Pima 13 by Pimagazine Asia

PIINSIDER POWER

A S I A’ S L E A D I N G P O W E R R E P O R T VOLUME 2, ISSUE 6

SOUTH KOREA GOALS: INNOVATION, INTEGRATION, INDEPENDENCE

PLUS • South Korea Overview • Nuclear Power In Asia • Smart Grid in South Korea

FEATURES INSIDE: Water Treatment at North Bangkok | Andhra Pradesh Capacity Addition | Veolia and Desalination | Fuel Cells, Renewables and the Wind business in South Korea | Forced Outages PI_NovDec_Cover_Final.indd 1

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welcome Welcome to the final issue of Power Insider Asia for 2012.

In this edition, we take a look at a country that knows how to make the best of what it’s got – South Korea. South Korea’s energy generation story starts as a familiar tale; developing Asian nation attempting to get back on their feet despite years of war, political turmoil, and crippling poverty. However, this plucky nation is one of the success stories, having developed a flourishing economy that is now the 12th largest in the world.

Contact us: Editor: Charles Fox Assistant Editor: Rachael Gardner-Stephens Journalist: Robin Samuels Creative Director: Colin Halliday Sales Director: Jacob Gold International Sales Manager: Sam Thomas Account Manager: Daniel Rogers Sales Executive: Kayleigh Jeanes Accounts & Customer Service Manager: Katherine Stinchcombe Managing Director: Sean Stinchcombe SKS Global Limited Kingswood House South Road Kingswood Bristol UK BS15 8JF E: info@sks-global.com W: www.pimagazine-asia.com W: www.sks-global.com T: +44 (0) 1179 606452 F: +44 (0) 1179 608126 SKS Global Power Insider Asia magazine is published bi-monthly and is distributed to senior decision makers throughout Asia and the Pacific. The publishers do not sponsor or otherwise support any substance or service advertised or mentioned in this book; nor is the publisher responsible for the accuracy of any statement in this publication. Copyright: the entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electric, mechanical, photocopying, recording or otherwise without the prior permission of the copyright owner.

South Korea’s energy supply comes primarily from fossil fuels, which they are almost exclusively forced to import. This makes South Korea alarmingly reliant on other nations, and at the mercy of fuel price fluctuations and geopolitical risks. Despite 100% coverage, grid operators KEPCO and Korea Power Exchange have come under huge strain in the past month, with the shutdown of 3 nuclear reactors following the ongoing component certification row. The response to this fallout was instantaneous with Kim Joong-kyum, long standing CEO of KEPCO, tendering a resignation. This has raised significant capacity shortage issues with blackouts expected over the demanding winter period. Korea is making plans and laying foundations to move forward into a new era of power generation. The Ministry of Knowledge Economy are providing exciting support measures for growth, and in January the Renewable Portfolio Standard was introduced. We take a close look at the countries heavy investment in green thermal generation parks, development of renewable energy solutions through 78 wind, solar, tidal & fuel cells, expansion of the nuclear program, coupled with the groundbreaking headway being made in the smart grid sector. This issue of Power Insider Asia will take a look at South Korea’s innovative approach to developing their power industry. We also have an exciting outlook on nuclear power in56 Asia, compiled with some key industry experts from the IAEA, WNA and KEPCO. This issue will also include tons of great interviews with the likes of CAT, EGAT, Cummins, Veolia and many more! It has been another exciting year for the Asian power sector as we head into a critical period. Please contact our team to find out what is happening in 2013. From all of the PI Magazine Asia team we wish you many happy returns and prosperity for the New Year. All the best

Charles Fox Editor

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BIOGAS PROJECT FINANCING SUCCESSFUL, SUSTAINABLE SUPPORT

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CONTENTS 6

News

Reducing reliance on imports: South Korea Overview 10 Investing in Renewable Korea

Smartening up South Korea

Making Dreams Reality: Fuel Cells South Korea

UTC Pioneering Fuel Cell Technology

South Korea Wind Review

Protective Coatings

Nuclear Power, the time is right

Caterpillar power project solutions

Andhra Pradesh capacity addition

DEIF growing with the market

78 Treatment at North Bangkok Water

Creating Water Solutions for the Power Industry 66

Forced Outages

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news desk

KEPCO’s CEO Kim Joongkyum tenders resignation in South Korea nuclear scandal The big news of the past month has been in South Korea, where a probe into how thousands of parts for its nuclear reactors were supplied using forged safety documents, as regulators are in the process of inspected all 23 of the country’s facilities - a move that could test public support for the industry and threaten billions of dollars worth of exports. Two reactors remained shut on Oct. 7, and five others are closed for maintenance, or through other glitches, raising the prospect of acute winter power shortages. The nuclear industry supplies close to a third of South Korea’s electricity. The authorities have stressed that the parts - such as fuses, switches and heat sensors -- are non-crucial, and there is no safety risk. Kim Joong-kyum, president and CEO of power utility Korea Electric Power Corp. (KEPCO), which owns the operator of the nation’s nuclear plants, tendered his resignation for what KEPCO officials said were “personal reasons”. A second nuclear official, appointed in June after a series of closures at other nuclear plants, also said he would resign once the investigations over the latest lapses were completed.”I am sorting out what happened in the past. I will resign at any time once this is settled,” Kim Kyun-seop, head of Korea

Hydro & Nuclear Power, the KEPCO subsidiary that runs the country’s nuclear industry and reviews equipment certification, told a parliamentary hearing. The closure of the two reactors in Yeonggwang county, 300 km (186 miles) southwest of the capital Seoul, and concerns of more widespread potential problems with a large and growing nuclear program, come after last year’s nuclear disaster in neighbouring Japan. South Korea’s Nuclear Safety & Security Commission said it set up a team of 58 private and public investigators to inspect all the country’s

reactors to see if they were supplied with parts with forged certificates. Eight companies submitted 60 false certificates to cover more than 7,000 parts used in the two reactors between 2003 and 2012, and Economy Minister Hong Suk-woo told parliament that most of the documents, which purported to come from certifying body UCI, were forgeries. Public support for nuclear power remains strong in South Korea, even after the Fukushima disaster last year, and Seoul plans to have added another 11 reactors by 2024. The investigation had not prompted the United Arab Emirates (UAE) to reconsider its 2009 order for some $20 billion worth of nuclear plant and construction work contracted to a KEPCO-led South Korean consortium, a spokesman for the Emirates Nuclear Energy Corp. told Reuters in Dubai. Also, Byun Jun-yeon, an executive vice president at KEPCO in charge of reactor exports, said the fraud would not damage the utility’s export drive.”The effects of this development on existing contracts like the UAE will be insignificant,” he said. “From what I understand, the parts that were fraudulently certified were not key to the function of the nuclear reactor, rather they were for general usage in non-critical aspects.

company news from around the world

Ming Yang enters cooperation with Reliance for renewable energy in India

China Ming Yang Wind Power Group Limited announced that Guangdong Mingyang Wind Power Industry Group Limited a subsidiary of Ming Yang,

has entered into a financing framework agreement with Reliance Power Limited, and China Development Bank Corporation, a government policy bank wholly owned by China’s central government, under which CDB is expected

to act as the coordinating bank and lead potential lender for renewable energy projects in India to be jointly developed by Ming Yang and Reliance Power. Ming Yang had earlier revealed that it has

signed a Memorandum of Understanding with Reliance Power to co-develop up to 2,500MW renewable energy projects in India within three years. Under the MOU, Ming Yang is expected to provide total

engineering, procurement and construction solutions for the projects and Reliance Power is expected to play a supporting role in facilitating the projects in addition to providing local market support.

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Coal India Ltd looking for JV to develop a power project Coal India has resumed hunt for a joint venture partner for its maiden 1,600 mw thermal power project it plans to set up in Odisha through a special purpose vehicle, Mahanadi Basin Power Ltd (MBPL). Under the revised plan, it would offer a lesser 51% stake from the earlier 74% in the SPV to the partner who would be selected through a tariff-based international competitive bidding process to be initiated soon.CIL would now hold a 49% stake in the SPV through its subsidiary Mahanadi Coalfields Ltd (MCL). “A notice for pre-request for qualification has just been floated and a meeting of the prospective bidders would be held on December 11,” an official of MCL recently said. The minimum net worth criteria for prospective bidders have been fixed at Rs2,000 crore with an annual turnover of Rs1,920 crore. The bidders must have prior experience of building thermal power projects.

Under the Framework Agreement, being the coordinating bank and lead potential lender, CDB will act as the lead arranger to coordinate the provision of financing facilities to Reliance Power to support future renewable energy projects. The amount, terms and

conditions of the financing facilities will be subject to the potential lenders’ respective internal approval procedures and further assessment of the projects. “We are very pleased to work with Reliance Power and have CDB’s support for our renewable projects.

MCL is overseeing the selection process for the JV partner in the SPV. The 2×800 mw pit-head super critical power plant has been planned at the Basundhara-Garjanbahal coal mines area of Sundergarh district in order to access customers near the mine where there are plans to produce about 20 million tonne of non-coking coal by 2017. In case MBPL decides to raise debt, the project would be financed through debt and equity in the maximum ratio of 70:30, the project document said. The JV partner would have to secure the debt for the project. “MCL would have the right to nominate and appoint two nominee directors on the Board of the SPV out of which one of the directors would be appointed as the chairman. The JV partner shall have the right to nominate and appoint two nominee directors out of which one of the directors would be appointed as the MD,” the document said. Power purchase agreement would be entered between MCL and MBPL for 25 years with most of the power to be sold to the Odisha government. When the RFQ was floated about a year ago, domestic firms including NTPC, CESC, Adani, GMR, GVK, Lanco Infratech, and also foreign players such as Israel Electric Corp and AES had expressed interest.

This is a big step forward for all parties involved, aiming at facilitating the strategic cooperation in renewal energy development between China and India. India presents a strong growth potential for us, which is substantially reflected by Reliance Power’s project pipeline.” said Mr.

Chuanwei Zhang, Chairman and Chief Executive Officer of Ming Yang. “Together with the proposed financial support by CDB, Ming Yang’s strong expertise and innovative total solutions will be expected to help us expand more new business opportunities overseas.”

Suez aiming to make a splash in China

Suez Environnement, plans to enter China’s desalination market by tendering projects in two coastal cities in the next two to three years, said the company’s chief executive officer. “We are preparing to tender desalination projects in Tianjin municipality and

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NEWS DESK SUMITOMO OSAKA CEMENT DECIDES ON BIOMASS

GVK GET APPROVAL FOR RATTLE HYDRO PROJECT IN INDIA India’s proposed 850-MW Rattle hydropower for renewable energy development jointly project has been awarded environmental approval by the Apex Committee of the Union Ministry of Environment in Delhi, HydroWorld. com has learned. The Rattle hydroelectric plant, to be constructed under a build, own, operate and transfer (BOOT) arrangement in India’s mountainous Jammu and Kashmir state, will be constructed by GVK Power Infrastructure Limited. The project is aiming to be completed by 2017, though the size was increased from its original 690 MW of capacity following revised water flow studies by India’s Central Water Commission. GVK will hold control of the project for 35 years as per the BOOT arrangement, after which point it will be transferred to Jammu and Kashmir. SOFTBANK Group announce exciting plans for Mongolia and Asia supergrid SB Energy Corp, a SOFTBANK Group company engaged in renewable energy business, has announced it has established a company, Clean Energy Asia LLC,

with Newcom LLC, a Mongolian investment company. Clean Energy Asia LLC will conduct feasibility study on the construction of renewable energy power plants based on surveys of wind conditions and amount of sunlight at a 224,00ha* area at the Gobi Desert in Mongolia where Clean Energy Asia LLC holds a right for its use, taking advantage of its favourable wind and sunlight conditions. Clean Energy Asia LLC will also search and select sites suitable for renewable energy power generation in addition to this 224,000ha area. The establishment of Clean Energy Asia LLC marks an important first step toward implementation of the Asia Super Grid concept, which aims to supply power in Asian countries by connecting power networks with submarine cables. In order to supply power to neighbouring countries where drastic increase of power demand is expected as well as to fast growing Mongolia, Clean Energy Asia will promote building renewable energy power plants and facilitate the penetration of renewable energy.

Sumitomo Osaka Cement Co., a Japanese producer of energy fuelled by organic materials, plans to cut its dependence on coal by using more biomass such as wood chips, a senior executive said. “As an industry that consumes a lot of power, we need to take measures to promote energy conservation,” Senior Corporate Executive Officer Masafumi Nakao said in an interview at the company’s Tokyo headquarters. “Wood chips are now in the spotlight as a fuel source.” Using more biomass is one way Japanese companies are seeking to reduce greenhouse gas emissions after the Fukushima Dai-ichi nuclear accident last year. Japan introduced a feed-in tariff program in July to provide incentives for companies that produce electricity from clean sources. Sumitomo Osaka Cement, which currently gets about a third of its fuel from sources such as wood and industrial waste, plans to meet 40% of its needs from alternatives within three years and 50% in the longer term, Nakao said. It burns a mix of wood chips and coal to make electricity at its Tochigi and Kochi plants. Japan’s fixed-premium rates for renewables are

COMPANY NEWS FROM AROUND THE WORLD Qingdao in East China’s Shandong province,” Jean-Louis Chaussade, CEO of the Parisbased Suez Environnement, was quoted as saying. During a recent visit to several of the company’s projects in Australia,

including the world’s largest desalination plant at Wonthaggi, Melbourne, Chaussade said the company has a plan to become a major player in China by helping the country turn seawater into drinking water.

He refused to reveal the details of the two pending projects in Tianjin and Qingdao but confirming that they are both small- to medium-sized projects with capacities to produce 100,000 to 200,000 cubic metres of drinking water

per day. The company’s large Wonthaggi project is able to produce 450,000 cu m per day. He said the company would probably see the first desalination project in China in the next two to three years, though no timetable

for the tendering of the two projects in Tianjin and Qingdao is confirmed. The company reported global revenue of roughly 11.12 billion euro ($14.58 billion) for the first three quarters of this year, showing

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ITRON TEAM UP WITH PANASONIC FOR A SMART MOVE IN JAPAN Itron, Inc. announced that it has formed a strategic alliance with Panasonic Corporation to develop a smart meter platform tailored to the Japanese market. The companies will utilize their combined global experience and local presence to offer a smart metering solution that will meet Japan’s electric utilities’ needs and requirements today and into the future. As part of the agreement, Itron will design, develop and deliver an Itron smart meter with its 3G cellular communications to Panasonic. Because of the inherent flexibility of Itron’s technology, the solution will support multiple communication options, including cellular, RF mesh and Power Line Carrier to meet specific business needs and geographies in Japan. With this collaboration, Panasonic will expand its communications product line to the smart meter business, contributing to the realization of an ecological and smart-enabled society via home

energy management systems. In Japan, the Ministry of Economy, Trade and Industry has mandated the adoption of smart meters over the next 10 years for nearly 80 million electric meters to help manage energy supply and demand. Smart meters are viewed as a key tool for gauging energy usage during peak hours so that utilities can offer special pricing programs to encourage reductions in energy consumption. This is important as Japan works to implement multiple technology and power generation alternatives to compensate for the nearly 30 percent loss in nuclear power generation. “We’re proud to partner with Panasonic to deliver a proven solution that will serve as the foundation for the types of programs the government, utilities and people of Japan envision for their future,” said Philip Mezey, president and COO of Itron Energy. “Itron’s technology will help the people of Japan realize their energy management and conservation goals.”

the highest in the world. The program premium for power derived from recycled wood is 13.65 yen per kilowatt hour for 20 years and 33.6 yen for unused wood, including from thinned forests. “Cement and paper producers, both of which use heat and electricity for their core businesses, have technologies and the accumulated knowhow to use biomass,” said Yugo Nakamura, an analyst at Bloomberg New Energy Finance in Tokyo. “The new incentive will create an opportunity for them to expect stable earnings from power sales.” Sumitomo Osaka Cement, which added its first biomass power plant in Tochigi in 2009, is seeking to increase the proportion of wood used in biomass operations to almost 100% from about 80% now, Nakao said. It’s also considering building more such facilities in Japan. The company sold about 45% of the 2.1 million MWh of power it generated and internally used the remainder at its facilities in the financial year ended March 31, according to Nakao. Fuel and electricity make up more than one third of cement’s costs.

a 1.3 overall growth year-onyear amid Europe’s economic turmoil. It, meanwhile, saw a 10 percent organic growth in Asia Pacific, in which the Chinese market is a major driving force. The company’s total income in China reached more than 1 billion euro in China in

2011. Around 80 percent of Suez Environnement’s China business is water-related. Chaussade said it’s a natural process to move from conventional water supply to higher end water treatment for his company’s business in China, especially when there is more competition in lower-

end urban water supply. The acute water shortage driven by the scarce water resources and the growing population makes China an ideal market for desalination. A report released by research firm Global Water Intelligence in 2011 shows that China is expected to

become the second largest desalination market in the world after Saudi Arabia by 2016.“If you want to know the potential of China’s desalination market. I have two figures for you. China, which presents 21 percent of the world’s population, has only 7 percent of water

resource. The situation speaks for itself,” Chaussade said. “A lot of cities combine water transfer projects, recycling water and more rational consumption with desalination technology together to secure the access to drinking water in case of severe water shortage,” he said.

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SOUTH KOREA OVERVIEW

REDUCING THE BURDEN OF IMPORTS:

SOUTH KOREA OVERVIEW BY RACHAEL GARDNER-STEPHENS

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outh Korea is a nation that has beaten the odds. The country is surrounded by historically hostile states, has minimal natural resources and has battled decades of war and repeated political upheaval. Despite this, the nation of 48.4 million now have a fully functioning modern democracy, with the fourth largest economy in Asia and the 12th largest in the world. South Korea’s economy is high-tech and industrialized. Its main industries include electronics, telecommunications, auto production, steel, shipbuilding and chemical production. Some of South Korea’s largest companies include Hyundai, LG and Samsung. The proliferation of these conglomerates, or “chaebol”, is down to aggressive government support and financing, which allowed family controlled groups to transform South Korea into a leading exporter of cars and electronic goods. Over the last three decades, South Korea has enjoyed 8.6% average annual growth in GDP, which has caused corresponding growth in electricity consumption - from 33 billion kWh in 1980 to 406 billion kWh in 2009. Power demand is projected to rise by 2.5% pa to 2020. The country’s long-term plan is to build 117 new power plants by 2015 to increase the country’s power generation capacity to 80,830MW. South Korea has

a varied energy mix, with electricity generated from nuclear and hydro power, oil, coal, and natural gas. THE KOREAN ENERGY MIX There were a number of enormous obstacles, such as a negligible amount of natural resources, which Korea has overcome in order to increase their energy generation. Despite this, South Korea has a stable grid that enables 100% of the population to have access to electricity. However, the energy solutions and fuel mix has created a less than ideal reliance on imports: Domestic gas production is barely significant, accounting for less than 2% of total consumption, necessitating South Korea’s status as the secondlargest importer of LNG in the world behind Japan. South Korea has no international natural gas or oil pipelines, and relies exclusively on tanker shipments. Korea Gas Corporation (KOGAS) dominates South Korea’s gas sector, and the company is the largest single LNG importer in the world. South Korea is the ninth largest consumer of oil in the world. South Korea is home to three of the ten largest crude oil refineries in the world. South Korea is highly dependent on the Middle East for its oil supply, and was the world’s fifth largest crude oil importer in 2010. Korea’s oil market is dominated by SK Energy, which has a 34% share of the petroleum product market (excluding LPGs).

South Korea is the third largest importer of coal in the world, following only Japan and China, as the nation holds only 139 million short tons (MMst) of recoverable coal reserves, almost all of it anthracite. Australia and Indonesia account for the majority of South Korea’s coal imports.

Nuclear power accounts for more than one third of

South Korea’s electricity generation. Korea is among the world’s top five nuclear power producers, with a

total installed capacity of 18,716MW. As of 2011, the country has 23 nuclear plants in operation and seven

under construction. State owned Korea Nuclear and Hydro Power Co., Ltd. controls nuclear output.

KOREA ELECTRIC POWER (KEPCO)SOUTH-

Energy Mix (MW) Coal Gas Nuclear Oil Hydro Alt Energy

Figure 1: KEPCO’s total energy mix

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south korea overview EAST POWER CO LTD. (KOSEP) KOSEP operates Samcheonpo Thermal Power Site Division and Yeongheung Thermal Power Plant. From 2011, the company’s total installed capacity was 8,396MW, with ten bituminous coal units (6,580MW, 78.4%), ten LNG combined cycle units (922MW, 11.0%), two petroleum units (528.6MW, 6.3%), and two domestic coal units (325MW, 3.9%). Based on Korea’s long-term power supply plan, the company is currently building Yeongheung Thermal Power Plant units 5 and 6, with a total capacity of 1,740MW. The plant currently supplies 3,340 MW of electricity, one fifth of the power consumption in the Seoul region. Doosan Heavy Industries & Construction will supply boilers for the plant. The boilers are 870 MWclass, providing the same in output as units 3 and 4. The plant should be ready for commercial operation by December 2014. KOREA MIDLAND POWER CO LTD. (KOMIPO) KOMIPO operates Boryeong Thermoelectric Power Plant and Seocheon Thermal Power Plant. The company manages the total installed capacity of 7,949MW, from eight bituminous coal units (4,000MW, 50.3%); twenty LNG combined cycle units (3,250MW, 40.9%), two domestic coal units (400MW, 5.0%), and five petroleum units (285MW, 3.6%). KOMIPO generates approximately 13% of all the electricity in South Korea. Boryeong is South Korea’s largest thermal power plant. It produces 4,000 MW of electricity from eight coal-fired units, 1,800 MW of power from four combined cycle units, and around 7.5 MW from hydroelectric and photovoltaic solar plants. The plant is also a record breaker, having achieved a continuous operating period of 3,000 days. The Boryeong Power Complex is currently being developed with two new units being build adjacent to the plant. Called the Shinboryeong Power Plant, the new project consists of two 1,000MW bituminous coal-fired ultra-super critical units. KEPCO E&C, KEPCO’s engineering arm, will provide designs for site preparation, generating facilities and auxiliary facilities. The plant will use 100% homegrown technologies, developed by

Doosan Heavy Industries and Korea Electric Power Research Institute (KEPRI). These institutions invested a total of KRW63.7 billion to develop the 1-million kW power generation system being installed in the new plant. The first two units are scheduled for completion in June 2016 and June 2017 respectively. KOMIPO is also currently constructing Seoul Combined Cycle Power Plant units 1 and 2 with a 1,000MW capacity.. KOREA WESTERN POWER CO., LTD. (KOWEPO) KOWEPO operates Taean Thermal Power Plant. As of 2011, KOWEPO’s total installed capacity is 9,604MW from eight bituminous coal units (4,000MW, 47.6%), twenty-four LNG combined cycle units (2,998MW, 35.7%), and four petroleum units (1,400MW, 16.7%). KOWEPO is currently constructing the 900MW Pyeongtaek Combined Cycle Plant based on Korea’s long-term power supply plan. KOWEPO are also developing the Taean Thermal Power Complex, by adding Korea’s first IGCC (Integrated Gasification Combined Cycle) power plant, called Taean IGCC#1. This 300-MW “cleaner coal” facility will turn coal into synthesis gas, then remove impurities from the coal gas before it is combusted and turn any pollutants into reusable byproducts, resulting in lower carbon emissions. KOWEPO picked General Electric (GE) as the supplier of a 7F Syngas Turbine, a D11 steam turbine, a heat recovery steam generator and associated equipment for the new plant. GE also will provide 10 years of maintenance service for the plant. KOWEPO will also be adding a further two units to the 8 unit power station. Units 9 and 10 will use ultra-supercritical generation technology, which will be provided by Hitachi in partnership with in Korea, with each unit capable of producing 1,050 MW. The plant is set to come online in 2016. KOREA SOUTHERN POWER CO., LTD. (KOSPO) KOSPO operates the Hadong Thermal Power Site. KOSPO’s total installed capacity is 9,239MW, from eight bituminous coal units (4,000MW, 43.3%),

thirty-one LNG combined cycle units (4,553MW, 49.3%), eight petroleum units (640MW, 6.9%), and nineteen wind power plants (41MW, 0.4%). The company is currently constructing the 400MW Andong Combined Cycle Power Plant. Siemens has partnered with GS E&C to supply the plant with one H-class gas turbine, one steam turbine, one generator and one heat recovery steam generator as well as the Balance of Plant (BoP), and I&C technology in a single shaft configuration. A ten-year term service agreement has also been signed for the main components. Start of commercial operation is scheduled for April 2014 after only 25 months of construction. KOSPO will also build a new 2,000 MW ecofriendly thermal power plant on its east coast. The company is investing 3.2 trillion won to build the two advanced 1,000MW turbines at Samcheok Green Power Plant by December 2015. The Advanced Thermal Power Plant-1000 model turbines are designed to use low-grade coal. This feature can raise overall energy efficiency and eliminates potential problems with the supply of high-grade coal. This is made possible by supercritical CFB (circulating fluidized bed) boilers, which will be supplied by global engineering and construction firm Foster Wheeler, with the turbines supplied by Toshiba. The plant will comprehensively use hightech carbon capture and storage systems, with a closed cycle water processing system will prevent any CO2 and waste water from being released into the environment. This green power development is also expected to incorporate renewable power technologies onsite, including roof-top solar panels and photovoltaic arrays, wind turbines, wave energy and fuel cells - bringing the total installed capacity to 5,000MW by 2020. For more information on the Samcheok Green Power Plant, see our extensive project review and interview with Bob Giglio of Foster Wheeler in the January/February issue of PiMagazine Asia. KOREA EAST-WEST POWER CO., LTD. (EWP) EWP operates Dangjin Coal-Fired Power Complex and Honam Coal-Fired Power Plant. EWP’s total installed capacity is 8,815MW, with ten bituminous coal-fired power plants (4,500MW, 51.0%), seventeen LNG combined cycle power plants (2,100MW, 23.8%), six petroleum power plants (1,800MW, 20.4%), and two domestic coal-fired power plants (400MW, 4.5%). The Dangjin power plant consists of four 600MW coal-fired units. The operational mode of the plant is base load and middle load with fully automated operation, and the total investment was around $2.7 billion. KOPEC was the prime architect-engineer and Hanjung was the lead equipment supplier. Hanjung manufactured the boilers, turbines and generators. The Dangjin plant has been equipped with extensive environmental control facilities. A low NOx burner and two-stage burning reduces nitrous oxide in the flue gas. The flue gas also passes through desulphurization and denitrification scrubbers, and water pollution is controlled with on-site plant wastewater treatment facilities.

