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Ansaldo Energia charts a new course in global power markets

Ansaldo Energia is laying the foundations of sustainable growth in the power generation sector by extending the company’s global reach, technological capability and product portfolio. Ansaldo CEO Giuseppe Zampini explains how the company is moving forward.

China is actually leading activity in global energy markets. As a player it is no longer considered a risk, but an opportunity. How do you see it?

Indeed, China has shown particularly in the past five years that it is one of the main players in the power generation business from the customer point of view, and is also playing a lead role in the production of generating equipment, mainly steam turbines. Perhaps not everyone will know this, but over the past fiveyears China has been the global market leader (50 Hz) for gas turbines rated over 50 MW, with more than 33 GWs worth of gas turbines traded. The second biggest player is the United States. This market is peculiar, since nearly all of the trade involves combined cycle power, and is therefore technologically advanced and high performance. Most of the great players in this sector have drawn up commercial agreements with big local companies in order to take advantage of the massive market potentiality. Ansaldo Energia is also entering this big but complex market with the addition of Shanghai Electric among its stakeholders.

Apart from China, how do you see the development of the gas sector going forward in strategic areas like Africa, the Middle East and the United States?

Natural gas is important now and will increasingly become the fossil fuel of the future, according to most influential market stakeholders. It is ecologically sound and flexible when used as a backup for the growing renewables market, and is therefore gaining its own place as an energy source for global power generation. In some areas of the world, the gas price is particularly convenient thanks to the presence of old and new oilfields and the deployment of new extraction technologies (see the initial growth of shale gas in the U.S.). This is facilitating its deployment as a primary energy source for power generation. Mainly, we’re talking about the U.S., many African states and almost all of the Middle East.

What new business drivers does Shanghai Electric bring to Ansaldo Energia?

The presence of new international partners within a company always brings a fresh perspective: when we talk about a massive Chinese entity that is operating in China as well as Africa and Southeast Asia, then this perspective can only represent a growth opportunity for us. The technological synergy includes Shanghai Electric’s know-how in the production of steam turbines, and Ansaldo’s expertise with gas turbines. This will provide new commercial and technological nourishment to Ansaldo Energia, which from now on will be perceived in the market as a really multinational group.

How does the global market change for Ansaldo Energia after the acquisition of Alstom by GE?

For sure this acquisition and the simultaneous asset transfer represents a significant turning point in Ansaldo Energia’s long history. Firstly, the technological intellectual property rights and the upgrade of the GT26 gas turbine - the top performing large combined cycle gas turbine - will complete Ansaldo Energia’s product portfolio and enhance the maintenance market for such turbines. The development and further trade of the GT36 for both the 50Hz and the 60Hz markets will enable Ansaldo Energia to enter for the first time the large size 60Hz gas turbines market, and to shorten the technological gap in the POST F class of latest generation turbines. Lastly, the American-based PSM asset will enable Ansaldo to enlarge its position in the profitable gas turbine service market.

In this context, how important is it for a company like Ansaldo Energia to consolidate strategic partnerships with groups like ABB?

For sure, from the perspective of product enhancement and development, it is vital for our company to count on strategic partners like ABB, who are reliable with respect to new technological challenges, who demand and expect technological excellence and also innovation, in terms of optimizing services and intervention times. Add to that list of essential qualities prompt and punctual problem solving, and last but not least, a partner who can help significantly improve our competitiveness.

Speaking of this, can you provide a brief analysis of Ansaldo’s 40-year collaboration with ABB? With particular focus on the four years following the launch of the Symphony Plus DCS?

Extensive experience in the field of power generation, a shared language, perfectly complementary skill sets in both companies, as well as a long-term collaboration represent the major points of strength in this consolidated partnership. Since 1974, we have installed more than 300 gas and steam turbines at more than 150 power plants, accumulating valuable experience in the process. ABB contributed its know-how and Symphony Plus power generation control technology. Ansaldo Energia contributed its knowhow as an original equipment manufacturer of plant and machinery, in addition to its dynamic simulation labs for prototype testing and qualification.

