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The first year (2005) of operation of the EU’s Emissions Trading scheme (ETS) was disappointing for the cogeneration industry, with cogeneration installations in some Member States having to buy emission allowances on the market to cover their positions. This was despite European Commission data showing that 63 million extra allowances were allocated to installations falling under the ETS over what was needed to cover verified 2005 allowances.

In May 2006, the EC released figures on actual emissions from plants under the ETS, the EU’s main policy plank for battling climate change.

The situation for cogeneration must not be tolerated by policymakers or industry, said COGEN Europe, as it goes against the very spirit of the scheme – to reward highly efficient installations while forcing large, inefficient carbon dioxide emitting installations to make progress towards more environmentally friendly operation.

Provided they are properly designed, cogeneration installations are the most efficient conversion technology and the fact that some such plants had to turn to carbon traders to buy missing allocations points to the shortcomings and flaws of many of the national allocations plans that have been prepared by Member State governments, adds COGEN Europe.

While 2005 was the first year of the ETS and some trial and error was to be expected, COGEN Europe has called on Member States to ensure that efficient cogeneration installations are not hit by an under-allocation of carbon allowances under the second phase of the ETS, which is due to begin in 2008, but for which the allocation plans are already on drawing boards throughout Europe.

COGEN Europe has issued a position paper highlighting the best practices found in some of the EU countries’ phase-1 national allocation plans, together with some detailed recommendations on how to make the scheme work towards greater efficiencies and lower emissions from the power sector and industry.


Very nearly a quarter (24%) of the electricity produced by power plants installed in 2005 was from decentralized energy (DE) systems, according to the latest annual market assessment published by the World Alliance for Decentralized Energy (WADE). This share is up from 13% in 2002.

The pioneering research (based on DE industry interviews, market information provided by WADE members and other publicly available sources) indicates a clear momentum in many international markets towards greater use of DE, says WADE.

DE’s growing competitive position is based on a rapidly emerging recognition of the economic benefits of generation at the point of demand which results in reduced need for high-cost investment in transmission and distribution networks. Other drivers include the environmental benefits, fuel savings and increased security of electricity supply, says the Alliance.

A high share of DE generation is based on cogeneration (CHP), which accounts for the majority of the capacity and generation additions emerging from the study. Standby and peaking DE systems have lower shares. Meanwhile, solar photovoltaic and on-site wind sectors continue to enjoy high global growth rates – although their share of the overall DE market remains small.

WADE’s goal is to achieve a 20% market share of total capacity for DE by 2025; the current level is around 8%-9%. This goal appears achievable, says WADE, provided that persistent policy and regulatory barriers (based on the continued conventional wisdom that remote central generation based on large power plants remains the optimal form of power generation and supply) are eliminated.

Countries such as Denmark, the Netherlands and Finland, where the DE share of generation is around 40%-50%, provide clear evidence that such a goal is not only achievable, but consistent with the provision of efficient and reliable generation, adds WADE.

See also the feature article starting on page 101.


Leaders of two-thirds of the world’s leading utility companies believe that their companies are facing their biggest challenge in modern times, according to the eighth annual PricewaterhouseCoopers report: The Big Leap: Utilities Global Survey 2006, published in London. More than half are said to rate the changes that the industry will have to undergo as little short of revolutionary

The sentiments are felt most strongly in Europe, which is grappling with conflicting challenges including supply and demand imbalances, infrastructure vulnerability and environmental concerns, adds PwC.

The industry is ready to make a big leap forward, with nearly two thirds believing that the industry needs to adopt a 10-year focus on reducing environmental damage, developing new technologies, improving customer service relationships and finding new fuel sources. However, many feel that policy-makers also have to make a leap, with 80% of respondents reporting that political and regulatory factors are inhibiting the ability of the sector to respond to these challenges, and that shock factors such as supply or environmental crises may need to occur to force change.

The report, which presents the views of 116 senior executives from utility companies in 43 countries, suggests that security of supply remains utilities’ primary concern as it has over the last two years, particularly in Europe where twice as many leaders believe prospects for power cuts have increased compared to five years ago.