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Independent Power Producers Until very recently, the above companies exclusively dominated the power industry in South Korea. In order to encourage economic growth both domestically and globally, South Korea has opened up the market to IPPs. Below are overviews of the two larger contributors to Korea’s energy industry. POSCO POWER The POSCO Group is predominantly a steel producer but has branched out into the energy market. Its subsidiary, POSCO Energy, was the first and largest IPP in South Korea. POSCO Energy’s top four core business areas are power generation, new & renewable energy, fuel cell, and new fuel and resources exploration. POSCO Energy owns the largest private LNG power plant in Korea, powering the company’s steel plants and selling the electricity to the grid through a power purchase agreement (PPA) with KEPCO. POSCO also own a combined cycle power plant in Incheon, which supplies electricity to the wider Seoul area. The Incheon Power Plant has six units with a capacity of approximately 2,800 MW. The two most recent units came online in 2011 and were engineered by Siemens, who supplied the key components for all six of the existing units. Siemens have now won an additional contract with POSCO Power for a further expansion of the Incheon site. The US$485 million order is for the supply of three natural-gas-fired power ‘islands’, which will have an installed capacity of 420 megawatts. Each island consists of one H-class gas turbine, one steam turbine, one generator and one heat recovery steam generator. The new equipment will be installed in a single building and commissioned in the summer of 2014. SK E&S The SK Group is the third largest conglomerate in Korea. While its largest businesses are primarily involved in the chemical, petroleum and energy industries, it also provides services in construction, shipping, marketing, telecoms and the internet. SK E&S operates in the liquefied petroleum gas (LPG) industry in Korea. The company engages in the marketing, import, and overseas trade of LPG. SK E&S supplies approximately 22% of the nation’s gas demand. SK E&S also operates power stations through its subsidiaries, such as the Gwangyang LNG Power Plant. The two unit plant has a generation capacity of 1074 MW. The plant cost KRW680bn, and imports LNG directly from Indonesia’s Tangguh consortium. The project is the first power plant in Korea to independently import LNG for its own use. The plant uses GE Power Systems’ F Class turbines. SK E&S is currently constructing the Oseong Combined Cycle Power Plant, which will have a generation capacity of 833MW. The commercial operation is scheduled to start in 2013, and will sell electricity and heating services to the grid. Also under construction is the Pyeongtaek LNG Power Plant. The plant will use 14 PureCell Model 400 fuel cell systems, installed in two phases. The plant is slated to be

operational by the end of 2013. Additionally, SK E&S are aiming to build the Jangheung and Munsan Combined Cycle Power Plant projects. They will be located in the northern part of the Seoul metropolitan area. Alternative Energy Korea Hydro and Nuclear Power (khnp) In terms of alternative energy sources, South Korea focuses mainly on hydropower and nuclear power (for more information on Korea’s renewable energy mix, see ‘Investing in Renewable Korea’ later in this issue). Korea Hydro & Nuclear Power (KNHP) is the state owned body responsible for the generation and output of hydropower and nuclear energy. HYDROPOWER Hydroelectricity is the country’s top renewable source. It has been estimated that South Korea has a small-scale hydro potential of up to 1.5GW, and

that 198MW could be generated by 2012. Installed capacity represents less than 5% of the domestic potential, indicating significant untapped resources. KHNP runs 27 hydro power units throughout South Korea, with a generating capacity of 539.26MW: Hwacheon Hydro Power Plant: Built to develop power resources in the Han River basin, this plant has been operating since 1944, and produces 108,000 kW of electricity. Chuncheon Hydro Power Plant: Operational since 1965, this plant is capable of increasing the output of the Uiam, Chungpyung, and Paldang plants in lower river. Combined with these plants, Chuncheon supplies up to 62,200 kW of electricity to the entire capital area through 154kV power lines. Cheongpyeong Hydro Power Plant: Using abundant amounts of Northern Han-river water, the plant produces and transmits electricity to Gyeonggido & Incheon city area with 154kV. Operational since 1943, the plant has a 139,600 kW capacity. power insider november/december 2012 13

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south korea overview Paldang Hydro Power Plant: This plant was built not only to generate electricity but to control the Han-river water level as well. The plant started its commercial operation in 1973 for 80,000kW and has a total capacity of 120,000kW. Seomjingang Hydro Power Plant: With the latest generator installed in 1985, this plant supplies the Honam area through a 154kV power line. The plant has a 34,800 kW capacity. Boseunggang Hydro Power Plant: This plant uses water from the Boseunggang River, which flows through a 2.2km water pressure tunnel & concrete water tank, with a 416m water pressure pipe to generate. Operational since 1937, the plant has a capacity of 4,500 kW. Goesan Hydro Power Plant: This plant was built as the result of a small valley generation plant development plan by the government. It has been operational since 1957 and has a capacity of 2,600 kW. The majority of existing hydropower plants are extremely old, but there are some new projects in the pipeline. These include five small hydro plants as part of the Four Rivers Project. Costing 22.2 trillion won, the initiative is aimed at upgrading and repairing the country’s four main rivers. The five facilities, Yipo, Gangjeong, Hapcheon, Nakdan and Seungcheon will be built using 11 Mavel Pit and Bulb Kaplan turbines. Once completed, the facilities will have a combined output of around 16.2-MW. KHNP is also investing in the development of pumped storage hydro plants. Pumped-storage power plants pump water from a lower level dam to an upper level dam using economical power during low pea k times during the night, and generate power at peak load. This increases operational efficiency of the economical power system and improves the overall power generation efficiency by handling the peak load of the power system. KHNP currently has a 4,700 MW pumped storage capacity (Figure 2). NUCLEAR POWER The enthusiasm for nuclear power in South Korea is primarily driven by the considerations of energy security and the need to minimize dependence on current imports. Nuclear energy is a strategic priority for South Korea, and capacity is planned to increase by 56% to 27.3 GWe by 2020, and then to 43 GWe by 2030. KHNP started commercial operation with Korea’s first nuclear power plant, Kori unit 1, in 1978. KHNP is now the world’s fifth largest nuclear power generator with twenty-one plants providing 28.0% of Korea’s electricity.

Commercial NSSS & T&G Construction Contractor Operation Supplier Doosan Daewoo, Samsung, GS 1/2013 E&C Corporation

Reactor

Type

Gross capacity

Shin Wolsong 2

OPR1000

1050 MWe

Shin Kori 3

APR1400

1350 MWe

9/2013

Shin Kori 4

APR1400

1350 MWe

9/2014

Shin Ulchin 1

APR1400

1350 MWe

4/2017

Shin Ulchin 2

APR1400

1350 MWe

4/2018

Shin Kori 5

APR1400

1350 MWe

12/2018

Shin Kori 6

APR1400

1350 MWe

12/2019

Shin Ulchin 3

APR1400

1350 MWe

6/2020

Doosan

Hyundai, Doosan, SK Engineering and Construction

Doosan

Hyundai, Doosan, SK Engineering and Construction

Doosan

Hyundai, Doosan, SK Engineering and Construction

Doosan

Hyundai, Doosan, SK Engineering and Construction

Figure 3: Nuclear Plants Under Construction

As of the end of December 2011, KHNP’s total installed nuclear capacity is 18,716MW. Based on Korea’s long-term power supply plan, KHNP is currently building seven additional nuclear units with a total capacity of 9,600MW. KHNP plans to complete up to 18 nuclear power plants by 2030 at a cost of 40 - 50 trillion won, to provide 59% of the country’s electricity. KNHP is currently constructing or preparing construction of 11 NPP units including ShinKori units 3&4, which will be online in September 2013 and 2014 respectively, and will utilize the domestically developed Advanced Power Reactor 1400 (APR1400). KNHP is also working on the second unit at Shin-Wolsong, which will be connected the grid in January 2013. Additionally, Shin-Ulchin units 1&2 and Shin-Kori units 5&6 will also use the APR1400. This proliferation of nuclear power has allowed the costs of nuclear energy to be quite low. In 2008, KHNP stated the price of nuclear generated electricity was at 39 won (KRW) per kWh (about 3c/kWh). Compared to coal at 53.7 won, LNG at 143.6 won and hydro at 162 won, nuclear electricity was not only cheap but the cheapest. The average price that KHNP sells electricity back to KEPCO is at 68.3 won (about 5c) per kWh.

All the fuels for the nuclear plants are supplied by a further KEPCO subsidiary, the KEPCO Nuclear Fuel Co., ltd. (KNF). KNF also supply some equipment, and will be working with KHNP to capitalize on internal success and promote the global export of Korean nuclear technology. The target of the South Korean Ministry of Knowledge Economy is to export 80 nuclear power reactors worth $400 billion by 2030. This would make Korea the world’s third largest supplier of nuclear technology, with a 20% share of the world market. To assist this, Korea will develop indigenous reactor technology with full intellectual property rights known as the Innovative, Passive, Optimized, and Worldwide Economical Reactor (I-POWER) by late 2012. Success has been demonstrated by Korea with the $20 billion contract to supply four nuclear reactors to UAE. The first of these is currently under construction, and will be completed in 2017, followed by the remaining three by 2020. The project is for the delivery of 1,400MW APR1400 reactors and KEPCO is the turn-key provider of the design, purchase, construction and technical support. KEPCO is implementing 99 overseas projects altogether, in a wide range of areas, including nuclear

Section/unit

Cheongpyeong

Samrangjin

Cheongsong

Sancheong

Yangyang

Muju

Yecheon

Capacity/MW

400

600

700

1,000

600

800

Height

60.7

Length

290

269

400

360

247

287

360

Million tons

2.7

6.5/10.1

7.1/10.2

6.4/7.4

4.9/9.2

3.7/6.7

6.9/8.9

1980

1985

2006

2001

2006

1995

2011 (construction)

Generator/Unit Dam (Upper) Total Storage

Year of Completion Figure 2: KHNP Pumped Storage Facilities

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MPS _

south korea overview

power, hydro and thermoelectric power, transmission and distribution, renewable energy, and resource development. KEPCO maintained revenues of over 150 billion won for eight consecutive years generated from the Malaya, Ilijan, and Naga plants in the Philippines. The plants account for 10.1% of the total power generated in the Philippines, and KEPCO is the second largest foreign provider. KEPCO has also completed a 200MW power plant in Cebu. In 2010, KEPCO won the contract for the 433MW Norte IgCC (integrated gas combined cycle) power plant in Mexico. NUCLEAR TROUBLES South Korea otherwise flawless record of nuclear power production has suffered a number of blows in 2012, however. South Korea was forced to shut down one of its nuclear reactors in October following a malfunction in its control system. The 1,000 MW Shingori 1 reactor near the southern city of Busan was shut down after a warning signal at 8.10am. A KNHP spokesperson was on hand to assure the public that: “There was a malfunction in the reactor’s control rod, but the reactor is now stable with no danger of a radiation leak.” Several other reactors were shut down this year for malfunctioning, such as the concealed blackout at reactor 1 at the Kori Nuclear Power Plant reactor in February, and KNHP have suffered continued problems with parts supply irregularities and breakdowns. Additionally, officials at KHNP have been investigated for receiving bribes. The South Korean nuclear industry’s woes were compounded in November when two more plants had to be closed for nearly two months of unscheduled maintenance to replace parts that had been provided with forged certificates. Eight firms had forged 60 false certificates to cover 7,682 items between 2003 and 2012. Many of the parts, which were valued at 820 million won, were used at five nuclear power plants, including the Yeonggwang reactors 3-6 and the Uljin reactor 3. A total of 5,233 parts of 136 types were actually used at the five plants. The items with the forged certificates include fuses and power switches, which are not core to operations and would not cause

nuclear leakage or accidents. The Korean ministry plans to shut down two reactors located in the county of Yeonggwang until the end of the year, by which time all the parts are expected to be replaced. The three additional reactors under investigation are still running. The two reactors already shut down will remain closed until the parts are replaced. With another five reactors already closed for regular maintenance and glitches, a total of 6,500 MW of power capacity has been removed from the grid, from a total capacity of 81,740 MW. The shutdown of the reactors may cause an unprecedented power shortage in the winter season, the ministry said in a statement: “We expect it will be unavoidable to have an unprecedented power shortage this coming winter due to the two reactor shutdowns, and the power supply offices plan to execute complex super-high supply measures early from mid-November,” the statement read. Because of this, the KHNP president Kim KyunSeop told a parliamentary hearing that he would willingly resign once the situation had been resolved: “I’m ready to step down any time... I will not cling to my post. I will take all the responsibility,” Kim said. There is no news yet on whether the resignation

will be accepted. Kim Joong-Kyum, the CEO of KEPCO, also offered to resign, leaving KEPCO without a CEO (at time of printing). Despite controversies, nuclear power contributes to an overall stable picture. The Korean national grid has the capability to provide the entire population with power, developing and building new power stations in tandem with the increase in power demand. The national energy policy is not without its negatives, however; the disadvantage of Korea’s reliance on imports cannot be stressed. This is probably why South Korea is keen to stand behind nuclear with its recent wobbles, and hydropower, which has a never-ending list of critics. Additionally, the reliance on imported fuels is also a reliance on fossil fuels. Despite endeavoring to use clean coal technology and efficient engineering, Korea’s energy output is quite dirty. This has stimulated the government into refocusing energy policy on low carbon and green solutions, in order to bring the nation’s carbon footprint down. To learn more about Korea’s low carbon strategy, see ‘Investing in Renewable Korea’ in this issue of PiMagazine Asia.

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south korea renewables

investing in renewable korea S

outh Korea has the 12th largest economy in the world, and the fourth largest in Asia. The GDP growth in 2012 is expected to be in the region of 3.5%, and the GDP per capita is just over $30,000 (PPP – Purchasing Power Parity). The country has progressed from basic industries such as cement, fertilisers and industrial chemicals, to producing automobiles, electronics, iron, steel and shipbuilding to computer and technological products. It is clear that Korea is primarily focussed on economic growth, with economic policies and objectives designed to encourage employment generation and export potential. However, the government are now turning to low carbon and green growth as the next drivers for their businesses at home and overseas. Having committed to spending 2% of the GDP annually on the low carbon economy, the commercial viability of new technologies and energy conservation products are at the forefront of Korean policies. Korea has a wide range of strengths in green industries. Despite a lack of focus both legislatively and economically, South Korea are starting to invest in New and Renewable Energy (NRE) solutions, and are interested in finding more sustainable forms of energy, and these ventures offer a great deal of potential for cooperation between international companies. This article, abridged from the “Low Carbon Opportunities in the Republic of Korea Report” by UK Trade & Investment, gives an overview of government and industry’s activity in the NRE economy. Korea’s Low Carbon Strategy In 2009, Korea announced a five year national strategy for green growth. It represents a major attempt to fundamentally transform Korea’s approach to green growth, and contains encouraging policy goals and targets to tackle climate change and enhance energy security. The Presidential Committee on Green Growth (PCGG) was established under the direct supervision of President Lee, Myung-bak to implement the

national vision of low-carbon green growth that he presented in an address in 2008. The overall carbon target announced by the PCGG was a 30% reductions compared to Business as Usual (BAU) estimated carbon emissions by 2020. In 2010, Korea produced 474,660GWh of electricity. This was generated primarily by coal but also by nuclear, oil and gas, hydro and NRE. NRE accounted for only 2.6% of total electricity generation in 2010. The Korean government has committed to increasing the ratio of energy generated by NRE to 6% by 2020 and 11% by 2030. The Korean government defines NRE to include the following technologies: • Solar PV • Solar Thermal • Wind Power • Fuel Cell • Hydrogen Energy • Biomass Energy • Waste to Energy • Coal Gasification, Liquefaction • Geothermal • Small Hydro-power (less than 10,00kw) • Ocean Energy (tidal, wave and thermal difference generation) The gap between NRE generation and target NRE is widening. A 2011 parliamentary inspection of the administration revealed that between 2004 and 2009, the administration has spent only 61% of the budget it has targeted for NRE. The inspection also revealed the target achievement rate of NRE in 2010 as follows: • Solar heat: 73% • Solar PV: 120% • Wind power: 80% • Biomass: 75% • Small hydro: 82% • Geothermal: 78% • Waste to energy: 0% • Total: 90% So there is still plenty of work to be done in Korea, and policy is beginning to reflect that. Since

1994, the Korean government have provided a number of general subsidy programmes. The Korean government subsidies 50% of the installation costs of NRE systems to encourage deployment and to reduce the end user’s cost burden, and central government supports regional governments by providing up to 50% of total cost of installation of NRE technology. A policy regarding the mandatory use of NRE technology has been in place since 2004. New construction, expansion and remodelling of public buildings with a floor area exceeding 3,000 square meters must allocate at least 5% of their total construction expenses to the installation of NRE systems. The government and public organisations invested 778 billion KRW while private organisations invested 3.879 billion KRW in this scheme. In addition, the Renewable Portfolio Standards requires all major power generation companies to generate a certain portion of their total energy from NRE’s.

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Waste to Energy Waste to energy strategies are focused primarily on disposing of waste. This is because it is increasingly difficult to dispose of waste in landfills due to a shortage of land and objections of local residents. Furthermore, disposing of food waste by dumping it into the sea will be prohibited from 2013. To combat this, waste can be converted into fertilizer and fuel. However, the fertilizer from food waste is perceived to be of low quality so farmers refuse to apply it even when it is provided free of charge. Waste can be incinerated directly to create energy or fuel; either methane of other gasses extracted from landfills or refuse derived fuel (RDF) in the form of large pellets. Despite local citizens remaining opposed to locating waste treatment facilities in their communities as it is perceived to reduce land values due to odour and inconvenience, a number of projects are in the pipeline. The Ministry of Environment has announced plans for the construction of waste

and biomass to energy facilities, and has allocated 3 trillion KRW to the industry over the period of 2009 to 2020. Korea Midland Power will also build a cogeneration plant using RDF that will generate 9.8MW of electricity. The plant is also expected to generate 75 tons of heat per hour, which will be sold to 9 petrochemical factories near the power plant. The total revenue from the plant is expected to be 26.5 billion KRW per year. SK Innovation is focusing on recycling the waste generated by their petrochemical factories. They are already saving 75,000 kl of bunker C-oil and have reduced 112,000 tons of CO2 per year by recycling steam and waste heat from its factories. They are also developing commercial manufacturing technology for â&#x20AC;&#x2DC;CO2 plasticâ&#x20AC;&#x2122;; plastic made from the CO2 captured at the factories. Kumho Petrochemical is also recycling by utilising waste tyres as fuel for cogeneration plants. Using this technology, they hope to establish a waste resource network with

neighbouring companies to provide industrial waste, waste heat and by products to each other. Opportunities Korea suffers from NIMBY opposition from citizens. Designs for waste to energy facilities that would be attractive and minimize objection from local residents would be very welcome. An opportunity also exists to provide technology for efficient conversion of food waste to fertiliser, and the enhancement of fertiliser made from waste. The introduction of more efficient waste to bio-mass/bio-gas technology for converting would also find a market in South Korea. Wind Power Wind power is likely to offer a great number of opportunities for large-scale projects. Korea intends to become one of the top three countries in the windmill industry. Koreaâ&#x20AC;&#x2122;s wind power development is driven by shipbuilding (heavy industry) firms power insider november/december 2012 19

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south korea renewables

such as Samsung, Hyundai, Daewoo and STX. With their outstanding engineering and manufacturing capabilities, they have all pledged to support the government’s offshore wind farm projects. Currently, the shipbuilders are in the process of obtaining certification for their components and systems from relevant bodies, driven by a desire for diversification in the face of a downturn in the shipbuilding industry. The government is providing support by providing test beds for construction of offshore wind farms. Having entered the field much later than their European counterparts, Korean manufacturers need to close a large technical gap very quickly. Onshore wind power projects are also being considered, as Korea is very mountainous. The locations for onshore wind farms are far from population centres, however, which create issues trying to connect the electricity generated to the grid. Companies wishing to install onshore windmills closer to the grid often encounter oppositions from local residents. The focus for the Korean government is therefore on offshore wind, but both industries have been given targets and timelines: Offshore: Technology development: 5MW offshore windmill Company Hyundai Heavy Industries Samsung Heavy Industries STX Heavy Industries Doosan Heavy Industries DSME

Wind Type Offshore Offshore Offshore Offshore Offshore

Figure 1

by 2012. Test trial: construct 100 MW (20 X 5MW) test offshore windmill farms off the west and south coast of Korea by investing 400 billion KRW by 2013. Demonstrations: construct a 400 MW demonstration offshore wind farm by 2015, investing 1,600 billion KRW. Joint investment by central government, regional governments and private companies. KEPCO will be responsible for the grid connection recovering its investment through sales of electricity. Onshore: Youngheung: South East Power will build a 30MW wind farm at Youngheung Thermal Power site. Saemangeum: Jeonbuk province will invest 75 billion to build a 40WM wind farm near the Saemangeum reclamation area by 2014. Private Industry The following projects are either up and running or in development, as displayed in figure 1: Other plans in development include a 7.6 trillion KRW Memorandum of Understanding (MOU) deal between the Samsung Group and the government to build a ‘Green Energy General Industrial Complex’ in Saemangeum that includes Capacity 5MW 5-7MW 7-8MW 3MW 7MW

Date 2011 2012 2012 Completed TBA

windmill, solar cell and fuel cell manufacturing facilities between 2021 and 2025. STX Heavy Industries plan to have its STX 93 windmill certified by the end of 2011 and will develop a 2MW low speed windmill in 2012. It will begin development of an offshore windmill by 2015. Unison was the first company in Korea to install windmills, producing a 750KW, gearless windmill. They are now developing a 2 MW model and will develop a 5MW windmill by 2014. Halla Windpower plan to construct a 100MW offshore wind farm with Korea Midland Power, POSCO Power and Korea District Heating Corp east of Jeju Island by 2014. It is clear that plenty of companies are investing in wind power. Opportunities • Technical cooperation is required in the development of offshore wind farms, because of Korea’s late entry into the market. At the same time, Korean companies have strong offshore capabilities due to their background in shipbuilding and offshore oil and gas vessel production. • Korea currently has only one supplier of windmill blades, and the entrance of competing suppliers would strengthen the market. • Korean windmills need to establish a proven track record through successful operation of test beds, so partnering for installation of offshore wind farms will create opportunities. • Korean windmill turbine manufacturers are in the initial stage of development and will require certification from globally recognised firms such as GL, DEWIOCC and DNV.

