December 2012/January 2013 www.gastopowerjournal.com China's shale gas subsidies underpin expansion of gas generation Generous subsidies for shale gas developers, offered by China's ministry of finance, are intended to boost domestic gas production which may herald an ascent of gas generation in the nation’s mix. he Beijing government is target- coal-bed methane production is currently ing to add 40 GW from gas-fired subsidised with 0.2 yuan per cubic plants in the near future, as it meter. Additional funds may be provided Tfocuses on a cleaner energy pol- by local governments, the ministry said, icy. Just three percent of the electricity reserving the right to adjust subsidies at generated in China stems from gas-fired some point in the future. plants, yet given China's enormous size, China could become the “second this translates into as much as 33 GW of game-changer in a global shale gas gas sourced power, according to Wood revolution”, should it manage to tap its Mackenzie figures. geologically challenging unconven- The shale gas subsidies of 0.4 yuan tional gas resources which are esti- (6.4 cents) per cubic meter, to be paid mated to be far larger than shale gas for shale gas developed and consumed plays in the US, Fatih Birol, chief econ- between 2012 and 2015, come in at the omist at the International Energy top end of analysts' expectations, as Agency (IEA) forecast. Shale gas basins and pipeline system of China continued on page 5... UK: Launch of capacity markets is likely to prompt ‘’ A 'dash for gas', triggering fresh investment in new power generation capacity, could follow the launch of capacity payment mechanisms. Chancellor George Osborne will unveil the much- awaited Gas Generation Strategy in his Autumn Statement on December 5. nder the new capacity payment sys- Capacity auctions will be held starting growth to be jeopardized by parts of the tem, power plant operators will get from 2014 for delivery of capacity in the government pursuing green targets. additional proceeds for making winter of 2018/19. A government-owned Reaching out to its coalition partner, the Ubackup capacity available at short company will act as a single counterparty Conservatives compromised by agreeing to notice on top of their earnings from selling for new long term Contracts for Difference cap subsidies for nuclear and renewables at electricity. The incentive scheme, which (CfDs), set to provide stable revenues for £7.6 billion in today's prices by 2020 under a comes on top of the £7.6 billion subsidy for investors in low carbon energy projects at "levy control framework". In return, energy nuclear and wind power, is expected to a strike price. secretary Ed Davey (Liberal Democrats) prompt investment in up to 20 new gas-fired An adamant supporter of the 'dash for gas', dropped a demand for a 2030 electricity sector power plants. Osborne says he does not want economic decarbonisation target. 

OMV aims to run Samsun CCGT on E.ON Generation targets Brazil, "CCS deployment will allow for more equity gas, start-up in H1-2013 manages gas fleet out of Coventry coal, gas to be used" – IEA analyst

Pursuing a strategy of integrated gas use, The BRIT countries – Brazil, Russia, [India] Deployment of carbon capture storage (CCS) OMV aims to operate its 870 MW Samsun and Turkey – are what E.ON Generation has technology will allow for more coal and gas combined-cycle power plant project in Turkey singled out as growth markets, Jim Lightfoot, to be used says Sean McCoy, analyst at the in the long-term on 'equity gas', similar to the director fleet management Gas CCGT at E.ON International Energy Agency (IEA). new Brazi plant in Romania ... Generation. See page 3 See page 10 See page 6. Markets

