VENTURE
I N T O T H E WO R L D O F I N D U S T R I A L R O TAT I N G E Q U I P M E N T
No 4_March 2006
FOCUS
TAKING A GIANT LEAP IN SUBSEA TECHNOLOGY
MONITOR
THE MISSING LINK
MINDSET
A MATTER OF ATTITUDE
SPOTLIGHT
BRIGHT NEW DAWN FOR COGENERATION
Power Generation
s
Acquisitions, joint ventures and stategic partnerships are often seen from their purely economic aspects. In many cases, however, they are the lever that provides the ingredients for an
evolution or even a revolution of the technologies of the partners. They have the capability to
evolve into new technologies and solutions for the industry.
In this issue of Venture, we travel to Oslo, Norway, where FMC Kongsberg Technologies and
Siemens have signed an agreement to jointly develop solutions for tomorrow’s challenges of
subsea oil & gas production.
We venture ashore in North Holland, where an innovative, but field-proven compression solution is being installed to power the Bacton-Balgzand-Line (BBL), a pipeline designed to deliver
volumes of European and Russian gas to the UK from December 2006 onwards.
Health, safety and environmental performance are fundamentals in many of the demanding
environments we work in today. Throughout Siemens PG I, a comprehensive program is currently being implemented to cultivate an attitude of uncompromising HSE compliance.
Finally, we take a look at the future of cogeneration, which, after a period of relative dormancy,
is now gathering a lot of interest outside of Europe, too.
Have a good read!
Dr. Frank Stieler, President
Siemens Power Generation Industrial Applications Division
Photo: Florian Sander
Dear Reader,
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ E D I T O R I A L _ I M P R I N T _ 0 3
Inside
06
10
NEWS FLASH
12
Around the World
Projects in China, Germany and Hungary — and a gas turbine’s 50th anniversary.
FOCUS
16
04
Taking a Giant Leap in Subsea Technology
FMC Technologies and Siemens Power Generation join forces to develop and market solutions for subsea oil and gas recovery.
FACES
Tore Halvorsen
Vice President/Managing Director of FMC Kongsberg Subsea AS.
MONITOR The
19
06
10
Missing Link
A new natural gas pipeline is currently being built to link the UK and the European Continent. The compressor station at
Balgzand, Netherlands, will be powered by a state-of-the-art Siemens-built compression solution.
12
MINDSET A
Matter of Attitude
14
Accepting responsibility for Health, Safety and Environmental performance (HSE) has become a core value of
corporate policy. Cultivating an HSE mindset is the only way to go.
SPOTLIGHT
Bright new Dawn for Cogeneration
16
After a snail-like rate of progress for more than a decade, the benefits of Combined Heat and Power (CHP),
cogeneration or ‘cogen’ technology are becoming widely recognized.
DATELINE
Trade Shows, Conferences, Seminars
19
March 2006 to May 2006
IMPRINT
Publisher: Siemens AG, Power Generation Industrial Applications, Wolfgang-Reuter-Platz, 47053 Duisburg, Germany Responsible: Dr. Uwe Schütz Editorial Team: Lynne Anderson
(Head), Manfred Wegner Contact: lynne.anderson@siemens.com Contributing Editors: Colin Ashmore, Eric Jeffs Design: Formwechsel Designbüro, Düsseldorf Photography:
Florian Sander Illustration: Lorna Egan, Ji-Young Ahn Lithography: Time Production, Düsseldorf Printing: Heining & Müller GmbH, Mühlheim a.d.R.
© 2006 SIEMENS AG. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical photocopying, or otherwise, without prior permission in writing from the publisher.
F L A S H
*1
*1 Fortunate providence: Siemens is continuously expanding supplies of advanced
compression solutions to the Chinese
market.
*2 Brand new technology: CAD impression of
Siemens’ latest SGT5-800H gas turbine.
*2
*3
*4
*3 Keeping wintery Budapest warm: Three of
Siemens’ newly-configured gas turbinedriven pipeline compressor packages have
been ordered by MOL Natural Gas Storage.
