Divide and conquer

Greek EPC firm Metka is expanding both technologically and geographically to create a diversified business for a new energy landscape. One new focus is energy storage, business development director Paul Smith tells Tildy Bayar

Metka is the EPC business unit of Greece-headquartered Mytilineos Holdings SA, best known for building gas-fired power plants.

More recently the company has increased its focus on the renewables sector, in particular solar PV projects, and lately, according to business development and new markets director Paul Smith, “the energy storage aspect is becoming much stronger”.

The firm is now involved in a number of storage projects worldwide, including off-grid power with battery storage, grid-connected storage for frequency control applications and utility-scale solar plants with integrated battery storage systems.

Its latest announced project involves installing off-grid hybrid power systems at four Nigerian universities. The project will include a total of 9.3 MWp of solar PV capacity,
5760 battery cells and 7.5 MW of diesel generators for backup power.

The project is part of Nigeria’s government-sponsored Energizing Education programme, which ultimately aims to take the country’s 37 universities off-grid in order to ensure that they have reliable power. Metka will provide EPC services for the project’s initial phase.

We spoke with Smith about the changing energy market and what’s involved in diversifying a business both technologically and geographically.

A changing market focus

According to Smith, the key to prospering in today’s energy market is diversification. “Solar PV and now storage are recent additions to our portfolio with great potential,” he says.

In addition, undertaking projects in a portfolio of countries means that “we’re not overexposed in any particular market. We like to be in some emerging countries, and are getting much more engaged in relatively developed countries as well.”

In the past, he says, “we were really focused on the EMEA region, and tending much more to, let’s say, the countries with a relatively higher risk profile. So we were doing projects in countries where, because of our responsiveness and flexibility, we were able to adapt and figure out how to execute projects often under difficult circumstances.”

But he says political risk applies just as much in developed countries as in emerging ones. “Brexit, the German nuclear decision ” it’s a very unpredictable world we’re living in.”

Renewables and storage

“We saw that the nature of the renewables business was very different from our traditional thermal power plant business,” Smith explains, “and that meant we needed an organization well-adapted to that particular sector because it moves much faster. The cycle of renewable projects appearing, being negotiated, being installed and becoming operational can be less than a year, whereas in the thermal business a project can take two to three years until you get to the contract stage, and then you typically have a 2.5-to-three-year execution period.

Metka added storage to the 57 MW solar PV plant in Isabela, Puerto Rico

“The renewable energy business is moving so fast that within those six years it would have probably changed completely. So we decided that the best way to go by far was setting up a new platform, Metka EGN.”

For a recent hybrid energy storage project in the UK, “we started discussing the project in July-August 2016, and everything was operational by the end of March 2017. That’s eight months from starting to discuss the project to having the agreement in place. This was a complex EPC contract negotiation which we started working on with the client from a solar project template because this kind of project hadn’t been done before. It was also one of the first large-scale battery storage projects in the UK, and definitely one of the most complex.”

The company went on to sign a second agreement to build a 30 MW storage project on three sites, and most recently another
20 MW energy storage system. All will provide fast frequency response and ancillary services to National Grid.

Through these and other such projects, Metka has found that implementation of an energy storage or hybrid solar/storage project has similarities with a straight PV project, Smith says. All are “very quick projects, so you can’t have a heavy project organization ” you need a fast, responsive one”.

Bullish on storage

Metka EGN has implemented a range of energy storage solutions, Smith says, including installing battery storage on an existing solar PV park. “We’ve done this in Puerto Rico for a 57 MW solar plant, which is the largest operating solar plant in the Caribbean region and among the largest globally with integrated battery storage.”

The storage solution is “used for smoothing the output, for example if if there’s a cloud,” he says. “This creates a semi-dispatchable profile for the plant, and you can also move the peak generation: if the utility wants more power later on in the afternoon you can store and dispatch.”

The fast frequency response projects in the UK are not connected with solar plants, Smith says. “The batteries are used together with diesel or gas generators as backup to provide frequency response to the grid. This is a very new area where you need to integrate several well-established technological components, but put them together in a new way.”

And for energy storage projects there is always a degree of customization required, he explains. In the UK, “exactly the kind of frequency response service that these projects provide can be slightly different from one project to another, depending on what their obligations are to National Grid.”

The project sites “had all been very, very constrained ” physical constraints like the size of the equipment, the grid connection or even the gas supply ” so on one project we installed some gas engines while others had to be diesel, and then you get into trying to select the optimum engine for the application because you’re always trying drive down the CAPEX.”

In addition, he says the battery component “can change from one to another project because you’re getting a better deal, and each battery type has slightly different characteristics ” you need to reflect that in the type of inverters you’re providing, the control system etc.”

The company mainly uses lithium-ion batteries, and Smith notes that their price per kWh or MWh “is coming down quite substantially, almost following the kind of curve we saw, or continue to see, for solar panels. There’s still a way to go for energy storage to become a game-changer, but it’s not that far away.

“Plus, you’ve got potentially new battery chemistries under development. We’re a bit cautious on new technologies; we tend to think that people overestimate how quickly these things can get into the market and make an impact. But with lithium batteries and the scale of new factories being built, within five years there should be either a sufficiently low price or a new technology on the market which makes a huge impact on energy markets, which are already very much in transition.”

Continuing expansion

In terms of geography, Smith says the firm’s strategy is about where the “interesting business” is. “We’ve been expanding a lot geographically and have solar projects now in Uganda, Kazakhstan and Chile, which were not even on our radar three years ago.” And in terms of future expansion, he says Metka is currently setting its sights on Southeast Asia.

“The first projects there are likely to be solar,” he says, “because they’re relatively easy to set up and organize. For example, in places like Indonesia with thousands of inhabited islands, there are real opportunities for hybrid power plants. That’s one new theme emerging for us.

“Africa has been a focus for the last five years. We’re getting good traction there, and we will definitely continue developing that market because the needs are obvious and the challenges are clear.”

Metka’s biggest market for gas-fired plants is Ghana, where Smith notes there are three ongoing projects. “One is gas-fuelled, one is dual-fuel with crude oil and gas, and the new one will actually be the first big LPG-fired power plant in Africa.”

The firm is also looking to move beyond a pure EPC business model to providing complete project solutions, potentially also getting involved in fuel supply and, as Smith puts it, “supporting the financing or investing in projects as opposed to just building them “we’ve already done that on the 250 MW power plant in Ghana.”

In Greece, the group already has a gas business which serves gas-fired power generation and industrial plants. “We import quite large volumes of LNG into Greece,” Smith says, “so we’re looking to package some of those skills and know-how into our projects to provide an overall gas-to-power solution.

“We are willing to put more at risk, if you like. Part of what we do is managing risks and making the projects happen. We’ve got close enough to these markets now to have a good sense of what the real risks are. When you understand the nature of the risk, you can make meaningful decisions.”

Tildy Bayar is features editor of PEI magazine

No posts to display