Re-dispatch: German power plant operators want full compensation

Index ermany's federal energy network affected power plant operators will take legal China's shale gas subsidies underpin regulator (BNA) should urgently action against BNA's. expansion of gas generation - cover improve compensation for opera- Electricity transmission system operators, OMV aims to run Turkish Samsun CCGT Gtors of flexible power plants that which are fully unbundled from power genera- on equity gas, start-up in H1-2013 - page 3 have to ramp up or down to maintain grid sta- tors, increasingly intervene in power plant op- bility, the German energy industry association erations following the phase-out of 8 nuclear Interview: E.ON Generation targets Brazil, manages global gas fleet out of Coventry BDEW told Gas to Power Journal. power stations. This puts fossil capacity at cen- - page 4 The fierce criticism is tre stage to step in and cover unforeseen de- directed against BNA's mand swings at short notice. Tokyo Gas expands capacity as Japan turns new partial compensation "Even if our power grids face an increas- to gas generation - page 5 scheme. It is applicable if ingly tense state [to match supply and de- "CCS deployment will allow for more coal, no more than 0.9% of the mand], caused by policy intervention into gas to be used" – IEA analyst - page 6 plant's electricity output energy-only markets, it's now up to fossil InterGen advocates switch from OEM to produced in the previous power plant operators to pick up the tab," third party service for F-class turbines - page 6 Hildegard Müller year were affected by Müller criticised. In BDEW's view, operators Montana’s Mill-Creek 180MW FT8 SWIFTPAC interventions, when called whose power plants are called upon for OCGT plant is replicable in Europe - page 8 for re-dispatch at short notice to backup re-dispatch need to be fully compensated for Interview: Siemens to break ground in renewables. all costs and operating expenditures. Singapore for H-class turbines - page 9 The risk of power grid instability, following “No trace of appropriateness” the politically-motivated phase-out of 8 nuclear Gas To Power Journal 2nd Floor, 8 Baltic Street East "Instead of granting a fair and adequate com- power plants, had prompted BNA to set out London EC1Y 0UP pensation for thermal plant re-dispatch which new rules for power plant re-dispatch. United Kingdom is indispensable for grid stabilisation, the regu- www.gastopowerjournal.com +44 (0)20 7253 2700 lator has put disproportional burdens on plant E.ON to mothball 1,037 MW of Publisher operators," said BDWE head Hildegard Müller. gas-fired generation in Germany Stuart Fryer The new regulation will be enacted on German's largest utility E.ON confirmed it Editor December 17, whereby the federal regulator will shut-down 1,037 MW of gas-fired power Anja Karl only awards compensation for 'essential' power generation capacity, mothballing both the Tel: + 44 (0) 7017 3417 plant interventions and will only cover costs 622MW Staudinger 4 plant unit and the [email protected] that are inflicted as a result of the re-dispatch. 415 MW Irsching 3 unit by the end of this year. Advertising Under the new system, operators will receive The two power plants will operate as winter Narges Jodeyri Tel: + 44 (0) 7253 3406 only the marginal cost derived from the hourly reserve under a short-term contract with [email protected] Epex spot price. Tennet, once E.ON has transferred responsibil- Events This will not allow for additional profits, ity to the regulator BNA. Kamil Hussain sparking outrage from fossil power plant "We have to accept this might be the new Tel: + 44 (0) 7017 3404 [email protected] operators. normal," he said, referring to a 10 MW/h drop "There's no trace of appropriateness," in average German wholesale power prices and Subscriptions  Stephan M. Venter Müller stressed, suggesting that it is likely that negative clean spark spreads. Tel: + 44 (0) 7017 3407 [email protected] Production Vivian Chee Tel: +44 (0) 20 8995 5540 Merkel calls for ‘capacity [email protected] Subscription solution’ by mid-2013 1 Year £95 No part of this publication may be reproduced or stored he German chancellor Angela Merkel by We will work on a national dialogue to pursue in any form by any mechanical, electronic, next summer aims to have parliament this without slowing-down the pace of expan- photocopying, recording or other means without the agreed on some form of market orien- sion," Merkel said following a meeting with prior written consent of the publisher. Whilst the tated capacity payment to underpin the country's 16 state leaders on energy in information and articles in Gas to Power Journal are T published in good faith and every effort is made to investment in new power generation capacity. Berlin. check accuracy, readers should verify facts and A regular leaders' meeting in December and Responding to a press query if this means statements direct with official sources before acting on them as the publisher can accept no responsibility in a special meeting in March, dedicated to Germany will introduce capacity payments, this respect. Any opinions expressed in this magazine Germany's Energiewende [energy transition] she remained rather vague, answering "not should not be construed as those of the publisher. policy, would specify and build on the progress necessarily", seemingly hesitant to give a Printed by: reached so far, she said. definite response that could rekindle a dispute Manson Group, Reynolds House, 8 Porters’ Wood "We need security of supply; we need rapid over a strategic reserve versus capacity market Valley Road Industrial Estate, St Albans, expansion of renewables, and bearable prices. scheme.  Hertz AL3 6PZ 02 Gas to Power Journal  Dec 2012/Jan 2013 Markets OMV aims to run Turkish Samsun CCGT on equity gas, start-up in H1-2013 Pursuing a strategy of integrated gas use, OMV aims to operate its 870 MW Samsun combined- cycle power plant project in Turkey in the long-term on 'equity gas', similar to the new Brazi plant in Romania which runs 100% on gas produced by the company's upstream arm, says Hans-Peter Floren, OMV board member responsible for gas & power. urkey and south-eastern Europe OMV has invested over 600 million euro ral gas produced by the company's upstream are the most attractive markets ($735 million) into the Samsun project. The arm in the Romanian deep water section of the in the EU 27 to invest in gas- OMV Turkey representative confirmed the Black Sea. "The power plant is 100% run on “Tfired power generation projects," plant will be run on proprietary gas once OMV equity gas, exemplifying our gas strategy he said in London in late November, forecast- manages to source sufficient gas supply from aimed at integrated gas [use]," Floren stressed. ing Turkey's gas demand will surge from an Azerbaijan or northern Iraq. In the start-up OMV invested 530 million euros to realise the average 38 billion cubic phase, however, the operator will have to pur- power plant project. Brazi was inaugurated on metres (Bcm) in 2009-11 chase gas to power the plant from Botas, he October 16 but has been in commercial operation to 59 Bcm by 2020. conceded, stressing that operations of the since August 2012, supplying 860 MW of net Plans to build addi- Samsun plant are expected to be profitable. electric capacity to the Romanian grid and cover- tional power plants in ing 8-9% of the country's electricity demand. Turkey are, however, Brazi plant 100% fuelled by "The efficiency of the plant is twice higher not on the cards and OMV's 'equity gas' than the sector average, while CO2 emissions Floren stressed “the The Brazi plant in Romania is fuelled by natu- are below European average," he said.  Hans-Peter Floren timing of further invest- ment in gas-fired assets depends on how quickly we will manage to source equity gas”.

OMV prepares to start-up Samsun plant in April next year The Austrian oil and gas group OMV aims to start commercial operations of the Samsun CCGT around April 2013, a representative from OMV Turkey told Gas to Power Journal at the sidelines of a press conference. Commissioning works are bound to start before the end of the year, as construction was already almost complete in mid-July when Turkey's top administrative court suspended works on farmland in the Black Sea province of Samsun. Model of Samsun CCGT; source: omv.com.tr runs Barry gas plant in open-cycle mode at end of life-time

entrica Energy's fleet of gas-fired fast-start capability at the Barry Power Station. Not all combined cycle plants, however, are plants has undergone "a massive "The operating budget is a bit more than ideally suited to run longer at the end of their change in operation" as flexibility half of what it was when operating the plant in lifetime in an open-cycle mode: "In the current Cis paramount to counterbalance the a combined-cycle mode," Hedges said. Mainte- climate, once the efficiency of a CCGT drops intermittency of renewable energy supply. The nance regimes, however, will change based on beyond a certain point, it is more likely that the operator now runs the 230 MW gas-fired Barry the way operators choose to run the turbine, he plant will be taken out of the market than to Power Station as a peaking plant in an open- told Gas to Power Journal at the sidelines of undergo a costly life extension programme," cycle mode to boost operational flexibility. the user group at the British Institu- Hedges said. "It is a strategic move to take the lower effi- tion of Mechanical Engineers (IMechE). The question is how to do the engineering ciency plant nearing the end of its lifetime and Overall, Centrica has seen a massive change to extend the run-time of the plant, one dele- operate it in an open-cycle mode," Mark in plant operations, requiring plants to start in gate at the IMechE gas turbine user group Hedges, asset planning manager at Centrica less than 20 minutes to full-load and then pos- remarked: "Some operators are not able to said, revealing that Centrica has undergone en- sibly switch to combined-cycle operation after afford to change the kit but they need to oper- gineering changes to the boilers to facilitate one hour. ate their plant for another twenty years." 