*4 A seasoned workhorse: The original
Victor GT35 from 1955.
Photos: *1: Florian Sander; *2 and *4: Siemens; *3: Corbis.
0 4 _ N E W S
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ N E W S
F L A S H _ 0 5
Around the World
*1 CHINA— SIEMENS TO DELIVER TURBINE-COMPRESSOR STRINGS TO ETHYLENE MEGAPLANT
The ethylene plant at Dushanzi, in North-West China, being built
by Linde AG under contract to PetroChina International, is set to be
the biggest in the country. It is scheduled to be in full production
by the second half of 2008, generating synthetics for the plastics
industry, and will have the capacity to produce one million tonnes of
ethylene and 500,000 tonnes of propylene per year.
It is to this plant that Siemens will deliver totally six compressors and
three steam turbines. Five single-casing horizontally split compressors (STC-SH) and one vertically split compressor (STC-SV), designed
for a maximum suction volume of up to 480,000 cubic meters an
hour, will be driven by three SST- 600 industrial steam turbines. The
units will be used to compress raw gas to fabricate ethylene and
propylene.
“This contract highlights our growing presence on the booming
Chinese market“, emphasized Dr. Peter Langer, Head of the
Compressor business in Duisburg, “and is a tribute to the excellent
customer relationships we enjoy with Linde AG and PetroChina
International.“
It also puts Siemens firmly on the map to benefit from the rapid expansion of the global production of ethylene. Icis estimates that in
the year 2009, China alone will achieve an ethylene production of
more than 4.5 million tonnes, more than four times the estimate for
2006. During the same period, the demand for propylene is reckoned to increase by a factor of ten to 2.3 million tonnes.
*2 GERMANY — E.ON ENERGIE AND SIEMENS JOIN
FORCES IN INNOVATIVE GAS TURBINE POWER
PLANT PROJECT
E.ON Energie and Siemens are to implement a new power plant project at E.ON Energie’s Irsching site in Bavaria, Germany, which will set
new benchmarks in terms of performance and operating economy.
As a first step, Siemens will build a newly developed gas turbine with
a capacity of 340 megawatts (MW), the world’s largest and most
powerful gas turbine, to be known as the SGT5-8000H. After a test
phase, the gas turbine will be incorporated into a high-efficiency
combined-cycle power plant with a capacity of approximately 530
MW and an efficiency of over 60 percent. After successful trial operation, E.ON Kraftwerke GmbH, a subsidiary of E.ON Energie, will
take over the plant for commercial operation.
The SGT5-8000H gas turbine will set new standards for environmentally compatible, economic power generation. Existing combined-cycle plants in Germany currently attain maximum efficiency
levels of 58 percent. The efficiency increase to over 60 percent will
set a new world ranking, and, of course, also lead to lower genera-
tion costs. The new plant will create about twenty new jobs at the
Irsching site. Work performance and material purchases locally will
provide a positive impetus for the regional economy.
*3 HUNGARY— FIRST STANDARD PIPELINE COMPRESSOR PACKAGES GO TO MOL
MOL Natural Gas Storage of Budapest in Hungary have ordered three
newly-configured standard gas turbine-driven pipeline compressor
packages, based on the 4.9 MW SGT-100 gas turbine in combination
with a direct-driven STC-SV compressor. The units will be installed at
Hajduszoboszlo, Hungary.
The pre-engineered standard packages, which have been designed for
maximum efficiency and economy, will be known as SPCP (Siemens
Pipeline Compressor Package). Three package types are available, based
upon gas turbine size, SPCP-100/200/400, all proven components
from the Siemens portfolio. The package delivery is a natural extension
of the single-source supply thinking which characterizes Siemens’
deliveries to the Oil & Gas market.
*4 ANNIVERSARY—VICTOR CELEBRATES HIS 50TH
BIRTHDAY
25 October 1955 the first GT35 gas turbine (now called SGT-500)
was started in Finspong, Sweden, and was inaugurated commercially
in August 1957. Not only the first GT35 but the first gas turbine ever
produced in Sweden was born and functioning.
