Gas to Power Journal - Weekly News - 11 - 2013 June 21 by Gas to Power Journal

Weekly News

21 June 2013

“Investments can be made in the absence of a capacity mechanism” – ESB The introduction of a capacity mechanism is not absolutely necessary to spur the building of new gas-fired power plants in the UK, Clare Duffy, General Manager UK at the Irish utility Electricity Supply Board (ESB) told Gas to Power Journal in an interview. SB has always been equivocal about the need for a capacity mechanism in the GB market and has demonstrated that investments can be made in the absence of a capacity mechanism through our investments in Carrington CCGT," she said. Duffy noted, however, that despite ESB's relatively cool position, on the need for a capacity mechanism, the company was working with Clare Duffy government to ensure the final outcome "is a bankable mechanism which strikes the right balance between maintaining existing and promoting new capacity, and is attractive for companies to participate." She added that ESB was particularly concerned that the introduction of a capacity mechanism too early could have a negative impact on the en-

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ergy market. "Timing of the introduction of a capacity mechanism is critical...care should be taken that a capacity mechanism is only introduced if absolutely needed," she said. The necessary investment signals for encouraging new build in the UK's energy marBird’s eye view of Carrington project location ket could, according to Duffy, better be served by "taking steps to improve the efficiency of generators whilst encouraging new entrants the wholesale market." She also pointed out into the market," she said. that a stable regulatory framework from the Duffy said that ESB sees a "real opportuongoing Electricity Market Reform (EMR) – nity" for new combined cycle gas turbine to be implemented by the government's En(CCGT) power plants in the UK due to the ergy Bill 2012/13 – would be "key for attractflexibility of gas generation to "support and ing investment." mitigate the system flexibility gap that will emerge as more intermittent and inflexible generation (such as wind and nuclear) comes on “Real opportunity” for new CCGTs the system." She added that CCGT plants also in UK energy market have the potential to run at base-load to fill the "Stability and predictability will help to imcapacity gap should there be a delay in new prove long-term confidence for investors. It is lower carbon capacity coming online. important that the Bill delivers for independent

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Statoil, SW Düsseldorf sign 15-year gas supply accord The deal “illustrates Statoil's willingness to develop and enter into new commercial concepts in the gas-to-power segment. “And – importantly for Statoil – this innovative deal creates value for our company," said Rune Bjørnson, senior vice president responsible for Rune Bjørnson Statoil's Natural Gas business.

orway’s Statoil and Stadtwerke Düsseldorf have signed a 15-year gas supply agreement for the latter’s upcoming 600-MW combined-cycle gas turbine power plant (CCGT) in Lausward near Düsseldorf, Germany. Statoil said deliveries of natural gas are planned to start in 2016.

AGENDA MARKETS Centrica aspires to replicate US shale gale in Britain 3 Louisiana's gas-fired electricity is “inexpensive” 4 at $0.069/kWh – IER

“Germany is a key market for us” – Statoil senior VP

POLICY & REGULATION

Bjørnson underlined the strategic position of Germany as a “key market” for Statoil. The long-term gas supply deal with Stadtwerke Düsseldorf is “a stepping stone for Statoil's strategy to promote gas in the power segment throughout Europe in general, but in Germany specifically," he added. Without highly efficient continued on page 2

PROJECTS & FINANCE

US upgrades social cost of carbon, favours of use of gas for power generation 5 Rolls Royce upgrades design of its Trent60/DLE 9 gas turbine

TECHNOLOGY & INNOVATION

GTP Journal

21 June 2013

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With 23 to 39GW of existing UK installed capacity estimated to close by 2023, including 11GW of existing plant expected to close by the end of 2015 due to the EU's Large Combustion Plant Directive and a further 15GW of coal and 2GW of existing gas to close due to the Industrial Emissions Directive, Duffy pointed out that gas-fired power plants were in prime position to "act as a bridge during this transition [to a low carbon economy]." "Gas power developments are favoured because of proven technology, lower construction risk, relatively short construction periods and are not carbon intensive and provide a flexible and efficient solution," she said.

Carrington power plant to commence operations in 2016 ESB's currently under construction 881MW Carrington Power Plant in the UK is scheduled to commence commercial operations by early 2016 and Duffy pointed out that "the fact that the Carrington Project is being financed by a number of international banks, shows that there is market confidence in [our] strategy." Carrington Power Limited, owned by ESB, has reached Financial Close with a syndicate of international banks for a combined cycle gas turbine (CCGT) power plant just outside Manchester. The project finance deal incorporates export credit support from the Swiss Export Credit Agency, SERV. RBS coordinated the overall funding, HSBC acted as SERV co-ordinator and the participating financial institutions include Lloyds, KfW IPEX-Bank, Santander, BBVA and Société Générale. UK energy secretary Ed Davey responded immediately to ESB's announcement on the secured funding for the Carrington project. "This announcement by ESB is great news for the UK's energy security, and recognition that the Gas to Power Journal Publisher Stuart Fryer Editor Anja Karl Tel: +44 (0)207 0173417 anja@gastopowerjournal.com Reporters Cristina Brooks Michal Zuk Tel: +44 (0)207 0173402 Advertising Narges Jodeyri Tel: +44 (0)207 2533406 narges@gastopowerjournal.com Events Natasha Wedlock Tel: +44 (0)207 173410 natasha@gastopowerjournal.com Subscriptions Stephan M. Venter Tel: +44 (0)207 0173407 venter@gastopowerjournal.com Production Vivian Chee Tel: +44 (0) 20 8995 5540 chee@btconnect.com

time to realise a power plant project starting from undertaking feasibility study to construction and commissioning. Policy makers are well advised to factor in these lead times given that the regulator Ofgem has warned that Britain faces a gap in electricity supply in about 8 years' time.

