European turbine makers plan for a shifting market

The Siemens SGT5-4000F turbine has a gross power output of 292 MW and a gross efficiency of 39.8 per cent Source: Siemens

EUTurbines’ president Dr. Chris Floyd, business development director for Rolls-Royce and a board member of Rolls-Royce Energy, shares his outlook on the future for Europe’s turbine industry.

PEi: How important is it that the European Union (EU) has a common energy policy? How does it benefit Member States and technology developers such as EUTurbines’ members?

Dr. Chris Floyd, President of EUTurbines
Floyd: The EU has set ambitious targets for its energy and climate policy. However, even the so-called 20-20-20 targets ” 20 per cent renewable energy, 20 per cent less greenhouse gas emissions and a 20 per cent increase in efficiency by the year 2020 ” will not be easy to reach.

Furthermore, discussions are under way in Brussels about raising the greenhouse gas emissions targets further, up to 25 or 30 per cent. These targets will not be achievable unless all Member States work together.

For example, there is a geographic mismatch between supply and demand; some Member States are well placed to produce wind and solar power, but are often not those states with the highest energy usage.

We at EUTurbines support the idea of a common approach and joint efforts. This is efficient for the Member States, their industries and citizens, but also for the technology providers, because it leads to a single and relatively large market, with harmonized requirements.

This is important to the equipment industry because we have the strong conviction that Europe should be the lead market for infrastructure technologies.

PEi: In Europe, is enough money being invested in research into energy technologies, such as gas and steam turbines, to ensure we can produce electricity in an affordable, efficient and environmentally sustainable way?

Floyd: The European industry, supported by Member States and by the EU, is the leader in the most important energy technologies, but there is fierce competition both from the Western world and from new competitors in the emerging economies. From our perspective, the last EU framework programme on research did not set the right priorities. The programme also suffered from inefficient procedures, making it unattractive relative to funding schemes in other regions of the world.

However, all institutions and stakeholders have progressed, and the so-called Strategic Energy Technology Plan (SET-Plan) shows that Europe is on the right track. If this plan ” which defines core technologies for a future energy infrastructure, and which brings together industry, EU and Member States ” becomes the core element of the next framework programme, then we are optimistic.

PEi: How does EUTurbines expect the gas turbine market to evolve in Europe and globally over the next 10″15 years, and where does EUTurbines expect the regional or country growth areas to be?

Floyd: In line with the International Energy Agency, we are expecting a period of relatively cheap gas. The situation in Europe is likely to follow this trend ” especially if large pipelines become reality, if liquefied natural gas (LNG) capacities expand, and if the European potential for unconventional gas is developed.

Given the uncertain investment conditions for coal-based power generation, together with the need for flexible power generation to stabilize the grids and to enable the feed-in of intermittent renewable power, then gas is likely to be the fuel of choice in Europe.

Global low prices, relatively low carbon emissions and reliable reserves are also drivers for the use of gas.

A new 876 MW combined-cycle plant at Emsland in Germany Source: Alstom

PEi: In the coming years the expectation is for greater integration of renewable energies into the grid. How important a role will gas turbines play in helping utilities balance the intermittent nature of renewables?

Floyd: Even if we expect a significant improvement in the grid infrastructure and in energy storage technologies ” many of our members are investing here ” gas fired power generation will be a key enabler for the integration of renewable power onto the grids.

We expect significant investments in gas turbine capacity and we do still see potential to improve the flexibility and the efficiency of gas turbine power plant installations.

PEi: With unconventional gas resources, such as shale gas, now being economic to recover, what impact do you expect these resources to have on the gas fired power generation sector, and on advances in gas turbine technology in particular?

Floyd: Shale gas is an interesting market development and is likely to provide greater security and price stability for global gas supplies.

We see some opportunity for our members to use both gas and steam turbine plant in shale gas extraction, and we may see some focus on smaller gas turbine power plants, located close to shale gas extraction locations.

However, the biggest impact of shale gas is likely to simply be one of stabilizing the price of gas in general, making it easier for our customers to plan for new gas fired power plants.

