Alstom GT26 gas turbine can run on shale gas

Speaking to an audience of close to 200

delegates at the annual congress in

Friedrichshafen, Germany, Schroeder

revealed that the unanticipated decrease in

gas-fired production throughout Europe last year

has caused challenges for firmly contracted

maintenance works. The operator is locked into

inflexible maintenance contracts, which do not

adapt into reduced runtime hours, and this weighs

heavy on profits.

Alstom GT26 gas turbinecan run on shale gas

Weekly News 14 June 2013

In Algeria, Alstom has proven the C2+ variation

tolerance of its turbine by running the combustion

chambers with 15 percent C2+. A hydrogen con-

tent of up to 15 percent volume can be handled by

Alstom’s GT26 turbines, according to Knapp. “Even if

we add hydrogen to gas not much happens to the

Wobbe Index, even at 100 percent hydrogen,“ he said,

explaining “Hydrogen and natural gas show similar

Wobbe Index values and so jet penetration, mixing

and pressure drop are similar.”

Handling variable fuel typeswith upgraded GT26“We can handle the situation as far as NOx is con-

cerned,” Knapp said pointing to experience gained by

the company with handling Wobbe Index fluctuation

of plus or minus 15 percent .

“The gas composition must be known in order opti-

mise the system. If we have NOX emissions of 15ppm,

the composition must be known. For hydrogen it will

have to be developed. Be it LNG or be it hydrogen ad-

dition, I would say we are prepared for this.”

Alstom has stepped up R&D efforts to prepare han-

dling future increases in variable LNG with its GT26

gas turbine combustion systems. It is already meeting

customer demands by supplying turbines capable of

switching to variable fuel types and compositions sim-

ilar to shale gas with its GT26 gas turbine which has a

capacity of about 300 MW.

Knapp outlined that particularly in

conjunction with shale gas the variants

of gas quality are bound to increase and

customer demands to switch between

gas types have to be considered.“We see

today that the hydrogen discussion is

coming up and we can expect that hy-

drogen will be added to gas locally that

the user or in the pipeline grid,” he said.

Hydrogen in natural gas increases the reactivity of

the flame and tends to ‘flash back’ or create a flame

flare within the combustion chamber.

Such flash backs can cause emissions increases, he

said. “If flame flashes back into the burner, it does not

necessarily cause damage, but leads to a NOX and emis-

sions increase. If I am careful I can adjust the flame,

but then I have the risk of losing the flame,” he said.

Clients for GT26 in Algeria, Spain and ThailandAlstom’s fleet of gas turbines and equipment is al-

ready used with a wide range of gas compositions. It

has supplied GT26 gas turbine to clients in Thailand,

Algeria, and Spain with variable gas compositions.

The fleet includes machines that use diluted gas with

high nitrogen, engines that operate blast furnace gas,

and also syngas from heavy oil and gasification. �

RWE optimises GT fleet maintenanceto cope with reduced run-time hours

Alstom’s GT26 gas turbine can already handle shale gas and other variable fuels as internal calculations show that shale gas and LNG will be within the company’s hydrogen gas experience range. “We have prepared for extreme cases of shale gas with lots of C2+ and we mayhandle 16-18 percent and go up to even 20 percent C2+,” Dr. KlausKnapp, group head, combustor operations and emissions with Alstomtold this week’s VGB Congress in Friedrichshafen, Germany.

AGENDA

Italy’s market share ofgas forecast to drop11.7% by 2020 – OIES

7

E.on UK chief concernedabout cost implicationsof EMR

3

MARKETS

POLICY & REGULATION

Egypt’s cement produc-tion drops 20% on gasand power shortage

6

PROJECTS & FINANCE

RWE has saved tens of millions by renegotiating gas turbine maintenance withOEMs, Bruno Schroeder, head of plant engineering and plant maintenance, fleetmanager of gas turbines for RWE Group, said at the VGB Congress this week. “We appointed fleet managers last year who do not have direct line responsibilityfor maintenance but who are in charge of identifying maintenance options and implementing programmes,” he said.

New generators helpCalifornia meetsummer challenges tosupply security

4

continued on page 2

Fully bladed GT26 at Alstom's Birr rotor factory

Siemens SGT 750reduces NOX to single digits

9Financing setbacksdelay PennsylvaniaCCPP project

10

“The challenge is that we do not get the

money and we do not earn the money so the

gas turbines and gas and steam plants must be

utilized accordingly,” says Schroeder.

RWE Generation has about 50,000MW

generation capacity in Germany, UK and

Netherlands, and Turkey. Its fleet includes

Alstom, Rolls Royce, and Hitachi turbines.

More flexibility addedto maintenance contractRWE Group negotiated intensively with OEMs

to find a mutual solution for maintenance dur-

ing slow production schedules. “For the large

fleets, Alstom, GE and Siemens has appointed

fleet managers and already described tasks. We

look at fleets and we see if there are synergies

in maintenance and who does the better job.

“We also talk to the OEMs who are our

service partners in most cases. You must be

open, so documents have to be disclosed,”

Schroeder underlined.

He cautioned that a typical win-win situa-

tion would not always be easy to achieve. “You

understand it as a win, but it is rather optimis-

ing losses,” he said.

The current mar-

ket environment

fosters trends to

make contracts

more flexible,

extend the terms

and duration,

and account for

internal service

organisations.

Service contracts

will in the future

have to be cus-

tomer-or project-tai-

lored: Long term,

but flexible enough to account for changes in

use, according to RWE Group.

Another result of RWE’s very intensive ex-

amination of its power plant fleets is the opti-

misation of its spare parts strategy. “In this

case we already achieved results especially in

large fleets, a double digit million sum, where

we said it’s good to know the other party has it

then we don’t have to buy it,” he said.