Gas to Power Journal  Dec 2012/Jan 2013 03 Markets

Interview: E.ON Generation targets Brazil, manages global gas fleet out of Coventry The BRIT countries – Brazil, Russia, [India] and Turkey – are what E.on Generation has singled out as growth markets. “Europe is still our core market but we are not seeing the greatest growth in this area at the moment. You might want to call the UK ‘an exception’; however it is the BRIT countries that we at E.ON target as growth markets,” Jim Lightfoot, director fleet management Gas CCGT at E.ON Generation told Gas to Power Journal in an interview.

he economic crisis and the con- ropean fleets with 65 GW of assets, spread Benchmarking allows E.ON’s Generation unit tinuous increase in subsided re- across 10 countries with additional support to drive down the costs per megawatt hour, newable power are impacting supplied to Russia. The CCGT global unit is however the precondition for doing so is trans- “Tthe operating hours of gas power based in Coventry, in the UK as this originally parency and trust, Mr Lightfoot stressed: plants and power wholesale prices. Both things had the biggest CCGT fleet and much of the “Global and local organisations need to be are heavily impacting the profitability of gas knowledge around handling such plants. willing to share data and knowledge, under- power plants across Europe, “Key to the success of the fleet is establishing standing that the overarching organisation will so you have to optimise op- one fleet culture and the creation and delivery make the right decision.” erations and costs of the of a single vision for the fleet that the regional fleet in this new market sce- organisations can buy into,” he outlined. “It can be difficult to get people nario”, he said. buy into single vision” E.ON entered a 50/50 Only ‘fleet players’ can afford Starting off with a regional approach, E.ON joint venture (JV) with moving away from OEMs has moved its fleet management to a functional Jim Lightfoot Brazil's MPX, the EBX Commenting on E.ON’s power plant procure- approach. With the new organisational struc- Group energy arm, creating ment strategy, Mr Lightfoot named technology, ture the influence on suppliers increased along the largest private energy company in Brazil. market and affordability, size of existing fleet, with the need for risk management. The strategy behind this move is to "establish a and partnering approach as the main factors “It can be very difficult to bring the people significant market position in Brazil" with the that determine the company’s negotiation posi- together and gather data across various countries. aim to "develop efficient conventional genera- tions with OEMs and non-OEMs. In year one, some people thought all is just a tion, renewable power and related supply and “You can’t move away from OEMs unless waste of time but by year two they started to buy trading activities in Brazil and Chile,"Johannes you’re a fleet player but it’s ultimately whether into the structure and come year three it all started Teyssen, CEO of E.ON AG announced after you will change, which comes down to your to make sense and fall into place,” he concluded. sealing the deal in April. MPX owns 11,000 risk appetite,” he said. To drive best practice one needs to use en- MW of already licensed projects that will be As for fleet management, the ‘real value’ couragement and exert power to some degree, partially contributed to the JV. comes from a single variant concept, whereby he said, suggesting “technical procurement and E.ON Generation GmbH, located in Han- knowing the plant better gives you an advan- planning is far easier to achieve than getting nover, Germany, is managing E.ON’s four Eu- tage over an independent regional operator. the people buying into a single vision.”  Brazil: Gas generation poised to expand its role as supplier of peak-load power as generation is poised to play a fact that, prices for wind energy in 2011 were accounted for an 8.7 percent share of Brazil's bigger role in denting Brazil's lower than those for natural gas," he said in a thermal capacity in 2011, while 32.4 percent need for peak-load power supply, country report seen by Gas to Power Journal. comes from oil-fired plants regardless of the Gprovided that bottlenecks in the uneconomic and polluting nature of burning oil gas pipeline network get resolved in order to Gas to cover 26% of Brazil's for producing electricity. allow the country's power companies make full power demand by 2020 Growing at a rate of 10.5% between use of domestic gas reserves. Gas generation in US-based multinational General Electric (GE) 2000 and 2011, Brazil's thermal installed 2011 made up 59.1%, or 13,220 megawatt (MW), is betting on the expansion of gas generation in capacity increased from 7,449 MW in 2000 to of Brazils 22,368 MW installed thermal Brazil and a spokesman said natural gas is ex- 22,368 MW last year, according to GlobalData. capacity. pected to account for 26% of Brazil's power In 2011, the market share of gas generation Gas-fired power plants are dispatched pre- sources by the end of the decade. Sales of gas reached 11 percent – dwarfed by the 74.1 per- dominately to cover peak load demand, due to turbines for new and retrofitted plants are ex- cent share of hydro power. "The development high fuel prices for gas compared with hy- pected to provide a major catalyst for GE’s of thermal power capacity is not a priority dropower. Runtime hours of gas-fired peaker business expansion in Brazil. for the Brazilian government, particularly plants are also curtailed by the growing supply Brazil has a low dependence on coal gener- considering the substantial potential that of renewable energy, particularly wind power, ation, as domestic coal reserves are generally exists for the development of other energy says GlobalData analyst Sayani Roy Nath. of low quality and, as a result, coal-fired plants sources such as hydro and renewable power," "Gas generation in Brazil is restrained by the run on imported coal. Coal-fired plants only Nath cautioned. 