Looking to the future, Manfred Wiegand, Global Utilities Leader for PwC, said: ‘We can expect to see a future power and gas utilities sector that is radically different from now. On the ownership and sector structure front, we will see many fewer and much larger super-regional generation and distribution companies, greater fusion of upstream and downstream energy and a continued move of infrastructure entities into private investment fund ownership. On the customer front, we will have the prospect of much greater end-user involvement in both industrial-scale power projects and smaller and more medium-sized distributed power.’


The potential for new electricity generating plant, including cogeneration, in the world’s two fastest-growing economies, those of China and India, is highlighted by recent reports of power shortages and plans for new generation capacity to prevent future interruptions emerge.

Power demand in Beijing will rise by 9.6% each year in the next five years, according to forecasts from the State Grid Corporation of China as the city is preparing to host the Olympic Games in 2008. Peak demand may rise to up to 15 GW by 2008, and by 2010, it may rise to nearly 17 GW, reports the Asian Power News Bulletin. 2005 was China’s third year of power shortages as the economy grew by 9.9% and peak electrical demand rose by 13%.

Last summer, Beijing rationed power supplies to factory operators in order to avoid blackouts for households. The city consumed 57 TWh of power last year, an increase of 11% from 2004.

Meanwhile, the Bulletin also reports that India’s Power Minister Sushil Kumar Shinde has said that the country intends to establish five major new electricity plants in the next year to help cope with the shortfall of electricity caused by rapid economic growth.

According to Shinde, the sites for the new plants have already been chosen by the Government, each being in one of five different states. Each plant will generate at least 4000 MW of electricity.

According to the Ministry of Power, India suffered from a peak power deficit of 12.5% in the 10 months to February this year. The Government has estimated that, in the last fiscal year, economic growth of India has risen to 8.1% and is targeted to rise to as much as 10% in each of the next three years.


GE Energy’s gas engine business is installing its first Jenbacher engines in Lebanon, in a biogas-fuelled cogeneration application. The company is supplying two JMS 320 GS-B.L Jenbacher cogeneration systems for a biogas plant being installed at a household solid waste treatment centre in south-western Saida, a coastal city located about 40 km south of Beirut.

The new plant will utilize biogas generated from the anaerobic conversion of household solid waste. The biogas will be used for the production of electricity and heat to support facility operations, an important requirement of the customer given Lebanon’s high energy prices. Excess electrical power will be sold to the regional grid or private consumers close to the site.

Each Jenbacher unit will generate 1.06 MW of electricity and 1.19 MW of thermal output, at an overall efficiency of 84.8%, says GE.

GE is supplying the engines to M/s IBC S.A.L of Beirut, a developer and supplier of turnkey projects in the waste management field. Passavant Roediger Anlagenbau GmbH of Germany will supply the bio-conversion plant, and Sidoon Environmental of Lebanon acts as the main contractor.


Part of the 750 kW CHP system being installed at an office building in Glendale, California
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Construction, installation and commissioning of a 750 kW CHP plant at 550 North Brand Boulevard in Glendale, California, US, have been completed by Northern Power, a subsidiary of Distributed Energy Systems Corp. The US$1.9 million turnkey system is expected to produce 86% of the total electricity currently used at the commercial office building in the Los Angeles suburb.

The system uses two 375 kW Waukesha natural gas-fired engine generator sets with fully integrated heat recovery systems. Operating in parallel with the local utility electricity grid, the generators supply the building’s base electrical load 24 hours a day, seven days a week. Heat from the engines’ exhaust systems is recovered and hot water drives a 240-tonne absorption chiller used to cool the building.

Northern Power says that its proprietary power electronics and supervisory controls operate the system to maximize energy efficiency and cost savings. The complete system is expected to reduce the facility’s annual energy costs by up to 50%.


The Goodyear Dunlop tyre manufacturing facility at Amiens in the Picardy region of France is to benefit from a new cogeneration plant, following an agreement between Elyo (part of Suez Energie Services in France) and Goodyear for the supply of all power at the plant.