Steam turbines had been produced since the turn of the century, but
gas turbines were the fledglings to the market, resulting from aeroengines developed during WW II. This became the first stationary
‘large-scale’ gas turbine (10 MW), and was christened ‘Victor’ to celebrate its triumphant creation.
Originally intended to be a peak load machine, over time the turbine
became a veritable workhorse. It has continued to be developed, now
producing 17 MW power and some impressive operation statistics.
Up to mid-December 2005 7, 814,772 operation hours and 182,743
starts had been registered.
Now known as the SGT-500, the world’s oldest gas turbine sold commercially as a new product is still going strong. It has become a bestseller with oil companies for use both onshore and offshore, thanks
to its reliability and low maintenance costs, and its eminent and
proven fuel flexibility. Three ‘Victors’ have just been sold for power
supply to Dubai airport, and he is at the heart of the newly developed
COGES system for marine application. The Victors in the field will
keep chugging along for a good few years yet!
Taking a Giant Leap in Subsea Technology
In a groundbreaking co-operative agreement between FMC Technologies and Siemens
Power Generation, the two companies are to jointly develop and market solutions for subsea oil and gas recovery. At the heart of the latest technological development is an
electrically-driven centrifugal compressor developed in a joint initiative between Shell
and Siemens. The new system will operate continuously on the seabed allowing efficient,
economic and environmentally friendly recovery of oil and gas at even the most extreme
depths.
An artist’s impression of a typical subsea installation for natural gas production.
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ F O C U S _ 0 7
We all live in an energy-hungry world. The health, wealth and political stability of nations around the globe are inextricably linked to
the availability of plentiful, affordable sources of energy. Highly
industrialized countries in the western hemisphere and rapidly
growing economies around the world are alike in their seemingly
insatiable demand for fuel and energy which is continuing to grow
at an ever faster rate.
LOOKING TO THE FUTURE
At the same time that consumption of both oil and natural gas is
spiraling upwards, many of the world’s major existing oil and gas
reservoirs located either onshore or in relatively shallow water offshore are in decline, and the forces behind the international oil and
gas business are having to look for innovative solutions.
With the low-hanging fruit all but picked by the oil companies as
their onshore and more accessible offshore oil and gas fields mature,
operators are now scrambling to find new reserves, often in the form
of smaller, ‘stranded’ reservoirs or in locations where resources are
physically and economically difficult to extract.
THE NEXT STEP
In the new deep and ultra-deepwater operating environments and in
Polar Regions where sea ice exists year-round, production strategies
based on the use of surface structures are either impractical, environmentally harmful, or are becoming prohibitively complex and
expensive. One solution has been to replace fixed platforms with
FPSOs — Floating Production, Storage and Offloading vessels, giant
combined floating factories and storage tankers, capable of operating in the deepest waters with long tie-back distances from multiple
wells. Now, in what has been described as “the next logical step”, as
well as moving away from fixed platform systems the industry is
looking ultimately to replace even these high-tech surface vessels
by moving the production process to the sea floor.
MARKET LEADERS
Illustration: Lorna Egan
On November 4th 2005, Tore Halvorsen, Managing Director of FMC
Technologies’ Kongsberg Subsea business unit, and Klaus Voges,
President of Siemens Power Generation, signed an agreement between their two companies to develop and market joint solutions
0 8 _ F O C U S
for subsea oil and gas recovery. As a ‘next step’ for the energy industries, but representing a ‘giant leap’ in offshore technology, the
two companies will jointly develop the subsea systems forming a
new generation of hydrocarbon production and processing plants
installed on the sea floor. A global leader in energy industry and
other industrial applications, US-based FMC Technologies Inc is a
US$2.8 billion company, supplying a wide range of products and
services on a global scale. Its subsidiary FMC Kongsberg Subsea AS
is the acknowledged global leader in the manufacture and supply
of subsea production systems.
