German power plant equipment manufacturers look toward international markets

Helmut Sendner

Contributing Editor

German producers of electric power plant equipment are looking more at the international markets. After the modernization of 4,000-MW power plants in the eastern part of Germany and the construction of approximately 10,000 MW of new capacity, there is a foreseeable slack period for the order books. In addition, Western Germany had no need for the additional capacity of new coal-fired plants. However, there is still a need for building small cogeneration units with gas engines and gas turbines in Germany.

For this reason German companies are being forced to become more international and are following the rule: “Think global, act local.” As a result, German manufacturers of power plant equipment are becoming very active in the international market. Some typical projects are:

joint venture of RWE Energie (Essen) and OBAG (a subsidiary of Bayernwerk, Munich), with the Czech automobile producer, Skoda, to supply the company with a power, heat and compressed-air plant

– 10.6-MW diesel engine turnkey project by MAN B&W for the Ceylon Electricity Board

– cooperative agreement between a group of Chinese electric utilities and Veba Kraftwerke Ruhr, VKR, Gelsenkirchen

– recently signed cooperative agreement between Vereinigte Elektrizit?tswerke Westfalen, Dortmund, and electric utilities in Hungary

– supply of a control system by Babcock Prozeautomation, Oberhausen, for a combined-cycle plant in Spain

– construction of a gas-turbine power plant in India by European Gas Turbines, Essen, and

– cooperative agreement between Siemens KWU, Erlangen, and the Chinese company, Dongfang Steam Turbine Works, to produce steam turbines in the 600-MW range.

Although German companies such as ABB, Siemens, Babcock and Steinm?ller have been active in foreign countries for many years, in recent years there has been a change in the philosophy of how business is conducted. Today German companies, in order to be competitive in the international market, must:

Y enter into joint ventures and use more locally produced equipment

Y increase joint-venture partnerships with IPPs and

Y join partnerships involved in build-own-operate (BOO) or build-own-transfer projects.

A major changeover the last few years is the entry of German electric utilities in international markets. Today German electric utilities are participating in many BOO projects and are acting as consultants by offering their services to overseas utilities.

Currently German electric utilities are marketing their experience in planning, building and operating all types of power plants including: nuclear, solar, coal, natural gas, wind and biomass. In addition to the five major electric utilities, smaller utilities and the subsidiaries of the big-five are also looking for a way of marketing their expertise in the planning and operation of power plants.

As an example, Steag (Essen), which operates 5,500-MW of coal-fired power plants and has experience with operating district heating systems, is already working as a consultant. Similarly, MVV (Mannheim), a municipal power producer, is working as a consultant in China and Eastern Europe. Naturally, German utilities are also customers of the German boiler and turbine manufacturers, so between them there is the possibility of cooperation in international markets.

The leading boiler companies are Babcock Lentjes Kraftwerkstechnik; Steinm?ller; and EVT Energie und Verfahrenstechnik, a member of GEC Alsthom Group in Germany.

ABB and Siemens/KWU, suppliers and contractors to international electric utilities, are the biggest global players in Germany. In 1993/94 Siemens KWU had sales of (US)$5.22 billion [export (US)$3.18 billion] and orders in hand of (US)$13.21 billion [export (US)$9.42 billion]. ABB had sales of (US)$2.24 billion.

In addition to the major supplies mentioned, Germany has many other companies involved in supplying equipment and services to the electric utilities worldwide. These include: Energieconsulting, Heidelberg; Fichtner Ingenieure, Stuttgart; and Lahmeyer International, Frankfurt.

German companies are able to offer all equipment and services for the construction, operation and maintenance of electric power plants.

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Babcock and Oberhausen upgrade a 1,000-MW lignite power plant and construct a new 930-MW unit in Eastern Germany.