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south korea renewables • Korea will need to train its workforce to manufacture, install, operate and maintain offshore wind farms. Organisations able to provide this training could capitalise on the massive investment in Korea. • The Korean government is planning several ‘test beds’ to provide Korean suppliers with practical references for offshore wind farms. Carefully recording appropriate parameters of performance data for offshore wind farms will be needed. Consulting on wind quality analysis is also crucial because of the low wind speed. Solar Power Solar energy is the most developed of NRE technologies. The global solar market has become highly competitive, with module makers being the most competitive. The major market in Korea is the GENCOs, who are obliged to install 190MW each to meet RPS targets. A major obstacle to the development of the local market is the unpredictability of electricity prices under the RPS system. Another is the limited government subsidies: Korean government programs are aimed at helping private Korean companies become competitive in the global solar industry, not local. Another issue for solar power was the locations of the farms. Up to 2009, most solar farms were established on mountains and field resulting in reduced vegetation, making the farms ‘non-green’. Government has discouraged solar farms in these places by reducing the subsidies while simultaneously increasing the subsidies for solar panels on roofs by 50%. Many of the Korean industries strengths lie in the manufacture of the components for solar panels. The government has set a target of achieving 15% market share in the global solar power market by 2015. By component, targets for global market share are displayed in Figure 2. Year Polysilicon Ingot/Wafer Cell Module

2009 14% 7% 4% 4%

2012 18% 12% 85 9%

2015 18% 12% 15% 15%

Figure 2 Private Industry Plans Given the challenging business environment, local developers are relying on affiliated companies for opportunities. GS Neotek, an affiliate of the GS Group, depends heavily on GS Caltex projects, which announced a plan to install solar panels on the roofs of their gas stations. At the end of 2010, solar panels on GS Caltex gas stations were generating around 300-500 KW per year. Also, Ssangyong Cement is reviewing their plan to establish a solar farm at its exhausted mine at Youngwol-Gn in Gangwon-Do. Ssangyong Cement favours installing a solar farm because it is easier to build deep in the mountains where there are no residents and it offers a better return than alternative remediation projects. A third project is by Korea Southern Power, who plans to develop the largest capacity solar farm in Asia (65MW ) on the roofs of the Busan New Port warehouses by 2016.

Opportunities in Solar Power Korean firms are highly dependent on foreign patents that suggest a good market for technical licences. Joint development of solar projects in Asia allows companies in Korea to obtain financial stability, technology and access to foreign markets. Opportunities also exist in the production base. Korean companies sell modules for 13,000 KRW/ WP while the global price is more than double at 2,900 KRW/WP, suggesting a competitive productions base. Wave Power Korean scientists are experimenting with several different wave energy technologies. All research is still in the initial, pre-commercial stage, but Koreans have registered more than 200 patents related to wave power technologies. The waves in Korea average only 1.5 to 2 meters (compared with the global average of 3 to 4 meters and maximum of 7 – 8). Wave ‘power’ is also weak with the most powerful waves (near Jeju) reaching 12-13 KW, compared to 40KW in the North Sea. The Ministry of Land, Transport and Maritime Affairs have allocated a budget of 33.2 billion KRW for wave power; this is allocated across 4 alternative technologies, making the research budget very limited. There are a number of research projects: The Korea Ocean Research and Development Institute (KORDI) successfully carried out its first test operation of a 150KW facility near Jeju Island in 2006 and is preparing for its 2nd test operation, a 500KW facility (10.5 billion KRW) at another

location in Jeju. By far the biggest investment in wave power is the 1.6 trillion KRW plan to build two 100KW ‘caisson breakwater’ wave power facilities at a Naval Operation Base in Jeju between 2012 and 2021. Despite these investments into research, government support of developing wave power is relatively weak compared to investment in other alternatives such as solar, wind, geothermal or tidal power. There is some public criticism against the government for failure to play a leading role in wave power in spite of many ideas, experiments and prototypes. There is little (or negative) public awareness of the potential for wave power but there is no public debate regarding environmental issues. Private industry Most of the activities in wave power are taking place at universities and research organisations. However, two projects have been identified: Samcheok Green Power Complex Generation Park is a 5.9 trillion KRW thermal power plant project being carried out in Gangwon Province by Korea Southern Power. The project will utilise a combination of wave power, CCS, offshore wind power and will generate 1000MW by the end of 2015. Taekyung Industry Co. Ltd. signed an MOU with Kyungnam University in July 2010 to carry out a demonstration study of an oil pressure wave power facility. Opportunities Wave energy generators are subject to severe environmental conditions and are often lost or

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will require new types of generators to convert the wave energy into electricity. Other opportunities lie in waterproofing. Wave driven generators are located in severe, wet locations. The piston has air in it and needs to keep the air so it needs to be waterproof, as do the electrical connections.

destroyed. For example, an experimental wave power generator near Pohang was damaged soon after installation. As a result, there should be opportunities for consulting on developing durable systems. Similarly, researchers are working on several technologies for capturing wave energy, but they

Tidal Tidal power is attractive due to the predictability of tidal movements and the reliability of the power that can be generated. The large-scale civil engineering involved in tidal power also generates appeal due to job creation and economic stimulus. The major disadvantage of tidal power is the negative impact on the coastal ecology. Koreaâ&#x20AC;&#x2122;s first tidal current power plant was established by KORDI at Uldolmok in 2011. The agreement was that Korea East-West Power (KEWP) would take over operations upon completion but KEWP has refused to purchase the facility and it has been suspended. KEWP claims that operating the facility would cost more than the value of the power generated. A more successful endeavour is at Shiwa Lake. The plant was completed and began operating in 2011. Shiwa Lake was initially intended to provide fresh water to farms around the lake. However, the project failed and the water became severely polluted, and converted into a tidal power generation project. While Sihwa Lake tidal power plant faced limited challenges, four plans at Asan bay, Ganghwa Island, Garorim bay and Incheon bay are facing strong opposition from environmentalists, civic groups and political parties. Tidal power generation has been facing major opposition from environmental groups that claim that tidal power should not be considered a NRE due to its negative impact on the eco-system. Government strategies for tidal power growth appear to be mixed. The Ministry of Knowledge Economy excluded tidal current power from the RPS weighted value list suggesting that the government does not plan to provide support for tidal current

power. Rather, according to the industry insiders, the Korean government is focusing on tidal power that provides better economics and generates a larger economic impact compared to tidal current power. However, the Ministry of Land, Transport and Maritime Affairs has allocated 27.9 billion KRW into tidal power and 49.5 billion KRW for tidal current power from 2001-2020. Opportunities Tidal systems are still in the pre-commercial stage. KORDI is responsible for researching the feasibility of tidal power including selecting the location, capacity, generation type and other technical research. Groups interested in tidal power should partner with KORDI for cooperation in the Korean market. There are also opportunities to invest in the development of Tidal Turbines. Doosan and Hitachi have the required technology to design turbines for tidal power applications. However, the turbines are imported from China because manufacturing them is labour intensive. In sum, NRE projects in South Korea are small but perfectly formed. Whilst the majority of the power generation is being left to fossil fuels, hydro and nuclear power, investment in and the policies surrounding NRE are moving in the right direction. Solar and wind power appear to offer the greatest opportunity for large scale investment, with many test projects in development. Despite the modest size of many of the Korean NRE projects, it would be foolish to assume that the attitude towards renewable energy in Korea is negative or indifferent. It appears that the idea in Korea is to start small, see what works best, and then translate that R&D onto a commercial scale. Whilst that means that no multi-megawatt projects are immediately forthcoming in this sector, it suggests a slow and steady growth that will create a stable market.

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SOUTH KOREA SMART GRID

SMARTENING UP SOUTH KOREA THE IMPLEMENTATION OF SMART GRID TECHNOLOGY BY RACHAEL GARDNER-STEPHENS

24 NOVEMBER/DECEMBER 2012 POWER INSIDER

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mart Grid technology has a very basic principle: it makes power grids smarter. The traditional electric grid is relatively simple; it is designed to transmit electricity in one direction from a small number of large power generation plants to a large number of distribution points. It is then transformed to the required voltage levels for industrial, commercial and domestic consumers. In a ‘low carbon, renewable energy’ environment, the grid must be more flexible and controllable to accommodate a large number of small scale, intermittent and fluctuating power sources, changing patterns of demand and electricity flowing in both directions. The implementation of Smart Grid technology facilitates. South Korea is interested in developing Smart Grid technology for a number of reasons. Over the past several decades, South Korea has become a pre-eminent developer of technology, ranging from computers and electronics to automobiles. Smart Grid technology can make the most of that domestic knowledge and market. Smart Grid technology can also generate new service industries such as energy management services, energy storage services, electric vehicle charging services, virtual power plants and so on. The Korean government is investing in Smart Grid R&D to become the leader in Smart Grid technologies such as smart meters (AMI – advanced metering infrastructure) Demand Response (DR) technologies, Real Time Price (RTP), Energy Management Systems (EMS) energy storage infrastructure (including sensors), and electric vehicles and home gateways. KEPCO have taken the lead with Smart Grid development, by focusing on strengthening the connectivity between power supply sources and transmission systems and optimizing the connection of renewable energy to the grid. Their plans include digital-based operation to improve system stability, while increasing transmission capacity and implementing automated maintenance and troubleshooting features. In addition, KEPCO will focus on power supply cost leadership by maintaining stable power transaction systems and innovating engineering and procurement processes, in order to maximize profit and develop competency for global marketing. The South Koreans will invest over $15 billion by 2016 in its aim to capture 30% of the global Smart Grid market. This goal includes the creation of a projected 50,000 annual jobs, US$43 billion in avoided energy imports and $3 billion in avoided power generation costs. To achieve these aims, The Korean government has prepared a ‘5 Year Basic Plan for Smart Grid’. It includes regulations for new businesses, financial support for households to replace old household appliances with ‘smart’ appliances and introduces variable electricity rates linked to real time supply and demand. Korea’s national roadmap breaks down the long-term goals described in Figure 1 into three phases. Phase One is the construction of the Smart Grid test-bed on Jeju Island, scheduled to run from 2009 to 2013. It will include work on the Smart Power Grid, Smart Places and Smart Transportation, linking grid networks to consumers and EVs.

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SOUTH KOREA SMART GRID

KEPCO and the Korean government are working together on the Jeju test bed, which is the largest smart grid test project in the world. Jeju Island is an autonomous province more than 200 km south of mainland Korea and connected with a 300 MWHVDC line. Currently, the $65 million pilot program on Jeju has a fully integrated Smart Grid System for 6,000 households, wind farms, and four distribution lines. There are currently over 160 companies involved in this development and many international players, eager to be involved in developing standards and determining direction, are bidding to be included. The project started with a 64.5 billion won government investment to test real-time grid monitoring, digital power transmission, and digitally operated power distribution systems. That investment is set to quadruple by the end of the project in 2013. More than 2,000 homes have been revamped with solar panels on the roofs. Smart meters and energy storage batteries integrate televisions, refrigerators, washing machines, and air-conditioning units. Tablet computers allow homeowners, many of them farmers, to monitor and adjust their household energy consumption. Power is adjusted according to peak demand and outside temperatures, and local utilities reflect that in the price. The island also has a PR center and four exhibition

halls. One aim of the Jeju Island project is to draw conferences and provide in depth demonstrations to outside businesses, governments and universities in order to highlight South Korea’s accomplishments. Phase Two of the road map implementation consists of taking the best outcomes from the test-bed and commercializing them, expanding the Smart Grid into selected urban areas.This phase is expected to run through 2020.The Third Phase of the plan is the completion of the national Smart Grid, targeted to finish in 2030. South Korea’s $162 million Smart Grid Technology market is projected to grow at a compounded 12.3% annually over the next five years. Growth of the sector has been broken down into five

segments, as shown in Figure 2 (below). The combination of the governments enthusiasm, the awareness of the importance of developing Smart Grid technology demonstrated by KEPCO, the growth projections of the market and the already successful collaboration of Korean and international companies in the Jeju test bed shows that Korean Smart Grid is a potentially lucrative market for investment. Korean companies would make good partners and suppliers for parts and components for the Smart Grid. They can produce high quality parts for a reasonable price with rapid delivery, particularly products that include an ICT component, such as: • Smart Grid apps and infrastructure • Smart Grid operations • Smart Grid communications and network services • Smart meter design and manufacture • Meter installation & maintenance • Smart meter communication network services • DCC applications and infrastructure • DCC operations • HAN device design and manufacture Other opportunities lie in helping Korea to create an innovative business model. The traditional Korean electricity market is vertical and integrated by sole electricity provider, KEPCO. Korea needs to change the market structure to respond to variable needs by implementing a Smart Grid. Companies could support the redesign of delivery and pricing to match supply and demand by taking a system wide approach to the problem. Despite the possible issues presented by the current structure of the electricity market, South Korea is the ideal place to invest in Smart Grid technology. The government and state owned utilities are committed to and are driving the development of technology and the expansion of the domestic and global market. The Jeju test bed is a unique opportunity to ‘try before you buy’, and the nation has the appropriate human resources, domestic knowledge, and IT infrastructure to support such a market. All in all, the grid in South Korea is really smartening up!

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DOING BUSINESS IN KOREA

DOING BUSINESS IN SOUTH KOREA BY RACHAEL GARDNER-STEPHENS

outh Korea is an ideal place to develop new clients and colleagues for expanding into Asian markets. As with any international business interaction, knowing the ins and outs of proper business etiquette will be the key to your success. Because just a few missteps could cost you a business deal, practicing proper Korean business etiquette will impress your Korean colleagues, demonstrate your finesse and help you solidify a lucrative new business relationship. MEETING & GREETING When doing business in South Korea, men greet each other with a slight bow sometimes accompanied with a handshake. When shaking hands, the right forearm is often propped up by the left hand. Maintaining eye contact is good etiquette. In South Korean business culture, women also shake hands. Women doing business there will need to instigate a handshake with Korean men, as out of politeness a hand will not be forthcoming.

NAME AND PERSONAL ADDRESS Korean names are written surname first, followed by the given name. Korean surnames tend to be onesyllable, while given names are more likely to be twosyllables. Often to facilitate communication with Westerners, the order is reversed to accommodate the culture. Titles are very important among the Koreans and are used when addressing individuals. The most common address in Korean is the title and surname, e.g. “Director Lee”. Initially, it is advisable to address people by their title and/or surname. First names can be used once a relationship has been established, but wait for your Korean counterpart to initiate this change. COMMUNICATION While many Koreans are comfortable communicating in English, many talented and capable Koreans are not. Speak in clear, basic English, and do not rely solely on verbal communication; reiterate your

messages in writing. Ask questions from several directions to verify that the message has been successfully communicated, as your counterpart is unlikely to request clarification even if understanding is not complete. Break up your speech with pauses for questions and to facilitate translation. Try to pause between points allowing your colleagues time to listen to a Korean translation, digest information and ask you questions. When making presentations, minimise words and maximise graphs, charts and visuals that can communicate across languages. Keep hand motions and facial expressions when talking to a minimum as being too animated is frowned upon. When employing a speaking interpreter, international etiquette maintains that translators are conduits to convey communication between parties. It is important to keep your eyes focused on your business counterpart while the translator is speaking. This shows respect and courtesy toward your business colleague. POWER INSIDER NOVEMBER/DECEMBER 2012 27

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doing business in korea Asking and answering questions involves a large amount of etiquette. If the answer to a question is negative, avoid saying ‘no’ directly. Instead, indicate disagreement or reluctance by inhaling air through closed teeth, tipping your head backwards and/or saying ‘maybe.’ Answer questions affirmatively and in the most positive way, even when you have to deliver negative information. Be concise and direct in your response. When you are asked a question, remember that less is more, so as get right to the point without being rude. If you are declining a request for a favour, you should sound very apologetic. It is also important to remember that Korean businesspeople will likely ask you many questions (often a similar question in a variety of ways), so be patient. ‘Saving face’ is also an important concept to understand. In South Korean business culture, a person’s reputation and social standing rests on this concept. Keep your cool and refrain from showing that you are upset. By remaining calm, you will be perceived as being able to control your emotions. Causing embarrassment or loss of composure, even unintentionally, can harm business negotiations. Moreover, refrain from criticizing your competition. Additionally, modesty is very important in South Korea. When you are paid a compliment, you may say that you are not worthy of such praise. Generally, Koreans have an intense pride in their country and a rich sense of its history. Consequently, it is important that you make every effort not to confuse the history and culture of Korea with other Asian countries, especially Japan. HIERARCHY Confucian ethics dominate Korean thought patterns and this translates in business terms into great respect for authority, age and seniority. All Korean relationships are hierarchical. The individual in the ‘superior’ position is treated with respect while the ‘junior’ is subservient. You may be asked personal questions regarding your age, salary, religion, and family life. If you don’t want to answer, remain polite but try to gracefully side step such questions.

In most cases, people make these inquiries to determine your status. For the status conscious Koreans, it is important to know the approximate age or relative status of their counterparts. Your ‘rank’ can have a major impact on who is willing to meet you and the nature of the dialogue. Know your counterpart and how he fits within his organisation. GIFTS The culture of gift giving persists in Korea. It is done to secure favours and build relationships. Gifts are always reciprocated so be prepared. Good gifts for a first visit are office items, maybe with your logo on them. After this try and bring items of beauty and craftsmanship. Foodstuffs will also be appreciated. Avoid overly expensive gifts, as this will require the recipient to match the value when they reciprocate.

If offered a gift, it is good etiquette to offer some initial resistance. However, after the giver insists for the second or third time feel free to accept. Gifts are usually not opened in front of the giver, although it is advisable to ask if they would like you to. When you plan to give a gift to several people within an organization, be sure to give a gift of greater value to the senior person. The gifts you present to that person’s subordinates may be similar, as long as they are of lesser value. DRESS FOR THE OCCASION South Korean companies are formal when it comes to business attire. Nearly all white-collar employees wear dark blue or black suits and a tie on a daily basis, with very basic striped or geometric-patterns. When meeting your hosts for the first time, subdued, conservative

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colours are considered the most appropriate. In business settings, standard attire for men includes a suit, a white shirt, and a conservative tie. Professional women typically wear conservative business suits or dresses. If you know you are going to a restaurant where you have to sit on the floor, avoid tight skirts. MEETINGS The most convenient times for doing business are between 10:00 a.m. to 12:00 p.m. and 2:00 p.m. to 4:00 p.m. Times of the year to avoid include holidays like the Lunar New Year (around January/February) and the Moon Festival (around September/October). Punctuality is important in South Korea, but be courteous if someone is late to meet you. Meetings have a predictable format. The senior person enters the meeting first and seating is arranged hierarchically. Business cards are exchanged before sitting down and several minutes of small talk follow. Receive the business cards with two hands (or at least the right hand) and study it carefully; place it face up on the table in front of you during the meeting. Treat cards with respect; they represent your counterparts’ ‘face’, provide important clues to their importance and are a key tool for managing relationships. After receiving a card, read it and comment on it before putting it into a card case or pocket. Do not shove it into a pocket as this will be viewed as disrespectful. It is also considered disrespectful to write on business cards you are handed. Prior to doing business in South Korea bring a plentiful supply of business cards. Try and have one side of the card translated into Korean. Mention your title on the card along with any qualifications - this helps convey your rank. When presenting or receiving a card, use both hands. You will always be offered ‘Tea’ (which can also be coffee, juice, water etc); it is awkward to refuse so better to accept even if not consumed. Wait until these rituals have been completed to commence business discussions. Allow your counterpart plenty of time to express his opinion. Avoid dominating the conversation but try to listen and understand what your counterpart is thinking. This is particularly true if your counterpart’s English is weak. RELATIONSHIPS Everything in Korean business depends on personal relationships. One can ‘borrow’ relationships and introductions are very helpful but successful business requires one to build one’s own relationships. Devote time getting to know your counterparts both professionally and personally. Develop, sustain and grow your personal network. EATING & DRINKING Eating is important in Korea. An important component of building relationships, it is rare for a meeting that ends near mealtime not to result in an invitation by the ‘host’. Is it common for the host to pay for the meal; sharing the cost of the meal is unheard of in Korea – be prepared to invite your guest. Seminars and workshops always include a meal usually hosted by the event sponsor. Health consciousness has blissfully supplanted heavy drinking with golf and other pursuits but drinking remains an important part of relationship building. An important custom in South Korea

involves nobody pouring their own drink at dinner. Instead, grab the bottle and pour everybody else’s drink except your own, then hand the bottle to somebody else to have your drink poured. Drinking is serious, not casual. Serious drinking is done at night and is often a drawn out affair demonstrating prowess and stamina. Koreans, in general, drink heavily and will invite you to do so as well at dinner — and beyond. Dinners can become long, bawdy affairs with food continuously arriving at the table accompanied by a lot of ‘toasting’ and consumption of beer and soju (Korea’s traditional rice liquor). Business guests are expected to drink, although Koreans are not offended if the guest drinks less (and more slowly) than the hosts. Most importantly: Be careful. Often, key commercial information is revealed at the very end of a drinking session. Just because a business promise was made at the bottom of a bottle of wine does not mean that it wasn’t made seriously. You need to be alert enough to catch the message. Caution with Numbers Simple things like numbers can lead to a breakdown in business relations. Korean counting indicates the units of time that a condition existed. As a result, the practice is to start counting at 1 (you are 1 year old when you are born, and an overnight trip is a 2 day trip). Large numbers are confusing as Northeast Asia counts in groups of 4 digits (10,000, 100,000,000) rather than in thousands. This makes converting large numbers between English and Korean quite challenging. To a Korean, 5 million is 500 ten thousands. When clarity is critical, write out the entire number with all its digits or use specific dates and times for starting and ending. Seek clarification when you are unsure. power insider november/december 2012 29

