ABB shares secrets of success in Asia

With demand for electricity outpacing supply by 7 percent a year in Asia, ABB has chosen to take the challenge and work toward reaping some of the rewards in this region. And it`s a strategy that`s paying off, according to Rolf H. Kehlhofer, ABB president of gas-turbine and combined-cycle power plants.

Kehlhofer offered insight into his company`s winning strategy during a conference at POWER-GEN Asia. “Asia`s rapid growth presents both an unprecedented opportunity and an enormous challenge to the world`s leading power systems suppliers. Nearly every Asian economy is expanding dramatically–not just China, but the ASEAN countries and the relatively untapped Indochinese markets as well,” he said. He cited Vietnam as a less-developed country which is looking to double its power generation capacity by 2000 in order to maintain its rapid economic growth.

“One need only look at the Philippines to see the difference the introduction of reliable power supply makes to economic development and stability,” Kehlhofer said. ABB has been active in the region since the turn of the century but has greatly strengthened its presence in the past decade.

With a Power Generation division employing more than 40,000 people, ABB received generation orders of (US)$10 billion in 1994. In the Asia Pacific, the company has operations in Indonesia, India, Malaysia, Thailand, Singapore, China, Hong Kong, Taiwan, Japan, Korea, the Philippines, Vietnam, Australia and New Zealand. Orders in the first half of 1995 totaled nearly (US)$18 billion.

In the Philippines, ABB led a consortium, including Kawasaki Heavy Industries and Marubeni Corp., to bring the country`s first combined-cycle plant on-line. ABB designed the 665-MW facility and is operating it for 15 years under an operations and maintenance agreement with National Power Corp. The plant, at Limay Bataan, west of Manila, was completed and entered service in less than two years.

In Malaysia, ABB has five projects recently completed or under way, which will provide a total of 3,000 MW of electricity. The two most prominent projects there are combined-cycle plants at Lumut and Kuala Langat.

Segari Energy Ventures Sdn Bhd awarded a turnkey contract for the Lumut plant to ABB in April 1994. It will be the largest IPP-commissioned combined-cycle plant ever built and the largest combined-cycle plant in Malaysia. Scheduled to enter operation in July 1996, the facility will deliver 1,320 MW from six GT13E2 gas turbines, boosting Malaysia`s total electricity output by more than 11 percent.

In Kuala Langat, Genting Sanyen Power, another IPP, contracted ABB to supply the 667-MW combined-cycle block, comprising three GT13E2 gas turbines and a 250-MW steam turbine. Almost 40 percent of the plant was supplied locally. The turnkey project is scheduled to enter service in March 1996.

Indonesia is familiar ground for ABB as well. In January 1995, a 1,180-MW combined-cycle plant at Tanjung Priok, in North Jakarta, entered full commercial operation. It is the second largest combined-cycle in Southeast Asia, adding 11 percent to the Java-Bali power grid.

“Indonesia needs power,” Kehlhofer said. “Between 1990 and 1995, demand in the grid area has grown by an average of 14.1 percent.”

ABB is now developing a 1,095-MW combined-cycle plant at Muara Tawar, near Jakarta, which will use six 13E2 gas turbines and an ABB steam turbine. This plant is set to enter service in 1996 and 1997.

In South Korea, Korea Electric Power Corp. contracted ABB to provide three KA11N gas turbines, a steam turbine and heat-recovery, steam-generation equipment to its Bundang plant, boosting its capacity by 320 MW when it goes fully on-line in June 1997. In India, ABB is part of a consortium completing a 650-MW combined-cycle plant in Ganhar, in the northwestern state of Gujarat, about 350 km north of Bombay. The plant, ordered by National Thermal Power Corp., is in trial operation and will be one of the country`s most efficient facilities, with a rated base-load efficiency of 46.9 percent.

The company recently received an order for a 25-MW GT10 gas turbine from Core Healthcare, a privately held company building a cogeneration power plant. “Our contract marks a breakthrough for the international power generation industry into India`s already large and fast-growing private industrial segments of the market,” he said.

The Provisional Electricity Authority in Thailand recently contracted ABB for a high-efficiency 24-MW advanced turbine program, with the turbine to power the first of three planned waste incineration plants.

Most recent orders in China include an order for a 71-MW addition to a 170-MW simple-cycle power plant, Meishi II in Shenzhen. ABB also supplied equipment for the country`s first two large combined-cycle plants, in Foshan and Shunde, Guandong Province, each with a 280-MW output.

ABB is also working on a 150-MW cogeneration plant under construction at the Baoshan Steel Works in Shanghai, which will be operational in the second half of 1996.

In Australia, ABB is lead partner in a consortium providing a turnkey coal-fired plant due to enter service in December 1998. The financing for the project is based on a (US)$60 million countertrade agreement for the export of Australian-made ABB and other goods.

“We are also seeing an increase of cross-border power sales,” Kehlhofer said. “In Laos, we have just received a (US)$30 million order from Theun Honboun Power Co. to equip a 210-MW power station, one of the world`s first hydro projects to be undertaken by an IPP. The plant will be completed in 1998, and its electricity sold to Thailand.”

In Japan, ABB is working on its second pressurized fluidized-bed combustion (PFBC) plant with licensee KHI. The contract, from Kyushu Electric Power Co., is for the first utility-size P800 PFBC plant there, to enter operation in 1999.

“Changing market conditions present a formidable challenge to ABB and to our customers. Our strategies and business plans are customer driven,” Kehlhofer said. “We constantly strive to improve our relationships with our customers and suppliers and to add value to their side of the equation. We are obsessed with efficiency; lower costs translate to higher customer value. Flexibility, speed, rapid information flow and transparency are critical to our success.”