YELLOW SUBMARINES
In an environment only dreamt of by Jules Verne, although not
quite reaching Captain Nemo’s 20,000 leagues beneath the sea, the
new-generation ‘intelligent’ production and processing plants being developed, manufactured and marketed by the partnership will
operate in a world more alien and less well explored than the
moon. The size of a small city block and painted in a bright yellow
finish for optimum visibility, these sea floor ‘factories’ will be installed — and very occasionally serviced — by robots, in the total
darkness, sub-zero temperatures and crushing depth of the seabed
nearly 2 miles below the surface.
SPACE-AGE TECHNOLOGY
Not only designed to operate in ‘inner-space’ under unbelievably
harsh conditions, the electrically-driven machines are being engineered to compress the raw, wet, ‘dirty’ natural gas which is also
typically mixed with hydrogen sulfide and other highly corrosive
gases, directly from an undersea reservoir. Adapted from
Siemens’ conventional existing compressors, but using the very
latest materials and technologies, the subsea compressor system
employs a high-speed induction motor developed from an
Photos: Florian Sander
Model of a typical subsea compression facility.
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ F O C U S _ 0 9
Components for advanced subsea solutions manufactured
at FMC Kongsberg Subsea AS
existing design at Siemens’ Berlin facility, powered through a
variable-speed drive system. The stator uses liquid cooling and
the integrated ‘squirrel-cage’ rotor is equipped with maintenancefree magnetic bearings. The design eliminates the need for seals
between motor and compressor housings and the entire machine
is contained within a hermetically sealed pressure casing. Despite
its space-age technology, the compressor uses an essentially simple, highly robust modular construction, enabling it to operate
with total reliability, continuously, 24-7, 365, for a minimum of
five years without maintenance of any kind.
IT’S A GAS FOR NORWAY
The initial development contract for the subsea compressor was
signed originally in November 2001 between Siemens PG and Shell
in the Netherlands. Norske Shell will be operator of the giant
Ormen Lange gas field, where the first subsea production and processing system will be installed. Development operator for the field
is Norske Hydro. Discovered in 1997 and located in the Norwegian
Sea some 140 kilometers west of Kristiansund, with recoverable
reserves of more than 315 billion cubic meters, the giant natural
gas field is the second largest ever discovered on Norway’s continental shelf. With factory testing now completed, June 2006 will see
an onshore version of the technology being field-tested in the
Netherlands. Subject to final decision in 2010, a fully commercial
system incorporating four compressors, each with an electrical
power rating of 12.5 megawatts, will be installed at a depth of 895
meters at the Ormen Lange field in 2014. The new system will be
remote-controlled from the onshore facility 140 kilometers away,
through an underwater ‘umbilical’ cable, which will also carry the
high-voltage AC electrical power to the compressors.
UNDER THE ICE
Even before the first commercial systems sink into the cold black
depths beneath the Norwegian sea, further applications are already
being planned together with other operators. Although this recordbreaking, world-first installation will be a major achievement for
the industry, the ability to transfer critical production systems to
the seabed at large distances from any onshore facilities will also
allow the recovery of previously untapped oil and gas resources in
the Polar Arctic regions. Installed either below permanent ice or
where ice movement presents a major hazard to any fixed platform
or floating surface production facility, arctic subsea systems are
already also planned for installation by 2020.
Minimizing environmental impact, slashing production costs and
enabling the economic recovery of stranded reserves of oil and gas,
the pioneering development of subsea compressors as vital elements
of the new generation of intelligent seabed processing systems will
help to keep supplies flowing for as long as they are needed.
Tore Halvorsen, Vice President/Managing Director, FMC Kongsberg
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ F A C E S _ 1 1
The Norwegian Connection
Returning to his office at the company’s headquarters in the old silver-mining town of
Kongsberg, among the mountains and pine forests some 70 km west of Oslo, Tore
Halvorsen, Vice President/Managing Director of FMC Kongsberg Subsea AS talked to
VENTURE after the official signing ceremony.
Venture: Mr Halvorsen, as the market leader in this niche sector of the offshore engineering industry why, exactly,
did you choose Siemens to partner FMC Kongsberg?
