Tognum invests €75m in engine and systems production

The Tognum Group continues its expansion trend by deciding to invest an additional €75m ($104m) in capacity expansion in the production of MTU engines, L’Orange high performance injection systems, as well as the extension of the MTU Onsite Energy power generation systems during the current and the coming year.

Particularly the in-house production of core components for high performance diesel engines will be expanded and given a more international outlook with an investment of around €50m. The Tognum Group is therefore currently looking for a new site in the US dollar region, which would initially supply the existing assembly plant in Detroit (Michigan, USA) with cylinder heads and components for the production of the successful Series 4000 engines.

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Furthermore, at the existing site near Istanbul (Turkey), the first step will be to set up a manufacturing facility for cylinder liners designed for the Series 4000. Simultaneously with the installation of new international manufacturing sites in the US and Turkey, an amount of more than €10m will be invested at the existing production site in Friedrichshafen in order to boost quantities in conrod and crankcase production facilities.

Volker Heuer, CEO of Tognum AG explains: “With these major investment efforts for the future, we will further increase the flexibility in our engine production and will be able to further grow revenues from 2010 onwards.”

The new US site, in combination with a purchasing offensive in the dollar region, is designed to have sustained calming effects on the currency volatility currently affecting Tognum.

“Moreover, in the long term, we are enhancing our competitiveness, and the production on site will improve our chances to be awarded major orders with public authorities” adds Heuer, when commenting on the confirmation of the Executive Board’s plans by the Supervisory Board. The Tognum Group continues to see strong sales potential for its broad product portfolio, which is available to 22 different customer groups in a wide variety of regions.

The Supervisory Board, which had received detailed information on the planned reorganization from the Executive Board in its previous two meetings, approved the continuation of negotiations with the shortlisted US sites and the conclusion of an agreement with the best of those sites.

Board member Dr. Gerd-Michael Wolters, who is responsible for Technology & Operations, said: “The US have a keen interest in the production of high quality engines in their country. We will be able to start parts production as early as late 2009.”

Currently, plans are focused on securing suitable premises by the third quarter of 2008, which comes with the ideal infrastructure in terms of transportation, energy and labour, whilst at the same time offering long-term options for expansion.

Explaining the overall schedule, Dr. Wolters comments: “Regardless of the global expansion in production, we will continue to step up our efforts regarding our new production logistics facility in Friedrichshafen. Also, as planned, we will start assembly operations for our Series 1600 during the fall of 2009 at Lake Constance.”

The development of a new engine production site in the US is another consistent step in the implementation strategy of the Tognum Group, which was initiated in 2005. Besides the assembly plants in Friedrichshafen (Lake Constance/Germany) and Detroit (Michigan/USA), MTU also has an assembly facility in Suzhou/China for Series 2000 engines, and has started a local Joint Venture in China targeted at the assembly of Series 4000 engines.

Apart from the expansion in the engine business, Tognum Group is currently investing around €10m as planned in the “MTU Onsite Energy” sites in Mankato, Minnesota, USA, and in Augsburg and Ottobrunn near Munich, Germany.

Wärtsilä seals the €159m deal for 331 MW power plant project in Brazilian state of Maranhao

Wärtsilä has bagged an order for a power plant project, representing two plants on the same site, to be delivered to a Brazilian energy consortium.

The order, valued at €159m ($221m), was placed by Geradora de Energia do Maranhao, a consortium made up of Brazilian energy providers Grupo Servtec, Grupo Ligna and FIP Brasil Energia.

The turnkey contract calls for two power plants, each with 19 Wärtsilä 20V32 engines giving a total output of 331 MW.

The power plants are to be located in Miranda do Norte in the Brazilian state of Maranhao and they will run on high viscosity heavy fuel oil (HFO). Construction will begin in early November 2008, and the plants are scheduled to be fully operational by the end of 2009.

