Asia’s power generators are seeking more capacity at greater efficiency and with lower emissions. Tildy Bayar spoke with one company that’s seizing the opportunity
By 2040, the Asia Pacific region will see almost as much investment in power generation capacity as the rest of the world combined, coming in at an estimated $4.8 trillion according to Bloomberg New Energy Finance. Of this investment, 10 per cent is predicted to be spent on gas- and coal-fired power.
Although coal is expected to account for 34 per cent of the region’s power generation in 2040, peak coal capacity is predicted to occur in 2024 and peak coal-fired generation in 2028, as power plant retirements begin to overtake new additions and as air pollution concerns continue to rise.
While Asian countries are adding significant amounts of renewable power to replace coal, with a 2–3 per cent annual increase in investment, a significant amount of gas-fired power is still required. The International Energy Agency (IEA) has said gas will be increasingly adopted over coal by 2025, due largely to Asian countries’ air pollution concerns.
|Combustion turbine facility in Malaysia
One company that makes gas-fired power technology is understandably bullish on the Asian market. “The Asia area is approximately 50 per cent of our business projections in the next three to four years,” says Bob Kraft, CEO of Powerphase, a company that has commercialized advanced air injection technology for power generation and industrial applications.
The company’s Turbophase system is designed to provide a power boost to existing gas-fired systems. It consists of an air compressor driven by a reciprocating engine and a heat recovery system which captures the engine’s exhaust heat and adds it to the compressor discharge, enabling the system to match the turbine’s compressor discharge temperature.
The Turbophase system “takes advantage of the fact that all gas turbines lose power as ambient temperatures or elevations rise,” Kraft explains, with the system “adding the air that is naturally missing back into the turbine”. The air is injected into one or more of the existing ports, “typically about 5 per cent air, which results in 10 per cent more net turbine power”.
Turbophase is “a fast-acting power generation source,” Kraft continues. “As renewable energy comes on the grid, gas turbines are called upon to make up for drops in renewable output. Because they can react quickly, Turbophase allows grid operators to get additional gas turbine power immediately at combined-cycle efficiency, reducing the need to run less efficient gas turbines.
“In every place in the world they dispatch gas turbines in order of efficiency; the last turbine can be up to 30 per cent less efficient than the first one that came online. So installing Turbophase on the grid allows the grid operator to shut off the least efficient turbines. Now the remaining plants can operate at baseload, with Turbophase serving as regulation, reserve margin and frequency control.”
The Asian market is “the largest market globally for our equipment because of how rapidly it’s growing,” says Kraft. “The core benefit of our product is that it can be installed very quickly and delivers a lot of incremental megawatts. It can be deployed around the entire power grid at existing plants, eliminating the challenges associated with new build such as land acquisition, transmission connections and fuel sourcing.”
Installing in Indonesia
In one such project, Powerphase signed an agreement in April with two subsidiaries of Indonesian utility PT Perusahaan Listrik Negara (PLN) to deploy its technology at PLN’s existing gas-fired power plants.
While Indonesia is Southeast Asia’s biggest energy producer and consumer, its market is geared toward exports with reliable domestic supply remaining a challenge. The government has targeted full electrification by 2019 through an ambitious programme that aims to add 35 GW of power capacity by that year. Of that number, gas-fired power represents 17 GW.
Powerphase’s agreement outlines a phased implementation plan beginning with a feasibility study, followed by an initial 100 MW project and full implementation of 2000 MW envisioned for the future. The company says the project will use a full turnkey approach utilizing significant local content, and will include its own financing.
During the pilot project, the Turbophase technology will be installed at two existing combined-cycle power plants for up to 50 MW of additional capacity. The project is expected to proceed beginning in October with the completion of a feasibility study, and the full rollout is expected within two years.
The total project value will be $80 million for phase one and an estimated $1.6 billion for the full-scale rollout. According to Powerphase, full implementation will save Indonesia $11.6 billion in electricity generation costs over 20 years.
The deal was signed under the auspices of a $10 billion US-Indonesia trade agreement, which focused largely on energy and included US companies such as GE, ExxonMobil, Applied Materials, waste-to-energy firm NextGen and geothermal power project developer Ormat.
According to a White House statement, the deals include the delivery of “cutting-edge US technologies to help meet Indonesia’s energy needs”.
“US companies are also supporting Indonesia’s desire for cleaner energy with the development of geothermal resources and the long-term supply of LNG,” the statement continued. “The procurement of US high technology equipment will improve Indonesia’s ability to provide affordable and renewable energy.”
According to Kraft, Powerphase’s technology is especially suitable to address Indonesia’s energy challenges. Building new power plants, he notes, involves “land, fuel, transmission and permits. If a project is successful in Indonesia it takes four to five years, and this is does not meet the goal set by the government.
