Europe moving toward an open market

POWER-GEN Europe highlighted both the potential growth in a deregulated European power industry and the possibility of conflict with environmental objectives

By Kevin Dodman,

European Editor

The POWER-GEN Europe exhibition and conference, sponsored by Power Engineering International and billed as “The Forum for the Changing Power Generation Industry in Europe,” took place in Cologne May 17-19. It featured 172 exhibitors and attracted more than 5,000 visitors from 52 countries.

This is approximately 20 percent larger than last year`s POWER-GEN Europe, which was held in Paris. Jan van Aken, European Division Director of PennWell Conferences and Exhibitions, who organize the event, was pleased that this year`s POWER-GEN attracted a number of attendees from power utilities in central and eastern Europe, Russia and Poland. Delegates were also registered from utilities throughout western Europe.

From a visitor`s point of view, it seemed that the organizers of the event were aiming to stage an exhibition to represent the whole of the power generation industry, rather than particular areas of technology. This may be one reason why it is becoming popular with utility companies. “Our aim is to make POWER-GEN very market-oriented,” Jan van Aken said.

The conference program followed a similar theme to the exhibition, with technical papers covering a wide range of areas, from Market Trends and Opportunities for European Power Utility Companies to Utility/IPP Interaction, Environmental Trends, New Thermal Power Plant Technologies and Power Plant Operation/Performance Improvement.

Consequences of competition

Gunther Einert, economics and technol-ogy minister, Nordrhein-Westfalen, Germany, chose the introduction of more competition into the energy sector as the theme for his keynote address at the conference.

Regarding the advantages and disadvantages that arise when competitive pressure is introduced, Einert said that the correct regulatory framework for the energy industry in Europe has been kept running since the mid 1980s by two things: the need to protect the environment and the development of the European Union.

The government of the Federal Republic of Germany has decided to take measures to reduce carbon dioxide emissions by 25 percent by the year 2000. There is some controversy about procedure but one approach would be a re-orientation of the regulatory framework for the energy industry. According to Einert, one of the effects of a merging Europe is that we can now more easily look over the fence and observe how our European neighbors are regulating their energy requirements.

Einert gave two examples of how different countries run their electricity industries. Energy for the six million inhabitants of Switzerland (which is not yet a member of the European Union) is provided by approximately 1,000 suppliers, while in France a single state-owned company supplies all the country`s energy.

There is another development–and one which the European Commission is constantly holding up in front of our eyes–the deregulation of the British electricity supply system, Einert said. However, what is often overlooked is that deregulation in this case started out from one publicly-owned monopoly. The suitability of such a model, at least from the point of view of restructuring the German market, is limited. In Einert`s opinion the cost-effectiveness of deregulation in Britain is not exactly breathtaking.

Four possible consequences of deregulation include:

– overcapacity in the power station sector,

– increased use of natural gas which can result in structural and social problems associated with decreasing use of other energy sources,

– increased use of natural gas means that its price is likely to rise drastically in the future, and

– undue concentration on the costeffectiveness of energy supply could have fatal consequences for the future development of new technologies, especially with regard to resource protection.

Einert concluded his address by drawing attention to the inherent conflict between environmental considerations and the overcapacity and wasted resources that can result from a competitive market policy. “When the Commission realizes that it cannot adequately solve the conflict of objectives by giving equal emphasis to the various goals, it should leave the decision-making to the individual member states. A common Europe will not only be able to make tentative progress towards a single energy market, but should stand as an example of how due consideration is paid to the policies of the regions,” he said.

Orders become deliveries

The “dash for gas” in the United Kingdom has meant that all the major equipment suppliers have been working hard in that market in recent years. The results of their efforts can now be seen, as a number of plants have reached the commissioning phase and several were being promoted as up-to-date references at POWER-GEN.

They include the 900-MW Killingholme and 700-MW Rye House plants supplied by Siemens and the 660-MW Medway power station in Kent, which will use two GE supplied MS9001FA gas turbines and one steam turbine. These are the first direct sales of MS9001FA units in Europe, and they were shipped in April of this year.