Halvorsen: Well, as you probably know, our two companies are not exactly strangers, as we were once owned
by Siemens, although there have been some very major changes within the company since then. However, today we are convinced that as both our organizations are now clear market leaders in their own fields, they are
now a perfect ‘fit’ with each other. My company has built up a huge knowledge base in subsea engineering systems for oil and gas production, while Siemens PGI brings to the party its own innovative technical excellence.
Venture: I guess you are referring specifically to the new compressor, but surely there are a number of other
companies who are active in this field?
Halvorsen: Yes, there are, but we believe that Siemens’ development is outstanding. It’s conservatively rated
and essentially simple and robust, but uses the highest quality materials and latest technologies to provide the
continuous, long-term, maintenance-free reliability essential for subsea applications. It also includes some
very clever features that the other manufacturers’ products just can’t match, giving us a clear technical edge
over the competition.
Venture: I see. So given this competitive ‘edge’, what are the market prospects for the system?
Halvorsen: In a word: excellent. The latest offshore gas field developments are already being designed without topsides production systems, using subsea installations instead. This trend is definitely going to continue,
particularly as the industry moves into ever-deeper water operations — such as in the Gulf of Mexico, East Africa,
Brazil — and of course difficult areas like the Arctic.
Photo: Florian Sander
Venture: You’re not just looking at new deepwater installations in big new fields, though, are you?
Halvorsen: No. It’s important to remember that this new generation of subsea production systems also enables
the life of mature oil and gas fields to be extended where it is becoming more and more difficult to maintain
production using conventional methods. Placing the compressor really close to the well is one of the most costeffective ways of enhancing recovery. The advantages don’t stop there, though. We can now place a production
unit right next to a trunk undersea pipeline, allowing valuable reserves to be extracted from smaller, previously uneconomic ‘stranded’ gas fields, and ‘plugging’ them straight into the transmission system — again
prolonging the life of the main field and boosting available reserves at the same time.
Venture: And what of the future?
Halvorsen: Well, I suspect that we will be seeing subsea installations moving further and further offshore, making it necessary to look hard at long distance power transmission systems using high-voltage direct current,
or floating power stations, perhaps. Even further ahead — who knows? We might even be installing dedicated
power plants on the seabed, perhaps applying fuel cell technology using the natural gas as the fuel, but this is
just speculation. What I do know is that we have world-beating technology, and through our new partnership
we have the vision, the products and the expertise to maintain our position as the best in the world.
Venture: We’ll toast to that!
1 2 _ M O N I T O R
The Missing Link
Recent predictions from the UK Department of Trade and Industry/Ofgem indicate
that — after decades of generous consumption and export of domestic fossile energy — the UK’s energy import dependency
could increase significantly beyond 2010.
Studies suggest serious supply-side challenges if the UK Continental Shelf (UKCS)
production rate decreases as expected.
Specifically, the UK gas balance will be
likely to show imbalances until 2007 and
in 2010 and beyond. And gas is continously
replacing oil as the major primary energy.
Against this background the European
Commission has identified that one of the
missing links in the main gas infrastructure is an interconnection between the
Netherlands and the UK. Designed to bring
gas from continental sources to the United
Kingdom via a route of just 235 kilometers,
the proposed BBL (short for: Balgzand
Bacton Line) pipeline will provide that
missing link.
even play an important role in connecting
Russian gas volumes to the UK.
TEAMING UP
GETTING STARTED
In July 2004, the utilities Gasunie (Netherlands), E.ON Ruhrgas (Germany) and
Fluxys (Belgium) decided to establish the
BBL Company through legally separate
subsidiaries. Gasunie's subsidiary company
will hold a 60 per cent stake, whereas the
subsidiaries of E.ON Ruhrgas and Fluxys
will each hold 20 per cent. With an investment of some 500 million euros, the BBL
Company will link Anna Paulowna in the
Netherlands and Bacton on the Norfolk
coast through a 36-inch pipeline. Operational by the end of 2006, it will substantially add to the 16.5 billion cubic meters
per year, which the existing Interconnector
pipeline between Zeebrugge, Belgium, and
Bacton could supply in UK import mode.
