Hitachi buys Horizon nuclear project for £696m

Hitachi has announced it has bought the Horizon nuclear power project in the UK for £696m ($1.2bn).

Horizon was set up by RWE and E.ON to build two new nuclear plants, but the German companies pulled out earlier this year citing financial difficulties following the Merkel government’s decision to withdraw from nuclear power.

The purchase is expected to be finalised by the end of November and Hitachi also announced it has signed deals with British companies Babcock International and Rolls-Royce to help plan and deliver the plants.

Hitachi president Hiroaki Nakanishi said the deal marked the start of “our 100-year commitment to the UK and its vision to achieve a long-term, secure, low-carbon, and affordable energy supply”.

“We look forward to sharing Hitachi’s corporate vision and nuclear business policy with the management and employees of Horizon, and working harmoniously with UK companies and stakeholders for the delivery of this vital part of Britain’s national infrastructure and the creation of a strong UK nuclear power company.”

The two locations for the plants are at Anglesey in Wales and Oldbury in England and Hitachi will utilise ABWR (Advanced Boiling Water Reactor) at both sites.

Nuclear Industry Association (NIA) chief executive Keith Parker said: “The sale of Horizon is a tremendous boost for the UK new build programme and the UK nuclear industry. We are confident that the consortium will now work closely with the regulators to ensure that an agreement is reached on the design assessment of the reactor, which has already received regulatory approval in Japan, Taiwan and the US. This announcement is good news for the UK supply chain, for jobs in the nuclear sector, and for the wider economy.”

UK Energy Secretary Ed Davey said: “Hitachi bring with them decades of expertise, and are responsible for building some of the most advanced nuclear reactors on time and on budget, so I welcome their commitment to helping build a low carbon secure energy future for the UK. I particularly welcome Hitachi’s firm commitment to involve the UK supply chain and local workforce.”

Angela Knight, chief executive of Energy UK, said that the deal “demonstrates the benefits in jobs and growth that the UK could see if the right policies and regulations are in place to attract the investment that we need. Today’s announcement represents a vote of confidence in the UK’s energy future.”

Siemens drops solar

A solar installation
A solar installation
Credit: Siemens

Siemens is to pull out of solar and focus its renewables business onto wind and hydro.

The company announced that it is in talks with potential buyers for its solar arms, which are part of Siemens Solar & Hydro, which has 800 staff, 200 of which are in Germany. The division is to be scrapped, although Siemens will still sell steam turbines, generators and control systems to solar companies.

In a statement Siemens said: “Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company’s expectations for its solar energy activities have not been met.”

Michael Suess, chief executive of Siemens’ Energy, said: “The global market for concentrated solar power has shrunk from 4 GW to slightly more than 1 GW today. In this environment, specialised companies will be able to maximise their strengths.”

He added: “The importance of renewable energies in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors. Our renewable energy activities will be focused on these two areas.”

Siemens employs more than 7000 staff in its wind division and another 2000 in its related service business. The division has an order backlog of more than €10bn.

The new make-up of Siemens’ Energy Sector will comprise divisions of thermal power plants, wind power, oil & gas (solutions for the oil and gas industry and small to mid-sized thermal power plants) and power transmission. The company stressed that existing solar contract will be honoured during business reorganisation.

Ingo-Martin Schachel, an analyst at Frankfurt’s Commerzbank, said the “decision to sell is really quite obvious”. He told Bloomberg: ”Solar is no core business and no core competency of Siemens. The growth prospects for these markets have deteriorated such that there is really no reason to remain active here.”

REpower enters Romanian market with eight-turbine deal

Wind power company REpower Systems has enetered the Romanian market with a deal for eight turbines.

The 3.2 MW turbines – each with a hub height of 93 metres and a rotor diameter of 114 metres – will be delivered to a wind project near Margineni which is expected to be completed in a year’s time. REpower – part of India’s Suzlon Group – has also set up a a Romanian subsidiary, REpower Systems DTE Romania, which is based in Bucharest.

Jan Gasche, managing director of the new company, said the Romanian market “boasts tremendous potential”.

ABB breakthrough a significant boost for renewables

A high-voltage test facility
A high-voltage test facility
Credit: ABB

Swiss engineering giant ABB has announced a technological breakthrough that could lead to the wider exploitation of renewable power.

Schemes designed to harvest power generated by offshore wind farms, remote hydroelectric plants and desert-based solar projects have been continually foiled by a lack of heavy-duty circuit breakers capable of safely handling the extreme voltage levels required for direct current (DC) transmission over long distances.