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KOREA FUEL CELLS

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MAKING DREAMS REALITY WITH FUEL CELLS IN SOUTH KOREA W

e have seen in this issue the critical role that coal, oil and gas plays in the South Korean energy mix, with their dependence forcing the hand of government to rightly implement some very attractive support mechanisms for renewable energy development. On the 1st of January 2012, the country’s Renewable Portfolio Standard (RPS) took effect. This law requires 350 MW of renewable power capacity to be added each year through to 2016, and an additional 700 MW per year through 2022. It is a clever progressive system that is not over ambitious and unrealistic like some other Asian counterparts. Despite the growth and support of innovative technologies in solar, wind and biomass, one significant other is seeing a sharp increase in installation across South Korea with a very positive outlook under the RPS, and that technology is fuel cells. KOREA’S RENEWABLE PORTFOLIO STANDARD In recognition of its advantages, Fuel Cell technology has been handed the top billing of all new and renewable energy sources falling under the governments support programme. Under the new programme each megawatt hour of power generated from a new & renewable energy resource will generate one Renewable Energy Credit (REC). Renewable power generated will receive a price above the market rate of electricity based on the price of the REC multiplied by the weighted value of the renewable energy source. Licensed electricity distributors are KEPCO (the retailer) and The Korea Power Exchange (the wholesaler). The weighted values have been assigned considering the actual electricity generated from renewable sources to electricity distributors. They exist from 0.25 to 2.0 – the lowest of which is assigned to IGCC and off-gas. Higher weighted values are deemed beneficial, resulting in a higher price paid

for the electricity generated. Fuel cells received the highest weighted value of 2.0, recognizing their environmental advantages and high capacity factor. With this system, power producers are remunerated by a true reflection of definate electricity generated, and reliable base load power from fuel cells is highly valued compared to the intermittent nature of some types of renewable power such as wind or solar. Given the well established manufacturing capability of solar related technology in Korea through industrial conglomerates Samsung, Hyundai and Hanwha, coupled with the huge investment being made by the likes of DSME, Doosan and Hyosung to develop the wind business, it was encouraging to see that the Ministry of Knowledge Economy are prioritizing fuel cell deployment. This has led to heavy investment and development from South Korean energy companies, as it begins to steadily emerge as a leader in large fuel cell power plant installations. Large fuel cell installations are receiving increased interest from multinational companies looking to reduce their carbon footprint, which has received a major acceleration now that a helping hand has been played by regulators with confirmation on pricing mechanics of the RPS. The RPS applies to power producers that generate more than 500 megawatts (MW) of power annually. Six utilities and seven IPPs are in the midst of discussing partnerships toward new sources of clean energy, including the required technologies and service. Below are some of the major projects shaping the future of the fuel cell business. POSCO ENERGY POSCO Energy is a subsidiary of POSCO the steel conglomerate. With a long term view that their primary business within the metals industry was going to decline, it was decided that an alternative revenue steam and business model had to be

developed, this in the field of new and renewable energy (hence the change of name from POSCO Power). POSCO Energy is currently responsible for the majority of stationary fuel cell power plants in South Korea. They recently embarked on an exciting Cell Technology Transfer and License Agreement with American supplier FuelCell Energy Inc. The agreement gives POSCO Energy the rights to manufacture molten carbonate fuel cell (MCFC) components in South Korea based on DFC technology and grants commercial rights to Asian markets. A production facility is going to be built at the POSCO Energy campus in Pohang, South Korea to produce up to 140 megawatts of fuel cell components annually, with equipment initially procured for an expected annual production volume of 70 megawatts. Construction will begin in early 2013 and fuel cell component production is expected to start in late 2014 or early 2015. This is a significant step for the Korean fuel cell business as up until now only balance of plant equipment is manufactured domestically. POSCO Energy is already importing the MCFC stacks and complete the fuel cell module with their assembly capabilities and balance of plant manufacturing at the Pohang facilities. They have installed more than 40 MW of fuel cell capacity across 16 cities in South Korea such as Ilsan, Busan, Yeosu and Seoul, most either 2.4 MW or 5.6 MW. They are also responsible for the world’s largest fuel cell power plant to date, an 11.2 MW facility in Daegu, which came online last November, generating base load electricity for the grid in addition to high quality heating needs for a neighbouring water treatment facility. Looking to push the boundaries further still, POSCO Energy are also in the process of building a 60MW fuel cell power plant at Baran Industrial Park in the city of Hwaseong with partners Korea POWER INSIDER NOVEMBER/DECEMBER 2012 31

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korea fuel cells Hydro Nuclear Power, Samchully Gas, the government of Gyeonggi Province and Hwaseong City to help meet the stringent demands of the RPS. The project is using a series of molten carbonate systems, and when operational in 2013 it will be a fantastic benchmark to show the world that large scale fuel cell deployment for prime power generation is ready. POSCO have been making big orders, their move into manufacturing and licensing agreement for the stacks is a smart move based on the domestic demand anticipated, because large installations are planned and projects are moving quickly. KOGAS POSCO Energy is also delivering an 8.4 MW fuel cell park at the incredible industrial site at Samcheok City, South Korea. They are making the installation for KOGAS who are developing a new LNG import terminal alongside KOSPO ‘s Samcheok CFB power plant. The fuel source for the fuel cell power plant will be boil off gas (BOG) which is the gas vaporized from processing LNG. Fuel costs for BOG are expected to be significantly less than LNG. The power generated plants will be sold to KOSPO for the electric grid and will be eligible for renewable energy certificates under the RPS. SK E&S No market is without competition and despite POSCOs quick start, another Korean energy major is signalling their intentions in an ambitious manner. SK E&S are the leading city gas supplier in Korea, providing approximately 22% of the countries needs. Their extensive distribution and supply network make them a great player to be pioneering large scale fuel cell projects, as hydrogen can easily be reformed from natural gas in their existing infrastructure. SK E&S are really pushing fuel cell development on a number of fronts. Pyeongtaek Energy Service, a wholly owned subsidiary of SK E&S, has just recently purchased 14 PureCell Model 400 fuel cell systems from prominent USA manufacturer UTC Power. This exciting project will be completed in two phases in the city of Pyeongtaek, in Korea’s Gyeonggi Province, supplying just over 6MW of electricity into the Seoul Metropolitan area. Configured in a CHP application, it will also supply thermal energy to Godeok International City, a centre for business, technology and global exchange. The plant aims to be fully operational by the end of 2013. SK Holdings have also recently signed a memorandum of understanding with Topsoe Fuel Cell, the Danish Catalyst manufacturer, aiming to commercialize

the solid oxide fuel cell technology (SOFC) until 2020. They now have two agreements for fuel cell development. One is with SK E&S and Topsoe Fuel Cell in order to develop and commercialize micro-CHP systems for residential applications. The second agreement is made between SK Innovation and Topsoe Full Cell for the development and commercialization of a medium/large fuel cell for Combined Heat and Power (CHP) systems. Topsoe Fuel cell will be providing the fuel cell stacks, while SK Holdings will be developing, manufacturing and deploying the SOFC-based power systems. Both companies will be cooperating in the technical development. Ultimately, SK is planning to secure a total value chain of all fuel cells from a small fuel cell system design & production to large fuel cells for prime time power generation. Through the co-development of fuel cells, SK Group aims to create synergistic effect in its power generation and its storage business, which uses new and renewable energies. This will be achieved by interlocking this business with SK Group’s current businesses such as PV for solar cells, ESS for batteries, and Smart Grid. GS Caltex GS Caltex opened a new chapter in the history of the Korean oil industry as the first private oil company. Since their beginning they have diversified into all areas of the energy business, establishing GS Power in 2000 by acquiring generation and district heating facilities according to privatization policies. GS Power sells electric power to KEPCO and supplies heat to 300,000 households in the Anyang, Bucheon and Pyeongchon areas. They have also been one of the pioneers for large scale fuel cell applications in South Korea, and in September 2008, Samsung Everland delivered 12 of UTC Powers innovative PureCell 400-kilowatt (kW) fuel cell systems for installation at a GS Power plant in Anyang, At the time this was one of the world’s largest fuel cell projects and was a important stimulator for other similar multi megawatt class plants that we are now seeing. GS FuelCell, the oil refiner’s subsidiary, has also developed 1-kilowatt fuel cell systems for residences, using natural gas and 5-kilowatt fuel cells combining heat and power. Both were successfully commercialized in 2010. Korea Nuclear and Hydro Power The Seoul Metropolitan Government announced in May that it will build 29 hydrogen fuel cell power plants by 2014,

and Korea Hydro & Nuclear Power executed a memorandum of understanding in September with Seoul City for the joint development of new and renewable power generation technology, aiming to provide a total of 230 MW. South Korea was hit by rolling blackouts in September 2011 after the Korea Power Exchange resorted to the reductions to conserve power consumption. This affected millions of homes throughout the country, and the city government has chosen fuel cell technology to ensure a smooth supply of base load electricity in the city, even in emergency situations. With some nuclear units aging at key plants such as Kori, offsetting shortages is key for both parties. In total the plans call for 29 fuel cell parks totalling 190 megawatts and 102 commercial building installations totalling 40 MW, by 2014, with 50 MW installed in 2012, 82 MW in 2013 and 98 MW in 2014. The first step is 50 MW of distributed fuel cell power to support the Seoul City subway system followed by other applications for municipal water treatment and pump facilities. Eight refuse collection centres will also be a recipient for the fuel cell systems totalling 50 MW. The fuel cell power plants are all expected to be configured for combined heat and power (CHP), also supporting district heating and cooling systems. Building installations will include 10 MW at hospitals and data centres and 30 MW at high rise residential developments. The City will actively support siting the power plants on City-owned property to avoid protracted delays with land acquisition. Hydrogen Production & the Future Now there still remain a number of key obstacles regarding fuel cell development one of which relates to hydrogen production. There are quarters that view hydrogen as being primarily produced by reforming natural gas, arguing that using it for fuel cells gives away valuable energy content from the gas, not considering that reforming the gas and taking the hydrogen will give you more energy content than just putting it into a combustion energy. These quarters are also forgetting that natural gas is not the only hydrogen resource, as some of the world’s leading scientists and developers undertake projects for hydrogen production. There are some incredibly innovative and advanced processes existing in biological hydrogen production from organic waste, photocatalytic hydrogen production, high temperature electrolysis, and an old, proven technology, water electrolysis, that could use surplus power from interim renewable to produce hydrogen from water. The technology is certainly maturing and progressing on a daily basis, and the ability for fuel cells to be delivered in large scale installations for prime power applications as is being done in South Korea, shows the current faith that energy companies have in the reliability, durability and cost performance of technology at present. This is only something that will refine itself as installations increase and research & development teams across the leading manufacturers look to push the barriers. One thing is for certain, fuel cells are going to play a big role in the future South Korea energy mix, and many other nations in Asia will be close on their heels.

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Proven. hanging The Energy World. Independence That’s Changing The World. Proven. Energy Proven.Independence That’s Changing The World. Proven. Energy Independence That’s Changing The World. Energy Independence That’s Changing The World.

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anging the worldMVY \UTH[JOLK ÄUHUJPHS LU]PYVUTLU[HS HUK WLYMVYTHUJL ILULÄ[Z economical fuel cell technology that has been changing the world To learn more about how UTC Power provides clean, efficient and for more than 50 years, visit UTCPower.com. economical fuel cell technology that has been changing the world To learn more about how UTC Power provides clean, efficient and for more than 50 years, visit UTCPower.com. economical fuel cell technology that has been changing the world To learn more about how UTC Power provides clean, efficient and for more than 50 years, visit UTCPower.com. economical fuel cell technology that has been changing the world

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21/12/2011 06:29 07:45 19/12/2012

fuel cell technology

pioneering fuel cell technology working to support Korea’s efforts to realize some of its ambitions with some important deliveries.

Eric Strayer, General Manager of International Sales, UTC Power

s part of the special PI Magazine Asia report on South Korea’s fuel cell market, we also took some time with UTC Power’s General Manager of International Sales, Eric Strayer, to find out more about the technology and of course, fuel cells in multi megawatt class installations. UTC Power is one of the pioneers of stationary fuel cell technology, and is

PI: Eric thanks for taking the time to speak with us, it is good to have you here today. Fuel cells have seen a lot of growth in South Korea since our last focus, can you tell us what has been happening with UTC Power? ES: It is my pleasure, thank you for your continued interest and strong support for fuel cells and other clean energy technologies in the region. Fuel cells have seen significant growth both worldwide and particularly in Korea since our last focus. UTC Power has been working closely with local partners in Korea to develop high overall efficiency solutions that improve our customers’ financial and environmental payback and help them meet their environmental leadership and Renewable Portfolio Standard goals. Building on the field success of our first 4.8MW installation in Korea, our stationary fuel cell, the PureCell® system, has since been selected by multiple power generation companies for large multi-megawatt utility power installations. We see great potential for growth going forward.

PI: The recent Renewable Portfolio Standard implemented by government at the beginning of the year has some great support measures, what are the standout benefits for fuel cells? ES: The recent Renewable Portfolio Standard implemented in Korea gives fuel cells the highest quantity of renewable energy credits earned for each megawatt-hour of operation. The RPS program is intended to be market driven, focusing on encouraging the power generation companies to create and upgrade the power infrastructure with new energy generation solutions to help reduce carbon emissions. This program’s emphasis on renewable technologies will also make the utility power infrastructure more resilient to power outage due to their de-centralized implementation. Fuel cells are included in this program because, unlike other renewable technologies, fuel cells run 24 hours a day every day, and C02 emission reductions over a year-long period can be 2-3 times that of other renewable technologies. These strong benefits make fuel cells a secure, reliable and sustainable way to produce power all year long UTC Power’s largest multi-unit installation to-date, installed by Samsung for GS Power in Anyang, South Korea

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PI: Do you feel that hydrogen infrastructure is a significant obstacle for fuel cell growth? ES: Developing a Hydrogen infrastructure will be a significant opportunity for fuel cells in the future and does present a challenge for transportation fuel cells to see widespread adoption; however, most large scale stationary fuel cell installations utilize the widespread natural gas infrastructure for Hydrogen fuel. With an on-board reformer, fuel cells can extract Hydrogen from the natural gas network resulting in a clean source of power. PI: In Korea, many mission critical applications are looking for independence from the grid, why is fuel cell technology an attractive option? These businesses are also looking to cut costs on heating and process steam use, how easy is it to implement fuel cells as CHP? ES: The PureCell® system is able to provide durable, reliable primary power in parallel with the grid, as well as the ability to provide back-up power during a grid outage. In fact, PureCell® systems are already providing backup power for our customers around the world. Our fuel cells have been tested many times in significant snow storms and hurricanes in the United States and the fuel cells continued to operate with high availability providing local shelters and customer’s businesses with continued operation during widespread outages. PI: Can you tell us about the suitability of fuel cells to be used in multi-megawatt class installations? ES: UTC Power’s fuel cell scales well to multimegawatt class installations. Not all fuel cells are able to size as effectively for multi-megawatt applications, and there are different approaches in terms of the size of the scalable module, but we expect this to continue to be an area of growth for our fuel cells as they are exceeding the required durability and availability required for investment projects of that magnitude. PI: The UTC PureCell® system is really at the cutting edge of fuel cell technology with regards to efficiency and durability, what makes this model such a good performer? ES: The PureCell® system Model 400 is a standout

In East Hartford, CT, Coca-Cola has installed two PureCell® Model 400 fuel cells at its bottling facilities

in efficiency, durability and availability. This is a direct result of choosing the right technology for the right application. UTC Power is the only fuel cell company in the world that has either developed technology or products in all 5 types of fuel cells. Over 20 years ago, UTC Power selected Phosphoric Acid fuel cell technology because its operating temperature is high enough to get useable heat for CHP value, and yet at a low enough heat to get 10+ years of durability life. That decision has paid off, and we have doubled the design lifetime of our products with each generation since. Our previous generation PureCell® system was designed to achieve 5 years of CSA life, and we have several fuel cells in the field that have achieved nearly 10 years of life. This gives us great confidence for our latest generation PureCell® system, which has a 10 year design life. This product is already performing extremely well in the field. PI: The recent order from SK E&S for the Pyeongtaek project is going to be one of the world’s biggest fuel cell installations on completion, can you tell us about UTC Power’s involvement? ES: UTC Power is providing the equipment as well as up front design consulting based on our experience

installing our fuel cells over the past 20 years. We will also be monitoring and servicing the units in collaboration with SK E&S. We are very pleased with our collaboration with SK E&S on this project and service. PI: Aside from Korea, can you tell us about fuel cell potential in other 60hz markets such as Japan and Taiwan, and can we expect to see a 50hz model from UTC in the future? ES: We expect a 50Hz model to be made available in the not too distant future, as more and more countries are implementing measures to reduce their carbon emissions. Like the United States, Korea, and the large number of residential fuel cells deployed already in Japan, fuel cells serve a unique role to deliver clean, quiet power generation in urban environments where real estate is often in high demand. UTC Power’s PureCell® system has a small footprint and offers flexible siting options, including installations on rooftops, basements or adjacent to buildings. The PureCell® system offers the benefits of` clean power without significant land resources needed for other clean energy options. With the continued growth of capacity and examples of fuel cell installations in the current markets, we see a bright future for fuel cells as a leading choice for clean energy.

The New York Power Authority selected UTC Power to provide 12 PureCell® Model 400 fuel cells that will be used in the new World Trade Center in lower Manhattan

UTC Power manufacturing facilities Sultan Iskandar power plant, power insider november/december 2012 35

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SOUTH KOREA WIND REVIEW

SOUTH KOREAN WIND POWER: PRIVATE SECTOR OVERVIEW

36 NOVEMBER/DECEMBER 2012 POWER INSIDER

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outh Korea has been slow to tap into and develop its wind power resources, but state support for the sector has been increasing. The South Korean government will invest 10.2 trillion won in building a 2.5 GW offshore wind farm, the largest in the world. The first 100 MW demonstration phase will be completed by 2014. Several private companies will be participating in the project, displaying an interest in developing the burgeoning wind market. South Korea is a latecomer to wind energy,and is coming in at a very difficult time for the industry. However, the technical expertise gained by Korean conglomerates experienced in shipbuilding and heavy industries gives these companies a confident grounding in wind technology development. This article gives a brief overview into the main domestic players. Hyosung Hyosung works in a variety of industrial and technology areas including power and industrial systems, industrial materials, textiles, chemicals, construction, trading, information and communication. The Hyosung Power and Industrial Systems Performance Group are heavily invested in wind energy. Hyosung develops wind turbine system’s components, such as gearboxes, generators, controllers and towers. Hyosung developed Korea’s first geared-type 750kW wind turbine and has also developed a 2MW wind turbine, which is under demonstration in Gangwon Province and Jeju Island. Both the Hyosung HS90 2MW and the Hyosung HS50 750kW wind turbines are three bladed, pitch regulated upwind wind turbines with active yaw systems. The rotors have three-bladed pitch bearings with full span control. The rotors have variable pitch systems. They help the blades to be operated in optimized angles at all times to maximize the power production. Hyosung is also developing a 5 MW offshore wind turbine.The turbine will be assembled during 2012 and it is expected to gain full government certification. The first two Hyosung offshore turbines are expected to be erected in the sea, South West of Korea, as part of a 100 MW test site delivering electricity to the mainland. Further turbines will be added until 2019, when the full generating capacity will be realized. LS Cable & System Part of the LS Group, LS Cable & System specializes in cabling for communication and power. In the wind sector, the company provides power and control cable for wind power generation, and for the transmission and distribution of wind power. Such products include magnetic wires for generators, medium and low voltage cables and high-voltage ground cables and overhead transmission lines. LS Cable have developed WindSol™ package, which offers communications, control and special power cables for wind power generation, submarine cables for transmitting power from offshore wind generators, high voltage cables, and essential ancillary equipment. LS Cable’s quality for wind generator loop cable has been acknowledged and accredited by Vestas

and Gamesa, as well as India-based Suzlon and Enercon. LS Cable last year concluded a contract with Enercon worth US$700,000. LS Cable also began delivering prototypes to Doosan Heavy Industries, and the company is currently undergoing UL accreditation to enter the US market. LS Cable was the first company in Asia to obtain certification for a CMS (condition monitoring system) from Germanischer Lloyd. With this certification, LS Cable secured a bridgehead for entry into global markets. LS Cable & System, together with Korea Midland Power, applied the CMS in January 2010 to two of the 1.5MW level wind power generators in Gangwon-do. The system is producing satisfactory results. Samsung Samsung Heavy Industries has a diverse business portfolio that spans sectors such as shipbuilding, engineering and construction and most recently, wind power. Samsung is applying their extensive technological experience to blades, the core parts for wind power generators, as well as the motors and the control systems that determine the performance of generators. The company is also creating synergism in the facility installations of wind power generators. Samsung’s wind power generators include standard onshore 2.5MW generators, generators for cold temperatures and low velocities, and the offshore 7MW generators. Samsung has installed the 2.5MW generators in Yeongheung, as well as in the U.S. and Canada. By developing these generators, Samsung aim to become one of the world’s top five wind power companies by 2020. Samsung also have the capability to provide complete offshore wind farm installation services. The company will build South Korea’s first commercial offshore wind farm off the coast of Jeju Island. Samsung will install fourteen 7MW turbines by the end of 2014, with commercial operation scheduled for 2015. The wind farm will be operated by Daejeong Offshore Wind Power (DOWP), a joint venture set up by Samsung and Korea Southern Power. If installation of the project goes smoothly, DOWP will expand the wind farm to 200MW. Samsung Heavy has also signed a MoU with the Scottish authorities to install one of its 7MW turbines at the Fife Energy Park in Methil by the end of 2014. The company is also considering building manufacturing facilities in Scotland. Additionally, Samsung have just successfully built Pacific Orca, the world’s largest wind farm installation vessel, and delivered it to Swire Pacific Offshore, a Singapore-based shipper. The vessel allows the installation of wind farms under extreme conditions with the velocity of 20m per second and waves that are 2.5m high. Hyundai Hyundai Heavy Industries is the biggest shipbuilding company in the world. Divisions of the company include engineering, electric systems and green power. Hyundai and its subsidiaries can supply onshore and offshore wind turbines, manage installation, inspection, and carry out O&M with industry-leading partners. power insider november/december 2012 37

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SOUTH KOREA WIND REVIEW Hyundai have a range of 1.65MW and 2MW Double Fed Induction Generator onshore turbines, which they are seeking to expand. They will also be accelerating development of a 5.5 MW full conversion type offshore turbine. Here are a few of Hyundai’s key benchmarks: • Hyundai’s Gunsan plant can manufacture up to 300 x 2MW wind generators a year. • Hyundai have secured orders for 2.0 MW and 1.65 MW wind turbines from Finnish Power and US Zotos. • Hyundai became the first domestic turbine maker to supply turbines to the Taebaek Maebong Wind Farm project, delivering four 2MW units to the 18MW facility. • Hyundai expects annual sales of $300 million from a wind-turbine factory in China. The plant in Shandong is able to make 300 x 2MW turbines annually. Hyundai will use the plant to bid for Southeast Asian wind projects. • Hyundai will begin work on a wind-farm project in Pakistan after winning certification for its 1.65MW and 2MW wind turbines. The turbines will be made in South Korea and in the China plant. The wind farm in Sindh will have a capacity of 50MW, sufficient to power about 60,000 homes a year. • Hyundai have partnered with American Superconductor Corp (AMSC) to develop 5MW offshore wind turbines. DAEWOO Daewoo Shipbuilding and Marine Engineering (DSME) specialize in heavy industry, the manufacture of high-quality IT products and large-scale project management. DSME aims to generate sales of up to $7.5bn a year from its emerging wind energy operations by 2020. DSME established a foothold in the global wind market with the acquisition of DeWind

Corporation, a US-based wind turbine engineering company with has a research center in Germany. DSME now develop blades, bearings, gearboxes, generators, towers and control systems for wind generators. Major products include the D8.2 / D9.1/D9.2 and in total, DSME has installed over 850 generators in 15 countries over the world (as of November 2011). The division is currently developing its first offshore wind turbine, and aims to unveil its 3MW and 7MW prototypes in the first quarter of 2013. DSME won a $30m deal to provide ten 2MW wind turbines to a project in west Texas, and the company is also due to select a site for a new generator factory in China by the end of this year. DSME has hinted that it may build vessels for installing offshore turbines and is considering plans to set up its own wind farms in Europe and North America. Additionally, the company may convert a shipyard in Romania to build turbines. STX The STX Group has four major business sectors; shipbuilding and machinery, shipping and trading, plant and construction, and energy. STX Windpower B.V. is a subsidiary formed during a takeover of Dutch manufacturer Harakosan Europe B.V in 2009, igniting STX intentions for the wind industry. They concentrate on developing and manufacturing multi-megawatt direct drive wind turbines. The company focuses on the design, sales, assembly, after sales and manufacturing the key components of wind turbines. Notable achievements include: • In 2011, STX has commissioned the first offshore direct drive STX72 2MW wind turbine, and has completed a successful test run at Jeju Island. • Also in 2011, STX Finland and STX Windpower started a joint collaboration on

•

turnkey windpark supply in Northern Europe, focusing on offshore sites in the Northern Baltic Sea region and onshore sites in Finland, Sweden and the Baltic states. Additionally, STX Windpower successfully finalized the commissioning of a new prototype wind turbine, the STX93 2MW.