The total costs of the contract can also be

reduced by defining the scope of maintenance

for a specific project’s operating regime.

“Every machine must be regarded as different,”

Schroeder stressed, “If you know the machine

is a peak machine it does not make sense to

have a full service concept.”

Renewables eat into runtimes, profit margins of fossil plantsThe planned increase in renewables, specifi-

cally wind power and photovoltaic in the

German market, will require increased load

compensation by gas tur-

bines and steam plants

capable of producing

50GW at short notice by

2020, up from 30GW in

2009, despite low whole-

sale prices for this energy.

Short operating times

present operators with

more stringent budgets.

“We are talking about peak

and if we are lucky this

peak may be high enough

so that we earn some

Euros with our power,”

he said. “We need in the

future more gas turbine

power but we can’t see if

this continues that we will

ever earn the money to pay

for these turbines.”

“Formerly we started

once a day. There were

times when we started Monday morning and

stopped Friday evening. Today we are talking

about a situation where we have short operat-

ing times so we have two peaks a day; one in

morning and one in afternoon.”

Challenge set for manufacturersFaster, larger machines are, from RWE’s per-

spective, no longer the answer as now the mar-

ket determines the need for the turbines. “The

value of these machines changes constantly;

this is the main problem,” according to

Schroeder. When operators think about new gas

turbine projects they need to think about new

gas turbine projects whereby they need to inten-

sify talks with OEMs to make clear what they

consider the drivers of demand in the future.

“Machines must be shorter in starting and

stopping and we require operational flexibility

and higher load points and it means fuel flexibil-

ity and response to what customers think, and it

also means flexibility in terms of machine

dimensions, and with maintenance,” he said.

OEMs need smaller, more flexible machines

with higher load points and part-load flexibil-

ity, while maintenance contacts have to adapt

to reduced turbine operating hours and variable

for demand for maintenance services.

“Very often our load distributors ask if we

can perform in inspections earlier than usual,

so this requires shorter delivery times of mate-

rials and supplies; no capital investment on the

one hand and no maintenance cost on the other,

he said, adding “This requirement profile

means lower CAPEX, unit sizes matching out-

come requirements, lower emissions. There is

no single machine that is capable of all this.” �

Gas to Power JournalPublisherStuart Fryer

EditorAnja KarlTel: +44 (0)207 [email protected]

ReportersCristina BrooksMichal ZukTel: +44 (0)207 0173402

AdvertisingNarges Jodeyri Tel: +44 (0)207 [email protected]

EventsNatasha WedlockTel: +44 (0)207 [email protected]

Subscriptions Stephan M. VenterTel: +44 (0)207 [email protected]

ProductionVivian CheeTel: +44 (0) 20 8995 [email protected]

� TECHNOLOGY & INNOVATION GTP Journal 14 June 20132continued from page 1

RWE npower's Aylesford cogen plant

RWE npower's Pembroke Power Station in Wales

14 June 2013 GTP Unlimited REGULATION & POLICY � 3

Leading a debate on the delivery of

Britain's energy policy at the Oxford

University, he emphasised that the UK

consumer is at present "not only paying

for power provision but also

the subsidy the Treasury pays

the power sector".

Apart from investing in

new power generation capac-

ity, Cocker called on the in-

dustry to focus on the

potential of demand-response

mechanisms. He called on policy makers to en-

courage more distributed heat and power

schemes in Britain, suggesting "smart meters

provide big opportunities for customer behav-

ioural change".

Adding to the debate, James Cameron, CEO

Climate Change Capital, cautioned that achiev-

ing capital investment in new-build power gen-

eration capacity "is not without its difficulties,

particularly as the UK has had 20 different en-

ergy ministers in the last 15 years". He criti-

cised there has been a tendency by the industry

to talk about its parts and not about the whole

system, warning "the question of how the in-

dustry is going to attract the requisite scale of

finance and whether it has the capacity to de-

liver needs to be debated."

Though admitting there is a need to

invest in energy efficiency, the E.on UK

CEO opposed the government's efficiency

schemes such as the Eco-and Green Deal,

forecasting these schemes "are likely to cost

the country some £2 billion with unfortunate

consequences".

He also discarded the carbon price as "just a

tax to subsidise old nuclear power stations".

This stance surprised parts of the audience

as it comes from the CEO of a company which

recently withdrew from Britain's nuclear

programme. �

“Cost implications of EMR need to be moretransparent”– E.on UK chief Criticising the UK government's slow delivery of introduction capacity payments as part of a wider Electricity Market Reform (EMR), Tony Cocker, chief executive of E.on UK said "there needs to be greatertransparency in discussion about the costs and implications of energy policy decisions."

Unabated coal plants close faster than anticipated What surprises forecasters at National Grid "is the segment of unabated coal generation, which has seenmany coal plants close earlier than expected as they have already used up their allotted runtime hours,"said Chris Train, Operations Director at National Grid. The British power transmission system operator hadcome up with three 2012 UK Energy Scenarios to evaluate the pathways towards meeting the country’s renewable integration and carbon reduction targets.

In the face of many uncertainties such as the

future level of economic growth, the decar-

bonisation of the power sector, the imple-

mentation of new regulation on capacity

markets, decision makers at National Grid need

to ensure that the day-to-day availability of sta-

ble power supply, he said speaking at Oxford

University's UK Energy Policy Day.

This development has exacerbated the ur-

gency for UK energy industry to move forward

with planned fossil new-builds, he said stress-

ing "There is no room for complacency in the

generating margins, since they are very tight."

National Grid has come up with three "2012

UK Energy Scenarios" – named 'Slow Progres-

sion', 'Going Green' and 'Accelerating Growth'

- which paint three possible pictures for the

future of the UK's power sector up to 2050.