But the Swiss group has developed circuit breakers capable of enabling long distance DC output to be easily integrated into existing local and national power grids, which are based on the more robust alternating current (AC) system.

Joe Hogan, chief executive of ABB, said: “This historical breakthrough will make it possible to build the grid of the future. Overlay DC grids will be able to interconnect countries and continents, balance loads and reinforce the existing AC transmission networks.”

Brice Koch, head of power systems at ABB, said that solving the puzzle was equivalent to “bringing a speeding 40-tonne truck to a halt within five milliseconds”.

The technology currently being used has held back operators’ ability efficiently to pool and distribute the output of remotely produced wind power, and DC transmission had a tendency to bring down entire grid systems through localised disruptions.

The breakthrough by ABB could bring such subsea and cross-border transmission schemes a step closer

UK picks four bidders in £1bn CCS competition

Four bidders have been shortlisted for the next phase of the UK’s £1bn carbon capture and storage (CCS) competition.

The four were selected from eight bids received after an evaluation process that considered project deliverability, value for money, and the government’s timetable to deliver “a cost-competitive CCS industry in the 2020s”. The successful bidders will next take part in commercial negotiations with the government before decisions on which projects to support further are taken next year.

UK Energy Secretary Ed Davey said the four projects “have all shown that they have the potential to kick-start the creation of a new CCS industry in the UK, but further discussions are needed to ensure we deliver value-for-money for taxpayers”.

He added that today’s announcement “is an important step towards an exciting new industry, one that could help us reduce our carbon emissions and create thousands of jobs”.

Three of the UK’s shortlisted bids also applied for European Commission funding from New Entrant Reserve (NER) allowances. But an EU source told Reuters in November that no British project had qualified for funding under the NER300 competition, under which European subsidies provide half of the funding for renewable or CCS projects for which national governments have guaranteed the remaining financing.

The four short listed bids, all full chain capture, are:

  • Captain Clean Energy Project: A proposal for a new 570 MW, fully abated coal integrated gasification combined-cycle (pre-combustion) project in Grangemouth, Scotland with storage in offshore depleted gas fields. Led by Summit Power, involving Petrofac (CO2 Deepstore), National Grid and Siemens.
  • Peterhead power station in the UK
    Peterhead power station in the UK
    Credit: Jennifer Witts

  • Teesside Low Carbon Project: A pre-combustion coal gasification project (linked to c330 MWe net power generating capacity fuelled by syngas with 90 per cent of CO2 abated) on Teesside, North East England with storage in depleted oil fields and saline aquifers. A consortium led by Progressive Energy and involving GDF Suez, Premier Oil, and BOC.
  • White Rose Project: An oxyfuel capture project at a proposed new 304 MW fully abated supercritical coal fired power station on the Drax site in North Yorkshire. Led by Alstom and involving Drax, BOC and National Grid.

Alstom Thermal Power’s chief technology officer Charles Soothill told PEi recently that projects like White Rose are “turning back the clock on climate change. This is the only industrial way of reversing the [emissions] process and you can do it with the power plants you already have.”

INTERNATIONAL

Anti-nuclear trend bucked in UK, China, India and US

A new poll has found that while nuclear energy remains the least popular form of electricity generation globally, several countries firmly buck the trend.

Of those surveyed by Ipsos, 55 per cent opposed the use of nuclear power. Instead, some 96 per cent backed solar power, 93 per cent supported wind, 79 per cent were in favour of gas and 48 per cent were behind coal.

In the UK, however, three in five respondents (59 per cent) said they were in favour of atomic energy. This figure also rose from 51 per cent at the time of the last Ipsos poll in April 2011, just a month after the Fukushima disaster in Japan.

France, Italy and Sweden also showed an Increase in support for nuclear over the last 18 months. The US, India and China emerged as the most pro-nuclear nations while, unsurprisingly, Japan remains the most strongly opposed to nuclear. Germany, Mexico and Argentina are also largely hostile to the technology.

Robert Knight, research director at Ipsos, said: “There’s no doubt global public opinion has recovered somewhat since Fukushima. But while the global picture is still not that encouraging for the industry, there are several countries where optimism about the future of nuclear energy is once again justified.”

Sizewell B nuclear plant
Sizewell B nuclear plant
Credit: WANO

WEO predicts energy independence for US

In its World Energy Outlook released on 12 November, the International Energy Agency (IEA) predicts the US will run counter to a global trend among energy importers by becoming almost self-sufficient by 2035.