As part of the contract, UK-based Centrax Gas Turbines has received an order for the supply of two CX501-KB5 generator sets.

Goodyear Dunlop, the major employer in Picardy, has two adjacent plants in Amiens which produce 60,000 tyres a day and employ 2600 people. The generator sets will supply power to both plants.

The two Centrax packages will be operated by Elyo at the site in a cogeneration capacity, supplying power plus heat to three heat recovery boilers. Elyo will also be installing the boilers and other ancillary equipment.

Work to install the new facility is being carried out during annual holiday closures to avoid disruption to tyre production. Work is being completed in two phases, the second being the installation and commissioning of the cogeneration plant which is scheduled for completion in November this year.


A Brazilian steel producer that uses waste gases produced at its plant to fuel its electrical power system has contracted GE Energy to study proposals to expand its electrical distribution system, a move that would also support a major expansion of the steel-making plant.

GE is performing the study for CST Arcelor Brasil, the world’s largest producer of steel slabs, and Sol Coqueria Tubarão Ltda of Espirito Santo, Brazil, a joint venture with Sun Coke of Knoxville, Tennessee. The companies are launching a multi-year expansion programme to increase the output of their steel mill from 5 to 7.5 million tonnes per year.

The CST Arcelor Brasil electrical power system uses gases produced in the steel-making process for fuel. Presently, four in-plant generators are supplying nearly 300 MW of power; the addition of two new generators will bring the total capacity to nearly 500 MW. Major loads include three blast furnaces, air separation plants, a hot strip mill, coking, sintering, continuous casting, pretreatment and converting. Surplus power generated on site is exported to ESCELSA, the local utility.

The study is expected to be completed by the end of the year.


ALSTOM is to build a combined-cycle cogeneration power plant in Scandale, in the Calabria region of southern Italy. Awarded to an ALSTOM-led consortium by Eurosviluppo Elettrica SpA, the contract is for the construction of an 800 MW turnkey plant based on two GT26 gas turbines.

The contract is worth around €340 million, of which ALSTOM’s share is around half.

ALSTOM will supply two gas turbines, two steam turbines, four TOPAIR generators, two air-cooled condensers, the plant control system and balance of plant for the power island. The ‘waste’ heat produced by the power plant will be re-used for external industrial processes such as wood drying. This increases the amount of fuel converted into usable energy to around 75%, as opposed to 56.5% without cogeneration, says ALSTOM.

The project is expected to be completed in April 2008.


A revival of nuclear power; more renewable energy, particularly wind power; and more gas and cleaner, more efficient coal-fired power stations – these represent the future for electricity supplies in Europe, according to three remarkably consistent keynote presentations delivered at the Power-Gen Europe event in Cologne in May and June this year from equipment suppliers Siemens and GE Energy and the local power distributor EnBW. No specific mention of distributed generation, whether cogeneration or not, or demand reduction initiatives made it to final drafts of the three presentations.

Dr Uriel Sharef, Executive Vice President of Siemens AG, which is building the steam turbines for use at the Olkiluoto nuclear plant currently under construction in Finland, said that as well as its nuclear capability, the company has also built five IGCC plants around the world and has more than 50% of the world’s offshore wind market. Dr Udo Brockmeier, Chairman of the Management Board at EnBW Kraftwerke AG, added that Germany’s existing nuclear power plants should be kept in operation for as long as possible and called for more renewables, including new and refurbished hydro and pumped storage plants, as well as fossil fuel plants with carbon capture and storage. Speaking later to the press, GE Energy’s President and CEO John Krenicki stressed his company’s nuclear, clean coal and wind power credentials, adding that the company is working to have its ESBWR nuclear design certified for use in the US.

Krenicki came closest to promoting local power generation in revealing that the company’s Jenbacher biogas-fuelled engines had received ‘ecomagination’ certification. GE’s ecomagination status is given to products that offer improved environmental performance.