In the more distant future, the BBL may
Groundwork, pipeline laying and construction work at the terminals is well under
way, and so is the production of the compression solution for the Balgzand terminal. Encompassing three state-of-the-art
compressor strings rated 23 megawatt
(MW) each, it will step up gas pressure to
approximately 120 bar for the gas to travel
the 235 kilometers to the Bacton terminal.
Key performance requirements included
an extended operating area to cope with
potential swings in demand, as well as lowmaintenance, fully remote-controlled operation.
A FINE PIECE OF TECHNOLOGY
Designed and manufactured at Siemens
facilities in the Netherlands and Germany,
Illustrations top left and right: Courtesy of BBL Company. Photo: Florian Sander
Connecting the British Isles and the European Continent, the first natural gas pipeline is
currently under construction between Balgzand, Netherlands, and Bacton, UK. It runs some
230 kilometers across the seabed of the North Sea and will be powered by a Siemens-built
state-of-the-art compression solution.
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ M O N I T O R _ 1 3
In order to avoid any adverse impact on the sensitive ecosystem of the sand dunes, horizontal directional drilling will be used to bore a shaft beneath the dunes through
which the pipe will be pulled, leaving nature unscathed.
the compressor strings feature high-speed
variable-speed motors which directly drive
multi-stage centrifugal compressors.
Motors and compressors are fitted with
active magnetic bearings. Through a smart
computer-controlled management of bearing stiffness and damping properties, minimal vibration is ensured at critical speeds
to provide the required wide operating
area. The strings are equipped with a digital control system for full remote control
and integration into Gasunie’s dispatching
center in Groningen, Netherlands.
Says Etienne Meier, Project Manager with
Siemens in Hengelo: „The machines do,
indeed, mark the state of the art in smart
turbomachinery. However, we have
amassed considerable routine with all the
technologies involved, as we have designed
a number of similar machines in recent
years. And they’ve all passed the acid test
of proof in operation — with more than
satisfying results.“ It was because of that
vast experience with similarly advanced
units that Siemens were awarded the contract to supply the Balgzand compression
solution. „Notably, BBL Company were familiar with the machines we delivered for
NAM’s GLT project. They have lived up to
all expectations,“ Meier continued. NAM is
a joint venture of Shell and Exxon Mobil,
operating the Groningen Long Term (GLT)
gas fields, where some 500 MW of compressor performance are being successively installed at 29 clusters.
TIGHT SCHEDULE AHEAD
By the end of January, the first of three
strings has successfully passed comprehensive performance tests and has been
released for shipping. Strings #2 and #3
will follow in March and May, respectively.
The first two units will be up and running
before 1 December 2006 — the day when
commercial operation of the BBL pipeline
is scheduled for start. Until then, installation on site and commissioning have
to match a challenging schedule. Says
Etienne Meier: „Flexibility is a value we
share with our machines.“ And smiles.
Building reputation: one of the smart compression
solutions installed at a NAM GLT compressor station
near Groningen, Netherlands.
1 4 _ M I N D S E T
A Matter of Attitude
Accepting responsibility for Health, Safety and Environmental performance (HSE) has
become a core value of corporate policy. Dedicated management structures are put in place
with a keen goal setting of zero incidents. Elaborate educational programs are indispensable, as the single most important factor is — the human mindset.
Throughout the oil & gas industry, first-time visitors are invited to
a compulsory video presentation before being admitted to a potentially hazardous area. Different as they may be in terms of aesthetics, these induction videos convey a clear message: Stay alert, stay
alive. Once access is granted, the newly sensitized eye discovers
the semiotics of an intricate HSE signage system. What to do, what
not to do, which path to follow, where to gather in case of an incident, whom to report to — it is all thought of and visualized.