Revived US oil and gas production through new extraction techniques such as fracking is set to shift global demand patterns. In 2020, for instance, US oil production (11.1m b/d) will top Saudi output (10.6m b/d), although the situation will reverse within a decade.

Meanwhile, a galloping increase in Asian demand makes China the dominant market for Middle East fossil fuels.

In the nuclear sector, the IEA has cut its 2011 growth projections by 10 per cent to 580 GW in 2035. The anticipated role of nuclear power has been “scaled back” as countries review policies in the wake of the 2011 accident at the Fukushima Daiichi nuclear power station, said the IEA.

Renewables will power half of new capacity over the period of the report, although coal remains the leading global fuel for power generation.

Growth in China’s electricity demand to 2035 will exceed total current demand in the US and Japan, according to the report. China’s coal fired output also increases almost as much as its generation from nuclear, wind and hydropower combined, it said.

Average global electricity prices increase by 15 per cent to 2035 in real terms, driven higher by increased fuel input costs, a shift to more capital-intensive generating capacity, subsidies to renewables and CO2 pricing in some countries, it said.

Next issue of PEi will examine in detail the IEA’s new forecasts for the power generation sector.

ASIA

Rolls-Royce in China nuclear deal

Rolls-Royce is to modernise the Ling Ao nuclear power plant with the company’s latest digital safety technology.

China Guangdong Nuclear Power Corporation (CGNPC) has Rolls-Royce for its Spinline digital safety instrumentation and control (I&C) technology for the plant’s modernisation programme.

The Neutron Instrumentation System is a safety-critical I&C system that ensures the integrity of the nuclear reactor. The technology enables utilities to optimise the safety, availability and maintenance of nuclear power plants.

NORTH AMERICA

FERC case spotlights electricity market abuse

Accusations against four traders in the US electricity market suggest that the system has been open to manipulation in recent years.

Four traders for Barclays are accused of trying to rig the price of electricity by the Federal Energy Regulatory Commission (FERC), which is seeking a penalty of $435m and to claw back $34.9m in profit.

Emails and instant messages between the traders show that they engaged in loss-making transactions in physical electricity markets to make greater gains in financial swap positions, according to FERC.

The allegations relate to 655 business days between November 2006 and December 2008.

Mexico eyes 6500 TWh from solar generation

Mexico’s entire energy demand could be met by harnessing just 4 per cent of its potential solar generation, according to Carlota de las Mercedes Cagigas Castello of the Energy Secretariat.

The government official said that her country could produce 6500 TWh from solar energy resources. A law to improve the use of renewable energy and financing for transitional energy resources aims to raise the share of non-fossil sources to 35 per cent of the country’s total electricity production by 2026, she added. To achieve this target, Mexico would have to add 20 GW of capacity.

LATIN AMERICA

Tractebel unveils new Brazilian hydro plant

Tractebel Energia, a subsidiary of GDF Suez has unveiled a 1087 MW hydropower plant at Estreito in Brazil.

The project cost $2.75bn and GDF Suez chairman and CEO Gerard Mestrallet described Brazil as vital to its plans in the region. “We are keen to participate in meeting the growing energy needs of the country through the development of projects that provide clean and renewable energy.”

Tractebel Energia owns a 40.07 per cent stake in the project with Vale, Alcoa and Intercement being the other joint-owners.

MIDDLE EAST

METKA lands second Jordan contract

Greek EPC contractor METKA has signed its second deal in Jordan with Samra Electric Power Co (SEPCO).

The $104m contract comes three weeks after METKA clinched its debut deal in the country, again with SEPCO. METKA will carry out the engineering, procurement, construction and commissioning of an Alstom GT13E2 gas turbine and related auxiliaries at SEPCO’s Samra Fast Track Simple Cycle Project near Amman.

Iraq seek to invest up to $1.6bn in renewable power

In September the Iraqi government announced a target of $500bn to be spent on energy sector investment in the Middle Eastern nation, but officials are now saying that $1.6bn of that figure is already being set aside for solar and wind energy.

An official with the country’s ministry of electricity has said funding will focus on generating 400 MW of power to grow the country’s shattered electricity infrastructure.

The International Energy Agency has said the Iraqi power sector would need a $6bn investment every year until 2035 to bring about an oil boom to transform the country’s fortunes and stabilise world energy markets

The Iraqi government has reportedly ring-fenced $200m from its 2013 budget for an initial 50 MW of renewables, with remote and border areas set to benefit first. Over the medium term, the country expects to source about 2 per cent of its electricity from renewables.