UNISON Unison has established themselves as a leader in the wind turbine market, in Korea and globally. The company is a manufacturer of direct drive wind turbines and low gear ratio wind turbines. The company also specializes in the development of wind parks. They completed the development of Korea’s first large-scale commercial wind farms in Pyeongchang (98MW) and Yeongdeok (39.6MW) and is operating them successfully. Unison completed the construction for a wind power generation factory which has 1,000MW manufacturing capacity per year. In this factory, Unison has developed 750kW and 2MW wind power generation systems. Unison is also looking to expand into the 3MW generation system market. One thing is for certain, with the support from Korea’s government to install wind farms domestically and give preference to the local manufacturers, it provides the turbine builders with a great platform to gain reference in demonstration of their competence. Although late starters in comparison to the more established European and Chinese players, these companies have heavy engineering capability and experience like no other. We saw a similar pattern with the Korean automobile manufacturing industry, which emerged when critics said it would fail. These ambitious powerhouses have a distinct willingness to succeed, and will be sure to make a storm in the coming years for the Asian and global wind market.

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Protective coatings

Facing up to the elements: China’s wind industry

ith the repaid social and economic of wind towers will be built to cater for the energy development of China, energy demand will consumption needs. Hempel provided high quality be increased dramatically in the next few decades. anticorrosive coatings to half of the wind towers built The 12th Five-Year Plan (2011-2015) stated that in China. We are among the world’s first supplier “China will promote diversified clean energy to provide coating solutions for wind turbines, with diversity and other measures to encourage changes in experience dating back to 1980. energy production and use.” Hempel paint system offers excellent anticorrosive With the stimulating government policy, wind protection for both onshore and offshore areas, from power will become and continue to be one of the the very harsh offshore environment like Horns Reef main drivers to realize the clean energy strategy in Denmark, to the blazing sun of northern China. proposed by the Chinese government. Wind power Hempel strives to provide high quality, innovative capacity in China is foreseen by 2020 it will reach up products as well as professional service for the wind to 200GW, 400GW by 2030 and 1000GW by 2050 power market. In addition, Hempel supports the (by China wind energy development roadmap). By protection of environment through its policies and then it will be one of the five major power sources actions. We have developed less or no HAPS and in China. Wind power is in its upscale development VOC products which allow our customers to comply and regarded as a sunrise industry. with the most stringent requirements. Designed and constructed by Contract Power Group Up to 2015, it is estimated that 7000-8000 sets One of the challenges for wind tower

manufacturers is to increase productivity but without increasing VOC emissions or to keep it to a minimal level. Hempel has developed UHSS, ultra high solids and speed systems to cater for this need. UHSS coating solution reduces the number of coats from three to two. Furthermore, UHSS halves VOC emission by 50%. Hempel is a total paint solution provider to the wind power industry. Not only providing anticorrosive coatings to both exterior and interior of wind turbines, but we also develop products to protect the wind blades. Hempel Blade Coating is a uniquely innovative solution that ensures low-friction blade surfaces while offering superior wear-resistant elasticity. This breakthrough coating helps lower the cost of energy by keeping output high throughout a turbine’s service life.

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PI_NovDec_China_Wind.indd 41

19/12/2012 06:35

NUCLEAR POWER ASIA

NUCLEAR POWER?

YES PLEASE! BY RACHAEL GARDNER-STEPHENS

42 NOVEMBER/DECEMBER 2012 POWER INSIDER

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ew other energy sources court controversy like nuclear power. Maligned and misunderstood, this efficient and clean form of power generation is the victim of a concentrated campaign of myth and misrepresentation. Rational discussions surrounding nuclear power are often lost amongst the imagery portrayed by anti-nuclear lobbyists of sickly children, mushroom clouds, and radioactive mists. Such propaganda is not only wildly inaccurate, panic inducing nonsense, but also masks the true debate about nuclear

power’s feasibility. Is time to face the cold, hard facts of reality; fossil fuels are dirty, dangerous, damaging and running out. Whilst developments have greatly advanced the generation capacity of renewable energy, no single source can yet match up to coal and gas in terms of efficiency and volume of generated power… ...except for nuclear power. And it’s reliable, safe, economically acceptable and ecologically benign. With this report, PI Magazine Asia aims to

dispel some of the fears about nuclear power and assert the validity of the claims made above. The report is split into two parts; the first part tackles the bigger objections to nuclear power, illuminating realistic problems and advantages. Part II will give an overview of the emerging nuclear power market in Asia. PI Magazine Asia has sought out expert input, with contributions from the International Atomic Energy Agency, KEPCO, the World Nuclear Association and the Asian Nuclear Business Platform.

POWER INSIDER NOVEMBER/DECEMBER 2012 43

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NUCLEAR POWER ASIA

COLUMN SPEAKERS DR. HOOMAN PEIMANI is the Principal Fellow & Head of the Energy Studies Institute at the National University of Singapore. His research interests include energy security, regional and international security and conflicts (particularly in South and West Asia, the Middle East, the Asia-Pacific region and the Arctic), the environment, including energy-environment-conflict Nexus. ZAF COELHO is the Project Director of the Nuclear Business Platform. He is an experienced Project Manager with a great passion for the energy sector. The Asian Nuclear Business Platform is an event crafted by the industry for the industry. STEVE KIDD is Acting Director General at the World Nuclear Association. He authors many articles on the commercial aspects of nuclear power, is a frequent speaker at conferences and meetings around the world and is the author of the book, “Core Issues – Dissecting Nuclear Power Today”.

PART ONE A nuclear plant operates very much like a thermal power plant. Fuel is used to heat water which produces steam and drives the turbines that produce electricity. What differs is the fuel; thermal plants utilize the combustion of coal or gas to convert water to steam. In a nuclear power plant, uranium is used to create nuclear fission. Uranium, the typical fuel for a nuclear plant, is a mined, non-renewable fuel. Uranium is sustainable, however, because of the worldwide abundance of the element. The heat energy comes from splitting the atom in the fissile U-235. This occurs when a neutron is captured by the nucleus of a uranium atom in the reactor core. The nucleus absorbs the neutron and makes it very unstable, causing it to split into two separate atoms, releasing heat and a number of other neutrons in the process. This sets off a chain reaction, as the neutrons released cause other uranium atoms to undergo fission, thus generating more heat energy. Fission is stabilized using a coolant and control rods. Bundles of U-235, usually consisting of between 3% and 5% U-235, are immersed by the coolant, for example water, to prevent them from overheating. It is overheating, due to loss of cooling that could lead to a range of serious problems. The control rods are lowered into the reactor core to control the number of fissions. When fully inserted, the control rods will absorb most of the neutrons, causing the process to cease. Partially inserted, the rods slow down the chain reaction, so fewer neutrons hit U-235 atoms and hence generate less power. EFFICIENT Fission is an extremely efficient and clean process. The efficiency of nuclear fission is down to the lighter fuel requirement. Typically, more than 36 million kilowatt-hours of electricity are produced from one ton of uranium. Generating this amount of electrical power from fossil fuels would require over 20,000 tons of black coal or 8.5 million cubic meters of gas. The process of uranium mining is far safer than mining coal. Coal-mining accidents and gas explosions account for thousands of fatalities each

year. Alarmingly, these deaths are so common that they generally go unreported. Dr. Hooman Peimani, of the National University of Singapore, told PI Magazine Asia that 2,500 deaths are reported in China alone, though the real figure is closer to 5,000. Some uranium is mined underground, and miners are potentially exposed to radioactive and radon dust which can increase the risk of lung cancer. However, as Dr. Peimani points out, coal mining is more dangerous because it releases methane and other dangerous gases; all it takes is a spark to create a catastrophic explosion. CLEAN Nuclear plants are considered so clean because they emit no carbon dioxide, sulfur or nitrogen oxides. As a result, the Nuclear Energy Institute suggests that the world’s existing nuclear plants have eradicated a potential 2 billion metric tons of CO2 per year. The significance of this cannot be overstated. The World Health Organization (WHO) estimates that air pollution causes nearly three million deaths each year, which will triple by 2025. This massive death toll provokes no discernible fear from the public, and receives virtually no news coverage, whilst the few deaths caused directly from nuclear plants are lobbied as proof of potential nuclear annihilation. RADIATION What the nuclear power plant does produce inside its reactor core, however, is radiation. When undergoing fission, uranium produces different kinds of radiation – alpha, beta and gamma. Alpha and beta are weak types of radiation and can be shielded by relatively thin materials. However, gamma radiation can penetrate a number of materials, and excessive doses can cause ill-heath and death. In addition to the reactor shielding, modern nuclear reactors are protected by extremely dense containment chambers to restrict the release of radiation in case of an accident. This is typically a meter-thick concrete and steel structure. This means that a properly functioning nuclear power plant actually releases much less radioactive material into the atmosphere than many coal-fired power plants. Nuclear power plant workers are monitored very closely and subject to strictly enforced legal dose limits, set by regulatory agencies. Naturally, there is still a risk of exposure, but it is important to maintain perspective. Everyone receives constant exposure to radiation, receiving about 200 millirems a year from everyday objects and outer space. If all our power came from nuclear plants we would receive an extra 2/10 of a millirem a year. This is less than the equivalent radiation exposure of one puff of a cigarette. Radiation doses of about 200 REMs would cause radiation sickness, but only if this huge amount of radiation is received all at once. The long term effect of extreme radiation exposure has been overexaggerated. In a study of 100,000 survivors of the atomic bombs dropped in Japan, there have been 400 more cancer deaths than expected. Similarly, the UN conducted exhaustive studies on the health effects of the Chernobyl disaster. The study discovered that of the 4,000 thyroid cancer cases attributed to the accident, nearly all were successfully treated (and these should have been prevented

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www www ww..n.nnuuuccclleleeaaarrrbbbuuusssiininneeessssss---pppllalaatttfffooorrrm mm..c.ccooom mm Visit Visit Visitus: us: us:w 19/12/2012 06:40

nuclear power asia Jong Kyun

Park is the Director

of Nuclear Division at the International Atomic Energy Agency. Before joining the IAEA, Mr. Park worked at the Korea Atomic Energy Research Institute, as the Vice President in the areas of Advanced Reactor Technology Development, Advanced Nuclear Technology Development, Nuclear Hydrogen Development, and most recently Nuclear Policy and

International Relations KIM KWANG-SOO is the General Manager of Overseas Nuclear Project Development at KEPCO, South Korea’s state owned utility. KEPCO is a patron of the World Energy Council (WEC) and is a co-host of WEC’s 22nd World Energy Congress, which will be held in Daegu, South Korea, between 13th and 17th October 2013.

by prohibiting the consumption of milk in the affected area). Beyond this, and after 20 years, there is no scientific evidence of any increase in cancer. Theoretical projections of Chernobyl’s possible longterm effects predict the possibility of 4,000 late-inlife cancer deaths. The UN’s authoritative findings do not minimize the gravity of the disaster, but they do refute many sensationalized reports. Enrichment In order to produce gamma and beta radiation, uranium has to be enriched. Uranium emits alpha radiation naturally, through the spontaneous decay. Enriching the uranium increases the strength of the radiation, which produces more heat energy during the fission process. The most common form of enrichment is centrifuge enrichment; the mined uranium is converted to a gas, and then passed through the spinning cylinders of the centrifuge, which reduces the concentration of uranium-238, leaving the U-235. The concentrated U-235 is then converted into hard ceramic pellets. Enrichment can also produce fuel for nuclear weapons, sparking fears over terrorism or explosions. However, for the use in a power plant, uranium is only enriched to 3-5% of U-235. To make an atomic bomb, you have to enrich it by approximately 97%. The concentration of U-235 is so low in enriched uranium in power plants that an explosion is almost impossible. Plant Stability A more real danger is the spill or release of dangerous radioactive material, but the safety record of nuclear power is outstanding. The only nuclear disaster

known to cause direct fatalities was at Chernobyl, where the death toll was 31. Whilst the impact the disaster had on the wider environment is more significant, it is worth noting that Chernobyl nuclear power plant was badly managed and poorly designed with weak safety features. The same could be said for Fukushima; the plant was built on a fault line and had only one emergency generator. These disasters sprung from poor decision making, not the dangerous material itself. Reactors with Chernobyl’s severe shortcomings have been eliminated or improved. Waste Storage The most legitimate objection to nuclear power is waste storage. Spent nuclear fuel is highly radioactive and needs to be stored and managed safely until it is no longer radioactive, which takes thousands of years. Storing this material presents enormous risks, such as radiation leaks, and the ever present threat of terrorism. The amount of waste produced is minimal. The spent fuel produced yearly from all the world’s reactors would fit inside a two-storey structure built on a basketball court. Some facilities utilized for waste include decommissioned nuclear plants, such as Chernobyl. Many experts are beginning to favor underground storage facilities, as a stable geological formation constitutes a highly reliable barrier. Geological repositories are designed to ensure that harmful radiation would not reach the surface even with severe earthquakes or the passage of time. Waste can be also be retrieved if new technologies offer ways to reuse the material or hasten radioactive decay. Nuclear waste is already being reprocessed. Using

Integral Fast Reactors (IFR), uranium and plutonium are separated or reprocessed, and the spent fuel is then used to power the reactor. Reprocessing reduces the wastes volume and toxicity. To Sum Up Few rational arguments can be made against nuclear power. The process of fission is simple, clean and efficient, uranium is far safer to mine, the process produces no emissions and considerably less waste, most of which can be recycled or stored safely. The plants are stable with an impeccable safety record, and the disasters have had a minimal impact when compared to fossil fuels. As stated by Jong Kyun Park, Director of the International Atomic Energy Agency’s Nuclear Power Division: “Confidence in nuclear energy was shaken by the 2011 accident at Fukushima Daiichi in Japan, but the many benefits of nuclear energy have not changed. Nuclear energy can help to improve energy security, reduce the impact of volatile fossil fuel prices, mitigate the effects of climate change and make economies more competitive.” Public Perception The biggest stumbling block for nuclear expansion is the public’s perception. Mr. Park told PI Magazine Asia that public acceptance is key to the success of a civil nuclear program. Dr. Peimani makes the point that the government needs to take responsibility in providing populations with facts. People need to be reminded that the nuclear industry is as dangerous as any other, but not more so. Zaf Coelho, Project Director of the Asian Nuclear Business Platform, agrees that the responsibility lies

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this issue head on to allow for growth. In part two, PI Magazine Asia will look at how the nuclear market in Asia is growing, with more input from our team of experts. It will look at who the big players are in Asia, what countries are making plans, and at the cost and feasibility of setting up nuclear programs.

PART TWO Despite widespread objections to nuclear power, the global market is growing. As of March 2011, there are 443 operating nuclear power reactors across 29 different countries. In 2009 alone, atomic energy accounted for 14% of the world’s electrical production. Major global players include France, for whom 75.2% of electricity is generated by nuclear plants. The USA has104 nuclear power plants which supply 20% of electricity, and the UK gets 16% of its electricity from nuclear power. Mr. Park gave PI Magazine Asia the International Atomic Energy Agency’s latest projections for nuclear power: “Our new low projection is for nuclear power capacity to grow by nearly 25% from current levels to 456 GW by 2030. Our high projection is 740 GW, which is twice the amount of current levels. Most of the new nuclear power reactors which are planned or under construction, are in Asia.”

with the government to develop a comprehensive public communication plan to engage its population and to allay their fears and doubts. Mr. Coelho adds that having a transparent approach is also crucial for a successful nuclear power programme. The concept of nuclear power should be “introduced at the school level which will allow children to better understand what nuclear is all about which will in the long-run affect their behaviour and attitude towards nuclear”. Stephen W. Kidd, Acting Director General of the World Nuclear Association, has an alternative perspective, asserting that the responsibility of educating the public is the responsibility of the nuclear industry: “They [private companies] can look to the government for some help, but if they want to operate a nuclear plant, they need to put a huge amount of effort into engaging with their various stakeholders.” Kim Kwang-soo, General Manager of Overseas Nuclear Project Development at KEPCO in South Korea and Jong Kyun Park favor a combined approach. Mr. Kim points out that Korea has introduced nuclear power projects under government policy, but the private sector, along with the academic, business and research sectors, are supporting KEPCO to enhance public acceptance. Additionally, Mr. Park’s organization, the IAEA, has programs to help a variety of national nuclear entities and to reach out to all of those who have an interest in the safe operation of nuclear facilities. Such “stakeholders” include the public, local governments, and commercial institutions. It is clear that any country or private company interested in investing in nuclear power is going to have to tackle

The Asian Market In Asia, 36% of South Korea’s electricity is nucleargenerated, 25% of Japan’s, and 17% of Taiwan’s. Altogether, 10 countries from the Asia-Pacific region are considering a nuclear program. There are currently 41 reactors under construction across Asia, and over the next decade there are 98 reactors planned with a further 221 proposed. This surge in interest in atomic energy in Asia has been labeled a “nuclear renaissance”, and many experts see the nuclear industry as a growth market. Dr. Peimani told PI Magazine Asia that despite the Fukushima crisis, “many Asian countries are still pressing ahead with their planned nuclear programs”. According to Zaf Coelho, this is because Asian economies cannot afford to count nuclear out of their energy mix. Asia is facing a burgeoning need for energy, with energy demand projected to double by 2030. Kim Kwang-soo of KEPCO adds that concerns “about climate change, volatile fossil fuel prices and security of energy supply will also push governments in Asia to seriously consider adding nuclear to their energy mix.” Mr. Kim adds that in Asia, whilst growth may differ from country to country, the prospects for economic growth are higher than that of any other region. The total generating capacity is expected to grow 3.4% annually to 2030 (resource: ADB). Mr. Kidd singles out China and South Korea as major growth markets: “China now has 26 of the 64 reactors under construction around the world and the program may yet accelerate further. South Korea has 4 units under construction, to add to the 23 already in operation, and has now become an exporter of nuclear plants, with a contract to supply 4 reactors to the UAE.” Zaf Coelho asserts that China “will soon become the world’s largest generator of nuclear energy. Currently [China] has 16 nuclear power reactors. The nation is aiming for 400 GW of nuclear power by

2050.” China’s planned reactors include some of the world’s most advanced technology, as the nation is rapidly becoming self-sufficient in reactor design and construction, as well as other aspects of the fuel cycle. More than 16 provinces, regions and municipalities have announced intentions to build nuclear power plants in the 12th Five Year Plan 2011-15. The plan includes the start of construction on phase II of Tianwan, Hongyanhe, Sanmen and Haiyang, as well as phase I of Taohuajiang, Xianning, and Pengze. By the end of 2015, 25 GW of new capacity is planned to be operational, and 45 GW more may be added by the end of the 13th Five Year Plan. The State Council Research Office calculated that nuclear development would require new investment of some CNY 1 trillion ($151 billion) by 2020, not counting those units being built now. In September 2010, China National Nuclear Corporation (CNNC) alone announced plans to invest CNY 800 billion ($120 billion) into nuclear energy projects by 2020. Mr. Kidd also highlights India as a growth market, stating that although “India’s program is behind China’s, it is set to be a major source of growth”. With 20 reactors already in place and nuclear plants providing 3.7% of India’s power, Mr. Park is right to call the nation an “established user”. India’s program expects to have 14,600 MW of nuclear capacity on line by 2020, aiming to supply 25% of electricity from nuclear power by 2050. India’s nuclear program is largely indigenous because of the country’s political expulsion from the nuclear market. India is outside the Nuclear NonProliferation Treaty due to its weapons program, so for 34 years was largely excluded from trade in nuclear materials. Due to these trade bans and lack of indigenous uranium, India has developed a nuclear fuel cycle to exploit its reserves of thorium. India’s largest power company, National Thermal Power Corporation (NTPC) plan to bring a 2000 MW nuclear power plant online by 2017. This proposal became a joint venture set up in April 2010 with NPCIL holding 51%. The companies will utilize local and imported technology. Mr. Kidd told PI Magazine Asia that the countries of South East Asia such as Malaysia, Thailand, Indonesia and the Philippines are also set to become nuclear countries by 2030. Malaysia aim to have 2GW of nuclear power by 2020, but the Malaysian government has until 2014 to make a decision. Mr. Coelho and Mr. Park both single out Vietnam as a major future contributor to the global nuclear market, with “advanced plans” to build reactors. Vietnam intends to build 8 reactors by 2030, the first of which will be online by 2020. The Global Industry This proliferation is set to have a knock-on effect on the nuclear industry, though what shape that effect will take, is yet to be seen according to Mr. Coelho. The scale of plans will effect what shape this development will take: “For a country planning for just 1-2 nuclear reactors, it may not be worthwhile or economical to localize the industry to support the nuclear development. On the other hand, with nuclear energy poised to increase significantly globally, there will be opportunities for local companies currently not involved in nuclear to get involved in the power insider november/december 2012 47