While the 'Slow Progression' scenario ex-

pects Britain to meet it renewable energy target

for 2020 not substantially earlier than in 2025,

the ambitious 'Accelerated Growth' scenario

envisions greater low carbon generation, in-

cluding renewables, nuclear and fossil plants

retrofitted with carbon capture and storage,

coupled with greater energy efficiency meas-

ures and electrification of heat and transport.

‘Going Green’ scenarioincreasingly unlikely He cautioned, however, that "due to economic

uncertainties, the 'Going Green' scenario is in-

creasingly unlikely." Indeed, he acknowledged,

"only 15% of stakeholders surveyed by

National Grid believed that the 2020 targets

will be met".

The big elephant in the room, for both

National Grid and the UK power sector, is the

arrival of on-going Electricity Market Reform

(EMR) whereby Train asserted "that the

reforms need to deliver to timetable" to create

certainty for investors in order to encourage

sufficient forthcoming new-build to be added

to the network. In investors' calculations

"delivering the new power plant is more a

question of getting the right strike price plus

the cost of pylons." as Train put it.

For Britain's future energy market, he fore-

casts, there will be more active demand from

consumers, improved interconnection, with not

only wind farms in the North of Scotland, but

with the rest of our neighbours.

The real dilemma for the grid planners,

particularly given the rising share of intermit-

tent power supply, is "how do we encourage

and restrict demand at the appropriate times,"

he concluded. �

Tony Cocker

Industrial Application of Gas Turbines CommitteeThe IAGT Committee Symposium and Conference,

October 2013, Banff, Alberta

CAISO, the grid operator for most

of the state, is facing supply con-

straints heading into the summer

peak demand season, largely due

to prolonged outage of the two units at the San

Onofre Nuclear Generating Station (SONGS),

which have been offline since January 2012.

"Replacing the lost power supply from a

low-cost source of generation like SONGS

already has changed wholesale electricity

prices in the state, analysts from the US Energy

Information Administration commented, for-

casting "Rising natural gas prices are likely to

increase that effect in 2013."

In its annual report, CAISO noted that 2012

wholesale power prices were higher than prices

in the previous three years even when adjusted

for the lower 2012 natural gas prices. In addition,

the unusually large spread in wholesale electric-

ity prices between the northern and southern por-

tions of the state indicates system congestion.

Over 2,500MW of fossil capacityadded to replace nuclearIn its latest Summer Loads and Resources

Assessment, CASIO noted that 2,502MW of

capacity (capacity adjusted for planning pur-

poses) have been added since June 2012, with

an additional 891 MW

slated to come online

by June 1, 2013. The

two off-line SONGS

units, in comparison,

total 2,246 MW.

"This new capacity

will help make up for

the loss of the genera-

tion from SONGS, but

the reliability issue is

more complicated than

simply providing re-

placement generation,"

EIA analysts said. Geo-

graphically, the SONGS grid region is local-

ized pocket of electric power demand near San

Diego and Los Angeles.

However, much of the new capacity lies out-

side of the San Diego-Los Angeles area, meaning

that additional upgrades of power transmission

capacity are needed to supply that area.

Plans of the grid operator are to bolster the

local interconnectors at strategic locations in

the Los Angeles basin and northern San Diego

County. Southern California Edison and to

reconfigure the existing 220-kilovolt Barre-

Ellis transmission line from two circuits to four

by June 15, increasing the amount of electricity

that transmission path can move.

EIA analysts stressed that the region also

needs local sources of reactive power – a portion

of generated electricity which is lost in large

quantities when transmitting power over long

distances, i.e. importing power from some of the

new generating capacity to Southern California.

To that end capacitors will be added to

several substations (see map above) by June 1,

and two natural gas-fired generators at the

Huntington Beach facility will be converted

to synchronous condensers by June 28. �

� MARKETS GTP Journal 14 June 20134New generators help California meet summer challenges to supply security A combination of adding new fossil power generation capacity and upgrading the power grids and substationswill help California's Independent System Operator (CASIO) meet peak electric demand this summer.

Transmission updates allow new, distant generators to supply Southern California

Montana’s Mill-Creek 180MW open-cycle plant is replicable in Europe – PW Power SystemsThe resemblance between Montana, a state in north-western United States and European countries likeSpain, Denmark or Germany is striking. "What we are seeing in Montana and also here in Europe is that ourFT8 SWIFTPAC aero-derivative gas turbines are being used to maintain adequate power flows in the grid tocounterbalance fluctuating wind energy," says Swift Tarbell, PW Power Systems' Area Director for Europe.

Montana's power transmission sys-

tem operator (TSO) is required

to maintain a constant level of

power on the grid.

"That is why 3x 60MW FT8 SWIFTPAC

were recently installed. One SWIFTPAC runs

continuously ramping up and down to maintain

a fixed amount of power in the transmission

lines, counterbalancing rapid swings in wind

generation, while the second SWIFTPAC

cycles on and off as needed to add additional

power to the system. The third unit stands

ready in reserve," he told Gas to Power Jour-nal in an interview.

NorthWestern Energy in Montana calls this

"regulation service." In fact, the Mill Creek

Generating Station's 180MW FT8 SWIFTPAC

gas turbine plant is actually operated "real

time" by the TSO directly to ensure adequate

power on the grid as wind energy generation

ebbs and flows in the system.

While Pratt & Whitney's fast-starting aero-

derivative gas turbines are famous for supply-

ing peak demand power, today they are also

being used to compensate for wind power fluc-

tuations on the grid. The flexible ramp rate of

the 30MW / 60MW FT8 and soon available

60MW / 120MW FT4000 gas turbines are

"ideal for matching electric power generation

with the demand load on the system on a

moment-to-moment basis," he said.