Wärtsilä is currently negotiating a separate operations and maintenance (O&M) agreement with the customer. This latest order follows three others, also for Brazil, signed by Wärtsilä earlier this year. The four orders will, together with other Wärtsilä power plants already in operation in Brazil, produce a combined generating capacity of more than 1500 MWe.

“Our recent orders further strengthen Wärtsilä’s share of the energy supply in Brazil, and have put us in a very favourable position to further increase our future business volume in the region” observes Robson Campos, Regional Director, Wärtsilä Power Plants in Brazil.

“The orders are testimony to the high efficiency of our products, the total power solution package that we can offer, and the support that we can provide locally.

“We enjoy very good relationships with our Brazilian customers” he adds, “and this co-operation is a key factor in our success in the region.”

Hydropower accounts for 90 per cent of Brazil’s electricity production. Since Brazil produces its own oil, domestic fuel can be used to cover the energy gap during these critical energy supply periods when there is not sufficient water for hydro generation. The Wärtsilä power plants are expected to be operational for approximately 2000 hours per year between December and April, when water reservoirs are low.

Meanwhile, Wärtsilä has inaugurated an extension to its Indian plant in Khopoli, Maharashtra. The plant manufactures auxiliary units and modules for engine driven power stations and supplies auxiliaries all over the world. The focus will be on Wärtsilä 20, Wärtsilä 32 and Wärtsilä 34 engines.

Exploiting biogas from chicken manure: GE’s Jenbacher gas engines power a new cogeneration project in China

GE Energy’s Jenbacher gas engines will use biogas created from chicken manure to generate needed power and heat at a large chicken farm north of the China’s capital city of Beijing.

The plant is the first of its type in China and could pave the way for similar applications in the future. The Beijing Deqingyuan Chicken Farm Waste Utilization plant comes as the country seeks innovative ways to meet its energy and environmental requirements. Providing 14 600 MWh of electricity per year, the project is designed to help reduce sub-urban electricity shortages.

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By using the biogas for power generation in place of previously used coal fired power, the new project is expected to reduce the equivalent of about 95 000 tonnes of CO2 per year, qualifying the project for the U.N.-sanctioned Clean Development Mechanism (CDM) programme.

The Beijing Deqingyuan project should also reduce the farm’s dust levels, further enhancing the area’s air and water quality by controlling odours and improving the work environment for the farm’s employees. The improvements support the guidelines of several Chinese government initiatives including the Underground Water Conservation Law, the New Rural Construction Plan and the Distributed Energy Solution Policy.

Located in Yan Qing District, about 50km north of Beijing, the farm owns three million chickens, producing 220 tonnes of manure and 170 tonnes of wastewater each day. The farm’s new cogeneration system features an anaerobic digester system to treat the waste material, producing enough biogas to fuel two GE’s Jenbacher JMS 320 GS-B.L gas engines.

The plant has an installed electric capacity of more than 2 MW for use at the chicken farm. Additionally, the plant’s thermal output is used to support the chicken waste fermentation process and also heat the chicken farm in the winter.

“This biogas project will quickly pay for itself by meeting the customer’s demand for cost-effective electricity and heat,” said Jack Wen, President and CEO of GE Energy China. “We estimate that the customer will save more than $1.2m a year in electricity costs alone.”

The project further expands GE’s overall presence in China, where the company has been active for more than 90 years. With about 1300 Jenbacher biogas engines delivered worldwide, GE is thus offering proven technology to support China’s initiatives to expand the production of renewable energy, including from animal and agricultural waste biomass.

GE’s agreement also includes spare parts and training for the cogeneration plant operators. The owner of the project is the Beijing Deqingyuan Agricultural Technology Co. Ltd. of Beijing. Other key participants in the chicken farm cogeneration project include GE’s local distributor for Jenbacher gas engines, Jebsen & Co. Ltd. of Hong Kong; DI, Beijing Power System Design Institute; and Huadian Engineering of Beijing, the engineering, procurement and construction (EPC) contractor.