ESB’s market presence in Britain began in early 1990s

Predicted View of Carrington Power Station

government's approach to encouraging new capacity is increasingly recognised by investors," he said. Emphasising the role of gas in the future energy mix, he added gas-fired plants "relatively quick to build and half as polluting" as coal-fired plants. The Carrington power plant project is being built under an engineering, procurement and construction (EPC) contract worth over €600m which was awarded to Alstom Duro Felguera. The full turnkey contract includes the supply of two gas turbines and two steam turbines. It also includes all the mechanical equipment such as two heat recovery steam generators (HRSG), as well as the electrical and Instrumentation and Control (I&C) equipment. It usually takes about 84 month or 7 years'

ESB’s Marchwood power plant in Southhampton, England

ESB has had a presence in the British energy market since the early 1990s as owner and operator of Corby Power Limited, one of the first independent power projects in the UK. Additionally, ESB successfully developed the new 842MW CCGT plant at Marchwood near Southampton which entered commercial operations in 2009. These projects, together with Carrington Power, have the capacity to generate enough electricity to supply close to 2.5 million homes. Project Development Manager, Ben Wallence, told Ben Wallace Gas to Power Journal earlier “ESB wants to build 3,000 MW portfolio in the UK, so we need to add large amounts of generation to realise this aim and that is why we are drawn to brown field sites.”

ESB’s Corby power plant Northamptonshire, England

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and flexible gas plants, the German Energiewende [energy transition] away from nuclear and towards more renewable energy is not deemed to be successful.

Accord struck despite unfavourable G2P regulation “The [long-term] agreement was possible despite very unfavourable regulatory framework for gas-to-power,” he underlined, hinting that German regulators and policy makers are still hesitant to introduce capacity markets to remunerate fossil plant operators for making capacity available at short notice. The municipal utility of Düsseldorf decided in December 2012 to invest into a new CCGT on its existing power plant facility in Lausward

with a view to producing both electricity and district heat. Commenting on the gas supply contract, Dr. Udo Brockmeier, CEO of Stadtwerke Düsseldorf said Statoil would share the utilities’ vision on the development of the energy market and the importance of gas-to-power projects in Germany. “This agreement materialises the partnership spirit between security of supply and security of demand with fully aligned interests on the long term; it is a perfect illustration of what gas market liberalisation brings in terms of innovation and value creation," he said without disclosing the terms of the agreement.

21 June 2013

GTP Journal

MARKETS – UK

Centrica aspires to replicate US shale gale in Britain

Centrica, Britain’s largest utility and buyer of Qatari LNG, aspires to replicate the US shale gas revolution in the UK as it bought stake in the Cuadrilla play in northwest England in a move hoped to amplifying gas supplies and alter the economics of gas-to-power generation. he abundance of shale gas production in the US has caused a price plunge of the front-month Jul13 at Henry Hub to $3.80/MMBtu – significantly lower than prices around 64.390 pence/therm for the same contract period Jul13 at the UK National Balancing Point (NBP). Centrica purchased 25 percent of the Bowland field exploration licence in Lancashire from Cuadrilla Resources and Australia's AJ Lucas for £40 million ($63m) in cash. The shale-gas deal coincides with Centrica's negoti-

ations to renew a three-year LNG supply contract with Qatar which expires next year. "With North Sea gas reserves declining and the UK becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the UK," commented Mark Hanafin, Managing Director of Centrica's International Upstream business. He refrained to give estimates on future volumes of shale gas production and the potential impact on gas prices at the NBP and the economics of operating gas-fired power plants in the UK. The US shale gas revolution has raised interest in the UK potential, but the British Geological Survey (BGS) cautions "it is far from certain that the conditions that underpin shale gas production in North America will be replicable in the UK". Technically recoverable shalegas resources in the UK are estimated at 26 trillion cubic feet, according to the US Energy Information Administration (EIA).

Reserves "abundant at depth", distribution not well known Map of UK shale gas formations

Shale gas reserves in the UK are "abundant at

depth, although their distribution is not well known" it said in a BGS/DECC Shale Gas report compiled under the motto 'Promote UK 2013'. The report identifies significant potential areas in northern England, including Widmerpool Gulf near Nottingham and a large area centred on the Elswick Gasfield, near Blackpool. "The untested shale rock volume in the UK is very large, however, more drilling, fracture stimulating and production testing is necessary to prove that shale gas development is technically and economically viable," the report reads. Even if one assumes that the American shale gas producing analogies are valid, BGS researchers cautioned, however, that "many of the operating conditions are different in the UK". Land owners in Britain do not own mineral rights and have s less incentive to support development, and local authorities must grant planning consent. The US, in contrast has relatively permissive environmental regulations, low population densities, tax incentives, existing infrastructure, well developed supply chains and access to technology. "Cumulatively, these factors mean that it is far from certain that the conditions that underpin shale gas production in North America will be replicable in the UK," the BGS report concludes.