Sychronous condensing service, which uses

the electric generator to inject MVARS reactive

power into the transmission system, is another

"flexible" feature of Pratt & Whitney's FT8 and

future FT4000 units. In fact, the SWIFTPAC

design provides this ancillary service without

the need for clutches or gearboxes. A signifi-

cant amount of wind turbine technology creates

a deficit of reactive power on the grid, which

can be easily offset by the use of the SWIFT-

PAC's electric generator operating in synchro-

nous condensing mode. �

Aerial photo of Montana power plant

Finding Flexible Futures

Through Pöyry’s extensive experience in market

design, we continue to work with clients across Europe

to shape the development and implementation of the

European Electricity Target Model.

In late June 2013, Pöyry will kick-off its pan-

European multi-client study on ‘Revealing Flexibility Value’. Through a set of three workshops with clients from across the European electricity sector, Pöyry will

effectively deliver a low-carbon power sector.

For further details, please contact:[email protected] (+44 7800 745611)

www.poyry.co.uk

Pöyry Management Consulting (UK) Ltd.King Charles House, Park End Street

Oxford, OX1 1JD, UK Tel +44 1865 722660 Fax +44 1865 722988

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� MARKETS GTP Journal 14 June 20136

continued on page 7

Egypt’s cement production drops 20% as gasshortage prompts power supply constraints A shortage of natural gas in Egypt and subsequent constraints in elec-tricity supply over the last 4 months has forced the country's cementindustry to reduce production by 20 percent. Peaking electricity use inthe summer months is expected to aggravate the decline.

An even steeper drop in production

capacity of 25 percent was incurred

by Arabian Cement Company

(ACC)'s Suez plant after the opera-

tor was struggled to come to terms with unfore-

seen gas and power shortages. The cement

company, which produces 10 percent of

Egypt's cement and is owned by Spanish Ce-

mentos La Union, anticipates production short-

fall to reach up to 50 percent in summer.

The main reason for Egypt's acute gas

shortage is that reduced domestic gas produc-

tion cannot meet rising power demand while

government's subsidy system for gas and

power prices disincentivizes the use of gas for

power generation and favours exporting as

LNG to global markets instead.

ACC applies to switch to coal for generating powerTo cope with the acute energy shortage, ACC

has applied to the Egyptian government to

switch 100 percent of the plant's gas-fired gen-

eration to coal and refused derived fuel (RDF)

-based generation, with 70 percent of genera-

tion to come from coal. The cement producer

needs to make the switch to reduce its gas

needs by 378 million cubic metres per year.

The company applied for the necessary gov-

ernment permits on 14 March 2013. It has

since asked the government for swift issuance

of an environmental permit and the removal of

the operation license fees, which were origi-

nally imposed for the use of natural gas.

Industry players have called on the govern-

ment to remove operating fees for the new gen-

eration, and consider incentivizing the

businesses for the costs associated with replac-

ing natural gas generation or mazot with coal.

Government encourages morediverse energy mixThe Egyptian government has since 2010

encouraged industry to invest in power sources

other than natural gas, but has recently intensi-

fied its request to switch to coal generation.

In 2010, almost all of Egypt's electricity

production came from domestically-produced

natural gas.

Representatives of Egyptian General

Petroleum Company (EGPC), a national oil

company of Egypt owning 70% of Egyptian

Natural Gas Company, have said the country

has plans to cut natural gas exports during

the current energy shortage.

Egypt to become net gas importerEgypt, has been a net gas exporter in the past

but is on its way to becoming a net importer,

after the country's key gas importers arranged a

swap deal with the word's leading gas producer

Qatar to increase supplies.

In the past few years the government had

supported operators' plans to pushed gas-fired

generation in Egypt and there were several ini-

tiatives to expand gas-fired generation capacity

and increase subsidies. In this context, it also

encouraged use of natural gas by reducing sub-

sidies of petroleum.

In contrast, the Egyptian government's

current plan to reflate the gas supply involves

telling major industries to plan their mainte-

nance and slow production during summer

peaking months. �

India lowers gas-fired generation target amid gas shortage India's Central Electricity Authority (CEA), which oversees development of the national grid for the IndianMinistry of Power, has reduced its gas-fired generation target for the current year by almost 46 per centamid gas supply shortages. Low natural gas production output last year is expected to continue through2013, an official told The Economic Times, despite Reliance Industry's recent announcement of a "signifi-cant gas condensate discovery in deep-water KG D6 block".

Gas production from at least one

facility, producer Reliance

Industries' KG-D6 fields off

India's eastern coast, has been

falling since 2011 which forced the company to

reduce, or halt, gas supplies to power produc-

ers. In a move likely to ease government con-

cerns about risk of power shortages that

hamper economic development, Reliance

Industry announced last Friday a discovery,

named 'D-55', which is expected to add to

the hydrocarbon resources in the KG D6 block.

"Appraisal will now commence to better define

the scale and quality of the field," it said.

Power and fertiliser industry compete for gas supplyCurrent gas volumes produced at the KG-D6's

field are sufficient to meet demand of India's

fertiliser sector's for urea-manufacturing needs

and some LPG sector requirements, but leaves

little gas as fuel for power plants.

Ministers in India's federalist state have

repeatedly called for the abolition of laws that

deprive gas-fired power plants of supply by

prioritizing supply to fertilizer and LPG plants.

The current priority ranking mandates that nat-

ural gas needs to be sold first to fertiliser

plants, followed by LPG units, and then to

power plants, city gas, steel and refineries.

The energy ministry has now put forth two

options for freeing up gas volumes for power

generation. The first option is to give equal pri-

ority to buyers in the fertilisers, LPG, power

and city gas distribution sectors, and the sec-

ond is for giving equal priority to just fertiliser

and power sectors. Either way, the Indian gov-

ernment would need to subsidize urea import

for the fertilizer industry.