04 Gas to Power Journal  Dec 2012/Jan 2013 Markets Tokyo Gas expands capacity as Japan turns to gas generation Tokyo Gas is expanding its power generation capacity as Japan's energy mix shifts away from nuclear towards gas generation, Yasushi Sakakibara, Tokyo Gas' deputy general manager for LNG contracts, has told Gas to Power Journal. Japan’s largest gas utility plans to start-up a third 400 MW gas-fired unit at its Yokohama power plant in 2015.

osts for the unit are expected to range between 30 billion yen and “Future gas demand will fluctuate greatly depending 40 billion yen ($371m - $495m). on when and how many nuclear plants will go back CThe unit will add to Tokyo Gas' “ fleet of gas-fired power plants, consisting on line after stress tests” of six units with a combined capacity of 2000 MW. Keen to source new ibara revealed. The Tokyo Gas 2020 strategy Tokyo Gas alone imported as much as ” long-term gas supplies to includes participating in Canadian shale gas 11.5 mtpa of LNG in 2011 and Sakakibara underpin the expansion developments that could lead to additional said the quantum is likely to increase in 2012. of its gas-fired power LNG exports in addition to sourcing LNG from Japan's gas imports are likely to surge to generation capacity, coal-seam gas (CBM) projects in Australia. 80-90 million tonnes per annum (mtpa) of Tokyo Gas has chalked "Future gas demand will fluctuate greatly LNG in coming years, Sakakibara forecast. In out a supply security depending on when and how many nuclear 2011, Japan imported as much as 78.5 mtpa, up Yasushi strategy as part of the plants will go back on line after stress tests," from 69.2 mtpa in 2010, statistics from Japan's Sakakibara Group's 2020 targets. A he said, referring to the suspension of nuclear Institute of Energy Economics show. timely arrival of new gas supply is urgent, as operations following the Fukushima nuclear Japan, the world's largest LNG importer, Malaysia and Indonesia, Japan's traditional incident. is shifting from nuclear to gas-fired power gas suppliers are scaling down gas exports Power producers accounted for 66% of generation following safety concerns in amid a rise in domestic demand. LNG imports to Japan in 2011, with the gas harnessing nuclear energy in the aftermath Importing from the U.S. shale gas Cove sourced mainly from the Pacific Rim region, of a devastating earthquake and tsunami in Point LNG terminal is also on the anvil, Sakak- namely Malaysia, Australia and Indonesia. March 2011. 

continued from page 1 China to add some 30 GW of nance of domestic coal in the power sector. Administration (EIA) estimates that China has CCGT capacity by 2016 Thompson suggested China has to reform and about 920 trillion cubic feet (Tcf) of potential Should China manage to replicate the US liberalize its tight power tariff regime for gas- shale-gas resources. shale gas revolution, this would bolster aspi- fired power generation to gather momentum The Beijing government has cautiously rations of the Beijing government to raise the and to attract investment in new-builds. pegged recoverable reserve capacity of shale market share of gas-fired power generation at the expense of coal. The Chinese govern- ment is targeting to add 40 GW from gas- fired plants in the near future, as it focuses The Beijing government has cautiously pegged recoverable on a cleaner energy policy. At present just “reserve capacity of shale gas at more than 800 Tcf, which three percent, or 33 GW, of the electricity would make China the world leader in shale gas. generated in China stem from gas-fired plants. "We have something like an additional ” 30 GW of CCGT coming online in China by "The power tariff is very flat,” he said criti- gas at more than 800 Tcf, which would make 2016 - this is named capacity, so we are pretty cising “there is no capacity charge for peak China the world leader in shale gas. The influ- certain that it is happening," Gavin Thomp- generators and very little regional difference in ential National Development and Reform son, head of Wood Mackenzie's China Gas & power prices." Commission set out plans in March to boost Power Research team in Beijing told Gas to annual shale gas production in China to 6.5 bil- Power Journal. He cautioned, however, by Shale gas potential in Sichuan lion cubic meters (Bcm) by 2015 and increase saying "this does not mean 30 GW of oppor- compares with Haynesvilles play volumes further to 60 or even 100 Bcm/year by tunity [for turbine manufacturers] as most Foreign investors flock to China, and particu- the end of the decade. contracts [to build the CCGTs] have already larly the Sichuan province whose potential in A second round of auctions for shale gas been awarded". shale production is estimated to compare exploration blocks, held last month, attracted The use of LNG in China's power sector has favourably with the Haynesville play in north- 152 bids from 83 companies. Commercial developed despite the comparatively low aver- west Louisiana. In a report on shale gas re- production of the fuel, however, is still at its age domestic gas price in China and the domi- sources outside the US, the Energy Information infancy. 

Gas to Power Journal  Dec 2012/Jan 2013 05 Markets "CCS deployment will allow for more coal, Deployment of carbon capture storage (CCS) technology will allow for more coal and gas to be used tha Journal. "More than two thirds of today's fossil fuel reserves would have to remain un-burnt and in the g

ny mayor drive towards CCS As for Europe, CCS deployment is essential deployment, however, is unlikely for gas to remain perceived as a low carbon fuel. to materialise without strong Gas is seen as a 'transition fuel' until 2050, while Apolicy action to reduce emissions, in the longer-term the role of gas is likely to he cautioned. change to peak-load generation except for the China, in its 12th Five-Year Guideline, use of gas generation with CCS technology. considers putting a price on carbon emission and CCS is ‘vital’ for gas to be seen has recently announced as ‘low-carbon fuel’ plans to introduce pilot The share of electricity generated from burning emissions trading gas will reach 23% by 2035 in the New Poli- schemes. Economy wide cies Scenario and 18% in the 450 Scenario, the CO2 prices will be intro- IEA forecast in this year's World Energy Out- duced in China in 2020, look (WEO). Gas generation with CCS, how- Sean McCoy the IEA assumes in the ever, accounts for a 0.1% share in the New WEO NPS and 450 Sce- Policies Scenario and 3% in the 450 Scenario, narios, while no emissions pricing mecha- with some additional use of CCS technology in nisms are seen to materialize in India. the industry sector. In this year's World Energy Outlook A lack of cost-competitiveness has so medium-term, CCS-specific support mecha- (WEO), the IEA takes into account India's far hampered the commercialisation of coal nisms for commercial deployment and, in the Copenhagen pledge to voluntarily reduce car- or gas generation, equipped or retrofitted long-term, emissions pricing. bon intensity by 2020, which heralds a 20% with CCS technology. reduction in the NPS and 25% in the 450 Sce- To achieve large-scale deployment, Carbon prices above 50 $/tCO2 nario, compared to 2005 levels. “For both McCoy said suggested the CCS technology needed for CCS deployment China and India we assume that there is spe- can be made economically viable by reducing Carbon prices under the EU Emissions cific support for CCS from around 2020 in technology cost (and risks) through demon- Trading System (EU ETS) prices, however, the 450 Scenario,” McCoy said. stration as well as through, in the near- to are unlikely to rise to levels high enough