UK: Development of Stag Energy’s Eye Airfield plant hinges on capacity mechanism Progress Power, a British power plant developer, has proposed to build a 299MW gas-fired power plant valued at £200 million for the Eye Airfield in Suffolk. Development of the project, however, hinges on forthcoming legislation on capacity remuneration mechanisms in the UK. n order to get project financing we need long-term revenue certainty by successfully participating in the capacity mechanism auction," said Chris McKerrow, project manager for Progress Power on the Suffolk project. “Until there is more definition on the design of the mechanism, it is very difficult to put a cost on what would make the project viable. Contract length and the penalty regime will have a big impact on the cost of the bid," he said, explaining that "If the contract length was similar to that offered to renewables, the cost to the consumer would be greatly reduced. We estimate as much as 20% between a 10 and 20 year contract." Stag Energy provides management services to Progress Power, a subsidiary of its power plant development business Watt Power. However, the capacity remuneration mechanism as proposed by the Department of Energy and Climate Change (DECC) has not yet been

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enshrined in law. "Specifics on the support offered under forthcoming capacity market legislation will impact whether investors choose a combined cycle or single cycle design, or even invest at all," he said. The Eye Airfield project is the first of several gas-fired project planned by Watt Power. "In addition to this project, we are looking to develop between 1,500-2,000MW of smaller gas power plants," McKerrow outlined. A formal consultation period for the Suffolk project is due to start in September with submission of a Development Consent Order application planned for January 2014. The gas-fired plant proposed for the Eye Airfield, a former World War II airfield 100 miles from London, will use gas from the national gas transmission system nearby and supply 299MW to the national grid. Progress Power is still assessing preferred gas and electricity routes.

Location of Stag Energy's project on Eye Airfield

GTP Journal

MARKETS – US

21 June 2013

Louisiana’s gas-fired electricity is “inexpensive” at $0.069/kWh – IER With power prices 30 percent below the US average, the predominately gas-powered state of Louisiana ranks second among US states for low-cost electricity, costing industry and consumers $0.069 per kilowatthour (kWh), statistics published by the Institute for Energy Research (IER) show. neither does it impose Louisiana Generation Shares, 2012 (Percent) standards that prevent emissions from new vehicles. The state government does however prevent utilities from decoupling their revenue from the sale of electricity and natural gas in order to increase revenues by selling less electricity and natural gas. There are signs that renewables may one day be regulated by the state, IER analyst suggested, referring to a pilot programme that requires producers to use more renewables. Source: EIA Electric Power Monthly, Feb 2013 Net metering from wind and solar has been possible in the state since 2005. Commercial and agricultural users are now production, producing 3,029,206 million cubic able to meter up to 300kW. The state does feet of natural gas, although production of natrequire that a small amount of biofuels to be ural gas in the state was higher in the early blended into gasoline and commercial and resi- 1970s. Since then it has been importing gas dential buildings must meet energy efficiency from overseas to meet demand. standards. Storage plays a role in making gas available to power producers during peak-demand in summer months, when gas is withdrawn to Oil and gas production help generate gas-fired generation to power Cheap shale gas, no cap Louisiana's natural gas resources, status as residential and commercial air conditioning location of the Henry hub pipeline network on emissions units. The availability of storage also ensures and 18 natural gas storage facilities make it a Another reason why power prices are low is gas can be exported to other power producers top US state for natural gas production and that Louisiana does not cap greenhouse gas distribution. Natural gas to feed the distribution in other US states that need to generate for emissions nor is it a member of a regional winter heating peaks. network is both imported and produced agreement to do so. The state does not reGas production in Louisiana takes place on domestically. quire utilities to make use of renewable enland and offshore at platforms, although proIn 2011, it ranked second in natural gas ergy sources in their generation mix, and duction has been interrupted in recent years by hurricanes: Katrina and Rita in 2005 and The cheap energy in Louisiana is also in high demand, Gustav and Ike in 2008. The state's multiple oil refineries and its oil and lion's share of demand comes from Louisiana's producing and refining operations mean gasoindustrial sector, including chemical plants and refineries. line is also cheaper there.

he abundance of shale and conventional gas production in Louisiana is the main cause for cheap gas and subsequent cheap power prices. Louisiana ranks second in the nation in natural gas production, behind Texas. In 2010, gas production in the state amounted to close to 2,500 trillion Btu of marketed natural gas, compared with merely 5.43 Trillion Btu of coal and 392.7 Trillion Btu of oil, according to the US Energy Information Administration (EIA). Gas covers more than half the Louisiana's energy needs, with the 3,409 GW of gas-fired generation accounting for a 57 percent share in the energy mix, while coal makes up a 21 percent (1,146 GWh) and nuclear makes up a 15 percent share (1,146 GWh). The share of renewables generation from hydroelectric and biomass is a combined 3 percent. The cheap energy in Louisiana is also in high demand, and lion's share of demand comes from Louisiana's industrial sector, including chemical plants and refineries. Half of Louisiana's households use natural gas as their primary energy source for home heating. EIA statistics show per capita energy consumption reached 894.4 million Btu in 2010, which is among the highest rates of per capita consumption in the US.