Ansaldo Energia’s branded gas and steam turbine automation system launched in 2012 is based on ABB’s Symphony Plus technology, which features high computational power as well as great flexibility and compatibility with the most advanced communication standards and devices. Scalability and standardization are two fundamental characteristics of this control system, which can be applied in various configurations to all existing models of gas and steam turbines, as well as those currently under development by Ansaldo Energia. The control system provides the “intelligence” to exploit the huge potential of the machinery and power plants, and also to satisfy increasingly demanding flexibility criteria required by the customer and the environment.

How important are DCS systems today for efficient power plant operation?

I would answer that by borrowing a sentence from a famous tire company: “Power is nothing without control.” As of today, the flexibility of power plant operations and their reliability in meeting required goals are winning ingredients in the power market. Also, modularity and standardization are vital in a control system, which can be applied – in its different configurations – to all existing gas and steam turbines, including those under development. The distributed control system allows operators to manage flexibility, and provides punctual monitoring of both single machines and fleets. Thus, it is possible to support customers in predictive maintenance and in the management of the power plant.

What technological evolutions do you see in the short-to-medium term in the generation sector?

The millennium that began with filling energy production needs in Italy and in Europe soon met up with the massive and sudden coming of the renewable energy sector. This forced power plant operators to deal with the need to frequently start and stop generating plants, in order to minimize consumption during pauses. Such procedures were never used before, and since then the term “flexibility” has become the mantra for all power plant operators. Out of this, the prime need for plant operability and reliability was born, as well as the need to measure and verify the consequences of such new procedures on components originally created to operate 8,000 hours per year, in terms of lifecycle decrease. How flexible plant operations should be has been the subject of study for the past five years, which is strictly connected to efficiency enhancement, or consumption and emissions reduction.

Speaking of research, this past September Ansaldo Energia obtained a 50 MEUR investment loan from the European Bank. Where are you considering investing?

The loan demonstrates how solid our R&D activities are. Not only projects related to flexibility were recognized as valuable and worth financing, but also those related to improving performance in terms of power output and overall efficiency, typical in recent years of efforts in more advanced emerging countries. These are the drivers of innovation where these resources should be invested.

In today’s competitive environment, research more than ever plays a strategic role. Can Ansaldo’s corporate developments provide new incentive to the idea of Italian excellence in the power industry, through collaboration with other centers of excellence worldwide?

Ansaldo Energia’s new corporate assets, our new partners’ perspectives and the opening up of new markets are enabling the company to raise its ambitions, to look at new prospects for development even on a large scale, and to develop new technological platforms. These are massive opportunities for Ansaldo Energia, and all of its partners who are willing to invest in excellence and technological innovation.

We often speak of new power generation, but must never forget what already exists. Service, revamping and optimization of the installed base can be an important opportunity, and perhaps is one more reason to collaborate?

The market is still dominated by factors that penalize and continue to limit the growth of service, such as the ongoing economic crisis that continues to affect all European markets; the global economic slowdown that only in recent months has begun to show signs of turnaround; and the complex socio-economic situations in some large emerging countries (BRIC) where Ansaldo Energia operates. Today we are witnessing some signs of recovery in the demand for maintenance of combined cycle power plants. Starting from February 2016, the service sector, already strategic for Ansaldo Energia, will enjoy new skills and new product lines thanks to the entry of the company Alstom Power Systems Manufacturing ("PSM") based in the U.S. in Florida, which mainly works on after-sales activities generated by other OEMs.

Ansaldo Energia (www.ansaldoenergia.it) is Italy’s largest supplier, installer and service provider for power generation plants and components, and a leading international player in power generation markets. Ansaldo Energia has an installed base of about 175,000 MW in single and combined cycle gas turbine, steam, hydroelectric and geothermal plants. The company also has a strategic presence in the nuclear and renewable energy sectors.

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In Control 02 | 2015

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