ABB announced that a consortium led by ABB Kraftwerke of Mannheim is to build the most powerful cogeneration plant in Germany, in the center of Berlin. The plant will have a maximum heating capacity of 380 MW and a power generation capacity of 380 MW and will cost close to (US)$330 million to build. It will use two GT13E2 gas turbines and one steam turbine, and is scheduled to go into operation at the end of 1996.

Product developments

Several exhibitors announced new products at POWER-GEN Europe. GE Industrial and Power Systems (GEIPS) gave details of its MS9001EC gas turbine, a 169.2-MW 50-Hz machine that will compete directly with Siemens` 156-MW V94.2 and ABB`s 164-MW GT13E2 gas turbines.

Ron Pressman, GEIPS Europe vice president, explained that the 9EC fits into GE`s existing product line between the 123.4-MW 9E and the 226.5-MW 9FA and is particularly suitable for use in 250-MW and 500-MW combined-cycle packages.

The 9EC has a power output 37 percent greater than the 9E, with two-thirds of the increase being achieved by adding a zero stage to boost compressor flow from 404 kg/s to 498 kg/s. The remainder of the increase has come from the integration of `F` technology materials, construction techniques and aerodynamic enhancements, and by raising the firing temperature from 1,124 C to 1,204 C.

Pressman commented that the 9EC is available with the same dry low-NOx combustion system as the 9FA and will meet NOx emissions requirements of 25 ppm. The first unit is currently being built and is scheduled for delivery in the first quarter of 1996.

GE is forecasting that the European power market will sustain an annual growth rate of around 2 percent for the rest of the decade, according to Pressman. “Central and Eastern Europe need power to support renewed economic expansion while Russia presents an opportunity for partnerships and local positioning,” Pressman said. In addition, the European Union is establishing a solid foundation for economic growth by encouraging an open and competitive market for power generation equipment procurement. GE`s forecasts for the amount of power equipment likely to be ordered in the European region over the next nine years are shown in Table 1.

Pressman explains that GE now regards local relationships with customers as the key to success. Last year, the company dismantled its international headquarters team and created a global sales and service structure with three local centers: GEIPS Europe in London, GEIPS Asia in Hong Kong and GEIPS Americas in Schenectady, N.Y., USA.

GEIPS Europe works with GE`s established network of business associates, which includes European Gas Turbines, a joint venture between GE and GEC Alsthom of the United Kingdom and France, Elin Energieversorgung of Austria, Blohm + Voss of Germany, John Brown Engineering of Scotland, Kvaerner Energy of Norway, Thomassen Inter-national of the Netherlands and Nuovo Pignone of Italy.

Further developments include the acquisition of a majority shareholding in Nuovo Pignone by a GE-led consortium and the signing of a 10-year agreement between GE and Skoda of the Czech Republic to jointly develop power plant projects

Upcoming events

POWER-GEN Europe `94 was the first in this year`s series of POWER-GEN events serving the global electric power market. The others are POWER-GEN Asia, which took place in Hong Kong August 23-25, and POWER-GEN Americas, which is scheduled for Orlando, Fla., USA, December 7-9.

Together, the three events make up the world`s largest power generation exhibition, conference and industry forum, according to the shows organizers.

The third POWER-GEN Europe exhibition and conference is scheduled for May 16-18, 1995, in Amsterdam, the Netherlands.

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Figure 1. Gunther Einert, Economics and Technology minister in Nordrhein-Westfalen, Germany, gave a keynote address on the introduction of more competition into the energy sector.

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Figure 2. The recently completed 900-MW Killingholme combined-cycle power plant, near Hull in northeast England, supplied by Siemens.

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Table 1. Power Equipment Order Forecasts, 1994-2003

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Figure 3. The rotor for the 250-MW GE steam turbine that will form part of the Medway power station in Kent, U.K. The reheat condensing turbine will be used in a combined-cycle configuration, with two GE MS9001FA gas turbines.

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Figure 4. The 169.2-MW MS9001EC gas turbine, announced at POWER-GEN Europe, is the latest addition to GE Industrial and Power Systems` product line.

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Figure 5. The new Berlin Mitte 380-MWe/380-MWt plant, to be built by a consortium led by ABB Kraftwerke, will be Germany`s largest cogeneration power plant when it enters service in 1996.