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Industrial Application of Gas Turbines Committee The IAGT Committee Symposium and Conference, October 2013, Banff, Alberta

21 June 2013

GTP Journal

REGULATION & POLICY

US upgrades social cost of carbon, favours use of gas for power generation The US president's Office of Management and Budget (OMB) has raised its estimate of the social cost of carbon emissions by 59% percent in a move likely to impact policy decisions favouring the use of natural gas over coal as a fuel for fossil power plants in the United States. he OMB updated predictive models gauge the monetised damages associated with increasing carbon emissions and include revised estimates of climate change's financial impact on coastal cities and agriculture. The models show a metric ton of carbon emissions emitted in 2015 will cost the American public $38 per ton up from revising previous estimates of $23.80/ton. Over the past three years some OMB estimates have increased by 120 percent, the Institute for Energy Research said. Cathy Landry, communications director for

Revised Social Cost of CO2, 2010 -2050 (in 2007 dollars per metric ton of CO2 - OMB

The Interstate Natural Gas Association of America (INGAA) told Gas to Power Journal, "It seems certain that natural gas would benefit from this, as it already has benefited from other trends in environmental regulation, both at the state and federal level." "On the environmental side, state renewable portfolio standards encouraging use of renewable fuels, and state clean air regulations have encouraged the switch from coal and oil to natural gas," she said.

Out with the coal, in with the gas Pre-existing regulations, such as the Clean Air Act enforced by the federal Environmental Protection Agency (EPA), are drivers in replacing existing, coal-fired plants with natural gasfired capacity. Landry said, "New upcoming federal EPA air rules – which are completely separate from this White House announcement and deal with other air emissions, not carbon, already had many companies announcing that they in-

tended to retire old coal-fired plants in the next few years. Many of the new generating plants to be built to replace the retired coal-fired plants will be natural gas powered." The EPA is now considering capping greenhouse-gas emissions from new power plants that would make building new coal-fired power plants prohibitively expensive by requiring use of CCS technology. There has been an on-going debate about clean air regulation in the US. Some have suggested policy makers and regulators might consider introducing a nationwide carbon-trading scheme, such as those of the countries in the EU Emissions Trading Scheme (EU ETS).

Price of gas still a capacity driver Cap and trade and emissions schemes and competitive price of shale gas have already caused American coal plants to switch to gas. "Competitive market factors – particularly the spot price discount of natural gas to coal last year – accelerated that switch," Landry commented.

Summer electricity peak demand down in 2013 for Northeast US and Eastern Canada – NPCC Coincident summer peak electricity demand in 2013 for the Northeast Power Coordinating Council (NPCC) region – New England, New York, Ontario, Québec, and the Canadian Maritime Provinces – is forecast to be down 330MW over the previous year, due to the region's drive towards conservation, energy efficiency and demand side response, NPCC latest report shows. uring the forecasted coincident peak load week, starting on 7 July, the NPCC estimates overall spare operable capacity will be 16 674MW. A portion of this capacity is, however, located in Québec and the Canadian Maritime Provinces where limits to transfer capacity mean that spare operable capacity for the entire NPCC area will effectively only be 12 555MW, or about 12 percent of peak demand.

Spare capacity pegged at 16,674MW starting July Overall, coincident summer peak for the region is estimated to come in at 107,052MW, while non-coincident summer peak is forecast at 110,635MW. "The forecast NPCC coincident peak demand for the summer, which is the simultaneous peak demand for the entire region, is about 0.3 percent lower than last summer's forecast, primarily due to the effectiveness of ongoing con-

servation, efficiency and demand response programs, despite a rebounding economy," said Edward Schwerdt, President and CEO of NPCC. At times of peak demand, New England has an estimated 701MW of active demand resources available, consisting of real-time demand response and real-time emergency generation which can help mitigate an actual or anticipated capacity deficiency. In addition, the state also has 1150MW of passive demand resources such as installed measures on enduse customer facilities. The amount of energy efficiency, meanwhile, is dependent on capacity supply obligations in the Forward Capacity Market.

Capacity deemed ‘adequate’ to guarantee supply security The NPCC expects the region to have an adequate supply of electricity over the entire summer period, even during periods of severe operating conditions and extreme weather.

"The NPCC assessment uses probabilistic methods to evaluate thousands of simulated weather and system conditions. I want to emphasize that the assessment includes the consideration of unexpected and random events," stressed Schwerdt. The report states that the implementation of a "limited number of operating procedures and programs" to keep electricity supply and demand in balance would only be required if extreme weather conditions occur in concert with severe system conditions.

TECHNOLOGY & INNOVATION

GTP Journal

21 June 2013

Sleeping giants: Dehumidification is key to preserve mothballed plants Dehumidification is key for keeping a mothballed power station operationally ready while protecting it from corrosion or degradation during its temporary closure, says Carl Webb who worked with Andrews Sykes when Barking Power Ltd. temporarily closed one 500MW unit at its gas-fired power plant. emporary closure does not merely involve 'switching everything off and turning out the lights'," he told Gas to Power Journal. Webb was involved in the process of Barking Power closing one of two units at its 1,000- megawatt power station in east London in mid-2012. In accordance with OEM recommendations, preserving the atmosphere by maintaining a low relative humidity inside vital and sensitive equipment such as generators, gas turbines, steam turbines, and boilers is essential, he said, explaining "Managed dehumidification provides successful protection, and ensures the power station will be fully operational once re-opened."

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Gas plants temporarily shut to use up coal stocks Compliance with European pollution rules (e.g. Large Combustion Plant Directive) is forcing closure of many of Britain's coal-fired power stations by 2015, according to Webb. "While coal stocks are being used up, gas power stations are being temporarily closed, as it makes financial sense. However, they need to be ready for full reopening when the time is right," he stressed. Temporary dehumidification is used to place facilities in to a controlled, dormant state while avoiding large capital expenditure outlay at the time of mothballing and no corrosion or degradation issues to deal with at a later date. The consequences of not using dehumidification could be "catastrophic", Webb said,

Combined Cycle at Barking Power Station

Barking Power Station at night

warning Plant could become "unserviceable or ruined", causing millions of pounds in repairs; and operational delays could lead to "nationwide energy shortages."