However, this is just the visible tip of an iceberg, the iceberg being
a vast corpus of occupational health, safety and environmental
protection regulations and practices issued and enforced by regulatory bodies and public authorities.
wide. After all, the nature of their business — and of the chemical
industry, who pioneered HSE — requires that HSE has the uncompromising commitment and support of the management. Says
Frank Stieler, President of Siemens Power Generation Industrial
Applications (PGI): „At Siemens, HSE is never a mundane chore.
Our management assume personal responsibility to ensure the
health and safety of people inside and outside of the company,
and to avoid any adverse impact of our business activities on the
environment.“ The policy currently being implemented throughout the company will bring all sites and employees to the level of
HSE awareness and practices defined by the most stringent standards of the industry.
ASSUMING RESPONSIBILITY
CONTINUOUS EDUCATION
While HSE started as something like a technical directive, in recent
years it matured to a comprehensive management system and
became a core value of corporate policy at oil & gas majors world-
Of course Siemens holds international certificates such as the environmental ISO 14001 and the OHSAS 18001 for health and safety.
But as Mike Peto, responsible for HSE at Siemens PGI, says: „These
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ M I N D S E T _ 1 5
„If we want to compete for business
opportunities, we must bear comparison with
the best in the industry.“
Mike Peto, Health, Safety and Environment (HSE)
coordinator of Siemens PG I.
are a good base, but no laurels to rest on. Correct HSE behavior
has to become part of our working life.“ Which is what Gordon J.
McDonough, HSE coordinator at Siemens’ Service Center in Trenton,
U.S., so imperatively coined: „Arrive safely, work safely and return safely home.“ Gordon explains: „Much of what we do, we do
with the uncanny sureness of a somnambulist. So sensitizing
people’s mind is key to the success of any HSE program.“ A smoker
who takes a small step in the right direction may be making a
giant leap for the safety of many others. HSE requires permanent
attention — and education. „Safety takes priority over comfort,“
Mike Peto comments.
REVEALING STATISTICS
It is a common experience that, once properly trained, selective
perception can work very much in favor of a positive goal. For
instance, when sensitized to identify risks in their working environment, employees suddenly report a much greater number of socalled ‘near misses’. Statistical evidence says that 500 near misses
equal one incident. „Incident may as well read accident,” says
Horst-Guenter Schaefen, HSE coordinator of Siemens PGI’s Global
Field Service. „A statistical datum of 500 near misses may actually
stand for one and the same hazard encountered 500 times. It may
refer to something as trivial as a pit at a construction site — easy
to jump over. But jump no. 501 may be fatal.“ The message is simple: cover the pit. Or: do it right the first time, every time.
DEMANDING PARTNERSHIP
HSE doesn’t start and end in any single company. Once construction
or service work is done on the premises of another company, a
basis of common understanding in all HSE-related issues has to be
ensured. Originating from the Benelux states and Germany, the
Safety Certificate Contractors (SCC) provides such a basis. It is a
management system widely applied in today’s oil & gas industry,
and without SCC, no employee of company ‘A’ would be allowed
to work on the premises of company ‘B’. In addition, company or
site-specific certification is often required, including compulsory
refresher courses at defined time intervals. At Siemens, these are
documented in the Personal Safety Logbook (see title photo) of
every employee concerned.
GOING BEYOND
While SCC defines demanding standards, HSE requirements of
some companies go far beyond. This is particularly true for the top
segment of oil & gas producers — companies which are always
in the public eye. „As a consequence,“ Mike Peto says, „not only do
they set the highest standards for themselves, but they expect the
same of their suppliers.“ For Siemens as a leading supplier to that
industry, this gives a clear heading. Mike Peto: „If we want to compete for business opportunities, we must bear comparison with the
best in the industry.“ As a consequence, Siemens don’t just aim to
meet legal minimum standards, which often vary among countries.
„Even more relevant are international standards, which go beyond legal requirements,“ says Peto. It is Siemens’ policy to work in
accordance with the highest locally applicable standards. By the
same token, Siemens applies these standards to its contractors.