One of ACC's cement plants in Egypt

Scenarios calculated by the author, based

on Italy's National Energy Strategy,

forecast the use of gas in the power

sector to drop from 30 Bcm in 2010

down to lows of 22.8 Bcm by 2020.

Overall gas demand is projected to decline

between 12.5 and 19.8 percent, dropping from

75.2 Bcm in 2010 to 60.3-65.8 Bcm in 2020.

Electricity produced from gas-fired plants,

meanwhile, is forecast to drop 22.6 percent

from 155 TWh in 2010 to merely 120-

136.8TWh in 2020, pluning up to 22.6 percent,

according to OIES projections.

Enel declared in 2012 that nearly half of its

electricity generation came from coal-fired

plants, which produced three times as much

electricity as its gas-fired combined-cycle

power plants, despite the similarity in installed

capacity between the two generation types.

Gas dominates Italy’s energy mixThe 1990s saw the number of gas-fired power

plants in Italy growing, spurred by innovations and

wider deployment of CCGT technology, the aban-

donment of nuclear power in 1987, the phasing out

of fuel oil, as well as environmental pressures.

Italy in recent years relied on natural gas to

fuel 50 percent of its installed power generation

capacity, equivalent to about 125TWh in 2011.

The late 2000s, however, saw a slowdown of

demand for electricity and a rise in renewables

which put a lid on the market share of gas.

Coal became as cheap as a competing fuel

to gas, helped by a drop in traded CO2 prices

due to a length in carbon allowances in the EU

Emissions Trading System.

The Italian gas market in 2012 was over-

supplied by 62 percent with buyers bound to

long-term supply contracts while

demand remained low amid weak

economic growth. Profit margins

of gas suppliers were hit as a conse-

quence and OIES analysts discarded

earlier predictions that demand

would continue to grow between

2000 and 2010 as incorrect.

Price challenges for gas suppliers aheadThe relative cheapness of gas prices

compared with coal prices (and low

costs for carbon allowances) since

2011 in Italy, as in much of the rest

of Europe, "has made gas lose the

competition with coal for base-load

power generation," the paper reads.

Despite Italy's wholesale power prices

being among the highest in Europe, this caused

an erosion in profit margins for gas-fired

power plants considering carbon prices (clean

spark spreads) compared to coal generation

(clean dark spreads).

Enel in 2012 declared that nearly half of its

electricity generation came from coal-fired

plants, producing three times as much electric-

ity as its gas-fired combined-cycle power

plants, despite the similarity in installed capac-

ity between the two generation types.

With gas demand at record lows, the com-

petition among gas whole sellers intensified

and the share of gas sold at spot markets in-

creased. Italy's dominant gas suppliers Enel

and Eni in 2011 had a market share of 13 per-

cent and 17 percent, respectively while EDF

affiliate Edison has another 12.7 percent. Enel

also supplies the majority of the nation's coal.

Power producers have for long called on

importers to step up price discounts for natural

gas supplied under long-term contracts. Many

reduced the gas offtake under take-or-pay

agreements to minimum levels, buying more

gas at spot markets, instead.

No return to 1990s-levelsPointing to a plethora of uncertainties for

Italy's future consumption, particularly in the

gas to power sector, the OIES research sug-

gests that "a return to 1990s-level demand

seems impossible".

Factors that will influence this forecast

include whether Italy's gas pipeline network

will be expanded by additional export capacity

to sell the oversupply of gas imported from

Algeria, Libya and to its neighbours in the North

and whether electricity demand increases as the

country's economy comes out of recession. �

14 June 2013 GTP Unlimited MARKETS � 7

continued from page 6

Italy’s gas market share forecastto drop 11.7% by 2020 - OIES The erosion of the Italy’s gas use for power generation is forecast to intensify, leading to a 11.7 percent dropin market share by 2020 as the sector is squeezed by the growth in wind and solar power supply and lowelectricity demand in the prolonged recession, a paper authored by Dr. Anouk Honore, senior researcher atthe Oxford Institute for Energy Studies (OIES) finds.

Gas price hike proposedThe Indian Oil Ministry meanwhile proposed to

increase gas prices from $4.2 - $6.7 per million

British thermal unit. Bodies that would see earn-

ings increase from the price hike would include

Reliance Industries as well as India's state-

owned Oil and Natural Gas Corp (ONGC) and

Oil India Ltd (OIL).

The Government's executive Union

Cabinet will determine the outcome of this

proposal after considering the impact of a

hike in power tariff and subsidies for fertiliser

manufacturers, according to India's finance

minister P. Chidambaram.

Uncertainty surrounding regulated gas

and energy prices has made risk-averse

projects developers shy away or put on hold

a number of proposed power plant projects.

Projects for new capacity put on holdSummit Group, in an electricity-producing

joint venture, has several times extended a

deadline to obtain funding for a 341MW

combined-cycle gas-fired plant near a gas

field by Bangladesh, Bibiyana 1. The simple

cycle unit of the plant was scheduled for

commissioning in December 2012 but this

did not come to pass.

On June 20, stakeholders will meet to

discuss what will be done with the Bibiyana 1

plant project.

The proposed projects - Bibiyana 1,

Bibiyana 2 and Meghnaghat 2, with a generat-

ing capacity of 335-341MW each, were ini-

tially set up under a joint venture of GE Energy

LLC and Summit Industrial and Mercantile

Corp. Bibiyana 1 Power Company Ltd (SBPCL

1) was incorporated in 2010 and the project

partners signed a Power Purchase Agreement

(PPA) with the Bangladesh Power Develop-

ment Board in May 2011. �

Share of gross electricity generation per companyin 2011 (%)

Source: AEEG

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14 June 2013 GTP Unlimited PROJECTS & FINANCE � 9

The turbine features a heavy, low-mainte-

nance design, and is aimed at CHP ap-

plications such as in cities with the

potential to support renewables.