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nuclear power asia

global nuclear supply chain, especially involvement in the non-nuclear island part.” Mr. Kim asserts that “in general, the nuclear industry promotes growth and technological development of related industries.” He cites South Korea and Japan as examples, who have “systematically developed nuclear power technology.” In Korea: “Related industries such as quality assurance, machinery, electric, I&C, chemistry, engineering and construction have shown growth along with the development of the nuclear industry, boasting world class technology level within the shipbuilding, steel and IT industry.” The Japanese Backlash A factor that may mitigate the growth of the global market is the phasing out of nuclear programs in countries reacting to the Fukushima crisis. Germany is one of these several countries, and Japan is another. Japan’s attitude to nuclear power is a peculiar one. Having lost over 100,000 people to nuclear weapons in the Second World War and suffered the devastating after effects, Japan nevertheless adopted nuclear technology and promoted its use as a major contributor to the nation’s grid. This acceptance of nuclear power was dramatically reversed in March 2011 when the country was hit by a tsunami that killed 19,000 people. The tsunami triggered the Fukushima nuclear accident, which

did not claim a single life. This was the catalyst for a backlash against nuclear, sparking a national debate between the population’s negativity and the continuation of reliable and affordable electricity. Up to the tsunami in 2011, Japan had 50 operational nuclear plants which generated 30% of Japan’s electricity. Japan has a full fuel cycle set-up, including enrichment and reprocessing of used fuel for recycle, and plans were in place to increase capacity to at least 40% by 2017. Since the Fukushima crisis, only two reactors are operating, and plans to increase nuclear power have been scrapped. The Energy & Environment Council’s (Enecan) “Innovative Energy and Environment Strategy” was released in September 2012, recommending a phaseout of nuclear power by 2040. To replace nuclear, Enecan promised a “green energy policy framework”, which focused on imported fossil fuels and renewables. The industry reacted strongly, particularly to the increased use of imported fossil fuels. In the past year increased fossil fuel imports were a major contributor to Japan’s record trade deficit of JPY 2.5 trillion in the first half of 2012. A consensus was reached that 20-25% nuclear was necessary to avoid very severe economic effects. Subsequently, the Japanese government relinquished support for the plan, relegating it as “a reference document”, and dropping the timeline. Reprocessing used nuclear fuel would continue and construction will continue at Shimane 3 and Ohma 1. The industry’s reaction to Enecan’s plan was unsurprising, as there is a consensus that phasing out nuclear isn’t feasible. Nobuo Tanaka, the former head of the International Energy Agency and an associate at Japan’s Institute of Energy Economics, called the plans unrealistic. Mr. Coelho agrees, calling the

decision “a knee-jerk reaction” that has “more to do with politics” than with the technology itself. It is unrealistic because of what it will cost Japan, both economically and environmentally. Simply put, there is not enough renewable energy to support the grid, and it is too expensive to fast track it’s development. This means that Japan will have to depend on fossil fuels. Mr. Kim’s view on the phasing out programs in Japan and Germany emphasizes the impact it will have on the public pocket: “For the time being, the only alternative energy sources for nuclear power are fossil fuel and renewable energy. However, there are limitations in the use of fossil fuel due to climate change, and for the renewable energy, there still exists the issue of low economic feasibility. Furthermore, the energy price is expected to be hiked up, following an increase in imports of alternative energy sources. In other words, it will take time and additional cost to replace the nuclear energy with alternative sources, leading to a burden on the public’s shoulder.” Mr. Kidd supports this view: “If they are serious about phasing out, it will be very expensive for them. In the case of Japan, they will need to use a greater amount of very expensive imported gas – which also has environmental and security of supply concerns, as well as economic. In Germany, the rush to renewables is causing higher prices and energy imports. The German power customers may not want to tolerate this into the long term, especially the industry buyers, who face competitiveness issues from Asia.” Mr. Coelho expands on these views, and provided us with some of the projected financial statistics facing Japan should they continue to phase out nuclear: “In Japan, based on estimates by the government’s Energy and Environment Council, Japan would face enormous costs should it eradicate nuclear. The council has projected that $615 billion would be needed to expand the use of renewable energy sources, while energy-saving investments would cost $1230 billion under the zero percent nuclear power scenario. Also, Japan’s chances of exporting its nuclear

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technology would also be reduced as no country wants to be the first or last to use a technology.” Dr. Peimani believes that Japan will not phase out nuclear for these reasons. He states that it is totally unrealistic, and no real targets have been set. Dr. Peimani believes that the decision was a reaction to the event and not to the facts, and so Japan will gradually u-turn on the policy. Financing a Nuclear Plant The issue of cost in phasing out nuclear is a key objection, but what about the initial cost of setting up a nuclear program? Mr. Kim states that “financing nuclear power projects is more difficult than others because of massive project costs, long-term construction periods and Nuclear Liability.” In that case, who invests in nuclear power? Mr. Kidd told PI Magazine Asia that many nuclear plants are financed by state authorities and banks. Other typical capital providers, according to Mr. Coelho, are Export Credit Agencies (ECAs), with commercial banks and international financial institutions playing a lesser role. Mr. Kim is the General Manager of Overseas Nuclear Project Development at KEPCO, and told us about KEPCO’s experience with government based nuclear financing: “In the industry’s early stage in the 1960~70s, the Korean government provided support in R&D and supported financing with government guarantees. However, private companies are now raising their own funds. Recently, most of the overseas nuclear projects are financed through project financing, and KEPCO assists in smooth financing from public financial institutions such as KEXIM and Korea Export Insurance Corporation as well as overseas investors.” Mr. Coelho also cited a KEPCO investment as an example of government funding at work: “A recent example of government financing is the UAE nuclear power program, which is a joint venture between the UAE and KEPCO in addition with other Korean partners. The tentative financing structure involved a $10 billion equity stake by Abu Dhabi, with the remaining $20 billion to be financed by debt backed by ECAs, bank financing and sovereign debt.” Mr. Park mentions several advantages to using financing from government owned utilities, such as “strong government support, access to resources, and good credit ratings that allow more affordable borrowing and easier access to the international credit market.”Mr. Coelho mentions some new trends that are emerging in the financing of nuclear plants: “Nuclear Steam System Supplier (NSSS) vendors have recently been taking equity stakes in the projects and China’s biggest nuclear power developer, China National Nuclear Power Co. (CNNC), recently announced plans to access international capital markets via an IPO, proceeds of which will be used to fund five nuclear projects with a total required investment of 173.5 billion yuan ($27.25 billion).” Mr. Park mentions some other new trends that involve coalitions of differing companies: “Large privately owned utilities are financing a smaller number of new reactors, usually as partners in coalitions. There are also a couple of projects (Olkiluoto-3 and Fennovoima in Finland) where ownership and funding is shared among municipalities, local utilities, industrial electricity

consumers and strategic partners. For countries starting nuclear programs, the sources of financing are usually partly or fully in the countries supplying the nuclear power plants. Sometimes, other innovative schemes based on a “build-own-operate” model are implemented, such as in Turkey.” Cost Effective Nuclear development has been described as unsustainable, costly and risky. Building nuclear plants is extremely costly, and critics claim that costs will only increase alongside the risk, making nuclear plants is not worth the investment. With nuclear construction, investors have to speculate to accumulate. On the one hand, nuclear power plants have extremely high capital costs for construction (Mr. Kidd), especially compared to those utilizing fossil fuels, as safety considerations are paramount. Storage of nuclear waste is expensive and dangerous, and so is attracting skilled labor. The costs of building plants is drawn out even more by the exhaustive planning process, and the extended period of construction. On the other hand, the operating costs of a nuclear power plant are very low – half or lower per kilowatt-hour than the cost of the cheapest fossil fuels. Nuclear power plants also produce more kilowatts than coal, wind or solar. This makes nuclear plants very profitable for their owners, says Mr. Kidd, because “operating costs are usually well below power prices.” Mr. Coelho states that only shale gas is a more competitive form of energy generation. This is partly due, according to Dr. Peimani, to the cheap price of uranium. The fuel’s abundance and the efficiency of fission ensures an economically viable cost. Zaf Coelho agrees, stating that: “Studies have shown that a 50% increase in uranium price results only in a 6% increase of electricity generation cost as compared to coal where the same increase in fuel costs will result in a 21% increase of electricity generation cost.” Additionally, advanced technology is helping to shrink construction periods and extend plant lifetimes. Advanced reactors will also cost even less to operate, and produce less waste. Also, investors have to think logically about the relationship between cost and investment period. Mr. Kim points out simply that “the financial cost in proportion to the investment period is larger as the construction period is longer.”

Mr. Kim also points out that for countries who have to import fuel, no matter how expensive nuclear plants are to build, they are always cost effective. This is particularly true for South Korea: “Nuclear power is the most optimal and stable energy source for Korea in terms of energy security, since Korea imports all fossil fuel and faces high fluctuation in the energy price. Generally, even considering costs for disposal of spent fuel and plant decommissioning, the generating cost of nuclear power is less expensive than that of the fossil fuel power.” Mr. Park gave the USA as another example of where nuclear plants have proved to be very cost effective. Mr. Park told us that 73 out of the country’s104 reactors“have sought and received license renewals to allow 60 years of total operation, and another 13 applications are being processed”. One also has to consider the human and environmental cost of investing in such a clean technology, rather than fossil fuels. Mr. Park points out that “in countries that have carbon taxes or require permits for emitting greenhouse gases (GHGs), nuclear power’s very low GHG emissions also lowers its operating costs relative to fossil fuels”. Dr. Peimani also suggests that whilst paying for nuclear construction may be high now, the price we may have to pay later for overuse of fossil fuels will be much higher. This price will include excessive environmental damage, as well as potentially millions of fatalities from respiratory diseases, cancers, and mining & plant accidents. It is with this in mind that Dr. Peimani asserts that it makes more sense to spend a little more today on nuclear power. Conclusion The nuclear industry is haunted. The specters of Chernobyl, Fukushima, and the atomic bombs of the World War possess the public consciousness, and creating an impossible climate in which to exploit the true potential of this natural resource. Unfortunately, there is no space for the supernatural in science, industry and the generation of energy. Whilst it is important to remember these disasters, we must do so in order to learn from the mistakes that were made, as opposed to using them to garner fear and spread misinformation. It is time to dust away the cobwebs of old and erroneous ideas and say Nuclear? Yes Please.

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UNCONVENTIONAL GAS IN SOUTH EAST ASIA

CATERPILLAR’S POWER PROJECT SOLUTIONS

with Mr. Steve Szymanski, International Sales and Marketing ManagerElectric Power, Cat Power Finance Asia Pacific and Dr. John Lee, Senior Sales Manger, Caterpillar Electric Power Division

f you are developing a renewable energy or gas engine power project in Asia, sooner or later you will probably meet up with these guys. John Lee is Senior Sales Manager for Caterpillar’s gas engine business in Asia. Steve Szymanski is International Sales and Marketing Manager for Caterpillar Power Finance, with responsibility for providing financing services for Cat’s electric power projects throughout Asia. Together, the Caterpillar team is actively engaged in providing solutions to customers for their electric power projects using Caterpillar equipment and financing services. PI: Gentlemen, welcome to the last issue of PI Magazine Asia for 2012. It is great to have some of your thoughts today. Can you tell us about some of your current activities for the Asian energy business? Steve: Thanks very much for the opportunity to talk to the PI readers. Much of our current activity is focused on the renewable energy space. There are

an increasing number of countries now providing incentives for renewable energy projects. In particular, these incentives include mandated feed-in-tariffs and standardized power purchase agreements. This improved business climate is driving a number of feedstock hosts and independent power developers to actively pursue renewables and small electric power generation. Besides these “pull” factors, we are also seeing other “push” factors for industries to improve their environmental compliance, especially industries that generate large quantities of agricultural waste such as crude palm oil processing. These factors are now aligning to create a very favourable environment for industries to create a new value stream by generating renewable energy. With growing opportunities also comes a growing demand for capital to finance the projects. John: Caterpillar is actively engaged in the power generation sector in Asia. We have products and

Caterpillar’s New G3516H High Efficiency, Long Service Interval, 2 MW Natural Gas Engine Generator Set 50 november/december 2012 power insider

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experience with traditional fuels like natural gas and associated gas as well as unconventional fuels like biogas, landfill gas, coal mine methane, coke oven gas, synthesis gas and others. Our products range from sub-100 kW to over 20 MW. Our high speed and medium speed reciprocating gaseous fuel generator sets range from sub-100 kW to over 4000 kW. Many of these models are the most efficient on the market and others are the most robust and reliable. We have several new models coming to the market and our recent acquisition of the MWM products provide our clients with more efficient options and total power solutions. For example, our soon to be released G3516H, 2 MW, natural gas platform has an electrical efficiency at 44.7%. This new 16 cylinder, 2 MW block is built on proven design and components. The pilot units have already racked up more than 40,000 hours of endurance testing. Furthermore, the operating expenses are significantly lower than most 2 MW blocks with very low oil consumption. The combination of high electrical efficiency, low maintenance cost, and some of the best aftermarket product support and services makes the G3516H the best choice for your natural gas and CHP applications. PI: Can you tell us about any recent project awards and successful deliveries in Asia? John: Our activities in Asia are very diverse. We have secured many different types of gas projects from simple cycle natural gas to combined heat and power projects. We are effectively number one in

120MW Jincheng Power Plant in China, fuelled by coal mine methane

supplying natural gas reciprocating gensets to captive power plants in Bangladesh. We are also number one in coal mine methane power generation in China and number one in landfill gas-to-power generation in Australia. Our other renewable projects include various wastewater-to-biogas projects including cassava tapioca, cassava ethanol, palm oil mill effluent (POME), molasses spent wash, pig manure, cattle manure, chicken manure, food waste, brewery and municipal sewage. We also just landed one of the first IPP projects in Myanmar, with a power generation capacity of 50 MW using natural gas. PI: There are vast amounts of untapped biogas resources available in South East Asia. What industries hold the most potential for producing alternative energy? What has to be considered in taking on these projects (challenges to overcome, gas volume availability, steam requirement and independence from the grid, for example)? Steve: Economically, I feel the biggest challenge is that the production and sale of alternative energy is not viewed as a core business of the host. For example, alternative energy will not become a major percentage of the revenues of a palm oil or cassava mill. As such, the host companies generally need other factors to drive their decision to engage in a project that is not their core business. Most of the agriculture-related industries have been in business for many years and have their energy needs well sorted, either via self-generation or purchase of electricity from the grid. Electric power generated from renewable waste streams will be in excess of the customer’s internal needs, and therefore must be sold to the grid. Effectively, this excess power sale becomes a new business venture for the host. Some hosts want to retain this additional income, but other hosts prefer to let others manage the power business for them. As a lender, we have to be ready to work flexibly depending on the direction the host wants to take. For those that don’t consider alternative energy to be their core business, we can suggest experienced independent developer partners who will develop and invest in the project. John: The simple answer in terms of “potential” is biogas power generation from the processing and treatment of palm oil mill effluent (POME). Others

include biogas power generation from the wastewater produced in cassava mills, sugar cane processing, agricultural ethanol plants and livestock manure. In countries where the policies are clear and transparent and the feed in tariff (FIT) with special adders are established and reasonable, biogas-to-power project development will continue and even flourish. As Steve indicated, these are not core practice for most of the hosts. Thus, incentives must be in place to stimulate investment and induce a small bit of risk taking in developing new businesses and technologies. One other key is that for projects to make good returns, they must be well managed. The design, construction, commissioning and operations must be done by a professional team. The plant components must be field proven and the equipment suppliers should have a strong track record. These are essential to make any project viable and feasible. PI: What are the benefits of doing this for a nontraditional power producer? Steve: Handing the development responsibility over to an experienced alternative energy provider can alleviate a lot of headaches for a host company while at the same time providing them all the benefits of a high level of environmental and social responsibility. As a lender, we will generally be more comfortable with an experienced party taking responsibility for all aspects of the project development. PI: The Roundtable on Sustainable Palm Oil is becoming a lot stricter on carbon emissions for the palm oil industry, how can producers combat penalties? Steve: We are seeing many palm oil producers who are now looking more closely at biogas projects that can both generate electricity and also demonstrate the capture and reduction of carbon emissions resulting from the palm oil mill effluent. This behaviour is driven both by the RSPO and also stricter enforcement of local environmental regulations. However, there is always some inertia to overcome with a potential host that has been carrying out its processes the same way for many years. At Caterpillar, we are trying to promote environmentally responsible operation of palm oil mills by making available a variety of technical and financial solutions power insider november/december 2012 51

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UNCONVENTIONAL GAS IN SOUTH EAST ASIA

Solar Turbines Titan 130 gas turbine generator with heat recovery boiler providing power and steam for a paper manufacturer in Tangerang, West Java. Financing by Cat Power Finance

that can allow the palm oil mill operators respond to new emissions requirements. PI: Financing for small power projects has been increasingly difficult to secure in recent years. Can you explain some of the problems developers may encounter? Steve: A small electric power project can sometimes be more challenging to finance than a large project. “Soft costs” such as development, legal and finance fees don’t reduce as the size of the project becomes smaller, and therefore become more difficult to absorb. We have had discussions with several developers of biogas projects that have had difficulty obtaining financing for their 1-3MW projects, simply because the small size made it difficult to interest lenders and to absorb the related soft costs. However, that is the nature of the business, and we try to accommodate small projects. We would also try to find small projects that can be replicated at several locations. PI: Can you tell us about a typical captive financing process? Steve: Generally, in the case of a captive power project, we will be working with a customer for whom electric power is not its core business. A significant amount of upfront development work may be needed in order to assist the customer to evaluate the costs and benefits of various options. Frankly, we would like be involved in the deal earlier rather than later. In the case of a project that is creating its own fuel, such as biogas or biomass, there are a number of logistical and operational aspects that need to be considered

during the evaluation of the project economics. And the financing may have to be customized to match up with the resulting cash flow. It’s an iterative process. A “captive” financing is seldom completely captive. Usually there is some type of external revenue, or at least an avoided cost, that must be assessed to determine the viability of the project. For example, in the case of a power plant utilizing palm oil mill effluent to generate biogas for electric power, the palm oil mill will usually have its own embedded generation or be purchasing electric power from the grid. The host may be reluctant to disconnect its existing electrical capacity, and any electricity that is generated from biogas will usually be in excess of the needs of the project. The only option is to sell the electricity back to the grid under the local feed-in tariff regulations. However, if the host is remotely located, there may be complications to sell the electric power to the grid. It may be necessary to look at installing some local distribution for the benefit of nearby villages. Access to grant aid programs or corporate social responsibility funds may be necessary in order to make this type of project economically viable. PI: What are the benefits concerned with true project financing? Steve: True non-recourse project financing allows the host company to set up a project company that is completely separate from its core business. In the case where the host company does not wish to go into a new business (electric power) that is unrelated to its core business, project financing can allow an independent developer to perform these non-core functions for the host, allowing the host to stick to

the business it knows best. However, project financing does not relieve the host of all of its obligations. The host will still have important contractual obligations that must be fulfilled in order for the power project to meet its goals. Primarily, the industrial host will be required to provide a certain quantity and quality of feedstock, as well as to allow the use of a plot of land. There will be penalties if the host fails to meet his commitments during the life of the contract. Although the host is not directly involved in the ownership and operation of the power plant, it will still have to commit to support the important inputs necessary for the successful operation of the power plant. There is simply no way that the host can completely separate itself from the power plant. PI: Data centres require absolute reliability in technology choice. What services do you provide for this sector? Steve: Caterpillar makes a complete line of diesel engines, uninterruptible flywheel power supplies and automatic transfer switches for the data centre industry. We can provide financing for the entire data centre including the servers. For very large projects, we have regional syndication bank partners that we can work with. John: In recent years, we have also been working with various parties to use gas gensets as base loaders for data centers. Onsite power generation using gas gensets provides an interesting option in terms of operational cost reduction, better utilization of power and heat and independence from the utilities. The matching of power requirements and chilled water

120MW Jincheng Power Plant in China, fuelled by coal mine methane

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requirements (produced via absorption chillers) for HVAC application in a data center is almost perfect for most gas reciprocating gensets operated in the hot and humid environments of South East Asia. In other words, the power and cooling requirements of a data center are an ideal match for most gas reciprocating gensets. There are also customers who are considering using gas gensets to power data centers in order to qualify for Tier 4 status. PI: What are the major problems of using utility supply as a back-up power source? John: Many often consider using the utility as a backup power source. This is feasible as long as the utility is very stable and the capacity charges are not excessive. In many applications, paralleling to the utility does provide significant benefits in terms of transient support, harmonic distortions and start-ups. On the other hand, strong, stable utilities can also fail. We have all witnessed the massive blackouts a few years ago in north eastern United States and the recent blackout in India. A stiff grid sometimes is not the best option since it is not very tolerant in many ways. PI: Do you think that natural gas, distributed power generation, has a big role to play for utilities in South East Asia? John: At present you wouldnâ&#x20AC;&#x2122;t think so with the regional natural gas and LNG prices being so high. But as cheaper LNG and increased production of localized unconventional gas (i.e., shale gas, coal bed methane and coal seam gas) comes to market, there is bound to be increased activity with distributed power generation using natural gas. This is only a matter of time. We already see increases in natural gas combined heat and power projects in little Singapore. There are

also new activities in Thailand and Malaysia. With the high quality Myanmar natural gas coming to market and the Qatari LNG coming into the region, there will be increased activities. Steve: Yes, to the extent that there are stranded gas reserves and small remote grids, and as small scale LNG becomes economically viable, we see a number of opportunities for small distributed power generation. PI: Can you tell us about any advancement in the Cat technology for biogas and natural gas applications? John: We do have some new products coming out. Our high power density 2 MW natural gas genset will be launched early next year. This new model, the G3516H, will have the highest electrical efficiency in its power class and it will also have the lowest owning and operating cost of any 2 MW genset. We also plan to launch two to three new products in the next two years. These will again have very high efficiencies and will carry the robustness, reliability and serviceability that you can expect from any Cat product. We are also working with many partners in the renewable sector to provide the market with gensets that can run on synthesis gas and also on special coal mine methane gas. We also have packaged solutions, where the genset can be containerized with the ancillary components skid mounted for ease of transport and for quick and simple installation and commissioning. Our modular approach allows us to deliver a commercial production unit in less than six months from order entry on several of our platforms. These predesigned and factory tested systems are perfect for fast delivery and short lead times. These activities are on-going and we welcome interested parties to work with Caterpillar on these new market developments.

