“We are in a transition from mere capacity to the capability and flexibility of a plant”

Howard Barnes of MAN Diesel & Turbo talks to PEi about the radical changes in the European power sector and where he sees these changes leading

Q:

What should the future role for gas-fired power plants be in Europe?

A:

Given that “Europe” consists of more than 25 single but collective energy markets, there can be no single answer to that question. In general one can say that natural gas is the fuel of choice, whenever peak loads and flexibility is needed. The more complex a system gets, e.g. because generation comes from intermittent renewable sources, the stronger the business case for gas and the gas engine becomes. In such systems, capabilities such as quick changes in load, fast ramp-ups, start-stop mode operation and startups within time frames of less than five minutes are essential to back up renewable generation. Based on our experience, gas engines are the most efficient solution available to achieve these requirements.

Q:

Will we see small rather than large-scale gas-fired plants, then?

A:

We will continue to see both. There is a clear trend to decentralized generation. Also an increasing number of companies finding it beneficial to take the cogeneration route and use electrical energy and heat on-site. Large-scale gas fired plants will, however, be needed in the future as well. They will not necessarily run single heavy frame gas turbines anymore, though. We are already seeing tenders for modular gas engine-based plants in the multi-hundred MW range.

Q:

Is the need for greater flexibility making a move from gas turbines to gas engines inevitable?

A:

The more essential flexible plant operation becomes, the more inevitable becomes the shift to gas engines. As flexible as any modern heavy frame or even aeroderivative turbine may be, if you need your plant to reach full load within a few minutes, turbines generally are not up to the task.

Q:

What do you think will be the most fundamental change in the European power sector in the next five years?

A:

I think one of the most fundamental changes has already been made, namely the German decision to phase out nuclear and aim for an 80 per cent share of renewable electricity generation until the year 2050. In an industry that was used to investment cycles of more than 20 years, like the power plant industry, this is a revolution. An energy system that had evolved over many decades was practically changed overnight. The consequences of that decision keep us busy, not only in Germany but all over Europe. The changes we will be seeing in the future will be much more gradual. They will nonetheless continue to evolve around the question of how we manage to integrate an increasing amount of renewable energy into given energy systems. To give an example: before the rise of renewable energies, stability of supply equalled installed capacity. Add renewables and stability of supply equals flexibility. We are in the middle of a transition from mere capacity to the capability and flexibility of a plant. The requirements a power plant has to meet today are very different from those ten years ago.

Q:

What is your perspective on the global market development? Where will the markets move in 2105 and where do you expect growth?

A:

Despite currently decreasing oil prices, we expect the world economy in general to remain under some pressure. Accordingly, we will continue to see a challenging market environment in 2015. The political situation will remain unstable – to say the least – in otherwise promising regions, especially parts of the MENA region and Russia. We do see a substantial demand for additional distributed generation capacity in many emerging economies and we are offering some of these markets more efficient solutions to cater for these needs. So the overall outlook is generally solid. However, since the emerging and developing markets are currently facing macroeconomic challenges, we may have to be patient and wait for an upside that will facilitate investment. In the short term we see a relatively stable outlook for sub-Sahara Africa. There is substantial growth potential and we have just opened a new office in Nigeria to further strengthen our market foothold. We are already looking at an installed base of 32 GW all over Africa and are currently engaged in power plant projects in five African countries.

Q:

How will Europe’s major OEMs be able to withstand the competition that will come from Asian manufacturers?

A:

Quality and efficiency will prevail. MAN Diesel & Turbo looks back at more than a century of experience and excellence in engine technology. Not only do we offer the widest range of gas engines in the market, starting from seven and reaching up to almost 20 MW, we are also a global market and technology leader in the field of diesel engines. In energy generation it is very often the operational expenses that make a solid business case. One might be able to find an engine that’s cheaper to buy than one from MAN, but it will be hard to find one that beats us on the field of fuel efficiency, power output or reliability. Whatever energy need our customers have, we work together with them and find the most efficient solution. To give proof of that, our new line of two-stage turbocharged gas engines feature efficiencies of more than 50 per cent and a power output of up to 20.7 MW.


Howard Barnes is Senior Vice-President of Power Plants at MAN Diesel & Turbo