The emergence of a strong market for biogas-fuelled engine-generators, particularly in Germany where a guaranteed ‘feed-in’ tariff has stimulated activity, was evident among exhibitors at the event. Some of these gensets are used in cogeneration applications. Both MTU Friedrichshafen and Deutz Power Systems – both based in Germany – reported a healthy market. MTU, which acquired gas engine genset manufacturer MDE Dezentrale Energiesysteme at the start of this year, also reported a strong market for natural gas-fuelled cogeneration plants in the glass house sector of the Netherlands.

Distributed generation did occupy one of six simultaneous ‘tracks’ within the two-day conference programme at the event, with papers covering microgeneration, cogeneration, gas turbines and engines, and fuel cells, although the tone in the fuel cells debate was downbeat as speakers suggested that, except (and unusually) where a supply of hydrogen was readily available, the cost of fuel cell deployment is still a major barrier for stationary power applications.


Pöyry’s Energy business group of Finland has been awarded an owner’s engineer contract by Sime LCP Power Co. Ltd. for a natural gas fired combined cycle cogeneration plant project in Thailand. The contract value is €1.1 million and the project will be executed over a period of 22 months. The plant is located in the Laem Chabang Industrial Estate, Chonburi.

The project is the 60 MW expansion of the existing 100 MW combined cycle cogeneration power plant owned by Laem Chabang Power Co. Ltd, which is a subsidiary of Sime Darby Berhad of Malaysia as well as Sime LCP Power Co. Ltd. Sime Darby Berhad is one of the leading power project developers in the region.

Pöyry is responsible for the preparation of the specifications for the engineering, procurement and construction (EPC) project, evaluation of the EPC proposals, assistance during EPC contract negotiations, assistance in obtaining environmental approvals, design review and construction supervision.


UK food retailer Tesco is using a newly installed CHP plant at its site in Swansea, Wales, as part of plans to reduce energy consumption in all of its buildings.

The 210 kWe containerized unit was installed and commissioned by British supplier Cogenco and is expected to reduce energy use at the site by one-third, as well as cutting overall carbon dioxide emissions. And there are additional savings as the power output of the plant is exempt from charges under Britain’s Climate Change Levy.

The containerized CHP plant at Tesco’s store in Swansea, UK
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Dudley McDonald, Business Development Director commented, ‘We are delighted to be involved at the early stages of Tesco’s new environmental strategy. We have had previous successes in the retail sector, which is an excellent area to make significant energy savings and reduction in carbon dioxide emissions.’

Cogenco’s CHP units are assembled, pre-commissioned and transported from the company’s headquarters in Horsham, West Sussex, from where the performance of units is remotely monitored.


The biomass-fuelled cogeneration plant of Lages, within the State of Santa Catarina, Brazil, that is owned and operated by Tractebel Energia, has been registered as a Clean Development Mechanism project by the CDM Executive Board.

To date, only 203 projects worldwide have reached registration, an advanced step in the CDM certification process, says developer Suez Energy International.

Lages, which has the capacity to generate 28 MW of electricity and 25 tonnes/hour of steam, will reduce greenhouse gas emissions by 220,000 tonnes of carbon dioxide equivalent per year under normal operating conditions, and hence be entitled, over 10 years, to 220,000 Certified Emission Reduction credits per year. The credits are tradable on the international markets and can be used within the European Emissions Trading Scheme.

The emissions reduction comes from the fact that the Lages cogeneration plant is using wood waste as a fuel – a waste which was dumped in nature before the construction of the plant, to produce methane and releasing this to the atmosphere.

The sale of a portion of the expected Certificates is being negotiated with the Prototype Carbon Fund of the World Bank. The outstanding Certificates will be sold on the market.

Suez Energy International says it is interested in developing more projects with lower carbon intensity under the CDM framework of the Kyoto Protocol.


Wasted energy will cost UK businesses £570 million (US$1.1 billion) this summer, owing to poor energy efficiency, according to new figures released by Britain’s Carbon Trust. This means that, even in the summer months, businesses are wasting 15% of their total energy spend.

Wasted summer energy emits over 8 million tonnes of carbon dioxide, equivalent to the city of Birmingham’s annual carbon emissions. As carbon emissions are the key cause of climate change, and business is responsible for up to 45% of all carbon emissions in the UK, the Trust has urged all companies to act to improve energy efficiency and reduce the cost of carbon.