Siemens has already provided one new SGT

750 turbine recently in a CHP plant in Greif-

swald, Germany where it supplied 37 MW of en-

ergy. The feed gas for the power plant is imported

from Russia through the Baltic pipeline and the

gas is pre-heated before usage in the turbine.

"The new industrial gas turbine is mainly

aimed at combined heat and power applications

primarily for those customers who have a need

for heat. Accordingly is able to perform well for

the needs of a German municipality for instance.

It can supply about 37 MW electrical and 45

MW heat energy and its operational flexibilty

and short start-up ability enables its use in

highly renewable energy markets," said Augele.

"We have the potential for single digits, below

10 ppm. It is an advanced model for this capac-

ity range. It stays well below legislation limits."

Hybrid design, over 40% efficiencyThe new turbine features a completely new,

heavy design rather than a successor design to

Siemens's popular industrial

gas turbine, Siemens SGT-

600/700 (GT10). The design

has been called more gener-

ous in design than a light-

weight aero engine.

With a running regime of 3,000 hours, it

features a hybrid turbine design with high effi-

ciency, over 40 percent.

The new SGT 750 turbine will also offer a

reduced maintenance requirement: It has two

complete maintenance cycles every 17 years.

This works out to about 17 days of mainte-

nance during a 17 year period.

Advanced NOX control at partial-loadThe SGT 750 is able to reduce NOX emissions

down to approximately 18ml, achieving a far

greater reduction than the current 50ml allowed

by regulations. It is possible to reach these lev-

els when operating at partial load.

Markus Tacke, CEO Business Unit Industrial

Power Siemens Energy added that industrial tur-

bines under development were capable of very

low NOX levels. "We are optimistic that we will

be able to achieve 5 ppm. "The Greifswald

customer had specifications in terms of NOX 2

commercial orders and we want to see the

machines in the field in operation. We want to

see long term experience with the machines."

"We have the potential for single digits,

below 10 ppm. It is an advanced model for this

capacity range. It stays below legislation,"

Augele confirmed.

Introductory ratingSiemens is launching its new industrial gas tur-

bine at an 'introductory rating' and offers a sales

package which can reduce maintenance costs.

"We were so far cautious in terms of distri-

bution and now we see we are going to market

an develop the product further," Tacke said,

outlining "We produced a total of five machines

one is undergoing testing in order to release the

machine for preliminary distribution now." �

Siemens hard-wearing SGT 750 capable of reducingNOX to single digits At this week's VGB Congress on gas turbines, Siemensregional sales manager for Germany, Dietmar Augeleshowcased the company's recently launched hard-wearingSGT 750 is capable to reduce NOX to single digits.

Loccioni's Smart Carbon project optimises combustionprocess to reduce carbon footprint Loccioni, a developer of automated control systems, haslaunched a Smart Carbon project that allows operators offossil power plants to monitor and regulate the coal combustion process to add economic value to operationsand reduce their carbon footprint.

While renewable energies currently

supply about 18 percent of world-

wide energy demand, Loccioni

estimates that the contribution of

coal will rise beyond today's 25 percent market

share, mainly driven by current low of the raw

material of coal as a fuel for power plants.

As power producers need to mitigate the in-

termittency impact of more renewable energy

being connected to the grid through deploying

fossil backup capacity, Loccioni's Smart Carbon

project helps enhance fuel efficiency. CINERIS

is the patented system designed to on line meas-

ure the percentage of unburned carbon in fly

ashes. This percentage represents a useful feed-

back on combustion efficiency and it allows to

control the quality of ashes have to be sold and

to avoid production of hazardous ashes needing

to be destroyed, avoiding high eco-

nomic and environmental costs.

Installed at a 660MW power plant

under ordinary working conditions,

the technology can reduce unburned

carbon in fly ashes from 4 percent to

2.4 percent.

When integrating Loccioni POW-

dER and Loccioni CINERIS, it is possible to

save 2.800 ton/year of coal that means a

€280.000/year fuel cost saving and the avoid-

ance of 7.000 ton/year of CO2, without taking

into consideration the effect of other polluting

emissions, the company said.

Combustion also produces exhaust gases

and to reduce pollutants emitted in the atmos-

phere, Loccioni integrated a set of CEMSs for

the emission monitoring on stacks, gas analyz-

ers for process monitoring and TDL systems

for the monitoring of the ammonia slip useful

to optimize ammonia injection inside the NOx

abatement system.

To keep the highest performances of the

steam and water cycles, Loccioni provides

steam and water customized solutions to

analyse possible contaminations and losses in

order to maintain the optimal balance of chem-

ical and physical parameters on the steam. �

EmberClear did not disclose any details

on the financing setbacks. It had ap-

pointed CCA Capital LLC, a registered

broker dealer, to act as advisor and

placement agent for the construction and term

financing of a 300MW combined-cycle plant.

James Stahle, Group Managing Director of

CCA Group said earlier he expects "significant

interest in this natural gas power plant" particu-

larly as its close proximity to the Marcellus

Shale region allows it to capitalize on low gas

prices. "North America remains the most desir-

able and lowest risk investment region for new

thermal generation," he said.

Project development has been the responsi-

bility of Future Power PA Inc. (FPPI), a wholly

owned subsidiary of EmberClear. Initially the

owner and operator had anticipated to start

construction during the third quarter of 2013.

FPPI President James Palumbo had

described financing of the project as "very

attractive" due to its close proximity to both

the Marcellus Shale, the fastest growing gas

field, and the PJM Grid, the world's largest

electric grid system.

"With over 18,000MW of coal-fired genera-

tion capacity slated to be decommissioned, our

power should help address the challenge of

diminishing supplies," he added.