InterGen advocates switch from OEM to th

The F-class turbine fleet is now mature and of the right size to interest third party part and service prov InterGen has terminated a maintenance support contract with an original equipment manufacturer (OEM

hird-party parts and service providers “Be frank to insurers and might pose a problem for the third party serv- can offer a lower cost alternative to lenders” ice provider. OEM maintenance support and the risk "Insurers and lenders are the two key stake- Tof switching can be assessed and man- holder groups that you have to convince. Tell “Not happy with services of aged. "We tendered for maintenance support them why you want to move away from the Asian OEM” and found what we believe is the 'ideal' third OEM," he said. Project financiers tend to be Asked on how many occasions InterGen has party service provider," he told Gas to Power more comfortable with the operator's decision chosen to move away from the OEM to service Journal in an interview following a confer- if the third party behaves like an OEM, so turbine equipment in its power plants, Baker said ence of the gas turbine user group at the Baker recommended that plant operators it has so far done on only one occasion when it British Institution of Mechanical Engineers facing a similar decision should hold addi- “had not been happy with the services provided (IMechE). tional spares and have a strategy ready for by an Asian OEM” that cannot be named. "The ideal point in time to terminate a con- forced outages. "In our fleet there is just one plant were we tract with the OEM is just after a major outage," Technology risks are associated with mov- use a third party and not the OEM but we he revealed, stressing that before replacing the ing away from OEMs as the third party needs might consider it on other occasions in the fu- OEM the power plant operator needs to scruti- to manufacture different design components ture," he said. nise the service provider to make sure it can to avoid IP issues. In the event of a forced To mitigate the risk that moving away from guarantee the necessary parts and resources, plant outage, the operator often requires to an OEM might impact negatively on future offer warranties and give quality assurance. obtain specific turbine parts quickly which projects, or create warranty issues, Bakers said

06 Gas to Power Journal  Dec 2012/Jan 2013 Markets , gas to be used" – IEA analyst an without CCS, Sean McCoy, analyst at the International Energy Agency (IEA) told Gas to Power ground in the absence of CCS," he said referring to the IEA's World Energy Outlook 2012.

to incentivise 4% of total global net generation, while net generation. power generators generation from CCS equipped combined- The ETP 2012 report presents scenarios to build CCS- cycle plants will be 8% in 2050, according and strategies to 2050, exploring pathways to equipped power to IEA's Energy Technology Perspectives a clean energy system with the objective of plants. (ETP) 2012, 2°C scenario. In 2010, electric- limiting the global temperature rise to 2°C "Additional in- ity generated from gas was about 22% of while enhancing energy security.  centives (apart from withholding some 4 000 16% credits from the Gas plant fitted

TWh with CCS market) will be 3 500 14% required since Coal plant fitted 3 000 12% with CCS carbon prices at or CCS share of total above 50 US$/tCO2 2 500 10% (right axis) are likely necessary for CCS in any 2 000 8% power generation 1 500 6% Note: application to make NPS = New Policies 4% sense," he said 1 000 Scenario referring to the IEA report 'A Policy Strategy 500 2% 450 = 450 Scenario for CCS'. The UK has introduced technology-specific 0 0% incentive policies to advance commercial CCS NPS 450 NPS 450 NPS 450 2020 2030 2035 deployment in the UK, although McCoy cau- tions that "it may be that coal will prove more attractive than gas". Generation from Coal and Gas CCS, and CCS as a share of total electricity generation, in the Gas generation without CCS (both New Policies Scenario and 450 Scenario, World Energy Outlook 2012 simple- and combined-cycle) is about hird party service for F-class turbines viders, says InterGen manager for project development engineering, Kevin Baker. M) and tendered for a third party provider to service one of its power plants.

that InterGen has invited the OEM Gateway project (900 MW) in in question to participate at the Essex. tender process to create a level The drive of InterGen to build playing field. new power generation capacity in the UK contrasts with the hesitation Pending applications for of E.ON UK which has shelved 1.8 GW gas capacity plans for two gas-fired CCGT plant InterGen, a global power producer projects at Drakelow with a com- with a total installed capacity of bined capacity of 2,520 MW. 7,686 MW worldwide, has applied The upgraded Spalding plant is for generation licences for 1,800 due to start commercial operations MW of new gas-fired capacity in in 2014. The upgrade will increase the UK. British industry regulator the capacity of the combined cycle Ofgem confirmed InterGen’s gas turbine (CCGT) plant from 860 pending applications for a 900 MW to 1,760 MW. Spalding is MW extension of the existing InterGen's third power station in gas-fired Spalding power plant, the U.K. after Rocksavage and Mitsubishi’s M501F / M701F series; source: mpshq.com located in Lincolnshire, and the Coryton. 