Why desiccant dehumidifier units? Gas-fired power stations are damp environments when operational, but uncontrolled moisture, above 30% Relative Humidity (RH), can cause widespread damage to plant during mothballing. To avoid this, desiccant dehumidifier units are deployed; using moisture-adsorbing materials, such as silica gel. These are most suitable when very low RH is needed as desiccant materials have a high capacity for adsorbing water vapour – up to 10,000 cubic metres per hour.

Nitrogen – a suitable alternative An 'alternative' to deploying dehumidifiers is to use nitrogen gas to fill areas to be mothballed, according to Webb. He was quick, however, to mention the disadvantage of hydrogen such as its limited reach on site as well as health and safety risk of nitrogen as an inert gas.

Site survey Operators of gas power stations usually know that controlled dehumidification needs to happen 4-5 months in advance of temporary shutdown, so Webb suggested dehumidifier hire through a specialist should be arranged “in good time”. “Once the decision to mothball a gas power station has been taken, a site survey is conducted by a dehumidification expert, during which required RH is assessed. The manufacturer’s manual usually has strict guidelines about specific RH recommendations,” he explained. The survey will address Health & Safety issues, ensuring that although there will be fewer staff on site, there are no electrical shock, fire or other such health and safety hazards. It will also address the risk of water forming pools in power stations which mean dehumidifier units will immediately need to work at maximum capacity and power consumption. “Removal of laying water first is wise, therefore,” Webb said. In particular, pipework may need to be blown through with dry air before units are installed, which ensures that

21 June 2013

GTP Journal

dehumidifier units can work efficiently from day one. It also needs to be assessed whether there enough power and whether it can be accessed in the necessary locations, he stressed, warning “at power stations, 125 amp isolators are often a problem.”

MARKETS

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Purchase vs. hire Outright purchase can sometimes be perceived as a more cost effective alternative to long term hire – particularly when exact timescales are unknown. However, hire is usually a better solution for a number of reasons but primarily because it does not tie up valuable capital, at a time when the parent company is looking to make maximum savings. It also ensures that the most suitable

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Carl Webb , Andrews Sykes

combination and highest specification of units are installed, serviced and maintained: where units are purchased rather than hired, the necessity for a separate maintenance contract is an often overlooked cost. The consequences of not using dehumidification could be catastrophic. Plant could become unserviceable or ruined, meaning millions of pounds in repairs; and operational delays could lead to nationwide energy shortages. Using temporary dehumidification to place facilities in to a controlled, dormant state, will ensure there will be no large

Carl Webb is Specialist Hire Director at Andrews Sykes. He worked with Barking Power to temporarily close one 500MW unit at its gas-fired power plant. www.andrews-sykes.com

E.on’s Power-to-Gas unit injects hydrogen into gas grid for first time E.on's Power-to-Gas (P2G) unit, installed at a plant in Falkenhagen, Germany, has injected hydrogen into the natural gas grid for the first time. During the 3-hour functioning test over the weekend, the unit produced 160 cubic meters of hydrogen for injection into the gas pipeline system. he start-up of the P2G unit "marks the first time E.on has successfully implemented all stages of the process, from receiving electricity to injecting hydrogen," the company said. The electricity to run the P2G unit is supplied by a nearby wind farm. The electricity runs electrolysis equipment that transforms water into hydrogen which is injected into the regional gas transmission system. The hydrogen hereby becomes part of the natural gas mix and can be used to generate electricity or heat at a later stage.

Full commercial operations start in late August The P2G unit at Falkenhagen is scheduled to "enter into full service" in late August, E.on announced.

“While coal stocks are being used up, gas power stations are being temporarily closed, as it makes financial sense. However, they need to be ready for full reopening when the time is right,"

Humidistats Given that fewer personnel will be on site during the mothballing of a power station, it is therefore vital that dehumidification is operational with minimum manual intervention and monitoring. Humidistats perform this task in a similar manner to the way in which thermometers are deployed to monitor and manage temperature. They ensure units are operational only when RH rises above threshold levels (usually around 30 per cent) and are equally important in minimising running costs and optimising energy consumption.

Once operational on a commercial basis, it will use surplus electricity from renewable energy sources to produce about 360 cubic meters of hydrogen per hour. The aim of the installation is to "harness renewable-source electricity that otherwise could not be fed into the grid," the operator said referring to an oversupply of wind power across wide parts of Germany as a result of subsidies and favourable feed-in tariffs under the 'Energiewende' policy. "The region's wind farms already frequently produce more electricity than the local grid can handle," according to the operator. E.on installed the unit in Falkenhagen because the location is deemed "ideal". The region has a high output of wind power, the necessary power and gas infrastructure is already on hand, and E.on has a control center nearby.

capital expenditure outlay at the time and no corrosion or degradation crisis to deal with at a later date.