The ‘cost of carbon’ lies at the heart of a new £4 million ($7.5 million) television and newspaper campaign being launched by the Carbon Trust which highlights the significant amount of energy that is used and wasted by businesses through failing to prioritize cost-effective energy-efficiency measures. The campaign encourages businesses to contact the Carbon Trust and seek help in cutting energy costs and carbon emissions ahead of the critical winter period.

The Trust says it already works successfully with thousands of businesses offering practical help and advice, including free energy surveys. It uses food retailer Sainsbury’s as an example of what can be done with on-site energy generation.

The company has achieved a 20% ‘carbon dioxide per square metre’ reduction on energy use between 2001 and 2005, against an initial target of 10%, says the Trust. Alongside mainstream energy efficiency projects, various stores are also taking a lead on on-site generation. Wind turbines have been installed at the East Kilbride depot in Scotland and stores at Greenwich and Kingston, CHP units have been installed in five stores and a solar power plant added to the Greenwich store.


Pharmaceutical company Merck has opened its first large-scale photovoltaic solar energy system, at its Rahway/Linden research and manufacturing facility in New Jersey, US. The 500 kW system includes more than 1500 solar panels that cover the roofs of two buildings on the campus, one of which already houses a hydrogen fuel cell. The system has been installed as part of the New Jersey Clean Energy Program.

The solar installation is the result of an analysis of clean energy systems that found that, over the expected 30-year life of the solar equipment, the emission of more than 3000 tonnes of carbon dioxide will be avoided by taking advantage of power from the sun. The photovoltaic panel installation, designed and managed by Dome-Tech Solar, incorporates new solar technology using highly efficient panels and specialized roof-mounting technology that supersedes other rooftop solar solutions, says the company.

One of the buildings on which the solar panels were installed is already powered by a 200 kW fuel cell, which produces clean energy using hydrogen from natural gas. With the addition of the solar electric panels on this building, Merck has created a unique clean energy building prototype for New Jersey corporations. The building is nearly self-sufficient in producing the electricity it needs, with virtually no greenhouse gas emissions.

New Jersey Department of Environmental Protection Commissioner Lisa Jackson said: ‘Merck’s solar powered facility represents a major step on a journey all of us in New Jersey must take to heed Governor Corzine’s call to reduce our dependence on fossil fuels and promote alternative sources of energy. It is a move we must make to ensure a healthy environment and a healthy economy for our state.’


Denmark’s Danfoss A/S has acted upon its expectation of considerable growth in the Romanian district heating market during the next few years by signing an agreement to acquire Schmidt-Bretten, a leading producer of district heating stations in the country. Schmidt-Bretten primarily produces large, welded district heating stations typically installed in blocks of flats and other large buildings. The Bucharest factory also produces plate heat exchangers.

Executive Vice President & COO at Danfoss, Niels B. Christiansen, said: ‘We are securing a strong platform for our district heating solutions in a market which is likely to face a very interesting development process, just like the one we have already witnessed in the new EU member countries. The main focus is on state-of-the-art and efficient district heating technology, while at the same time the market is undergoing a gradual internationalization process. We aim to actively and positively influence this development, as we have done in the rest of the eastern European countries.’

The growth potential of the market for complete district heating stations is high, says Danfoss, particularly in Russia, China, and eastern Europe.


The US Air Force and the US Department of Energy’s National Renewable Energy Laboratory (NREL) were recipients of the 2006 Climate Protection Awards for their efforts in buying green power and using on-site energy sources, according to the US DOE’s Energy Efficiency and Renewable Energy newsletter.

Presented by the US EPA, the Air Force was honoured for buying more than a billion kilowatt-hours of green power in 2005, making it the largest buyer of green power in the country. The Air Force also invests in on-site biomass, wind, and solar power. NREL was the first federal participant in the EPA Climate Leaders Partnership (CLP) and was one of five CLP members to set and successfully meet its greenhouse gas emissions reduction goal of 10% from 2000 to 2005.