“For an island nation, moving gas around the island is really tough. In bringing LNG into specific areas, the challenge is how to get it to the power plant. With our technology, they don’t face new land or transmission or fuel supply challenges.”
The Turbophase unit comes packaged in what Kraft describes as a “short shipping container, with the same height and width, but 10 metres rather than 13 metres long. We haven’t found a power plant yet where we can’t find spots for it.” The units don’t all have to be located together, he adds, or even near the plant: “They could be a kilometre away”.
“Plus, it’s always hot in Indonesia so their turbines are missing 20–25 per cent of their output. They’re missing air, which we add.”
PLN “is going to turn the technology on and never shut it off,” he says. “It makes the power plant and the grid so much more efficient, and in Indonesia it’s about efficiency.
“At the efficiency point where we’re going to generate the energy, it’s 50–55 per cent more efficient than what it will replace. It will be directly offsetting peaking plants, which are in the 35 per cent efficiency range.
“The government-run grid can see that making more power at combined-cycle efficiencies but in a rapid manner, even faster than simple-cycle peakers, has huge economic and emissions benefits.”
Kraft says Powerphase’s deal with Indonesia will involve a “no-CAPEX model” or one that is “very inexpensive” at one-third the cost of a new combined-cycle plant. “What’s critical,” he says, “is that it can be deployed rapidly – we can put in 2 GW in under two years. That includes a one-year feasibility study and a demonstration project on two power plants, then we basically do the other 1.9 GW in a year.
“Our factory in Korea is set up to do 5 GW a year,” he adds. “It’s our only factory in Asia; it’s adequate and the assembly process is relatively straightforward.”
Opening in Singapore
A project in Malaysia is also in the works, although the company can’t yet say who the customer is. “We expect it to kick off a lot of activity though,” says Kraft, “for example a memorandum of understanding (MoU) that could be worth $2 billion of equipment.”
“Malaysia is a flagship Asian project” for the company’s technology, he adds.
Putting its money where its mouth is, the company recently opened an office in Singapore in order to serve Asia-based owners of combustion turbines. The office will be led by Antony Mansfield, a former Asia general manager for industrial and aeroderivative gas turbine technologies with Pratt & Whitney (now owned by Mitsubishi Hitachi Power Systems).
Mansfield is “really well known in the industry as a combustion turbines expert,” says Kraft. “Turbophase on aeroderivative turbines, like GE’s LM6000, offers more than 5 per cent fuel efficiency improvement. OEMs fight for every 1 per cent, so a boost of 5 per cent is huge. We’re happy to have someone who is an expert in the region, someone who also has expertise working with an OEM.”
Mansfield will be “running the Asia operations,” says Kraft, adding that he will help to “implement innovative solutions for the challenges of the region’s developing energy needs”.
And the firm is planning more projects around Asia. In November, it was issued a Japanese patent for the Turbophase system. “We consider the Japanese market one of the most important in the world,” Kraft says, “and are making strides with customers throughout Japan.”
Other Asian players are getting into the act, with Thai oil and gas company PTT Public Company Ltd and Japanese utility TEPCO investing in Powerphase through Energy Impact Partners (EIP), a coalition of global utilities. In June the firm announced that it had closed an initial investment with EIP and would use the investment to expand its global sales capability and further build up its supply chain. The investment “gives us staying power and credibility because all utilities can be customers,” Kraft says.
Working with the OEMs
Former GE CTO Dr Mark Little recently joined Powerphase’s board. During his 37 years at GE, Little served as vice-president of GE’s power business, in engineering and management positions in the turbine business and in business development for the energy sector.
“Powerphase welcomes Dr Little’s involvement,” says Kraft. “It’s important for us to advance our strong technical credibility in the marketplace, and having Dr Little on our board of directors helps further that goal.”
Rather than competing with the major gas turbine OEMs, Kraft says Powerphase “has worked to establish dialogue and partnership. We’ve received feedback from the OEMs that they could integrate the Turbophase system into a power plant better than Powerphase can.
“To some degree I have to say that they probably could – they could package it with all the different types of upgrades to bring a very compelling value proposition to the customer.
“There are other technologies that involve injection of, basically, water: for example, fogging, inlet steam, or wet compression. Some people have good experiences with that, but there are a lot of climate-related limitations, and potentially serious damage you can cause to the gas turbine if meticulous protocols are not followed – and even then there can be serious negative consequences to the life of the turbine parts.”
When asked if he’s considered selling the business, Kraft says it “has way too much potential – we believe it will be a multibillion-dollar revenue business”.
In the long term, he will say that the company is “very confident that we have enough patents” to retain its market niche “until 2035-ish – long enough to deploy many gigawatts globally.”