Ansaldo Energia CEO sees eastern promise

The head of Ansaldo Energia says his company is hoping to see a strategic preference for its gas turbine technologies and services in the Asian markets bear fruit.

Speaking on the fringes of the POWER-GEN Europe (soon to be Electrify Europe) conference in Cologne, Germany, Filippo Abba, Chief Executive Officer of the Italian power engineering specialists also expressed confidence that inroads the company has made in developing the Russian market will have a similar pay-off once that country’s market re-emerges.
Ansaldo Energia
Two years ago, Ansaldo bought all of Alstom’s heavy duty gas turbine intellectual property rights for the latest ratings of the GT26 and GT36 turbines, as well as existing upgrades and pipeline technology for future upgrades. Abba says that the business is being driven 50-50 by services and installations but the new additions to the fleet are capturing attention, particularly from the east.

“We have signed last week a couple of memorandums of understanding with Chinese customers for the GT36 50 HZ. That will be installed in the Shanghai area with the delivery of the equipment in late 2018. Definitely we will have some items in operation pretty soon and this would represent a good starting point for our GT 36 launch.”

The GT36 is an attractive product for today’s market with its flexibility, quick ramp-up and down and emission control, and complements the Chinese need to improve its urban environment.

“China is proving to be very, very focused on emissions and emissions control and the opportunities for us in that country are big. One of our major shareholders, Shanghai Electric is definetely helping in developing some opportunities in the area. Last year, our fleet there was in the top part of the selling rank, and I look at Asia and China as the breakthrough market for our GT 36. We will later roll it out to the rest of the world, with the 50 hertz first and the 60 herz a little bit later.”

The company came to acquire GT 36 technology following the GE-Alstom acquisition and Abba acknowledges that it has given Ansaldo a boost in terms of overall portfolio and bottom line.

“Definitely we have seen an improvement in our revenues. Certainly, the position of that new technology is helping us to get to a new dimension. The portfolio of products we can offer to our customer is wider than before and we have the possibility to be considered on the same level asà‚  the other big O&M players and for the first time I can say we have a product, which will be available for the 60 hertz market with the new GT36 60 hertz which is certainly opening up new opportunities for us.”

“On top of that, our service business is growing extensively because we have acquired the possibility to work on the GT26 and we have quite a large fleet. Our capability to offer service and spare parts on a larger portfolio of equipment coming from almost all of the OEMs is unique.”

While the Russian market is, momentarily, at least not as prospectively bright for the company as further east, nevertheless Abba believes that when the scenario changes, Ansaldo will be in a good place.

“In Russia we have localised, have an existing office and running company mainly focusing on service activities.”

“The market for new installations there has been non-existent in the last few years. Consumption has not gone up dramatically and the amount of investment they have done in extending their fleet of gas turbines has been marginal. But sooner or later the market will re-open and we are well positioned in Russia with our local establishment.”

“We are in discussion with other potential partners in that country and we know for sure that one of the key drivers for working in Russia is to be able to prove to be as local as possible. We are looking at opportunities also to localise better production of our existing fleet, the former Ansaldo fleet as well as final assembly of the gas turbines. So, we are getting ready for the future there.”

Closer to home, the situation is described by Abba as stable with some bright spots, and the UK a country of particular interest as it’s retired older coal and nuclear fleet, as well as government championing of gas, makes it the ideal profile.

“There are some opportunities particularly in the UK because the situation in that country requires them to move faster with new installations and our GT26.”

“They need to move fast and restore some additional capacity otherwise coming out of coal and some nuclear facilities they will have a shortage of power. They are looking at a number of projects based on gas turbines and combined cycles.”

“Apart from that, If I look at Europe and the Mediterranean areas, the business is stable however the market is tough, competition is very high. On the services side, we are extending our portfolio and the services side is growing and will continue to be strong over the next 10 -15 years.”

The aspiration of many member states to end their coal power industries also facilitates a future need for gas power, according to the Ansaldo chief.

“People are looking at gas installation and gas turbines in other parts of Europe for the balancing effect on renewables. There are even opportunities in Germany so we are following the overall market and for the next three to five years gas will continue to be one of the most interesting opportunities in Europe as a balancing for renewables as well as with a new H-Class machine as potential replacement for the big coal facilities that are going out of production.”

“When I look at the pipeline of opportunity or the funnel as I call it within Europe the UK is the most promising. There are other opportunities spread to other countries, there may be other opportunities in Italy as well as everyone is looking at taking coal production out of the chain and gas-fired power will come back.”

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