmEnT cOnGRESS (Emc) Long BeacH conventIon center, Long BeacH, ca, Usa.

Organisers: IQPC Email: enquiry@iqpc.com.sg URL: www.unmannedsystemsasia.com

Organisers: Terrapinn Pte Ltd Email: yeeling.chua@terrapinn.com URL: www.terrapinn.com

28 JUn - 30 JUn

OPTimiSinG OiL and GaS LOGiSTicS tBc, London, United Kingdom. Organisers: Hanson Wade Ltd Email: info@hansonwade.com URL: www.oilandgaslogistics.com

21 JUn - 22 JUn

EUROPEan SmaRT mETERinG FORUm & SmaRT mETERinG UPdaTE tHe BLooMsBUry, London, UnIted KIngdoM.

Organisers: Marketforce Email: conferences@marketforce.eu.com URL: www.marketforce.eu.com

28 JUn - 30 JUn

cLEan POwER aSia cOnFEREncE and EXPO 2011 tBc, Bangkok , thailand. Organisers: Synergy Email: priya@synergy-events.com URL: www.cleanpower-asia.com

21 JUn - 23 JUn

UPSTREam & dOwnSTREam EXPO 2011

advERTiSER indEX AE Photonics

Page 2

SAPA

Page 43

SCS Renewables

Page 4

Lubrication Engineers

Page 47 Page 51

Tempress

Page 23

Machine Alignment

Enerproject

Page 28

GEA

Pages 53

Powergen

Page 37

Asia Smart Grid 2011

Pages 53

Wartsila

Page 39

Ercam

Pages 56

54 MARCh/APRiL 2011 POwER inSidER


ASM Advert (205X275-Final).indd 1

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Pima 4  

Issue four of Power Insider Asia focussed on India and the solar mission. We have some excellent coverage of the market and exciting intervi...

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