Other winners include Johnson & Johnson, the largest corporate purchaser of green power and a significant generator of on-site power from landfill gas and solar energy.


Germany’s MAN B&W Diesel AG has secured two orders, together worth €10.4 million, for stationary engines to be run on biofuels in cogeneration mode, at sites in Belgium and Germany.

The company is to supply one of its 18-cylinder, 18V48/60 engines for the Belgian customer Electrawinds Biomassa Mouscron SA. The plant will produce 17.7 MW of electricity and 14 MW of heat from a biofuel made from waste oil of animal and vegetable origin. The waste oils are prepared in the customer’s own facility according to MAN B&W Diesel specifications.

Meanwhile, Naturstrom Betriebsgesellschaft Oberhonnefeld, based in Koblenz, Germany, has contracted MAN B&W to supply a 12-cylinder, 12V32/40 engine to operate on vegetable oil and be installed in a cogeneration plant in which waste heat will be used in the production of pellets. Electrical power will be sold under the German EEG Erneuerbare-Energien-Gesetz (renewable energy legislation). In addition to an electrical output of 5.5 MW, a further 5 MW of thermal energy will be exploited.


A 110 kWe solid oxide fuel cell (SOFC) trigeneration unit has been operating successfully at the facilities of Gas Turbine Technologies S.p.A. (GTT) in Torino, Italy, for more than a year now (over 9000 operational hours), and has produced approximately 1100 MWh of electricity for export to the grid. The natural gas-fuelled system also generates 60 kW of thermal energy.

Thanks to a system availability of 99.5%, the Siemens ‘CHP100’ unit operates at an overall efficiency of between 70% and 80%, or an electrical efficiency of up to 46%, says the company. The system has therefore demonstrated a potential superiority in efficiency to a gas turbine or to an internal combustion engine, adds Siemens. During this one year of operation, the GTT team has confirmed that the operation is stable and reliable, including dealing with variations in pipeline natural gas composition.

This SOFC CHP system was previously operated both in the Netherlands, by Nuon, and the Dutch/Danish Utility Consortium from 1996 to 2000, and in Germany from 2001 to 2002 at RWE. Total system operating hours, combining all locations, now exceeds 29,000, the longest operating period for a solid oxide fuel cell system that is grid-connected and operating in a CHP mode, says the company.

‘Characteristics of this technology are high efficiency, extremely low polluting emissions; zero CO and SOx; and NOx emissions of one hundred times less than that of the best in class gas turbines’ said Luigi Tarricone, president of GTT. ‘This is a tremendous environmental breakthrough in small-scale power generation.’

During the latest operating period, there was no measurable voltage or power degradation, and there were no thermal cycles taken by the generator module, says Siemens. The system operation is automatic and very dependable, with no operations required in the control room. Maintenance to the system is completed on-line and is relatively simple, with only replacement of air filters and desulphurization reactant generally required.

The CHP100 generator supplies part of the electricity demand of GTT’s manufacturing facility (20% of its electricity requirement), and part of the thermal energy required for heating and air conditioning of GTT offices. Siemens anticipates installing a second industrial SOFC generator, the SFC200A, in early 2008, at the GTT facility.


UK-based ENER·G Natural Power, renewable energy specialist has been awarded contracts by Fife Council in Scotland to recover energy from two of their landfill sites, one of which will supply a nearby community with heating and hot water.

The two sites, located at Lochead, near Dunfermline, and Lower Melville Wood near Cupar, will initially provide enough methane gas to allow ENER·G to generate more than 4.5 MW of electricity. As the gas production increases over time, the level of power generated should also rise.

And, in what is believed to be the first time in the UK, heat produced by the electrical generation process at the Lochead site is to be recovered and transported into Dunfermline as hot water via highly insulated pipes. Designed and project managed by community energy specialists, PB Power, it is planned that the scheme will supply heating and hot water to a leisure centre, schools, homes and other public buildings in the town.


