Back to Basics at PowerGen International 2003
 

Back to Basics at PowerGen International 2003

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Back to Basics at PowerGen International 2003 ...

Back to Basics at PowerGen International 2003
PowerGen International 2003 still reflected a depressed US market for
power generation equipment and a “back-to-basics” trend. All types of exhibitors
showed products, which addressed this market reality. Forwardlooking
utilities are using this period to bring their asset management and
performance monitoring capabilities into real-time.

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Back to Basics at PowerGen International 2003 Back to Basics at PowerGen International 2003 Document Transcript

  • THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC INSIGHTS By Harry Forbes The 2003 PowerGen International Exhibit showed vendors responding to the “back-to-basics” environment in US power generation. Other visible trends were a growing move to company-wide support centers and alternative generating technologies targeting premium power applications. INSIGHT# 2003-54P DECEMBER 23, 2003 Back to Basics at PowerGen International 2003 Keywords Power Generation, RPM, Remote Support, Fuel Cells Summary PowerGen International 2003 still reflected a depressed US market for power generation equipment and a “back-to-basics” trend. All types of ex- hibitors showed products, which addressed this market reality. Forward- looking utilities are using this period to bring their asset management and performance monitoring capabilities into real-time. Analysis The PowerGen International Conference and Exhibit returned to a Las Ve- gas venue for its 2003 event on December 9-11. This is the “international” event, as opposed to several regional-oriented shows held in Europe, Asia, and the Middle East. Yet the show reflected the difficulties still being faced in the US market (see “Plant Utilities: The Morning After” at http://www.arcweb.com/myARC/home/PDFs/2 003-21M.pdf for background information on the size of the US power generation equipment boom/bust). Power prices remain low in the US, and natural gas prices are both rising and volatile. One sign of the times was El Paso Corporation’s exhibit showing possible LNG import sites in the US. Wider LNG import capability would couple US natural gas prices more closely to world energy markets. The spark spread squeeze has led several merchant power generators to seek bank- ruptcy protection in 2003. Generators in regulated markets and those with a better financial position have been focusing on improving their balance sheet rather than investing in generating assets. Those automation businesses, which are tightly coupled to new power gen- eration equipment, remain troubled in the US market. The investment climate for US Power Utilities is now characterized as a “back to basics”
  • ARC Insights, Page 2 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com environment, which focuses on smaller and lower risk investments that can yield asset management improvements quickly. The US situation is in stark contrast to markets in regions such as EMEA, where growth has remained fairly steady, and an Asian market where Chinese electric power capacity now has serious trouble growing fast enough to sustain the country’s rapid economic expansion. OEM Exhibits Major OEMs and automation suppliers were prominent among the 1,000 firms exhibiting at PowerGen, and each major showed the US customers products, which reflected the current concerns of the market. GE Power Systems had the largest exhibit, both in terms of floor space and of equip- ment, as GE showed a full size vane from its 1.5 MW wind turbine. GE also took a “Project of the Year” award for the introduction of its H System Gas Turbine technology, which was commercialized this year at a new generat- ing station in Wales, UK. Advanced automation and condition monitoring were featured prominently in GE’s exhibit. These included products GE acquired through its purchases of Bently Nevada, Intellution, Enter Soft- ware, Panametrics, and Praxis. Siemens Power Generation (operating as Siemens Westinghouse in the US) made automation announcements includ- ing an advanced control solution for coal-fired units and a steam turbine governor retrofit solution based on Siemens’ S7 automation product. RPM Applications Grow One “back to basics” trend that could be seen clearly was the move toward enhanced real-time performance monitoring (RPM). In many cases, this is indicated by the development of equipment diagnostic and re- mote support centers. Utilities, OEMs, and specialists are all designing their offerings to provide enhanced remote support in real time. From the Utility perspective, this capability allows improved utilization of a shrinking number of domain experts, without forcing personnel to be constantly on the move (and wasting time) traveling among a fleet of generating units. Me- chanical, thermal, and environmental performance of equipment can be monitored and enhanced through condition monitoring applications harnessed to advanced Internet technologies such a Portals. TransAlta, Xcel, and Entergy utilities announced agreements for Fleet Management applications with Siemens, Emerson, and SmartSignal respectively. GE an- nounced the completion of its first GenGauge fleet management installation PowerGen RPM Applications Device Management Equipment Condition Monitoring Thermal Performance Fleet Optimization Environmental Compliance
  • ARC Insights, Page 3 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com to US utility who wished to remain anonymous (showing how competitive forces are indeed changing the formerly chummy world of Electric Utili- ties!). Emerson demonstrated live data from its Xcel installation, as part of its new “AMS Suite”, a portal offering for device management, machine health, equipment performance, and fleet optimization. The recent acquisi- tion of IndX software by Siemens is a further indication of this trend, as IndX has developed and deployed many such solutions in a number of process industries. While utilities have deployed historical data collection almost universally, these new applications represent a bigger picture than just historical data. They show the growing need for making informed asset management deci- sions in real time. Even though the move toward power deregulation is now stalled in the US, power generators very much feel the need to develop this capability. Fuel Cells Refocus Venture firms in US power generation can no longer expect high power prices. Instead of the dozens of micro-generation offerings that could be seen in the Enron era, advanced generation technologies such as fuel cells are now focused on premium and critical power applications, where reli- ability of supply and ease of maintenance are key parameters. These firms are able to tap at least part of the Federal research support, which is now pouring into fuel cell power trains for transportation. Two offerings shown at PowerGen are indicative of this trend. Plug Power displayed a 5kW fuel cell, which can be paired with a compact reformer that generates Hy- drogen fuel. This pair can generate reliable power for telecommunications, Broadband Cable, and other pre- mium applications. Ballard Power Systems showed a prototype 1 kW fuel cell that mounted in a 19-inch rack as part of a larger UPS. Ballard’s target applications also include telecommunications and critical building sys- tems. Both of these systems can be used to reduce dramatically the number of lead-acid batteries that must be kept in service for critical backup power systems. ARC believes that fuel cell solutions will affect premium station- ary power applications before they will challenge internal combustion technologies in transportation. A Rack-mounted 1kW Fuel Cell
  • ARC Insights, Page 4 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com Recommendations • Power Generators should begin planning to bring together real-time and historical data, analytics, OEM applications, and resources. Plan with a view towards leveraging in-house expertise and employing closer support from OEMs as it develops. • Consider alternative technologies such as fuel cells as a future alterna- tive to battery-backed UPS, especially in applications where batteries compromise system reliability or dominate maintenance expenses. This is especially true in locations where natural gas is available. Please help us improve our deliverables to you – take our survey linked to this transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further information, contact your account manager or the author at HForbes@arcweb.com. Recommended circulation: All MAS-P clients. ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.