Strong Technology Portfolio Positions Alstom for a Strong 2011
Timothy Curran, head of power for Alstom Power, USA, recently shared his company’s view of 2011 and beyond with POWER’s editor-in-chief.
Alstom is a global company with business activities in all power generation sectors. It also offers a full range of services, including plant modernization, retrofit, maintenance, and operational support.
Peltier: What innovations in the company’s 2011 product line should we expect?
Curran: Alstom follows a dedicated R&D program to develop industry-leading technologies for power plant owners and continuously develops its product offering. We will continue this trend in 2011. Alstom will continue to invest in a range of renewable and carbon-free technologies to make our clean power offerings as comprehensive and valuable as possible for customers. We are developing and demonstrating products for carbon capture and sequestration, wind, hydro (including pump storage), nuclear, thermal solar, biomass, geothermal, waste-to-energy, and our “smart power” offerings. In 2010, we formed a new sector—Alstom Grid—that is providing and developing products to improve the efficiency of energy infrastructures through automation and grid connections. We believe that these investments, taken together, offer a comprehensive clean power portfolio of products for our customers.
The latest ratings of our GT24, GT26, and GT13 gas turbines provide increased power and efficiency, reduced emissions, and increased operating flexibility. For coal, our latest implementations of high-efficiency coal plants with steam conditions above 600C are entering service at power sizes up to 1,000 MW. The program for the development of carbon capture technologies progresses well with pilot projects in the USA and around the world with large demonstration projects in the engineering phase. Our nuclear conventional islands are adapted to suit the steam conditions of any nuclear reactors commercially available. For hydro, variable-speed pump storage turbines have been developed, and for wind the 3-MW ECO100 platform has been extended to make use of lower wind speeds. Alstom has entered R&D partnerships with the National Institute for Renewable Energy to further improve the 1.67-MW ECO86 and with the National Renewable Energy Laboratory for the 3-MW ECO100.
Peltier: The global economic and financial crisis that reduced power demand and tightened credit caused markets for large power generation equipment to hit rock bottom. How did your company fare?
Curran: Alstom continues to see a balanced technological mix in terms of demand for the large power plant market in the coming years with at least two-thirds coming from new fossil power plants, a strong hydro market, a global nuclear revival, and strong growth in demand for wind.
Alstom sees good opportunities for air quality control products given the expectation of more stringent environmental regulations in the future. Retrofit and service markets are also growing steadily due to the aging of the installed base in developed countries.
Alstom benefits from a number of strong assets to face the less-than-favorable economic environment: The long-term outlook on its markets remains favorable, the customer base is strong, the group’s backlog is healthy, and the power sector has continued to show good operational performance despite the difficult environment.
Peltier: How have recent lower gas prices affected your company’s sales today, and what are your plans should the price of natural gas rise?
Curran: While it is true that rising supply and expectations of continuing growth in the supply of natural gas—especially “unconventional gas”—have pushed down prices, and combined with opposition to new coal plants have created expectations of a new “dash to gas,” Alstom continues to believe in the importance of providing our customers the full portfolio of generation options. Whether natural gas prices go up or down in the near to medium term, we will stick to that strategy. That’s because we believe the fundamental, long-term driver in power generation investment decisions will be environmental considerations that make economic sense.
We have also enhanced our natural gas offering in North America by reintroducing the GT24 gas turbine combined cycle and continuing to invest in a state-of-the-art turbine manufacturing facility in Chattanooga that will bolster our ability to build natural gas generation equipment in the U.S.
Peltier: What is your company’s perspective on the China and India markets?
Curran: The countries of China and India are among the world’s largest consumers of electricity and will lead the future world’s growth of electricity production. While the government of China recognizes the need to import foreign technology, it does support a self-reliance policy and is increasingly expecting more technology localization. We believe that Alstom brings to the table our global experience and our strong R&D program, and therefore mutual collaboration will be a win-win situation for all. In the case of India’s nuclear development, it has largely been based on indigenous reactors. With the recent opening of the market, the nuclear industry of India will have access to foreign technology that will enable it to achieve its nuclear development program by increasing the reactor size and installing larger units.
Peltier: What are some major barriers to doing business with governments or private entities in developing countries, and how do you deal with them?
Curran: Alstom is an international company with global presence in 70 countries worldwide. We believe that transferring technology is rational and necessary. In China, for example, for each product line and project, we target to increase localization for design and equipment manufacture, as much as is practically possible in our own factories, through our Joint Ventures and with our partners. Under a typical technology transfer agreement (TTA) we transfer our latest state-of-the-art technology in machinery and equipment, project management, and quality control. This effective and unique TTA has benefited our customers and partners, enabling them to obtain our latest proven technologies, while ensuring that all products can draw on Alstom’s continued R&D and technology innovation. This is true, for example, on our nuclear projects in China, like Ling Ao II, Taishan (China’s first EPR).