The proposed plant is expected to operate as

a base load generation facility, according to

EmberClear, and is intended to become "one of

the most competitive plants in the PJM markets"

due to its high efficiency and low emissions. �

� PROJECTS & FINANCE GTP Journal 14 June 201310Financing setbacks delay Pennsylvania CCPP projectFinancing setbacks have forced Alberta-based EmberClear Corp to pushback the start of construction of a 300MW gas-fired combined-cyclepower plant (CCPP) in in Good Spring, Tennessee. The operator had in-tended to sell the electricity produced at the proposed plant to the PJMInterconnection – the largest electric market in the US.

NEWSNUDGESGE to build open access windturbine test platform in the UKJune 10 – GE is spending £50 million

to build an open access wind turbine test

platform at the National Renewable

Energy Centre (NAREC).

The test facility is designed to allow

manufacturers to speed up the develop-

ment time of their systems, GE said

adding that the rising volume of wind

energy requires flexible fossil backup

capacity to balance the grid.

The Energy Technologies Institute

(ETI) is investing a further £25 million

in the NAREC facility, through public-

private partnership between the UK

government with GE Power Conversion

and MTS Systems Corporation.

ABB Symphony Plus installedin 25,000MW power plants in 2 yearsJune 10 – ABB announced that in the

two years since its launch, Symphony™

Plus control solutions won orders for new

power plants that generate more than

25,000 megawatts (MW) of electricity,

equivalent to the installed capacity of

countries the size of the Netherlands,

Malaysia or Egypt.

Some recent Symphony Plus project

awards include the 700 MW Xiaoting

supercritical coal-fired power plant in

China ; the Samra thermal power plant,

Jordan's largest power plant with a gener-

ating capacity of 885 MW; Enel's 590

MW Grazia Deledda Sulcis power plant

in Italy; Dong Energy's 250 MW Avedore

Unit 1 in Denmark and the 125 MW

Arlington Valley solar project in Arizona.

Siemens delivers 434MW gas-fired power plant to Niger DeltaPowerJune 10 – Siemens Energy has won a

contract to construct the 434-MW Geregu

II power plant for the Nigerian utility

Niger Delta Power Holding Company

(NDPHC).

Geregu II is Siemens' third turnkey

project in Nigeria for which it will

supply three SGT5-2000E gas turbines,

three SGen5-100A generators, all the

electrical systems and the SPPA-T3000

control system.

APR Energy starts-up new 200MWgas turbine in UruguayAPR Energy, a global supplier of fast-track power solutions, has startedcommercial operation of its 200MW temporary power generation projectin Uruguay, divided across two sites in La Tablada and Punta del Tigre.

“We now begin a

commercial

stage in which

we are strategic

partners, commented UTE President

Gonzalo Casaravilla. "With the avail-

ability of these machines, we will sup-

ply the demand in Uruguay and it will

allow us to optimize our system."

The two revamped plants, together

with the additional 100MW of turbines

installed by APR Energy last July, now

help increase Uruguay's power produc-

tion capacity by a total of 300MW.

Fast-track project deploymentThrough APR Energy's fast-track project de-

ployment, eight mobile turbines were sent via a

mix of ocean and air freight to meet a tight op-

erational schedule.

The full turnkey 150kV, 100MW solution

at Punta del Tigre went into operation in

May, bringing APR Energy's total capacity

at the site to 200MW. The 100MW plant at

La Tablada, which became operational in

April, includes 150kV substation equipment

for protection and metering.

Both sites utilize demineralized water solu-

tions to comply fully with Uruguay's strict

emissions standards.

APR Energy specializes in large-scale, fast-

track power solution whereby it provide a

turnkey approach covering everything from

mobilization of equipment to installation, oper-

ation and maintenance of the power plant,

Since 2004, the company has installed over

1.5GW of capacity in approximately 30 proj-

ects across more than 20 countries. �

Once operational, the Ras Djinet

and Ain Arnat combined-cycle

plants will have an installed elec-

trical capacity of more than 2,000

megawatts (MW) and will supply power to

over five million households on Algeria's

Mediterranean coast.

The Ras Djinet power plant location is ap-

proximately 100 kilometers east of the Alger-

ian capital Algiers. Ain Arnat is located

approximately 260 kilometers east of Algiers.

Algeria’s power generation capacity to reach 26GW by 2022Siemens said the scope of its delivery of power

plant components includes a total of six SGT5-

4000F gas turbines, six SST5-3000 steam tur-

bines, and six SGen5-2000H generators. In

addition, Siemens will provide technical sup-

port and services for the construction and com-

missioning of the six power trains. A

framework agreement was also concluded for

the delivery of spare parts for the plant in Ras

Djinet for a ten-year period.

Algeria is one of the wealthiest countries in

Africa in terms of raw materials, with exten-

sive crude oil and natural gas deposits. Due to

economic development, Algeria plans to ex-

pand its power generation capacity from the

current level of 11 GW to approximately 26

GW by the year 2022.

"By supplying the components for the new

Ras Djinet and Ain Arnat power plants, we are

happy to be playing a major role in the indus-

trialization of Algeria. Our proven F-class gas

turbine technology combines high levels of ef-

ficiency with low capital costs. With those fea-

tures, this technology offers our customers

crucial economic benefits," said Thierry

Toupin, CEO of the Products Business Unit at

Siemens Energy.

Highly efficient combined cycle power

plants are part of Siemens' Environmental Port-

folio. In fiscal 2012, revenue from the Portfolio

totaled about €33 billion, making Siemens one

of the world's largest suppliers of ecofriendly

technologies.

In the same period, our products and solu-

tions enabled customers to reduce their carbon

dioxide (CO2) emissions by more than 330

million tons, an amount equal to the total

annual CO2 emissions of Berlin, Delhi, Hong

Kong, Istanbul, London, New York, Singapore

and Tokyo. �

Siemens to supply power plant components for two CCPPs in Algeria

ICC approves ComEd's accelerated smart meter deploymentJune 7 – Illinois Commerce Commission (ICC) has issued an order approving the accelerated

deployment of smart meters to all ComEd customers.