â&#x20AC;&#x2DC;We are also working with many in the renewable sector to provide the market with gensets that can run on synthesis gas and also on special coal mine methane gas. We also have packaged solutions, where the genset can be containerized with the ancillary components skid mounted for ease of transport and for quick and simple installation and commissioning.â&#x20AC;&#x2122;

Coke Oven Gas CHP Application with Three Solar Turbines Titan 130 Gas Turbine Generator Packages at the Jinneng Coal Gasification Chemical Co. Ltd. in Shandong, China

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apgenco overview

APGENCO fighting coal supply, water allocation and financing

ndhra Pradesh is the fifth largest state in India, but represents a significant contributor in the form of gross domestic product, with the Planning Commission of India announcing it to be the second largest in nominal GDP for the financial year 2011 -2012. Rice production and export formed the bulk of GDP as the state represents the largest rice growing region in India. With rice and many other industries thriving in Andhra Pradesh, a rapidly growing population is leading to a huge workload for the Andhra Pradesh Power Generation Corporation to keep the states lights on, but in recent years there have been major challenges concerned with fuel supply. Limited infrastructure is holding back gas fired power plants with a number of projects delayed and the coal situation continues to paint a bleak image, with Andhra Pradesh one of the most heavily affected states in India. The gap between electricity demand and supply in the state has mounted to 67 million units (MUs) per day, forcing authorities to impose long power cuts. The generation has come down by 48 MUs compared to last year. As a short term measure, power utilities have finalised orders and entered agreements for procurement of power around 1300 MW per month till May 2013. As a medium term

measure, the AP Power utilities are in the process of purchasing around 1000 MW power from June 2013 to June 2016 by forecasting the future requirements of the electricity consumer. August 2012 was one of the worst months in recent history when the state government completely switched off power supply to industries across the state, irrespective of category, this despite industry already being subjected to three days-a-week power holiday. In the month gone by, about 1,210 MW of thermal power generation capacity from three units of APGENCO has been out of generation due to shortage of coal. The operation of coal-based stations has been affected due to inadequate supply of coal from the Singareni Collieries Company Ltd, whose miners are agitating in support of the division of Andhra Pradesh and subsequent creation of a separate state, Telangana. In spite of alternative arrangements made for coal from Mahanadi Coal Fields, Western Coal Fields and South Eastern Coal Fields, IB Valley and augmenting additional supplies from imported coal, thermal power generation has been adversely affected. Two major power plants of NTPC have been running at low plant loads, with 435 MW at Simhadri power plant out of production due to inadequate coal and about 550 MW unavailable from

a possible 2,600 MW at Ramagundam, of which Andhra Pradesh shareâ&#x20AC;&#x2122;s is 175 MW. The coal shortages on these NTPC units, along with the APGENCO units out of production, means that Andhra Pradesh is currently facing a shortage of about 39.34 million units against the dayâ&#x20AC;&#x2122;s demand of 265.34 million units, in spite of purchases from other sources. The 210 MW Vijayawada thermal power station Unit V is under shutdown due to coal shortage, unit 6 of Kothagudem thermal power station has recently been under forced outage from some technical difficulty on the stator winding and 500 MW of Kakatiya thermal power station has been closed also due to coal shortage. APGENCO has taken up annual overhaul of the Kakatiya 500 MW unit to take advantage of the downtime. The APGENCO thermal units have supplied 78 MUs and the hydel plants 27 MUs to the Andhra Pradesh grid, of the total power 226 MUs supplied by the Discoms. When at full thermal capacity, APGENCO can produce up to 5092.50 MW across 5 major power plants. The largest power plant under their ownership is the Vijayawada Thermal Power Station. Vijayawada Thermal Power Station Officially known as the Dr.Narla Tata Rao Thermal Power Station (Dr.NTTPS), the plant stands at an impressive 1760 MW, consisting of seven units. It was constructed in 4 stages, with original commissioning taking place in 1979. Stages I, II & III are all 420 MW, whereas the newest seventh unit, was recently finished in 2009, standing at 500 MW. The plant has been an impressive performer in India, achieving the highest plant load factor for a number of consecutive years in the nineties. Located inland just off the Krishna River, the plant takes cooling water from upstream of the river and return water is fed back to the river downstream. Alternative cooling water system with forced draught cooling towers is also available when water levels drop in the Krishna. The plant has also made a conscious effort with regards to air pollution technology, augmentation of ESPs at Stage-I (13 activities) has been taken up under APDP with the financial assistance from the Government of India and Power Finance

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Corporation and completed at a cost of Rs.22.30 Crores. Another 23 R&M activities are taken up (16 activities for Stage I) under APDP with the financial assistance from PFC (50% of Project Cost). Electrostatic precipitators are provided for pollution control at Stage IV, and opacity meters are provided for SPM measurement and measurement of SOX and NOX emissions. Kothagudem Thermal Power Station The Kothagudem Thermal Power Station is another large scale plant under APGENCO’s remit, currently consisting of 11 units. The most recent addition of 500 MW for unit 11 reached commercial operation date towards the end of 2011, after BHEL supplied the BTG package. The plant is one of the longest standing facilities in India, with units 1 & 2 dating back to the midsixties. The performance of the Kothagudem has not been especially satisfactory of late due to generic defects associated with 110 MW units, and ageing of the KTPS ‘A’ Station. As the design life of the four units of 60 MW was coming to an end, renovation & life extension works was taken up with the financial assistance of the Overseas Economic Cooperation Fund of Japan. Under recommendation and execution of BHEL, the renovation and modernization programme included a complete rehabilitation of 4 x boilers, 4x steam turbines and 3 x generators. Following its completion there has been a significant improvement in the performance of the plant. Kakatiya Thermal Power Plant Stage-I & II The Kakatiya Thermal Power Plant is the newest

construction of APGENCO, the first stage representing 500 MW was commissioned in 2010. Bharat Heavy Electricals Ltd were responsible for the design, manufacture, supply and erection of the plant, and recently secured the order for Rs.1,325 crores for supply and installation of 1x600 MW complete thermal power generating unit at Kakatiya Thermal Power Project Stage-II at Bhoopalapally in Warangal district of Andhra Pradesh. The boiler and its auxiliaries have been manufactured at the Tiruchirapalli and Ranipet works in Tamil Nadu, while the steam turbine and generator are being manufactured at BHEL’s Haridwar plant. The pumps and heat exchangers will be manufactured at the Hyderabad plant and electricals at the Bhopal plant, while BHEL’s Electronics Division, Bangalore, will supply controls and instrumentation system. Below is a recent status update and overview of the stage II construction: BTG Package: • Order placed on M/s Desein Engineer Pvt Ltd on the 30.10.2009 for rendering Consultancy Engineering Services related to Kakatiya TPP-II. • Design & Engineering of various main plant items such as the Turbine, Boiler, Generator, Power Transformer and Station Switchgear etc is under progress at various units of BHEL. • Boiler erection work is under progress, with 9894 Tons in Boiler in place • ESP erection work is under progress, with 4528 Tons in ESP in place Balance of Plant Package: • Purchase orders for Supply, Erection, Testing & Commissioning, and Civil works were issued on

L1 tenderer Tecpro Systems Ltd on 25.11.2010. • Men and Material are being mobilized to site by Tecpro Systems and its consortium partners for commencing BOP works. • 10% advance (interest bearing) payment has been released to Tecpro Systems against submission of advance bank guarantees. • Main Power House building: CEP concrete completed Main columns and internal columns pedestal works are under progress. TG raft works are also under progress • Fuel Oil Pump House: Excavation and reinforcement for pedestals is under progress. • Transformer yard: RCC wall completed up to bottom of deck slab. RCC for ST is under progress. • Switchyard: Excavation is under progress. • ID Fan (North and South) deck reinforcement completed and shuttering under progress. North side deck casting completed and staircase reinforcement under progress. • PA Fan & FD Fan: PA Fan north side wall and deck completed. FD Fan north wall and deck completed. • Chimney: Excavation completed. Shell Concreting was completed up to +275M on 09.09.2012. Fabrication of suspended platform is under progress. • Cooling tower: Reinforcement, cutting, bending, fixing is under progress. Racker column and reinforcement is under progress. • CW Pump house, Fore Bay & Channel: Excavation and PCC & RCC work is under progress. • Engineering of various systems of Balance of Plant is under progress. • The Unit is scheduled to be commissioned in March 2014. power insider november/december 2012 55

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apgenco overview Rayalaseema Thermal Power Project Rayalaseema Thermal Power Project is located near Kalamalla village, 8KM away from Muddanur railway station in the Kadapa district. It comprises of Stage 1 (2 x 210MW), Stage II (2 x 210 MW), Stage III (1x 210 MW) and most recently Stage IV (1 x 600 MW) that is currently under execution, and expected in 2014. Water requirement of the project is met from Mylavaram reservoir across river Penna through a 22KM long steel pipeline laid underground. Coal is transported by rail from Singareni Collieries. Salient features of the stage I unit is a single pass tower type boiler supported on concrete pylons, direct fired tube mills, direct ignition and pulverized coal burners. Salient features of the Stage II & III units are conventional two pass boiler with bowl mills.

Stage IV of Rayalaseema is well underway, below is a current update of the project status: BTG Package • Purchase orders were placed with BHEL for execution of the BTG package on 18.11.2010 for a total of Rs. 1445Crs. • Contract Agreement was entered with M/s DESEIN Pvt. Ltd. For providing Engineering Consultancy Service for the project. • An order was also placed with QUEST Pvt. Ltd for Third party Inspection of BHEL equipment at vendors place. Balance of Plant Package • Purchase orders were once again placed with Tecpro Systems for the execution of the Balance

of Plant Package for a total of Rs. 1255 Crs. • 99.42% excavation work is completed for Fuel Oil System Area and PCC work is under progress. • Procurement of balance 6KM length of Cable for construction power supply is under process. • Re-Routing of 11 KV Lines over the boiler & ESP foundation works is under progress. • 100% of evacuation & PCC work completed for Boiler Area and RCC footing is under progress. • 100% of evacuation work completed for ESP foundation. • Excavation and PCC work of Gate complex is under progress. • PCC and RCC footing work is under progress for ESP foundation. • 95% of Levelling and grading work is completed for Switchyard area and work is under progress. • 100% of Levelling and grading work is completed for Chimney area. • Fencing for isolation of new and existing CHP area is completed. • Construction of labour colony by GAMMON is in progress. • Construction of Vatec Wabag site office is under progress. Damodaram Sanjeevaiah Thermal Power Station The Sri Damodaram Sanjeevaiah Thermal Power Station is being developed by Andhra Pradesh Power Development Corporation Ltd, which is a 50:50 joint venture between APGENCO and Infrastructure Leasing & Financial Services Ltd. It comprises of 2x 800 MW units each located near Nelaturu Village, where the phenomenal greenfield Krishnapatnam port is used for equipment and coal transportation. The cooling water for the plant is drawn from the sea and will also undergo desalination. The plant will also utilize blended coal (70% domestic washed + 30% imported) for combustion in its two 800 MW supercritical boilers, each with a weight of about 32,000 metric tonnes. The supercritical technology is being set up by BHEL for the first time in Andhra Pradesh following a Rs.2500 crore order placed on the company by Andhra Pradesh Power Development Company Limited (APPDCL). The steam generator is a supercritical, once through type which operates on variable evaporation point principle where water is preheated and evaporated, and steam is subsequently superheated in single pass. This type of boiler has the ability to not only realise supercritical steam conditions but comfortably handle a wide range of coal qualities. Larsen & Toubro & MHI Turbine Generators Pvt Ltd are responsible for 2x800 MW Steam Turbine Generator Islands. Environmental Challenges Despite the nationwide challenges, APGENCO still has an ambitious pipeline of projects planned, but all of their developments are facing key challenges related to ash handling, air pollution control and water allocation. The annual generation of fly ash from Thermal Power Plants of APGENCO is presently around 6.8 million tons/annum. APGENCO has been

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implementing some innovative measures to handle responsibility. Brick plants have been set up at Vijayawada, Kothagudem and Rayalaseema and APGENCO are also actively engaged in the feasibility of ash stowing to mines. Research and field tests are underway through Acharya NG Ranga Agricultural University (ANGRAU) and Department of Agriculture, GOAP to establish benefits with fly ash use for agriculture for all crops in the different agro-climate zones of Andhra Pradesh. Fly ash is found to be a supplier of essential micronutrients to crops, and many farmers in the vicinity of the ash ponds of APGENCO thermal stations were reaping higher yields by irrigating their fields with ash pond water. New field application of fly ash has commenced with a few farmers lifting the material from the Vijayawada thermal power station. Pollution Control High efficiency Electro-static Precipitators (ESPs) are installed to control Suspended Particulate Matter (SPM) in the flue gas. All new plants are designed for SPM level of 100 mg/Nm3. Old units have either been or are in the process of upgrading for 50/115 mg/Nm3 against APPCB limit of 115 mg/Nm3. Latest micro processor based EPIC-II controllers are installed for improvement of collection efficiency and reduction of power consumption. Online flue gas dust monitoring systems are installed at Vijayawada, Rayalaseema and Kothagudem. Coal plant & other plant effluent is generally treated in the settling tanks. Plant and colony sewage is treated in the septic tanks. Oxidation pond is provided at Rayalaseema for enhanced treatment of sewage. At other stations like Vijayawada “Activated sludge treatment with diffused Aeration” is under contemplation. Effective De-cantation systems are provided in the ash ponds to control suspended solids. Suspended solids in the ash pond outlet effluent are below 50 ppm against standard of 100 ppm. Re-circulation and Re-use system is provided at Rayalaseema and at other stations such systems are under contemplation. Water Shortage Putting aside coal supplies, another major obstacle facing power projects in Andhra Pradesh is an acute water shortage. The total annual surface water of Andhra Pradesh is assessed at 2,746 tmc, of which the major contribution comes from Godavari, Krishna and Penna rivers. By 2020 the population of the fast growing state is expected to exceed 90 million, the water availability per capita per annum will be 1150 m3, bringing the state closer to the severe scarce category (<1000 m3 per capita per annum). Thus, in order to sustain further growth and development, the limited water resources available will have to be utilized effectively and efficiently. Of course power generation requires a heavy usage of water, but consideration must be made in light of emerging technology to overcome excessive water application. Two key areas here surround cooling systems and bottom ash handling. At APGENCO bottom ash has been handled in a wet condition via established technologies such as impounded hoppers or submerged scrapper conveyors. A more modern approach is to develop dry techniques that offer increased thermal

efficiency, reduction of unburned carbon and most importantly the removal of water systems and treatment. There is much liability concerned with the ownership of ash storage ponds, many are reaching capacity fast, approaching potential risks concerned with overflowing, and new sites are becoming increasingly difficult to secure for existing plants with tough new regulation from the Ministry of Environments and Forestry. The ash pond at the Vijayawada has a capacity to take additional volumes for just another 5 years, with the height of the pond reaching 47 mts., a new ash pond is not ready, but as things stand a 400-acre acquisition, with the help of the State government, has become essential. There is an alternative proposal, as a stop-gap move, to increase the height of the existing pond to 50 metres the existing ash pond is spread over 1,060 acres in Mulapadu village, and proposals to acquire another 400 acres adjacent to it in Mulapadu are well underway. The cost of acquisition can be very high, and many of the people who own agriculture land comprising this identified area are against giving away their land or demand very high price for it. Proposed projects for the future Even following the completion of the significant projects currently under execution, there is still a major shortfall for power in Andhra Pradesh. APGENCO is planning three more major thermal power plants in the near future to ensure supply outstrips demand, below is the status of the Vadarevu, Srikakulam and Sattupally developments: Vadarevu TPP Stage-I (1600 MW) • Government of Andhra Pradesh accorded approval to take up the project by APGENCO. • Detailed project review and tender specifications are ready. • Power Finance Corporation has agreed in principle to provide loan for Stage-I. • Project cost of 1600 MW is Rs.8507 Crores with 80% Debt (Rs.6806 Cr.) and 20% Equity (Rs.1701 Cr.) • Proposal for Long-term coal linkage for domestic portion has been submitted to Ministry of Coal. • Proposed to proceed to blend of imported and

Indian coal in the ratio of 40:60. • Coal linkage is awaited. Srikakulam Thermal Power Station (2400 MW) • Proposed to take up the project through SPV ( Joint Venture of APGENCO and Power Trading Corporation). • Proposal regarding equity participation of Power Trading Corporation is submitted to Government of Andhra Pradesh. Approval is awaited. • 2000 acres of land is identified near Palasa. District Collector, Srikakulam has been addressed to earmark the site. • Coal requirement of 13 million tonnes per annum can be met from Nuagoan & Telisahi coal blocks in Angul District, Orissa. • Topo survey is under progress. • Tenders for preparation of detailed project review are under finalisation. Sattupally Thermal Power Station (600 MW) • Land has been identified. • Irrigation Department informed that it may not be possible to allocate water from Bolligattu reservoir. Alternative source of water is being identified. • Ministry of Power has recommended Ministry of Coal to allocate 3.25 million MT coal linkage from SCCL. Coal linkage is awaited. • Hon’ble Chief Minister addressed Hon’ble Minister for Power, Government of India to recommend the project for granting coal linkage by Ministry of Coal vide letter dated 25-05-2010. • A draft detailed project review is almost ready and under finalization. • Unit is programmed to commission by March, 2014. Overcoming challenges surrounding coal supply, environmental opposition and of course water shortage, presents a new set of challenges for the power business in Andhra Pradesh, parallel to one of India’s biggest capacity shortfalls per state. This is pushing investment into advanced technology and APGENCO are striving to develop and renovate capacity in an environmentally friendly manner, with an exciting workload they are a power generator making a big impact. power insider november/december 2012 57

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GEN-SET CONTROL

GROWING WITH THE MARKET: ESTABLISHING THE DEIF GROUP IN SOUTH EAST ASIA

or the past 10 years, DEIF has been successfully represented in Singapore by Power Instruments, but as part of the company’s growth strategy and responding to fundamental market changes in Asia,the Danish-owned DEIF Group is now opening offices in Singapore. An award-winning global supplier of green, safe and reliable control solutions for decentralized power production, marine/offshore power production and wind turbines, DEIF already has sales offices, competence centres and training facilities in nine keys markets and distributors in an additional 35 countries and territories. With DEIF China now certified as an ISO 9001-2008 company, the Group is in a strong position to bring more market-leading products and services at competitive prices to the Asia theatre, targeting European and American engine and genset manufacturers working in the Far East for instance. DEIF expands in South East Asia as markets grow from a base of relatively simple power plant

installations to more advanced paralleling installations with remote monitoring and data management systems, eyeing an opportunity to grab significant market shares for its advanced controller solutions. There are endless numbers of manufacturers of simple genset controls, but only a few of these are truly global, and an even smaller subset creates advanced and innovative power management for parallel gensets that are in DEIF’s league. With fuel prices increasing and transitions to greener energy underway, DEIF solutions offer significant savings and reduced emissions. Defying the heavy pressure the marine sector has been under since the outbreak of the 2008 crisis, DEIF’s share of the marine and offshore market has seen continuous growth carried by technological innovation. Over the coming six months the company plans releases of new lines of marine controllers and bridge instruments. With branch offices in Indonesia and Vietnam, DEIF Asia Pacific in Singapore is able to offer full

service application engineering assistance from factory-trained technical experts, as well as best-inclass training with realistic genset simulators. NEW LEVELS OF POWER MANAGEMENT: JAPAN A recent achievement is the comprehensive and sophisticated AGC Plant Management system that DEIF Power & Control Technology developed for the temporary power installation at the Hitachinaka region in Japan in the wake of the 2011 tsunami and earth quake. Drawing on resources and competences across the DEIF Group, engineers and developers created a ground-breaking Plant Management solution in a format not seen before: with 64 gensets producing 130MW, the plant can supply an average of 300,000 households annually. The basic principle of the AGC Plant Management is that it lifts genset control from single units to plant level, enabling advanced control and protection for

60 NOVEMBER/DECEMBER 2012 POWER INSIDER

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DEIF Asia Pacific Pte Ltd

Following 10 years of dedicated representation in Singapore by Power Instruments, DEIF is pleased to announce the opening of DEIF Asia Pacific Pte Ltd on 1 January 2013. Part of the DEIF Group’s continued efforts to broaden the group’s infrastructure and extend our global reach, the new team’s 20 skilled experts offer presales support, intensive product and application training, engineering, commissioning of simple as well as award-winning system solutions, service and repair.

DEIF Asia Pacific Pte Ltd covers the following markets: Australia, Cambodia, Indonesia, Malaysia, Myanmar, New Zealand, Papua New Guinea, Philippines, Singapore, Taiwan, Thailand, and Vietnam.

A global group with offices in 10 key markets and distributors in an additional 35 countries, DEIF develops market-leading energy and generator control solutions for the power generation industry and marine and offshore markets.

The DEIF Group: sales, training, and competence centres in Brazil, China, Denmark, France, Germany, India, Norway, Singapore, UK, and USA DEIF Asia Pacific Pte Ltd · 31, Bukit Batok Crescent #01-16 · The Splendour · Singapore 658070 · Tel.: +65-69335300 · inquiry@deif.sg · www.deif.com

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GEN-SET CONTROL

large setups from one central point of intelligence. The system also incorporates plant power factor control at connection points, scaling, load profile priorities routines, and uses fan control to reduce fuel costs. The system uses the plant’s generators to black start large step-up transformers with the push of a button. The solution has a proven ratio of up to 1:39 between the generator and the transformer, costoptimising black starts in both island and fixed power mode by limiting the need for high voltage breakers. With a dedicated plant communication structure, SCADA systems are kept separate from the control system. As a result, the system’s performance is not compromised and on-site installation can be reduced to a minimum. When operating in fixed power mode, the AGC Plant Management system assigns generators their most fuel-efficient power setpoint. If a generator trips or fails to deliver the required amount of power, the other generators automatically depart from their optimum setpoints to fill the production dip until a new generator starts up. With the new generator properly synchronised, the generators return to their original fuel-optimised setpoint. In island mode, the system introduces a new dynamic and asymmetrical load sharing design. Unlike traditional setups where all gensets run at the same effort level, this principle activates generators in a cascade: as one generator reaches its fuel-optimised setpoint, the next generator starts up and begins to take load. If and when needed, the load sharing generators can draw on the system’s spinning reserve, enabling the majority of generators to stay at their optimum setpoint without losing the ability to react to significant load fluctuations. The Plant Management system at Hitachinaka can handle up to 16 grid connection points, eight bus tie breakers and 256 generator breakers. Developed not just with an eye for safety but for fuel saving and optimised maintenance intervals as well, the strategy for a set of 64 generators, for instance, could reduce fuel consumption by as much as 18,000 litres of diesel

a day on a continuous use basis. THE GROWING SIGNIFICANCE OF GAS China’s new 5-year plan shifts focus towards clean fuel technologies like natural gas, Combined Heat & Power (CHP) and gas infrastructure as a whole, is growing rapidly across the whole of Asia, with unconventional gas types playing an important role for industrial power producers. DEIF’s advanced generator controllers and Power Management Systems are ideal for these applications, offering safe and efficient operation with DEIF recommending the following considerations: Standard safety precautions are a vital part of DEIF’s gas engine control system. Before starting, the gas supply line (also called the gas train or the gas rack) has to be checked for any leaks. This is done by sealing off the line with two independent valves and pressurizing the pipe section between them. If the pressure is stable, the line is tight and the starting sequence can continue. The Delomatic 4 Gas controller supports two gas supply lines and thereby two gas types at the same time. This means if you run out of one (unconventional) gas, the Delomatic 4 Gas controller automatically switches to another if available, without having to stop the engine at all. The system can also start on conventional gas and smoothly switch to the second gas type. This is useful if the second gas type calorific value is not good enough to start the engine. When running on unconventional gas fuels of any kind, the calorific value of the gas can vary. The Delomatic 4 Gas has more ways of controlling the engine to run it at its optimum level. One of these ways is monitoring the CH4 content in the gas and control the generator set accordingly, another is mounting an Anti-Knocking System (DEIF’s very own AKR3) on the engine, and have the Delomatic 4 control the engine to the point just before knocking based on information from the AKR-3, as this is the point of the best engine efficiency of any given situation with the given fuel composition. The AKR-3 is recommendable

to use also with natural gas fired engines for fuel consumption and emission optimization. 25 YEARS OF EXPERIENCE WITH CHP APPLICATIONS DEIF has 25 years of experience with system integration for gensets, auxiliary and external controls, which presents a lot of benefits to end users, especially for CHP. This application, however, comes with a number of control related challenges that DEIF have been able to solve with their technology. A conventional way of controlling a CHP plant is to use single control units and PLCs for the different systems like e.g. gas mix, speed governor, generator measurements, control and protection, synchronizing, heating and cooling systems. DEIF have another approach with the Delomatic 4 Gas: Only one single unit will control all of the above and more. The unit itself may look bulky, but when this single unit is compared with the number of single function units otherwise needed, it is clear that a lot of panel space and wiring work can be saved. This also minimizes the possibilities for wiring faults. The Delomatic 4 Gas is a 19” rack unit, and the system hardware is based on only 3 types of plug-in modules. With these 3 modules, all gas engine and generator controls and protections can be made, and spare parts become an uncomplicated matter. The integration eliminates some of the challenges otherwise faced when using single function controllers. For example, DEIF have a full internal integration of the speed (throttle) and gas mix control. This means that speed and mix controls interact directly and thereby enhance the engine characteristics, something otherwise very complicated to achieve. Integration also means faster reactions to events since all message transfer is internal. Additionally, communication with the outside world is easy: One single TCP/IP connection gives the user access to all data. There is no need for complicated communication setup between modules, as there is only one module to talk to.