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21 June 2013

GTP Journal

TECHNOLOGY & INNOVATION

Rolls Royce upgrades design of its NEWS Trent60/DLE gas turbine NUDGES Rolls Royce has been working alongside power plant operator Vattenfall to upgrade the design of its Trent60/DLE which led to a redesign for this model, Dr. Andreas Goetz, Chief Engineer, Trent 60 GT, Energy at Rolls-Royce Canada said in a presentation at this weeks' VGB Congress. ver the course of several years starting in 2007, Vattenfall and Rolls Royce have jointly investigated a NOX emissions problem with a turbine operating at a district heating plant in Hamburg. "It was a joint venture between the manufacturer and operator that upgraded the design of the Trent60/DLE," Goetz said. The Trent60/DLE at the plant is a high efficiency rated aeroderivative gas turbine in the 60MW class. The Trent 60 engine on a test bed in Montreal, Canada

Hamburg district heating plant A problem was encountered at Trent60/LE installed in a heating island network, consisting of three power plant units at Vattenfall's district heating plant in Hamburg. The plant produces about 350MW of thermal energy. The plant units were remotely controlled. The number of the projected start-ups per engine per year used to be about 200, and for heat production it was required to have short standstill times. "The machine is started up three times a day, and since the machine is also used in minute reserve area, we want to have short start up and short generation times of a maximum of 10 minutes, " Goetz said, explaining "We are able to keep planned operation time for each engine and year 3,500-5000ch." The turbine was commissioned on site in 2007, however, during the process of commissioning Rolls Royce encountered problems with the NOX emissions levels. It determined the cause was a small amount of combustor chamber damage of the HP, which was made

Iran, Armenia extend gas, electricity swap deal June 19 – Iran and Armenia have extended a gas swap deal under which Iran receives electricity from Armenia produced mainly based on natural gas supplied from Iran. By importing Iranian gas, Armenia seeks to reduce import dependence from Russia.

MHI-MS, Tecpro strike licencing agreement in India

out of nickel alloy a component made of C1023, with cooling air holes. In the end Rolls Royce exchanged the unit for a component made of C263. Rolls-Royce redesigned the cooling air hole placement, and also changed its manufacturing technique to water-jet drilling, noting that micro-cracks in metal were created by laser cutting.

Successful upgrade During the upgrade works, Rolls Royce exchanged and operated a lease engine in three days. An integrated test run for the total CCHP plant was completed by 2009. Despite similar problems with its other turbine in 2009, Vattenfall worked with Rolls Royce to keep the plant's running times up. An agreement was reached to reduce performance to 80% of nominal load until 2010, which helped to keep the plant in operation, Goetz said. Vattenfall's Hamburg portfolio was inspected three days ago, in 2013, and the inspection was successful.

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“The machine is started up three times a day, and since the machine is also used in minute reserve area, we want to have short start up and short generation times of a maximum of 10 minutes...We are able to keep planned operation time for each engine and year 3,500-5000ch.”

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Dr. Andreas Goetz, Chief Engineer, Trent 60 GT, Energy at Rolls-Royce Canada

June 19 – Mitsubishi Heavy Industries Mechatronics Systems (MHI-MS), a group company of Mitsubishi Heavy Industries (MHI), has struck an agreement with India's Tecpro Systems under which MHI-MS is to provide electrostatic precipitator (EP) technology to the Indian licensee. The licensing arrangement explores of local demand for high-performance EPs in India, which are now marking growth in tandem with India's increasing number of new coal-fired power plants, MHI said.

GE moves machines to the Cloud June 19 – GE announced today the first big data and analytics platform robust enough to manage the data produced by large-scale, industrial machines in the cloud. The platform will benefit major global industries including aviation, healthcare, power production and distribution, transportation and manufacturing, it said.

LM6000 achieves over 26 million operating hours June 19 – GE today announced a global technology milestone as it is celebrating "20 years of powering progress around the world" with its LM6000 aeroderivative gas turbine that achieved more than 26 million operating hours. The technology of the LM6000 is based on GE's CF6-80C2 aircraft engine; and GE said it has shipped more than 1,000 LM6000 units to customers globally, gaining "our times more experience than all other competing gas turbines in its class combined".

K+S KALI’s new gas turbine unit reaches 88% efficiency June 18 – E.on's recently commissioned gas turbine unit on the premises of K+S KALI in Philippsthal, Germany, reaches 88 percent efficiency. The operator said the modernised complete power station has now entered the

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PROJECTS & FINANCE

phase of expanded trial operation. Full commercial operation is due to start in September.

ABB uses 'dry air' to insulate units up to 12kV June 18 – ABB, the Swiss power and automation technology group, has launched a new SafeRing Air portfolio using 'dry air' as the insulation medium for applications up to 12 kilovolts (kV). The switchgear design is based on a completely sealed system with a stainless steel tank containing all live parts and switching functions, the company said.

German investor sentiment nudges up: ZEW June 18 – German investor sentiment has nudged up in June, with hopes for a gradual recovery driven by chemicals, construction and mechanical engineering sector, shows a ZEW survey published today. "The German economy is likely to gain momentum in the second half of 2013," the economic institute forecast. The survey results indicate, however, that the economic recovery will "proceed timidly," it cautioned.

ABB Symphony Plus installed in 25,000MW power plants in 2 years June 14 – 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 generating 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 Delta Power June 13 – 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 projects in Nigeria for which it will supply three SGT5-2000E gas turbines, three SGen5100A generators, all the electrical systems and the SPPA-T3000 control system.