AFRICA

Wartsila wins $165m Mauritania dual-fuel power plant deal

Wartsila has won a €128m ($165m) turnkey contract to construct, supply and engineer a power plant in Mauritania for state utility Société Mauritanienne d’Electricité (Somelec).

The plant will be powered by eight Wartsila 50DF dual-fuel gensets, which can run on both natural gas and conventional heavy and light fuel oil.

Vestas to axe 3000 more jobs

Danish windpower company Vestas is to shed a further 3000 jobs by the end of next year, on top of those that the beleagured company has already announced.

Vestas is now expected to have a global staff of 16,000 by the end of 2013, down from 22,700 at the start of 2012.

  Chief Executive Ditlev Engel said the further cuts were essential despite earlier retrenchment. “However difficult it is to make further cost savings and also further reduce the workforce, it is simply necessary in order to create an even leaner and more agile Vestas to ensure the company’s continued profitability in a very uncertain and unstable wind turbine market,” he said.

But some job losses are likely to happen through divestments, which would mean employees would keep their jobs but work for a different employer, he added.

By the end of 2013, Vestas expects to save an €150m ($192m), which will bring the company’s yearly cost reductions since the end of 2011 to a total of €400m. These increased cost reductions will be realised through divestments, continuation of the hiring freeze and the additional layoffs.

Engel said this further intensification of cost saving initiatives “happens as part of the plan to create a scalable and flexible business model”. He forecast that 2013 would be “a tough year for the wind industry.”

“To adapt to future uncertain market development we have decided to further intensify our cost saving plan to make sure we are scalable and able to react fast to the challenges we expect in the market in the coming years,” he said.

Vestas announced the job losses along with its third quarter figures. Revenue was €1.9bn in the third quarter of 2012 – up 49 per cent on the same period last year.

largest rotor blade, the B75
Siemens has announced that the world’s largest rotor blade, the B75, is on the ground and ready to be assembled on the hub. Siemens said field testing of the 154-metre rotor for the 6 MW turbine would be “an exciting step in the development of competitive technologies for the large offshore wind farms of the future”. Siemens incorporated the technological expertise gained over more than three decades into the development of both the gearless turbine and its 75-meter rotor blade.

China and India tipped to lead boom in gas, nuclear and renewables

Emerging markets led by China and India will drive a global boom in gas for power generation, with nuclear and renewables also surging, according to a new report.

But research from Frost & Sullivan predicts that coal will “fall massively… as developed countries decommission capacity and emerging nations become more diversified in their fuel mix”.

Annual Global Power Generation Forecasts 2012 expects the next 20 years to see electricity demand in emerging markets overtake demand in developed regions. “Rapid urbanisation and the creation of a middle class will drive electricity consumption in these economies as a wealthier population takes up electric appliances that are considered standard in the developed world.”

Frost & Sullivan predicts the bulk of this growth will come from India, China and ASEAN, with the combined share of these three regions rising from 27.5 per cent in 2010 to 40.1 per cent in 2030. It expects the power generated by China to exceed that of North America by 2015.

While gas will be the major winner in terms of power generation, it adds that nuclear will expand strongly, with Asia driving much this growth. Strong growth is also projected for renewables, with the wind, solar PV, CSP, biomass, geothermal and marine sectors substantially expanding their share of power generation over the next two decades.

But coal’s share in the energy mix will fall over the longer term, said Frost & Sullivan industry director Harald Thaler.

“The growth of coal is not far behind as emerging nations such as China and India rely strongly on this fuel,” he said.

“Nevertheless, growth of coal fired generation is expected to fall massively during the subsequent decade as developed countries decommission capacity and emerging nations become more diversified in their fuel mix.”

What PEi readers are talking about online

Obama wins: what does it mean for the power sector in the US and worldwide?

Agree? Disagree? Join the debate at the Power Engineering International group at www.linkedin.com

The administration has an opportunity, and in my opinion a duty, to formulate an energy policy that opens up markets and jobs for our citizens without driving power costs past record levels. High energy costs kill jobs. That is a reality.
Ken Riddle, supervisor of chemical processes at Lakeland Electric

I believe the goal of the Obama administration is to make fossil based energy so expensive that renewables can compete without the tax breaks. A good marker will be the approach to permitting terminals for export of coal and LNG.
David Galpin, consulting engineer at The Shaw Group

One thing is for certain – more US coal mining to feed growing Asian markets. Also, if the US exports gas, the power sector is likely to slow investment in new gas power.
Nicholas Newman, energy journalist