Gas to Power Journal  Dec 2012/Jan 2013 07 Technology & Innovation

Montana’s Mill-Creek 180MW FT8 SWIFTPAC OCGT Plant by Pratt & Whitney is Replicable in Europe

The resemblance between Montana, a state in north-western United States and European countries like Spain, Denmark or Germany is striking. All are producing massive amounts of wind energy and putting a greater burden on grid operators to balance out intermittent wind generation to guarantee stable electricity supply to consumers.

hat we are seeing in Montana and also here in Europe is that our “WFT8 SWIFTPAC aeroderivative gas turbines are being used to maintain adequate power flows in the grid to counterbalance fluctuat- ing wind energy,” says Swift Tarbell, Pratt & Whitney Power Systems Area Director for Europe. Montana’s power transmission system oper- ator (TSO) is required to maintain a constant level Swift Tarbell of power on the grid. “That is why 3x 60MW FT8 SwiftPacs were recently installed. One SwiftPac runs continu- ously ramping up and down to maintain a fixed Aerial photo of Montana power plant amount of power in the transmission lines, counterbalancing rapid swings in wind genera- NorthWestern Energy in Montana calls this a deficit of reactive power on the grid, which tion, while the second SwiftPac cycles on and “regulation service.” In fact, the Mill Creek can be easily offset by the use of the Swift- off as needed to add additional power to the Generating Station’s 180MW FT8 SwiftPac Pac’s electric generator operating in system. The third unit stands ready in reserve,” gas turbine plant is actually operated “real synchronous condensing mode. he told Gas to Power Journal in an interview. time” by the TSO directly to ensure adequate The soon to be introduced 60MW FT4000 Historically, electric load demand on the power on the grid as wind energy generation gas turbine derived from the Pratt & Whitney grid has been much more volatile than power ebbs and flows in the system. PW4092 aircraft engine will double the generation. Dispatchable power generation Synchronous condensing service, which capacity of the 30MW FT8. The FT4000 from hydro, coal, and gas turbines SwiftPac’s modular design and small foot- are typically used to meet fluctuat- print, 60 meters in length for its twin en- ing demand. But non-dispatchable gine120MW package, affords quick and easy renewable energy from wind and installation. solar power are by nature an unreliable And the source of energy to meet demand on a mo- FT4000’s dual ment-to-moment basis. Plus wind tur- fuel efficiency of bine power is technically more 41% will provide difficult to integrate into the trans- the largest mission system. aeroderivative While our fast-starting open cycle gas aeroderivative gas turbines are turbine package famous for supplying peak demand of 120MW. power, today they are also being Pratt & Whit- Graphic of FT4000 SwiftPac used to compensate for wind ney aims to repli- power fluctuations cate the use of its on the grid. The flexible ramp rate of the uses the electric generator to inject MVARS aero-derivative Swift- 30MW / 60MW FT8 and soon available reactive power into the transmission system, is Pac gas turbine packages in Europe where 60MW / 120MW FT4000 gas turbines by another “flexible” feature of Pratt & Whitney’s there is even greater dependence upon intermit- Pratt & Whitney Power Systems is ideal for FT8 and FT4000 units. In fact, the SwiftPac tent renewable wind and solar energy genera- matching electric power generation with the design provides this ancillary service without tion. And the 120MW FT4000 unit should be demand load on the system on a moment-to- the need for clutches or gearboxes. A signifi- a true “flexible” response technology for moment basis. cant amount of wind turbine technology creates the grid. 

08 Gas to Power Journal  Dec 2012/Jan 2013 Technology & Innovation Interview: Siemens to break ground in Singapore for H-class turbines Siemens, the German engineering giant, is hopeful to break ground in Singapore for its H-class gas turbines as it builds on the market penetration of its F-class technology, says Thomas Hagedorn, Vice-President, Sales, GT Power Plant Solutions Asia Pacific. he F-class gas turbine technol- more efficient and higher technology power ogy, which has been around for plants to be able to compete against the already over 15 years, is firmly en- installed fleet," he pointed out. Siemens is “Ttrenched in Singapore's gas-fired capable to step in with its 'H' class gas turbine power generation," he told Gas to Power Jour- technology, which among other advantages is nal. Hagedorn heads designed to fulfil stringent grid requirements. Siemens Energy Solu- “The UK has one of the most stringent grid re- tions’ new front office in quirements, which our machines are fulfilling,” Singapore which opened he said. in October last year to support gas power plant Newcomers need efficient plants The 60 Hz-version of Siemens’ world record business in Asia. to compete with incumbents gas turbine, installed in South Korean projects. In Singapore, Siemens Siemens H class gas turbines have a competi- Thomas Hagedorn is building two power tive edge as the machine is completely air “Interesting possibilities” in plants based on F-class turbine technology, cooled, he said. The internally air cooled en- the Philippines and Malaysia using the SGT5-4000F gas turbine with an gine paves the way for simplified combined Having spent most of his working life in Asia, electricity output of 292 MW. cycle integration. Hagedorn said Siemens has been exploring Siemens was awarded the contract by “Our machine is proven and are able to sign turnkey power plant opportunities in South- Hyflux Ltd to supply, construct and commis- contracts for not only small 60 Hz machines, but East Asia. “Turnkey projects have been the tra- sion the 411-MW on-site combined cycle gas also bigger 50 Hz machines,” Hagedorn said. The ditional strength of Siemens”, he said, pointing turbine power plant as part of the Tuaspring de- smaller 274 MW gas turbine (SGT6-8000H), at “interesting possibilities” in the Philippines, salination project that is expected to begin op- which is more suitable for the 60Hz market such Malaysia and Thailand apart from Singapore. erations in 2014. It is also supplying F-class as South Korea, while the 50 Hz gas turbine While the former see gas generation as a gas turbines to GMR Energy Singapore's 800 (SGT5-8000H) has a capacity of 375 MW. way to reduce carbon emissions, heavily popu- MW CCGT plant in Jurong Island that is ex- Both the H class turbines are prime drivers lated countries in South-East Asia such as In- pected to begin operations in late 2013. of the single-shaft combined cycle power plant: donesia and Vietnam are more interested in An array of CCGTs is under construction in The SCC5-8000H 1S (for 50 Hz markets) has generating “cheap power for the masses”, he Singapore and is set to enter the market, but an output of 570 MW, while the SCC6-8000H said. The latter therefore prefer lower cost fos- competition is severe, according to Hagedorn. 1S (for 60 Hz markets) has a net power output sil fuels such as coal and oil instead of natural "This means that newcomers will have to add of 410 MW. gas to fuel power plants.  Gas-to-power on track to hit 90 percent of Singapore’s installed capacity ingapore is on track to reach a market erated the trend towards natural gas. feed power and petrochemical plants and other share of 90 percent gas-fired power Factors that have contributed to the rising industrial applications and households. Alter- generation capacity, Neil McGregor, gas factor in power plants include availability native sources of gas have become imperative Schief executive at Singapore LNG of piped natural gas from neighbouring coun- because of rising domestic demand within Corporation forecast. McGregor bases his as- tries of Malaysia and Indonesia, the advance- Malaysia and Indonesia. sessment on the imminent addition of 3,000 ment of gas turbine technology and combined “It is one of the fundamental reasons why MW of gas-fired capacity in the next couple of cycle plants that have enhanced efficiency, en- investment decision has been made to increase years together with new supplies of LNG gas. vironment edge that gas has over other fossil Singapore’s gas supply options through the At present 80% of Singapore’s power gen- fuels and competitive pressures. LNG terminal development and the first LNG eration is fuelled by gas in stark contrast to a Various gencos have been trying to aggregate supply agreement with BG,” McGre- decade ago when 80% of power generation reduce costs in tandem with rising demand gor said. “Many more to follow.” was based on oil. for electricity. The BG franchise allows it to sell 3 million “Greenfield projects and brownfield conver- As gas will continue to play a pivotal role in tonnes of LNG into the domestic market. As sions have led to some cannibalization of ear- Singapore’s economy the country is looking to of now sales have reached 2.7 million tonnes, lier oil-fired plants,” McGregor told Gas to ensure energy security. Singapore has no natu- McGregor revealed, forecasting sales to hit Power Journal, explaining that this has accel- ral resources and relies entirely on imports to 3 million tonnes by 2013. 