21 June 2013

Mobil’s new DTE 932 GT gas turbine oil reduces risk of varnish ExxonMobil has launched Mobil DTE™ 932 GT, a gas turbine oil designed to reduce the risk of varnish with a view to help improve the operational reliability of turbines and increase power output. "Varnish can have a highly detrimental effect on gas turbine operations" Kirill Chervyakov, Industrial Marketing Advisor, ExxonMobil Fuels and Lubricants said when showcasing the oil at PowerGen Europe in Vienna. eposits of varnish tend to build up during gas turbine operation and stick to various interior surfaces, blocking openings and filters which ultimately reduces the electricity output and operational reliability of the turbine. "Mobil DTE 932 GT offers the potential for greatly reduced varnish formation," he stressed. During testing, Mobil DTE 932 GT delivered additional critical performance benefits such as high temperature performance, deposit control and excellent foam control and air release. According to ExxonMobil, the new gas turbine oil meets or exceeds the standards set for General Electric (GE) frame 3,5,6,7 and 9 turbines. SHC Pegasus, ExxonMobil's other natural gas engine oil, has also been approved for use in GE Waukesha APG 1000 engines. GE cited

good results for engine component wear and deposit control as well as fuel efficiency improvement. Mobil SHC Pegasus can reduce fuel consumption by up to 1.5 percent and increase oil drain intervals from four to eight times that of conventional gas engine oils. "The technology used in Mobil SHC Pegasus helped raise fuel efficiency by up to 1.5 percent compared to Mobil Pegasus 1005 and 805 series when tested in standard natural gas engine applications under controlled conditions," Chervyakov said. The fuel efficiency of Mobil SHC Pegasus, however, relates solely to the fluid performance when compared to ExxonMobil's standard SAE 40 natural gas engine oils, whereby efficiency improvements vary based on operating conditions.

Siemens completes Knapsack II CCPP ahead of schedule Siemens Energy has completed the Knapsack II combined-cycle power plant (CCPP) with a capacity of 430-megawatt on behalf of Statkraft Markets six weeks ahead of schedule. iemens built the entire power plant, located in Hürth near Cologne, Germany, as a turnkey project and delivered the main components, including an FClass gas turbine as well as a steam turbine, generator, and heat recovery steam generator. The Knapsack II power plant is a single-shaft unit in which the gas and steam turbines are arranged on one shaft and drive the same generator. Such plants offer economic advantages due to lower investment costs, along with a high degree of operating flexibility with short run-up and shutdown times. Considering the plant's efficiency of 59.2 percent and an electrical capacity of 430MW, it is considered to be one of the most modern and environmentally friendly of its type in Europe. "The Knapsack II power plant is a highly modern facility that stands out thanks to its maximum flexibility and environmental compatibility. Due to its high efficiency, the CO2 and nitrogen oxide emissions are very low. In

addition, when in hot-start mode, the power plant can be run up to full load in just a few minutes and thereby compensate for fluctuations in electricity generated by wind turbines and solar stations," said Lothar Balling, the head of Gas Turbine Power Plant Solutions at Siemens Energy. Flexible and reliable CC plants such as Knapsack II are necessary and capable to support the Germany's new Energiewende energy policy, Balling stressed. "However, it does have to adapt to market conditions in order to ensure that the investments are amortized over time.

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PROJECTS & FINANCE

SST-500 GEO steam turbine taps heat from the earth To better tap geothermal energy, Siemens Energy has developed a new steam turbine – the SST-500 GEO – as a single-casing, double-flow condensing model for plants in the power range up to 120 megawatts (MW). “The SST-500 GEO will enable us to participate in the geothermal growth we currently see in regions such as the eastern coast of Asia, the western coast of the Americas and parts of Africa,” said Markus Tacke, CEO of the Industrial Power Business Unit of Siemens Energy. e announced that Siemens will introduce the new turbine at the GeoPower Indonesia 2013 conference in Jakarta. The SST-500 GEO steam turbine follows the SST-400 GEO turbine, which was introduced in the autumn of 2011. It can be deployed in geothermal power plants with a varying range of steam conditions as it is designed for both single and double flash applications. As a derivative of the SST-500 and SST-600 turbine families, it combines the proven casing and auxiliaries of the Siemens SST-500 and SST-600 steam turbines with the geothermal features and steam path technologies developed, tested and applied by Siemens Energy Services. "With the SST-500 GEO we will expand our portfolio in the range of steam turbines for

geothermal power plants," said Tacke. "We are now able to offer a family of turbines that is based on our unique know-how as a world leading manufacturer of industrial steam turbines as well as on our extensive experience in the geothermal after-market. Power generation from geothermal energy is a comparatively mature technology. In contrast to other renewable energy sources, geothermal energy can be used around the clock, regardless of the time of day or weather or climatic conditions, such as solar radiation, clouds and wind strength, enabling high availability base-load power plants to utilize this natural energy source in many parts of the world. At the end of 2012, the global installed power generating capacity of geothermal power plants was more than 11 gigawatts (GW), and further strong growth is expected. Geothermal resources most often are found in areas with high seismic activity which must be considered in the turboset design. The turbines themselves frequently face highly corrosive steam which consumes conventional materials. Steam quality is low but with large volume flows. These challenging physical conditions require specially adapted steam turbines. "Siemens has been active world-wide in the geothermal after-markets for over 20 years,"

added Werner Altmeyer, Siemens' sales manager responsible for the industrial steam turbine business. "During that time major refurbishments, including supply of new rotors, blade redesign and replacement of complete steam paths have been carried out on machines supplied by the major geothermal turbine manufacturers. For the design of the SST-500 GEO, we exploited that experience, along with our expertise as a leading industrial steam turbine manufacturer." Each SST-500 GEO turbine is designed uniquely for particular resource conditions by adapting the blade path within the standardized casing. Like all Siemens geothermal turbines, the SST-500 GEO is designed with an impulse type steam path, which due to the robust design has been proven by extensive experience in the after-market. The materials of all steam path components are specifically selected according to the particular conditions and the specific steam chemistry of the application to resist corrosion and corrosion-related cracking. The SST-500 GEO is suitable for live steam temperatures up to 250°C, with steam pressures up to 15 bar absolute, and includes resource- and turbine-stage-specific high-grade materials as well as special features for moisture removal at every stage.