Britain’s Rolls-Royce has signed a US$20 million contract to supply two RB211-6761 Dry Low Emission (DLE) gas turbine generating sets to power a combined-cycle heat and power plant that will provide electricity and heating to a new industrial park in the town of Levice, Slovakia.

Delivery is scheduled for the end of this year, with the cogeneration plant expected to be operational in the first quarter of 2007.

Developed by ADATO s.r.o., an engineering project management company based in Levice, and with financing by the SLOVINTERGRA Group, the project, will provide around 80 MWe to the industrial park and the public electricity grid. In addition, two heat recovery steam generators designed by ADATO will provide 50 tonnes per hour of high pressure and low-pressure steam.

Levice industrial park has attracted a number of foreign investors, including companies from Austria, India, Germany, the Netherlands and Sweden.


Caterpillar Inc. has been selected to provide 60 methane gas-powered generator sets to produce 120 MW of power at the She Coal Mine in Inching City, Shania Province, China. The Shania Inching Anthracite Coal Mining Group Co. Ltd is the project developer for the methane gas power project, which is expected to be the largest of its kind in the world when it is fully operational.

Methane gas found in coal seams can be hazardous if not properly managed and ventilated from mines. The power plant project is expected to improve methane gas ventilation at the mine site, improving safety while providing an environmentally friendly fuel source to generate electricity.

The proposed on-site power station at the She Coal Mine
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Historically, the methane has been vented into the atmosphere, generating greenhouse gas emissions. By capturing the methane gas and converting it into electricity, the generator sets will significantly reduce greenhouse gas emissions while also improving the capacity of the local power grid, says Caterpillar, which estimates that the project will reduce greenhouse gas emissions by 4.5 million tonnes over a 20-year period.

It is anticipated the planned power generation plant at the She Coal Mine will use 60 Caterpillar G3520 generator sets, integrated Caterpillar paralleling switchgear and controls and four steam turbines driven by recovered exhaust heat to produce 120 MW of power. Project partner Shanghai Electric Group Co., Ltd will provide the steam turbines and the entire plant is expected to be fully operational in 2007.

Caterpillar has a long history of operating in China. The company sold its first products there in 1975 and opened an office in Beijing in 1978.


A mandatory greenhouse gas control regime is likely coming to America sooner than thought as corporate America and Wall Street, particularly electric utilities, are calling for regulatory certainty in investing in new plant and equipment, according to a new multi-client study being launched by the US-based UtiliPoint International and Global Change Associates.

Companies such as Southern California Edison, AEP, Duke-Cinergy, and Excel Energy are said to be out in front of the curve. And, if a US carbon regime is now a certainty, it’s time to get the rules in place so industry can respond, says Utilipoint. The question is, are companies ready, and do they understand what impact this potential development will have on them?

The two companies have launched a study to address these issues and to provide guidance to corporate America and particularly, electric utilities, on what the impact of a mandatory greenhouse gas regime will be. It will examine market opportunities, market sizing, regional and national markets, project finance opportunities and review how prepared the industry really is.

Peter Fusaro, chairman of Global Change Associates said: ‘It seems likely that the US will have its own mandatory greenhouse gas regime legislated sometime in 2007, but it won’t be part of Kyoto. Since US companies are already evaluating their carbon risks and mitigation strategies, it increasingly makes sense to be ahead of the carbon curve now and have a road map to future developments’.

In brief…

Aluminium producer Aluminium Corp of China (Chalco) has linked up with a hydro power plant in the aim of covering itself against rising energy costs, according to China Power & Energy News. The company has decided to form a joint venture with a Chinese hydro power company to develop a power plant and an alumina refinery in China’s Guizhou Province.

Norway’s Aker Kvaerner has been awarded a contract worth €80 million for the supply of a recovery boiler to modernize the chemical recovery plant at a paper pulp mill in Kuusankoski, south-eastern Finland. The new boiler is designed for maximum power generation and it will increase the electricity production produced from biofuels, so improving the pulp mill’s energy efficiency and cutting emissions of carbon dioxide.