Gas to Power Journal  Dec 2012/Jan 2013 09 Technology & Innovation Alstom’s flexible GT26/GT24 turbines suit dynamic power markets The GT26 and GT24 gas turbines offer greater flexibility to suit today’s dynamic power markets like the UK. Improved fuel flexibility, flexible operation modes, and unique low load operation capability are achieved through sequential combustion, says Alexander Bill, Service Manager at Alstom’s Power Division.

nvestors in more than 75% of the new-build class’ gas turbine technology for the 50 Hz and lar markets, which poses new challenges for CCPP projects – namely Langage for Cen- 60 Hz markets, Bill stressed. generators, system operators and Original trica, Grain CHP for E.ON, and Staythorpe Offering greater operational flexibility, the Equipment Manufacturers (OEM’s) such Iand Pembroke for RWE npower – selected GT26/GT24 upgrades improve the high fuel as Alstom. Alstom’s GT26 technology to power their flexibility of the GT26 turbine, making the plants. Since 1991, Alstom has built and serv- engine and the overall combined cycle power High part-load efficiency iced over 11GW of Britain’s operational plant (CCPP) better placed to handle regasified The GT26 has a specific strength regarding CCPPs, equating to 14% of the UK’s current LNG as a fuel. part-load efficiency over a wide load range, power generation capacity, he told Gas to Enhancing the turbine’s low load operation which can yield an efficiency advantage of up Power Journal. capability increases output by providing a to 2-4 percentage points over a CCPP in base- “Alstom is not only meeting the challenges spinning reserve within 15 minutes, Bill said, load performance which utilizes conventional of the gas turbine new equipment market here stressing “Alstom continues to work on this single-combustor gas turbines. in the UK, but also the important after-market feature to make it even more attractive to Today’s gas turbine equipment also requires business,” Bill said after presenting at a recent customers and grid companies.” increased flexibility in terms of natural gas conference of the Institution of Mechanical Flexible start options, including hot starts in composition which is particularly important in Engineers (IMechE) in London. less than 30 minutes, are further results of the UK, as a net importer of fuel gas. A precon- “With an ever increasing fleet, now more KA26’s optimization. “The flexible operation dition for this fuel flexibility is a robust com- than 11GW, we are succeeding through contin- modes introduced on the latest GT26/GT24 bustion system that does not need additional uous sustaining innovation, coupled with our upgrades allows the plant operators increased measures like hardware change or fuel preheat- long-term relationships and customer intimacy, flexibility and choice between performance ing, which either results in additional down- i.e. our service packages,” he explained. and plant maintenance cost / availability,” time for changing hardware or may impact on Developers of new power generation capac- Bill said. the efficiency of the power plant. ity in the UK need to meet demands of more The increasing market penetration of renew- stringent global environmental standards, ables, particularly wind power, calls on reliable Evolution of GT26 development whilst increasing all-round efficiency, lowering and rapidly dispatched CCPP’s to cover peri- The upgraded GT26 launched in 2011 repre- fuel consumption and reducing maintenance ods of sudden generation under- or over-capac- sents the fourth product upgrade since its initial costs by increasing inspection intervals. ity, peak demands or system imbalances. The launch in the mid 1990’s. The original platform The latest GT26/GT24 upgrades offer a sig- efficiency and flexibility of CCPP’s under has remained virtually unchanged throughout nificant improvement in both the base-load and base-load and part-load operation is becoming this time, but the GT26 has reaped the benefits part-load performance of Alstom’s ‘advanced ever more important in the UK and other simi- of operational (fleet) experience & feedback, as well as enhancements and improvements in CCP Load the aerodynamics and inturn efficiency of the compressor, combustors and turbine. 100% 90% 80% 70% 60% 50% 40% The GT26 remains still the only “advanced class” gas turbine having sequential (2stage) rel

ƞ combustion, proven to deliver high all-round performance and outstanding operational and 2%-4%abs. fuel flexibility, Bill said. The turbine’s unique combustion system allows high CCPP perform- ance, while producing low NOx and CO emis- sions. Overall, these technical features enabling the KA26 combined cycle to stay online to offer full standby spinning reserve at combined cycle loads down to 20% and even

CCP Relative Efficiency CCP Load lower. From this low load operation point, the KA26 combined cycle can ramp backup to deliver more than 350 MW for the KA261 Typical MSL Range (1on1) configuration or more than 700 MW MSL = Maximum Stable Load for the KA262 (2on1) configuration in less Part-load efficiency the GT26 over a wide load range; source: Alstom than 15 minutes.