GE’s LM6000 reaches over 26 million operating hours GE is celebrating “20 years of powering progress around the world” as its LM6000 aeroderivative gas turbine that achieved more than 26 million operating hours. its class for the last 10 years. he technology of the LM6000 is based Since its commercial introduction, the on GE's CF6-80C2 aircraft engine; and LM6000 engine and package design has continGE said it has shipped more than 1,000 LM6000 units to customers globally, gain- ued to increase its capacity to meet a wide range of customer needs through technology developing "our times more experience than all other ments like 15 parts per million Dry Low NOx competing gas turbines in its class combined". combustion, spray intercooling for power enhancement, fiber optic distributed controls and Fuel flexibility, 5-minute fast off-gas/liquid fuel flexibility including the starts capability world's first sugarcane-based, ethanol-fired Package flexibility, diverse fuel capabilities power plants operating today in Brazil. and advanced emissions technology enable the LM6000 to serve a broad spectrum of energy users. The turbine offers 40 to more than 50 Upgrade of LM6000 launched megawatts of power with up to 42 percent effiin mid-2011 ciency and 99 percent reliability in a flexible, GE said it introduced the latest enhancements compact package design for utility, industrial of its proven LM6000 product line in June of and oil and gas applications. With fast ramp 2008 and September of 2011, launching the rates, demonstrated 5-minute fast starts, cyFlexAero LM6000-PG with a single annual cling and load-following capability, high efficombustor and its dry low emissions equivaciency and modular maintenance, the LM6000 lent, the FlexAero LM6000-PH. The enhancehas been one of the top selling gas turbines in ments include increased power and exhaust

energy in the same size gas turbine, with the FlexAero LM6000-PH offering emissions control with no water usage – an annual savings of 26 million gallons of water per machine. The LM6000 gas turbine is part of GE's ecomagination portfolio, with products and services having demonstrated both improved economic value and environmental performance. Aeroderivative gas turbine technology is part of the GE's portfolio of innovative distributed power solutions, which also includes Jenbacher and Waukesha gas engines and Clean Cycle waste heat recovery solutions.

The future role of Gas to Power in Germany Tuesday 2nd July - Wednesday 3rd July 2013, Düsseldorf 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

Headline Sponsor:

In the run-up of the September general election, debates on Germany's future power market design are at centre stage. Profitability, operational dispatch of gas-fired plants and commercial viability of existing fossilplants and investment into new capacity hinges on capacity mechanisms, the outcome of 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?

Gold Sponsors:

Confirmed speakers :

Franzjosef Schaffhausen, Head of Department for Energy, German Federal Environment Ministry Dr. 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.ON Mike Diekmann, Director, Head of Strategy/ Business Development, VNG Dr. Jürgen Tzschoppe, Senior Vice President Continental Energy, Statkraft Markets Bernd Goedde, Head of Options and Structures Trading, Vattenfall Energy Trading Dr. Karsten Klemp, Head of Power Stations, RheinEnergie AG, Cologne Dr. Oliver Weinmann, Chief Executive Officer, Vattenfall Europe Innovation

Silver Sponsors:

Dennis Volk, Gas, Coal and Power Markets Division, International Energy Agency (IEA) Olga Mikhailova, Advisor Markets Unit, Eurelectric Dr Fiona Riddoch, Managing Director, COGEN Europe Dr. Marco Nicolosi, Managing Director, CONNECT ENERGY ECONOMICS GmbH Mike Wilks, Director, Pöyry Management Consulting Reinhard Rümler, Senior Manager, Energy Advisory Practice, PricewaterhouseCoopers Frank Reichenbach, Manager, The Advisory House Tim Rudolph, General Manager – Energy Business, Rolls-Royce Michael Kruck, Head of Sales GT Power Plant Solutions NW-Europe, Siemens AG, Energy Sector Klaus Payrhuber, Senior Product Manager Gas Engines, GE Power & Water Shonodeep Modak, Global Manager Marketing, GE Power & Water Markus Rieck, Country Sales Director Germany, ALSTOM Deutschland AG Swift Tarbell, Area Manager Europe, PW Power Systems Richard S. Tuthill, Manager of Advanced Engine Programs, Pratt and Whitney

Bronze Sponsors:

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

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

Energy Policy / Regulation Power Generation Power Plant Management Grid Development Business Development Regulatory Economics Corporate Strategy

Project Management and Development Carbon Reduction / CCS Programmes CCGT Technology/Operations/ Maintenance Gas Turbine Manufacture Fleet Management Asset Management and Optimisation Turbine Engineering

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

PARTICIPATE | SPEAK | SPONSOR Save the date in your diaries and contact us to register your interest: Narges Jodeyri Email: narges@gastopowerjournal.com Phone: +44 (0)20 7017 3406