We are also using TTAs in India to advantage. In 2005, Alstom and BHEL entered into a 15-year agreement for the manufacture, supply, and technology transfer of supercritical coal-fired boilers. In 1999, we entered into a 50:50 joint venture with National Thermal Power Corp. (NTPC) to create NTPC Alstom Power Service Ltd. (NASL). NASL undertakes renovation, modernization, retrofit, and refurbishment of aging power plants with full support from Alstom Global Technology Centers located in Europe, the U.S., and India.
Peltier: What is Alstom’s involvement in smart grid technology development?
Curran: Alstom has been active in the area of smart grid since before it was a household term. Alstom’s approach to making America’s grid smarter is built around the concept of “evergreen” implementation, whereby sophisticated new technologies (such as high-voltage direct current and voltage source converter technologies) are paired up with the existing grid. The first demonstration project is the Tres Amigas Super Station that, when operational, will provide a first-of-its-kind linkage between America’s three major grid networks, making it possible for renewable energy generated in the Southwest to reach homes on the eastern seaboard.
We see two key barriers to the wider implementation of a smart grid system: the inability of the industry to clearly articulate the business case of smart grid technology to regulators and the lack of a consistent policy on how utilities can and should recover the high cost of investment.
Peltier: What initiatives does your company have planned for the next 10 years related to the development of new or improved renewable energy technologies?
Curran: We expect the world market for renewable forms of marine energy to grow very strongly over the next 10 years. Between now and 2020 we expect that 60 GW of offshore wind generation and 2 GW of tidal generation will be installed.
Alstom is focusing on two key wind development areas: making wind turbines that create more power per square meter and increasing the energy yield of a turbine under low-wind-velocity conditions. With our 100-meter (m) and 110-m rotor diameters, the 3-MW ECO 100 and ECO 110 (designed for lower wind velocities) are at the forefront of the emerging 3-MW onshore wind turbine technology that is rapidly becoming a new market standard, particularly in Europe. Alstom is developing a large (6-MW) offshore, direct drive (no gearbox) wind turbine designed to meet the expected UK requirements. The prototypes and pre-series are planned to be available in 2012–2013, for series production to start in 2014.
The hydroelectric market has grown by 40% in recent years with only one-third of the world’s potential hydro sites developed. We will therefore continue to improve our turbine blade profiles for efficiency gains, further develop generator insulation technology, pump storage, and control systems. We are also continuously improving our turbine and generator rehabilitation and upgrade solutions—especially “green solutions” for refurbishment, such as fish-friendly turbines and oil-free bearings.
Alstom plans to demonstrate its tidal technology in two phases: first, deploy the first full-size demonstrator in the Bay of Fundy (Canada) in 2012 and then deploy a second, larger unit in Brittany (France) in 2013. Once these two technology demonstration projects are completed, we intend to commercially offer tidal farm projects. From preliminary discussions with potential customers, we anticipate that tidal farm projects could reach several hundred megawatts by 2020.
Alstom has a long experience in the field of geothermal. In 1958, Alstom participated in the construction of the world’s first large-scale commercial geothermal power plant in Wairakei, New Zealand. Today, Alstom’s geothermal business builds on more than 50 years’ experience in the building and servicing of geothermal power plants.
Concentrated solar thermal power is a high-growth industry, and that technology will be an important part of our future development plants. Alstom is one of the main shareholders in BrightSource Energy now developing several very large projects in California and elsewhere.
Peltier: What are your three key predictions for the power industry in 2011?
Curran: A balanced portfolio of products is needed now more than ever. Energy security is a key driver for many countries, and utilities are working hard to balance their energy resources. We expect carbon-free technologies (renewables, hydro, and nuclear) to gain in worldwide market share in the future. We also expect that the impact of CO2 emissions from plants on climate change will increase in importance in these energy resource decisions.
At the same time, we must take care of our existing power plant fleet to improve performance and extend their life expectancy, while simultaneously reducing their CO2 emissions. Retrofit and service of these existing assets is an easy way to either increase the output or extend the number of years of operation.
Asia and emerging countries will lead the power market growth. Gross domestic product growth and recovery from the crisis is faster in Asia and in emerging countries in general. Consumption is growing fast, and reserve margins are tighter, driving more orders for new plants, either thermal or renewables.
— Dr. Robert Peltier, PE, POWER’s editor-in-chief, conducted and edited this interview.