10 Gas to Power Journal  Dec 2012/Jan 2013 Technology & Innovation

Low Load Operation (LLO) Although shutdown may be in certain circum- stances the more desirable option from an eco- nomic perspective, the cyclic lifetime impact on the plant may be sufficient to sway the plant operator to keep the plant online at the mini- mum load point. With the GT26 upgrade Alstom introduced for the first time the Low Load Operation feature, which again is a flexibility feature offering fast responding spinning reserve from a very low combined cycle load point made possible by the sequential combustion system in the GT26. With the latest GT26 upgrade, this LLO feature now offers even more power reserve, capable of delivering more than 350 MW for the KA261 (1on1) and more than 700 MW for the KA262 (2on1) combined cycle power plant within 15 minutes, thereby offer- ing useful minute reserve. The KA26 combined cycle plant from Alstom, utilizing the GT26 gas turbine, is Low Load Operation field experience of an actual KA26-1 in Europe; source: Alstom. able to be “parked” fully online at 20% CCPP load or even lower and remain fully emission stom GT units (GT13E2, GT8C2) as well as majority of units lie in the range from 0 to compliant. silounit types (GT11N2) and in further silo 16%, but Bill said Alstom has also obtained ex- With respect to the fuel consumption sav- combustor upgrades (GT13D, GT11N, GT8). perience with concentrations beyond this point. ing, the KA26 when in the Low load Operation Combustors containing this burner type are The possible variation in gas composition illus- mode is consuming in the order of 40% less termed EVcombustors. trates that a continuous automated operating fuel than when operating at around 50% CCPP load, and in-turn the NOx and CO emitted are Alstom has continually improved its burner technology likewise lower. Currently, the so-called ‘mini- mum stable load’ for the CCPP set by technical to cope with an expanding range of fuel compositions and/or emission restraints seen in the market “ while maintaining emissions and reliability, place is in the order of 40% to 60% CCPP load.

Flexible Startup Capability The SEV (Sequential EnVironmental) concept adjustment is necessary in locations Alstom has also further optimised the KA26 burner is employed specifically for the 2nd- where gas composition is likely to vary to” a combined cycles utilising the GT26 (2006) stage reheat combustor (SEVcombustor) of high degree." These uncertainties are well and GT26 (2011) engines to enable greater the GT26 and its 60 Hz sister engine, the accounted for with the built in key design flexibility over the time taken to startup the GT24. Due to the sequential combustion features of the GT26," he said. full power plant. arrangement in the GT26, the EV combustor Natural gas with a higher content of inert A “hot” start is considered to be anything firing temperature determines the inlet tem- gases such as nitrogen and carbon dioxide is up to 8 hours shutdown (typically an overnight perature for the SEV burner. With increased represented by a heating value and Wobbe period), whilst a “warm” start is considered to C2+ and thus increased reactivity the lean Index reduction of the fuel. Fleet experience be up to 48-60 hours shutdown (typically a stability margin of the EV combustor at low- has proven reliable operation with Wobbe weekend period). The time for a hot start can ered firing temperatures is improved. This Indices from 52 MJ/ m3 down to 31 MJ/ m3. be reduced to less than 30 minutes without allows the inlet temperature of the SEV to be This is achieved without alteration to the significant investment for additional or in- reduced to stay within the SEV burner opti- burner hardware. creased equipment. mum operating window. With regard to emissions the latest field "A continuous fast response gas composi- experience of the GT26 is that NOx emission GT26 combustion technology tion monitoring system determines within levels well below the typical emission permit Alstom has continually improved its burner milliseconds the C2+," he said, stressing this level of 25 vppm (corrected dry to 15% O2) technology to cope with an expanding range of sensor would be "much faster than traditional and even lower at part load are achievable. fuel compositions while maintaining emissions gas chromatographs". The operation concept Moreover NOx emissions similar to those at and reliability, Bill pointed out. The EV (En- then determines which SEV inlet temperature are already reached at the Low Load Vironmental) burner is a technology devel- is needed and automatically alters the fuel Operation point of around 10% relative GT oped for medium to high calorific natural flows between the combustors accordingly, load. This characteristic enables the operator to gases from 29–50 MJ/kg. It is installed in the while maintaining power output and low NOx ‘park’ the GT26 combined cycle power plant at 1ststage annular combustor of the sequential emission levels. around 20% load whilst meeting emission per- combustion gas turbines GT26 (50 Hz) and The GT26 can handle natural gases contain- mit levels, which according to Bill is "unique GT24 (60 Hz) and all of the other annular Al- ing a wide range of C2+ concentrations. The in the heavy duty gas turbine market". 

Gas to Power Journal  Dec 2012/Jan 2013 11 Gas to Power Conferences 2013

Conference Highlights for 2013 2013 Conference Calendar Participating Organisations in • Electricity policy and 2012 Conferences include regulatory reforms and their Gas to Power Europe impacts on investment Crowne Plaza, Brussels, 25-26 February • Regulatory landscape affecting energy markets Gas to Power Turkey • Challenges and drivers for Pera House, Istanbul, large scale gas to power 13-14 March generation Gas to Power Technology • Support schemes: feed-in Munich, 29-30 April tariffs versus capacity payments Gas to Power Korea • Overcoming financing Seoul, May challenges for gas-fired power generation projects Gas to Power UK London, September • Identifying the commercial potential and long term Gas to Power USA viability of new projects Houston, October • Gas as a backup fuel for power generation: managing Gas to Power Brazil the challenges of intermit- Rio, November tency in renewable energy Gas to Power Middle East • Determining the benefits of Dubai, December large-scale versus small- scale turbines • Managing operational and maintenance costs for gas turbines

Organiser Partners

de l’innovation informatique

Conference Enquiries: +44 (0)20 7017 3404 Email: [email protected] www.gastopowerjournal.com