ComEd said it can now start installing smart meters to customers in September 2013.

The order follows the Illinois General Assembly's action last month to enact Senate Bill 9,

getting the state's Smart Grid program back on track.

HZI selects Metso automation for Ferrybridge plantJune 7 - Hitachi Zosen Inova (HZI) has selected Metso's automation technology for the

Ferrybridge waste-to-energy plant in Knottingley, UK.

The 68MW plant Ferrybridge is scheduled to start operations by summer 2015 and will

produce power for Scottish and Southern Energy (SSE).

The greenfield plant will be located at the SSE Ferrybridge C Power Station, which is

due to be closed in 2015.

Siemens has won a contract to supply power plant components, including six F-class gas turbines, to theKorean engineering and procurement companies Daewoo E&C Co and Hyundai Engineering Co. that arebuilding two combined cycle power plants (CCPPs) for Algeria's state-run energy provider Sociéte Algériennede Production de l'Electricité (SPE).

14 June 2013 GTP Unlimited PROJECTS & FINANCE � 11

“By supplying the components for the new Ras Djinet and Ain Arnat power plants, we are happy to be playing

a major role in the industrialization of Algeria.”“

”Thierry Toupin, CEO, Products Business Unit, Siemens Energy.

WHO IS THIS CONFERENCE FOR?This conference is aimed at attendees from utilities and power generation companies, energy policy and regulatory bodies, energy in-frastructure project finance, banking and legal firms, and low-carbon and renewable energy companies. Including professionals responsible for:

Energy Policy / Regulation Power GenerationPower Plant ManagementGrid DevelopmentBusiness Development Regulatory EconomicsCorporate Strategy

Project Management and Development Carbon Reduction / CCS ProgrammesCCGT Technology/Operations/ MaintenanceGas Turbine ManufactureFleet ManagementAsset Management and OptimisationTurbine Engineering

Gas Procurement / Origination Gas Supply and Trading Trading Operations Market Development Analysis Project Finance and Investment Sales and MarketingRegulatory Affairs

Tuesday 2nd July - Wednesday 3rd July 2013, Düsseldorf

The future role of Gas to Power in GermanyHeadline Sponsor:

Gold Sponsors:

Confirmed speakers :Franzjosef Schaffhausen, Head of Department for Energy, German Federal Environment MinistryDr. Kathrin Thomaschki, Vice Chair Ruling Chamber 6, Access to Electricity Grid, German Federal Energy Regulator (BNetzA)

Håkan Feuk, VP Political & Regulatory Affairs, Director of Market Rules, E.ONMike Diekmann, Director, Head of Strategy/ Business Development, VNGDr. Jürgen Tzschoppe, Senior Vice President Continental Energy, Statkraft MarketsBernd Goedde, Head of Options and Structures Trading, Vattenfall Energy TradingDr. Karsten Klemp, Head of Power Stations, RheinEnergie AG, Cologne Dr. Oliver Weinmann, Chief Executive Officer, Vattenfall Europe Innovation

Dennis Volk, Gas, Coal and Power Markets Division, International Energy Agency (IEA)Olga Mikhailova, Advisor Markets Unit, EurelectricDr Fiona Riddoch, Managing Director, COGEN Europe

Dr. Marco Nicolosi, Managing Director, CONNECT ENERGY ECONOMICS GmbH Mike Wilks, Director, Pöyry Management ConsultingReinhard Rümler, Senior Manager, Energy Advisory Practice, PricewaterhouseCoopers Frank Reichenbach, Manager, The Advisory House

Tim Rudolph, General Manager – Energy Business, Rolls-RoyceMichael Kruck, Head of Sales GT Power Plant Solutions NW-Europe, Germany Siemens AG, Energy SectorKlaus Payrhuber, Senior Product Manager Gas Engines, GE Power & WaterShonodeep Modak, Global Manager Marketing, GE Power & WaterMarkus Rieck, Country Sales Director Germany, ALSTOM Deutschland AGSwift Tarbell, Area Manager Europe, PW Power Systems

Edward Nagelhout, Market Development Analyst, Wärtsilä Power PlantsDr. Tilman Tütken, Vice President Sales Europe for Power Plant, MAN Diesel & Turbo SEDr John Newton, Business Development Manager, ITM PowerUwe Würtenberger, Clean Energy Technology, Linde Innovation ManagementHerbert Gries, Head of Pressure Equipment and Plant Security, TÜV Rheinland Service GmbH

Germany goes green - so how can gas win market share against ‘dirty king coal’? Challenges for gas-fired peaking plants to find a place in the Energy Transition

In the run-up of the September general election, debates on Germany's future power market designare at centre stage. Profitability, operational dispatch of gas-fired plants and commercial viability ofexisting fossilplants and investment into new capacity hinges on capacity mechanisms, the outcomeof price arbitrationsover Russian gas supplies and electricity demand forecasts.

• Are capacity payments vital to keep gas-fired plants running and incentivise investment in new capacity?

• Coal or gas? Which fuel source will be most economical for peak-load power supply?

• Cogeneration - can selling heat make conventional gas plants profitable?

• Will power and gas demand recovered as the German economy rebounds from recession?

• Efficiency vs. flexibility - what technology enhancements are key for future gas turbine technology?

Silver Sponsors:

Bronze Sponsors:

PARTICIPATE | SPEAK | SPONSORSave the date in your diaries and contact us to register your interest:

Narges Jodeyri Email: [email protected] Phone: +44 (0)20 7017 3406

Alstom GT26 gas turbine can run on shale gas

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