PEi: We appear to be very close to achieving a gas turbine that is 60 per cent efficient in combined-cycle. In your opinion, how efficient could a gas turbine become?

Floyd: Achieving 60 per cent combined-cycle efficiency is undoubtedly a great step forward, and a credit to the engineering and research efforts by our members over the past decades.

Further efficiency improvements will be possible, and our members are continuing to develop technologies that will deliver these. However, we should keep in mind that operating efficiency is not the only objective of a gas turbine power plant.

Power plants also need to be cost effective and reliable, and to deliver low emissions and be able to operate with the flexibility needed to balance grid instabilities and fluctuating load demand. In recent years baseload efficiency has been the focus of public debate, but in the future we will see that part-load efficiency and dynamic capabilities are at least as important.

Our members are aware of the technical challenges, and we are confident that they will continue to deliver innovative and effective products.

PEi: Although arguably less dynamic than the gas turbine market, in EUTurbines’ view, how will the steam turbine market evolve in Europe and globally over the next 10″15 years, and which countries or regions will form the growth areas?

Floyd: We have to distinguish between smaller steam turbines for industrial applications and decentralized power generation, and large turbines for power plants.

For the large machines, the world market is positive. We see significant investments in nuclear power and, in some major regions such as China and India, in coal fired power plants. Europe is difficult due to a lack of investment in the coal fired fleet.

Today, Europe’s coal fleet is significantly less efficient than that of the Chinese. It is not all bad news.

Because of this lack of investment in new plants, we see opportunities over the next decade in new machinery to give plant lifetime extension and for retrofit of turbines into existing plants.The future for smaller industrial sized steam turbines is quite positive, as they are among the winners in the transformation of the energy infrastructure.

They are used in decentralized power generation with combined cycle power plants, in biomass plants and in heat recovery systems. We also see a big potential for small steam turbines in renewable power plants, such as concentrated solar power.

PEi: In Europe, the construction of new coal fired power plants is expected to be minimal in the coming years. How important will the retrofit market in Europe be for steam turbine makers?

Floyd: Two factors will drive retrofit activities. First, we will need a lifetime extension for many power plants in Europe. Even if renewables fulfil the high expectations on them for the period after 2020, there will still be a need for fossil fuel capacity. The second factor is the need to use coal fired power plants as residual power in combination with intermittent renewables.

This flexibility will stress the old power plants to extremes and this will reduce plant lifetimes. Lifetime management will be one of the major trends in the upcoming years, not only in coal, but also in nuclear.

A steam turbine for RWE’s lignite fired Neurath plant in Germany, which has an installed capacity of 2205 MW Source: Alstom

PEi: Concentrating solar power (CSP) technology is a growth energy area, with many CSP plants now at a commercial scale in both the US and Europe. Do you expect this renewable energy sector to provide a significant new market for steam turbine technology in the coming years? And could it eclipse steam turbines’ traditional markets?

Floyd: It is already a market and it will become a significant one. Our members are investing in these technologies and we will see significant improvements in the efficiency and reliability of CSP systems in the near future. CSP will open completely new markets in Africa and regions in Asia where no other energy source is viable.

However, CSP is clearly not the answer for all areas and all needs. There will be competition between CSP, photovoltaics, wind, nuclear and coal ” with and without carbon capture ” and we are sure that all these technologies will still be in use even in the second half of the 21st century.

PEi: China is becoming recognized as a significant supplier of both gas and steam turbine technology globally. How much does it threaten the competiveness of the European turbine industry?

Floyd: The economic and industrial success of China has been remarkable. As in other industries and technologies, Chinese companies are establishing a position in the turbine industry. However, as long as we have a level playing field, we are confident that our industry is strong enough and well prepared enough to maintain its competitive position in the market.

Our members are among the world leaders in their industry, and have invested in high levels of R&D and made capital investments over many decades to maintain their leadership positions. Going forward, it will be important to ensure that there is a level playing field. Europe has to monitor the situation closely, and in particular consider state aid rules, R&D support and questions of intellectual property rights, and trade regulation in the World Trade Organization (WTO).

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