Projected power generation capacity shortages and increasing electricity prices in the residential market are boosting demand for DG in Europe. In particular, demand for micro CHP is rising, due to its high overall efficiency and the cost savings it presents to end users, according to a new report from Frost & Sullivan. To maintain this momentum, partnerships between boiler manufacturers, installers and utilities will be critical. Frost & Sullivan suggests that the European micro CHP market earned revenues of US$67 million in 2005 and estimates that this will reach over $800 million by 2012.

‘Governments in Europe are beginning to take note of the benefits of micro CHP; the recent reduction of VAT from 17.5% to 5% in the UK is a favourable sign and there will be more regulatory support for this technology in the future,’ says Frost & Sullivan. ‘Anticipated incentives for micro CHP due to its carbon saving potential will also give a thrust to the market.’

While market participants are confident about micro CHP’s prospects, end users are excited at the possibility of having a small power station in their homes. Meanwhile, utilities are interested in micro CHP to improve their share of eco-friendly electricity. Micro CHP also offers opportunities for boiler manufacturers and installers that are already familiar with producing and selling boilers.

The market has shown consistent growth over the past five years with an increase in investment, and more products and manufacturers are likely to enter the market, says Frost & Sullivan. However, despite this upbeat scenario, the industry still faces a number of challenges. Currently, developers sell their units either directly to customers or through distribution partners. This business model places the entire risk of investing in a new technology on end users. Therefore, there is an immediate need for innovative business models to ease the adoption process.


While solar photovoltaic (PV) power projects are now being built throughout the country, California continues to be the US leader in large PV power plants, according to the US Department of Energy’s EERE Network News, citing new on-site PV plants installed at a training centre and a wine manufacturer.

Kyocera Solar has supplied solar modules for a 457 kW solar installation at the Electrical Training Institute of Southern California, a higher education and advanced technology facility located near Los Angeles. Completed in April, the solar electric system is operated jointly by the Los Angeles County Chapter of the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW) Local Union 11.

Meanwhile, in northern California, Fetzer Vineyards is adding a 900 kW PV system to the roofs of its bottling plant and Red Wine Barrel Room. The project will be installed by 3 Phases Energy, LLC and MMA Renewable Ventures, and will supply 80% of the bottling plant’s electricity needs. Fetzer has long been a leader in renewable energy, having installed a 40 kW PV system and bought 100% green power from back in 1999.


US-based David Sweet will become the new, full-time Executive Director of the World Alliance for decentralized Energy (WADE) on 1 August 2006, replacing Michael Brown, who served as WADE’s half-time Director since 2002, and who will now devote all his time to work with Delta Energy & Environment.

See the WADE pages starting on page 162 for the full story.


Eight cogeneration units from GE Energy’s Jenbacher gas engine business have been installed to form the company’s largest CHP project in Hungary, at the public grid and a district heating system in the industrial city of Székesfehérvár, 65 km southwest of Budapest.

GE supplied Energott Kft, the general contractor of the project, with eight, natural gas-fuelled JMS 620 GS-N.LC units capable of generating a total of 24.4 MW of electricity and 22.4 MW of thermal power. The plant, for which commissioning began at the end of June, is owned and operated by Erömü Fejlesztö, Beruházó Kft.

The engines were installed at two sites in the city. This arrangement improves overall plant efficiency by reducing the distance that the engines’ heat must travel within the district heating system, and therefore the amount of heat that is potentially lost during distribution, says GE.

Part of the Székesfehérvár CHP-based district heating plant in Hungary
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To strengthen customer service capabilities for Jenbacher plants in the central and eastern European region, GE Energy opened its Hungarian Jenbacher engine service centre in late 2005. Located in the city of Veresegyház, 20 km north-east of Budapest, the office is co-located with GE’s gas turbine spare parts manufacturing operation.

That expansion comes as demand for GE’s gas engine technology is expected to remain strong in Hungary and throughout the region. Indeed, many Central and Eastern European countries are seeking to modernize their local district heating systems, says the company.

In addition to serving customers in Hungary, GE’s new Jenbacher centre is helping to enhance customer service in surrounding countries including Romania, Slovakia and Croatia.