62 NOVEMBER/DECEMBER 2012 POWER INSIDER

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Sea Water Desalination with

h GRP Pipe Systems O highly suitable for intake and outlet pipelines in desalination plants O highly corrosion-resistant to salt water and brine O adaptable to various requirements O very long service-life of more than 50 years O complete pipe system including fittings, joints, manholes, etc. Diameter range 25 - 4000 mm Pressure classes 1-40 bar Suitable for temperatures up to 160 째C

For details about HOBAS GRP Pipe Systems and their various applications take a look at our website www.hobas.sg.

h Singapore Pte. Ltd. 77 Robinson Road | Level 34 | Robinson 77 Singapore 068896 hobas.singapore@hobas.com

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egat water treatment

Water Treatment at EGATâ&#x20AC;&#x2122;s North Bangkok Power Plant I

n order to ensure efficient and environmentally friendly operations, many power plant operators are choosing to install water treatment technology at their facilities. We asked Mr. Jennarong Termthanam, Section Head of the Chemical & Environment Department at EGATâ&#x20AC;&#x2122;s North Bangkok Power Plant, to give us an overview of the water treatment facilities. The North Bangkok Combined Cycle power plant is located at Bangkruai in the Nonthaburi

province, near Bangkok city. The plant has been in commercial operation for almost two years, and the 725 MW station uses 120 Mcuft/day natural gas from Myanmar to generate electricity. There are a number of long term benefits that water treatment at the plant has had towards the overall plant operation. With a steam flow of 607 tons/hour produced by a three stage pressure heat recovery steam generator, the plant needs the most efficient, reliable and environmentally friendly water

treatment plant to compliment its operations. There is a regimented treatment process that water undergoes to ensure that it is useable. For the boiler feed water, the treatment facility utilises raw water from the Chao Phraya River. This river is a fresh water source in close proximity to the power plant. About 30-35 m3/h of this water is treated with a Micro Filter, and the suspended particles (the undesirable materials taken out of the water) are captured within the filter.

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The filter effluent is sent to be stored in a service/ fire water storage tank, to be cooled as service water. Feed water pumps then transfer the service water to the Reverse Osmosis (RO) system. The RO system consist of two trains designed to produce 15 m3/h/train and sent to Mixed Bed Exchangers using hydrochloric acid and caustic for resin bed regeneration. The mixed bed effluent is then cooled as de-mineralized water. The water treatment process used by EGAT is an innovative one. The conventional system pumps raw water to the Clarifier, where it is treated with a coagulant, a coagulant aid, and lime, in large quantities to produce cleared water. It is then sent to Ion exchangers and regenerated with acid and caustic to produce de-mineralised water. The integrated membrane –based system used by EGAT is very compact, and is installed in limited space to reduce the water’s exposure to aggressive chemicals throughout its consumption. EGAT did face some challenges in the selection and implementation of a water treatment system. For example, during the start up of the power plant, the use of a large quantity of de-mineralised water was required. This was solved by implementing RO, by which two trains are started together in series (“double pass”), which could reduce salt irons and control such limits. This allowed the plant to treat a large amount of brackish water in the summer of 2010. Tap water supply was also installed to support unexpected events. The North Bangkok Power Plant is now set for an expansion, and that expansion will also have water treatment facilities. The EGAT plant is to use a MF-

RO-EDI (Electro-deionization) water treatment system to ensure low-chemical usage throughout the power plant. Reducing the use of aggressive chemicals is a priority for EGAT, and the North Bangkok Plant has been highlighted as a benchmark project in that regard. The reduction of chemicals is included in their Environmental Policy. ISO 14001 & TIS 18001 (Thai Industrial Standards). This means that measures are implemented to guarantee environmental and occupational safety, and health management in all power plant activities. New, clean water treatment technology assists the power industry to reduce the use of aggressive chemicals, and EGAT recognises that water treatment facilities help the power industry to develop. As such, reliability & availability in water treatment processes is now becoming more and more of a consideration before planning to build any future power plants. This is because without water, power plants would cease to function, and there are a number of factors that restrict access to the pure water required for operations. For example, climate change influences quality and quantity of boiler feed water. A serious lack of water supply is also hindering the power industry, and this could be solved by the development of desalination works. Addressing the water crisis similar has become very much a hot issue in Thailand. Desalination works are most definitely a clear way in which to address any scarcities. The development of the North Bangkok Power Plant expansion will begin next year. power insider november/december 2012 65

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veolia water

Veolia Water: Improving environmental & economic performance in the Power Industry

With Mr. Carlo Patteri, Business Development Director, Design & Build Projects, South East Asia at Veolia Water Solutions & Technologies PI: With your 20 year plus in the South East Asia region, what have been the key developments Veolia have been part of throughout the Water Industry? CP: Established in Singapore for 25 years, Veolia Water Solutions & Technologies (Veolia), a global

leader in water treatment, actively pursues its strategy to deliver environmentally conscious and innovative water technologies & solutions, meeting the diverse needs of both municipalities and industries. Holding 350 proprietary technologies and 1,000 patents, Veolia maintains an active research and development department. Veolia’s annual R&D budget is estimated at €150 million with a focus for its water division on delivering neutral or positive energy solutions, migrating toward green chemicals and water-footprint efficient technologies with high recovery rates. Our clients have confidence that we can deliver on our promises. We cover the whole spectrum and we have support capabilities for extended warranties and we constantlydevelops new solutions that address specific needs of our clients and help to reduce their environmental footprint. We offer to our customers integrated water solutions which include resource-efficient technology to improve operations, reduce costs, decrease dependency on limited resources and comply with current and anticipated regulations. As Asia rises to become a global powerhouse, Veolia proudly works with its industrial partners to keep the region’s water safe for future generations. We service global clients such as Alstom, STMicroelectronics, L’Oréal, Pepsi Co, Exxon and Shell.

Actiflo® packaged plant Designed and constructed by Contract Power Group

PI: As technologies advance and the relationship between the Power and Water-treatment sectors continue to blossom, how are Veolia personally continuing to ensure plant efficiency? CP: Veolia takes pride in its customer-focused organization strategy. We work very closely with a number of our strategic clients like Alstom to make sure our strategy is in line with their development to ensure and optimize their plant efficiency. Aside from working closely with our clients, we consider the protection of the environment as part of our key strategies. Whenever it is possible,Veolia is applying the “Reduce, Reuse and Recycle” in its power plants. Wastewater is not only a problem to dispose but also a source of value and our research and development works are moving forward in this direction. PI: How are Veolia’s current and future technologies ensuring Environmental sustainability? CP: We understand that new priorities are emerging and require companies to limit their global footprint, reduce energy and water consumption. Committed to staying at the leading edge of sustainable offerings, Veolia Water Solutions & Technologies pursues a strategy to deliver innovative and environmental conscious water and wastewater technologies and solutions. In Asia, Veolia is proposing technologies such Evaled® evaporation, Biothane anaerobic treatment, AnoxKaldnes™ MBBR towards wastewater optimization, reclaim and zero liquid discharge technology for wastewater which acts as protection against any contaminant discharged into the environment. Veolia through its Veolia Environnement Research and Innovation Center (VERI) has also developed new measurement and decision-making assistance tools to help companies to meet the new needs: Carbon Footprint Reduction Program: This corporate-wide initiative drives the innovation, adoption and development of clean technologies for water treatment.The metric demonstrates the value of investing in a best-in-class solution, not just because it reduces operating costs but also because it minimizes the financial impact of direct and indirect carbon contribution. Water Impact Index (WIIX):The WIIX expands on existing volume-based water measurement tools by incorporating multiple factors such as volume, resource stress and water quality. It is the first indicator to enable a comprehensive assessment of the impact of human activity on water resources

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Creating Water Solutions for the Power Industry 1

PRE-TREATMENT

► Ground water, surface water, grey water ► Seawater desalination

Iron and Silica Removal

Recovery & Reuse

BOILER FEED WATER TREATMENT Flue Gas Desulfurization

Reduction of imputities Water Demineralization

BOILER FEED WATER

PRE-TREATMENT Aquamove™ Mobile Water Solutions

• Filtration • Reverse osmosis • Demineralization • Continuous Electro-Deionization • Combined pre-treatment • Mixed bed ion exchange • Water Treatment Chemicals

COOLING TOWER BLOW DOWN

CONDENSATE POLISHING

► Remove impurities from condensate steam ► Iron and silica removal

Desalination

SERVICES

Hydrex™ Chemicals

SERVICES

COOLING TOWER BLOW DOWN

• Clariﬁcation • Filtration (media ﬁltration media membrane) • Zero Liquid Discharge

WASTEWATER TREATMENT

• Forced circulation crystallizer with vacuum system • Evaporation • Cristallization • Membrane technology

• Resin regeneration • Candle ﬁlters • Pre-coated ﬁlters • Filtration • Mixed bed ion exchange • Deaerating feedwater heaters • Separate beds condensate polishers

PI: How do you envision the Power and Water relationship continuing its development throughout the next 10 years? CP: We recently participated in PowerGen Asia to share our expertise and technologies with the power generation industry players. As solution provider, Veolia covers the complete water and wastewater cycle and we are proud to say that we have over 300 power generation references throughout the world. Our company is focusing on system performance, compliance with process and environmental requirements as well as long-term cost-effectiveness. Water is critical in the Power generation industry and Veolia guarantees the most demanding standards of reliability, safety and quality working in partnership with its clients to develop new solutions to meet industry challenges. Maintenance work, repairs, or planned reconstruction measures: downtime can cost power companies that depend on a water treatment plant in their production a lot of money. With AQUAMOVE™, Veolia Water Solutions & Technologies offers a mobile solution for water treatment which in an emergency can, within 24 hours, get a technical «water bridge» underway at

► Minimise water ► Zinc and chromates removal ► Carbonate removal

► Water footprint ► Metals removal ► Particle matters and Gypsum desaturation ► Environmental impact ► Flue gas desulfurization

► Mobile water solutions ► Green Chemicals ► Outsourcing

Green2Biz: This tool, developed by Veolia in Asia, is a unique business approach that translates social environmental responsibility into sustainable value through the evaluation of water treatment facilities performance, from both water and carbon footprint perspectives.

WASTEWATER TREATMENT

• Water treatment chemicals • Side stream ﬁltration • Full stream ﬁltration • Electro-chlorination • Turbine inlet cooling

Flotation

COOLING TOWER SIDESTREAM

► Reduce scaling and deposition ► Minimize microbial activity ► Increase concentration cycles

Sidestream Filtration

• Screening • Flocculation, sedimentation • Settling, clarification • Combined clarification + filtration • Membrane technologies • Softening • Electro-chlorination • Desalination

► Reduction of impurties ► Water demineralization

COOLING TOWER SIDESTREAM

the desired production site. Thanks to its extensive fleet and range of models, Aquamove™ meets the high demands of energy companies for reliable temporary water treatment. The «mobile water bridge» not only fills the gap in the case of a sudden breakdown of a company’s own water treatment plant: it can also be booked for temporary deployment, such as maintenance or planned repair work, process validation, coverage of peak demands, raw water changes or during the time required to build a new plant or reconstruct an existing one. It is precisely for that reason the Swiss company Alstom Power called upon Aquamove™ at its Birr site. ALSTOM POWER Alstom Power is one of the world’s leaders in power generation and for more than 100 years has offered technical solutions for the increasing demand for electricity. The Alstom plant in Birr includes the rotors factory, a test power station, research and development laboratories and a reconditioning centre. The in-house test power station is equipped with a modern GT26 and a GT8C2 dualfuel gas turbine which enables Alstom to test the power station components at the plant under field conditions and optimize the products there. The gas turbine at the test power station has an output of up to 500 megawatt. The necessary cooling of the air intake for the turbine part of the gas turbine is ensured by a water steam circuit. For

this purpose, the in-plant water treatment plant produces ultrapure water for the circuit, which must fulfil very demanding criteria. The silicic acid content (SiO2), for example, must not be higher than 20 ppb, otherwise deposits can form due to the evaporation and cause damage to the sensitive heat exchanger. Alstom Power in Birr acted cautiously: when it became clear that the existing water treatment plant should be modernized, the company called in Veolia. Two days later, the Aquamove™ trucks from England and the Netherlands rolled into the factory grounds in Alstom has two tanks, each with a volume of 1700m³ of fully desalinated water that must constantly be filled. Following technical agreement and in only a short reaction time, a MORO-C24 container with reverse osmosis pre-treatment, and a MODI15000 trailer with a mixed media polisher and a pressure booster station with 100 m³/h 6 bar arrived at the Alstom grounds. The MORO system managed about 98 per cent of the desired water quality and amount while the MODI15 000 unit took care of the rest by ion exchange. As an extra benefit to the customer, after exhaustion of the mixed media polisher, Veolia replaced it by an identical and freshly cleaned and regenerated system. Up to 60 tonnes of resin were regenerated a day. Via the supplied pressure booster station, for the booked period of five weeks, the pressure loss in the piping was compensated for and the ultrapure water produced was pumped into the tanks through hoses. POWER INSIDER NOVEMBER/DECEMBER 2012 67

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FORCED OUTAGES

FORCED OUTAGES The words no-one wants to hear anytime of the day or night, are ‘forced outage’. It sets a process in motion that requires major decisions to be made on a highly-compressed time line, so as to minimise the impacts of lost generation capacity. If a unit trips off line, initial input from original equipment manufacturers often portends an unavoidable, extended outage in order to replace or totally rebuild the machine. By Tony O’Brien, Australian Winders and Jane Hutt, NEC

aced with this input, a major South-East Asian utility found a winding repair during a shorter outage a better alternative. This winding repair was made possible thanks to a successful partnership of service and technical expertise between Australian Winders (AW ), an Australian generator service company, and National Electric Coil (NEC), a high voltage winding manufacturer with machine design expertise. The Failure Sequence A 124 MVA Toshiba generator commissioned in 1984, experienced a cooling system failure. Due to this failure, the unit overheated and a flashover occurred, causing the soldered series connections at the coil ends of the stator winding to melt. The unit tripped offline when the current flow was interrupted. Melted solder flowed out of the joints. Stator bar insulation was damaged. Copper strands from the stator bars were melted. Where the solder had melted out of the connection joints, further overheating occurred, because not enough of a cross section remained to be effective for heat transfer. The overheating continued until some of the adjacent coils also experienced severe damage with 50 percent of copper cross section of the coil in the affected areas melting away (Figure 1). Scope of Work Engineers for the unit’s owner quickly identified available options for a scope of work for getting the machine back online and narrowed them down Figure 1 Initial inspection of the damage showed extensive damage at the end turn series connections

to the two most workable. The first was to declare the generator winding a total loss as a result of the failure, and the second was to make repairs to the winding. While the rewind option entailed the overall least risk, it would require several months of forced outage and greater costs, including lost generation. The winding repair option involved a higher risk in making a successful, reliable repair, but it had the potential to minimise delays and the higher costs of a rewind.

At the end of the owner’s selection process the NEC/ AW team was chosen and the decision to repair the damaged winding was made, since it would bring the machine back on line in the shortest time frame. However, a repair project of this type can be very complex. Removing parts of the winding assembly without damaging those remaining requires extreme care and great skill, and each operation for disassembly and reassembly must be done in a planned order.

Selection of Vendors The owner’s next step was to locate vendors who were qualified to perform either scope of work. In addition to the original equipment manufacturer (OEM), their candidates included NEC, a major winding manufacturer and rebuilder of large generator equipment, who had experience performing an almost identical repair on a unit of the same make of the damaged machine, and had the engineering and manufacturing resources to execute either workscope. While located in the US, NEC had the advantage of an established network of resources through its Generator Service Network (GSN). Based on the location and the skill set needed for the project NEC proposed to include in the project team one of its member Generator Service Partners (GSP), Australian Winders (AW). AW was ideal for this type of project. They had worked with NEC on other large generator rewind projects and were experienced in NEC’s technical requirements for rewinds and coil installations and had the skill set to carry them out.

Preparation First the owner’s engineers performed electrical testing to establish baseline condition of the unit. This data would be compared to the factory values and used as reference in validating the success of the repairs. NEC/AW went to work with inspecting and documenting the unit’s damage and determining how much and where the unit needed to be disassembled. Other than the obvious damage, there were many places where the molten solder at the connection and liquefied resin flowed from the clip joint onto the winding, damaging ground wall insulation. Disassembling the Critical Areas All 138 of the existing insulated clip caps and copper clips from the unit’s series connections were removed, since some degree of melting of the clip solder could have occurred in all and been hidden by the caps. In this operation, care was needed so as not to damage any of the coil insulation, since the clips were soldered and a flame torch was needed to remove the adjacent coil insulation. This also allowed a more thorough inspection for hidden damage to the coils in the winding. Also, all phase leads were stripped and inspected for overheating damage. Damage to some coils was very obvious, since these coils had large sections of copper strands that had been melted and blown away. These would require special repairs to the strand bundles. Since the phase leads were insulated, possible discolouration could not be observed without the stripping them. The Repairs i.Coils determined to have damage on the ends received new soldered clip assemblies. These included tapered copper wedges that insure that full surface electrical contact is made. (Figure 2) After cleaning all new clips were installed using induction heating and a specially-designed hydraulic clamp. A second pass of solder was applied as was necessary to fill in any voids. All clips were re-inspected

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ď&#x20AC;

POWER GENERATION ď&#x20AC; Repair : Refurb : Rewind Australian Winders can offer complete inspection, testing, cleaning and overhaul of all your power generation equipment from hydro through conventional cooled to high voltage liquid cooled units. Fast 24 hour response globally with a full service onsite workshop, testing equipment, dry ice cleaning and induction braze welding.

Complete turnkey project capable including coil or bar supply We are able to supply high quality large machine coils and bars for any size project, plus any re-design requirements or reverse engineering to upgrade the capability of your generator. We offer project management, self sufficient winding teams, or just supplemental project labour at cost effective rates. Australian Winders can provide inexpensive solutions for your power generation equipment service allowing you to get back in service quickly saving considerable lost revenue.

Visit us at www.australianwinders.com.au For personal assistance from one of our specialists: Perth, Australia +61 412 989 173

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21/12/2011 11:41 07:28 13/08/2012 10:11 19/12/2012

FORCED OUTAGES

Figure 2 New silver soldered copper tapered wedges inserted into the series connection clip assembly

after soldering to be sure that there were no voids and the surface area showed adequate electrical contact. The tapered wedges were then cut off even with the end of the coils. After a final cleaning, the resistance of each clip was measured, and each showed a consistent value. All new clip caps were used to complete the series connections, instead of the more widely used taped systems. (Figure 3) The caps can be installed much more efficiently. This reduces the overall repair time, and in addition, their uniform size and shape assures consistent spacing of the series connections and coils ii. Specialised repairs were needed on the coils that had been severely damaged by the flashover. Each coilâ&#x20AC;&#x2122;s copper strand bundle required rebuilding before the series connection could be remade as described above. (Figure 4) iii. No discolouration indicating damage was found on the phase leads. These were reinsulated with 12 layers of mica tape. Before applying the next layer of tape, each layer was painted with an ambient temperature curing epoxy resin compound. iv. Series blocking was installed between the newly fitted and cured insulating clip caps. The blocks were tied in place with heat shrinking tie cord and then coated with an epoxy resin. This blocking, plus additional phase lead blocking, provided secure bracing to resist end turn vibration, which could lead to cracked conductors and shorted strands in the future. (Figure 5)

Figure 4 A view of the two most damaged coils that required special repair procedures for restoration. These particular bars had lost a considerable amount of their copper cross sectional area at the ends

Figure 5 Final tying of series blocking in place. This blocking helps prevent vibration of stator end turn series connections that can lead to strand cracking, shorting and overheating

Figure 3 Final appearance of end winding soldered connections before and after installation of the insulating clip caps

Faced with this input, a major South-East Asian utility found a winding repair during a shorter outage a better alternative. This winding repair was made possible thanks to a successful partnership of service and technical expertise between Australian Winders (AW) v. A phase to phase resistance measurement was done on each phase of the stator winding with consistent results. Bump testing and modal analysis were done on the end winding. The bump testing included a roving hammer impact test. Data collected was converted to modal format and evaluated by NECâ&#x20AC;&#x2122;s engineering team. Final bump tests showed that the N=2 oval mode was sufficiently low tuned away from the double operating frequency of 100 Hz. vi. Final insulation resistance tests showed acceptable values. As part of the overall project, NEC provided a final condition assessment of the stator winding; this assessment was based in part on EMI (Electro-Magnetic Interference) testing and evaluation. EMI is a new generator testing method that can be done with the unit online, with testing techniques and applications being developed by Doble Engineering, Boston, Massachusetts. The repaired generator actually showed lower EMI readings than two other generators in operation at the same location. However, even with those low values, considering the degree of overheating that occurred coupled with the previous service life of 24 years, this generator is still a candidate for a rewind in the near future. Conclusion At the end of the generator work (Figure 6), the steam turbine was re-commissioned and the unit was back online after a total outage of only 24 days. Because of the NEC Generator Service Network teamâ&#x20AC;&#x2122;s capability to perform a large scale emergency repair, the customer now has a reliable, rebuilt generator, more robust and upgraded, and ready to withstand similar fault conditions in the future. The teamwork between Australian Winders, NEC and the customer showed effective project management and proved it is possible to effectively coordinate tooling and manpower halfway around the world and perform a successful repair within an urgent timeframe.

Figure 6 Unit after painting before the re-insertion of the rotor

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NONSTOP Because of Cat® Gas Power Systems

GAS-FUELED PRODUCTS. PEOPLE-FUELED SUPPORT. At the Guangzhou Zhujiang Brewery Group Co., Ltd. in China, the biogas recovered from the brewing process is used to generate electricity – while transforming excess heat from the generator’s exhaust into a cooling source. It starts with a Cat® gas power system, which converts waste into sustainable energy, lowering your operating costs and improving efficiency. And it’s backed by the support of local Cat Gas Power Systems experts, who will help keep your business going nonstop.

Visit us at www.catelectricpowerinfo.com/gas

To watch the rest of the story.

CAT, CATERPILLAR, their respective logos, ACERT, “Caterpillar Yellow,” the “Power Edge” trade dress, as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. © 2012 Caterpillar. All Rights Reserved.

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Creating water solutions for the power industry With more than 300 power generation references worldwide, Veolia has a trusted expertise to provide

safe and reliable water and wastewater solutions that comply with the quality and environmental standards applicable to the power industry. Focusing on system performance, compliance with process and environmental requirements as well as long-term cost-effectiveness, we are able to meet the most demanding standards of reliability, safety and quality for all applications.

www.veoliawaterst-sea.com

• Pre-treatment • Boiler feed water • Condensate polishing • Cooling tower sidestream • Cooling tower blow down • Wastewater treatment • Services

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