POWER industry FEELS STRONG WIND IN FLORIDA
Wind grabbed most of the headlines at last month's annual PowerGen show in Orlando, Florida. The biggest press conference of the week featured Siemens' acquisition of Bonus; a huge entranceway exhibit showcased the nose cone of a GE 3.6 MW wind turbine; and mainstream gas turbine giants like Mitsubishi, GE and Siemens displayed model wind turbines prominently in their booths.
"Shows like this give wind a platform to communicate its value proposition to the traditional power market players," said Brian Schimmoller, editor of Power Engineering Magazine and a senior coordinator at the show.
PowerGen is the biggest event on the American energy calendar. Its 16,000 participants and over 1000 exhibitors cover the spectrum of the power industry. PowerGen has a tight business focus with an audience primarily of engineers, technicians and executives from the power field. The interest in wind of this mainstream audience is rising. Wind may have accounted for only three out of about 30 sessions, but these were among the most well attended -- and wind came up unexpectedly in several others. Vestas gave a presentation at one panel on the transmission grid, explaining how today's wind turbines are more grid friendly and minimise interconnection issues. Henry Durrwachter, an engineer with Texas-based utility TXU Energy, heaped praise on wind during a session on distributed generation.
"With the PTC, we estimate the cost of wind to be less than $30 per MWh compared to $45 for gas," said Durrwachter, referring to wind's federal production tax credit in the US. "Two-thousand-and-five is going to be a very big year for wind power in Texas. TXU is currently negotiating with ten different suppliers on wind related projects."
The biggest news of the week at PowerGen was the Siemens-Bonus takeover and the acceptance of the acquisition by the EU. "We are excited to have wind power as a part of Siemens," said Randy Zwirn, president and CEO of Siemens Westinghouse Power Corp, the US branch of the world's largest power equipment supplier. "We believe wind has the potential to become an eight billion euro market by 2009."
Zwirn attempted to promote his company as a whole, but most questions from the press returned his attention to the Bonus deal. He targets a doubling of Bonus' EUR 300 million revenues within three to five years and achieving a market share in excess of 10% in the same time frame. The Bonus brand will eventually disappear, he said, as Siemens sets about renaming everything in its portfolio according to a unified Siemens-based naming system. Acquired brands like Westinghouse, Parson, TurboCare, Demag and Bonus will be eliminated in the coming months.
Siemens PG Wind company headquarters will remain in Denmark and business will continue as usual while the details of the merger are worked out. Siemens expects to continue the Bonus practice of not acting as a project developer so as not to compete with its customers. Financing via Siemens, though, is an obvious possibility. The company is also looking at opening its own wind facilities in the US, though this would probably first require a more stable US policy base.
Henning Kruse, former export manager at Bonus, is part of the team working out the fine points of the arrangement. He noted that during the six weeks following the announcement, it became easier to sell Bonus turbines. "There is no doubt that Siemens adds strength to Bonus as well as brand reputation in the mainstream," said Kruse.
Nuclear dark side
Wind's marriage of convenience with "big energy," however, may have a dark side. Zwirn outlined his plans for Siemens to push wind and nuclear power together as the solution for a more environmentally friendly energy future. He spoke of a coming nuclear power industry renaissance and the need to continue to change the public mindset to achieve it. Rather than mere talk, 30 GW of nuclear is going online in Russia and China in the next few years and site works started this year on fifth new nuclear plant in Finland.
"Wind is a significant niche, but it won't overtake oil and gas anytime soon," said Zwirn. "As customer surveys tell us that emissions reduction is more important than plant efficiency, wind and nuclear will both grow in importance in the coming years." The wind-nuclear theme was further reinforced by Power Engineering Magazine's choice of projects of the year. GE Energy's 25 MW Arklow Bank offshore wind power plant off Ireland earned one of the main awards, while the other went to a nuclear facility.
The far pavilions
A major disappointment at the event was the "wind pavilion." Situated at the far end of the vast hall beside a lonely biomass booth bearing the "renewable pavilion" moniker, the number of wind booths actually fell compared to last year. Vestas dominated the area and was the most visible wind manufacturer at the show. Michelle Montague of Vestas Americas said the company had been coming for several years as it is an opportunity to interface with a wide cross section of the energy marketplace. But she voiced her disappointment that not more of the industry attends shows like PowerGen. "If we want to be recognised by the mainstream, we have to be visible at these events," she said. "Wind has a challenge of educating the mainstream power and PowerGen provides a forum to accomplish that."
Others in attendance at the wind pavilion were the American Council on Renewable Energy and Advantek, an arm of the Russian small turbine manufacturer Specremtex. This was the first ever PowerGen for Advantek and those at the booth were very happy with the results. "This show has far exceeded our expectations and we haven't had a minute to ourselves the whole time," said the company's Joseph Kelman. "In the last 24 hours we have managed to get a foot into the South American market with several openings for our products in Ecuador, Chile and Dominican Republic."
Back in the mainstream, while GE, Mitsubishi and Siemens booths may have emphasised their wind presence, not all big energy was upbeat about wind. French turbine manufacturer Alstom has no wind division and no plans to start one. "It is a very small and localised market and it is even going down in some areas," said company president Philippe Joubert. "Now is not the right time for us to enter."