CULTIVATING AN HSE MINDSET
HSE is not a one-off program. Besides the involvement of top management, dedicated management structures, and efficient means of
reporting and analysis, it needs persistence in spreading the message that constructive communication among all related people and
parties is an indispensable prerequisite for improvement. Anything
relativizing the keen goal of zero incidents would mean a step in
the wrong direction. Cultivating an HSE mindset is the only way to
go. After all, we all want to return home safely.
1 6 _ S P O T L I G H T
Bright new Dawn for Cogeneration
After a snail-like rate of progress for more than a decade, the benefits of Combined Heat and
Power (CHP), cogeneration or ‘cogen’ technology as a very high-efficiency, low-carbon
source of energy are now starting to be widely recognized, not just throughout Europe, but
on a larger international scale. As a means of developing a more sustainable energy future,
this mature system for converting primary fuels into a combination of electricity and useful
heat is now growing rapidly in importance.
Despite the growing numbers of wind turbines, biomass-burning power stations,
solar panels and other sources of so-called
renewable energy, the electricity-generating sector has a huge ‘environmental footprint’. The majority of this footprint is due
to atmospheric emissions of carbon dioxide, the greenhouse gas now widely believed to be responsible for global warming. In the UK alone, every household releases into the atmosphere an average of
10 tonnes of CO2 every year, much of which
is from the use of electricity from fossilfuelled power stations. While individual
efforts to reduce consumption and use
electricity more wisely are entirely commendable, it remains a little-known fact
that from fuel input to electricity used by
all consumers, the average efficiency of
supply has not improved beyond just 33
per cent for the last 20 years. In other
words, two-thirds of all the fuel burned in
power stations around the globe is simply
wasted, just adding to the enormous annual tonnage of carbon dioxide and other
pollutants being poured into our overloaded atmosphere.
cient and effective way of converting hydrocarbon-based fuels into electricity and
thermal energy. Systems based on both
conventional fossil fuels and biomass are
widely used in Europe, providing 13% of all
electricity and heat, saving 280 million
tonnes of carbon dioxide and 1,500 petajoules of energy each year. In simpler terms,
this saving is equivalent to the total energy
consumption of the whole of Portugal,
Estonia, Luxembourg and Malta combined.
RAISING EFFICIENCY
Delivering 140 MW of electricity and 150 MW of district
heating: the new Siemens built TEC1 CHP plant of the
Latvian capital of Riga.
BIG SAVINGS
Energy conversion systems based on
Combined Heat and Power (CHP) technology are without question the most effi-
Unlike other forms of thermally generated
power, where only a relatively small proportion of the total available heat energy
from the hydrocarbon fuel is converted into
electrical energy, CHP systems are designed
to use almost all the available heat, enabling
operating efficiencies to soar above 85 per
cent. Some of the thermal energy is converted into electricity, frequently using modern, high-efficiency gas turbine-driven
generators, with the exhaust heat captured
efficiently by a large heat exchanger to produce steam. This can either be used directly as a source of high-grade heat — for an
V E N T U R E
M A G A Z I N E _ M A R C H
Steam turbine
2 0 0 6 _ S P O T L I G H T _ 1 7
Generator
Waste heat recovery unit
55 %
Generator
Heat exchanger
Gas turbine
Photos: Florian Sander Illustration: Ji-Young Ahn
A typical cogeneration scheme achieving an overall
efficiency of some 80 per cent.
urban district heating network or for an industrial process, as was recently done at
the Girvan, Scotland, whisky distillery of
William Grant & Sons, one of their largest
and most important investments in new
technology in recent years. External supply
had begun to form a major and rapidly-increasing percentage of the company’s total
production costs. The integration of a gasturbine driven CHP solution into the facility now gives Grant complete control over
their process and their power costs. The
steam can also be used to provide lowergrade heat and hot water after first driving
a steam turbo-generator to produce additional electricity. Alternative to a gas turbine, the basic fuel — which may range
from natural gas to ‘renewable’ biomass —
can be combusted in a modern, ultra-clean
boiler, producing steam to power a turbogenerator and providing additional process
heat. For a given output from all types of
combined heat and power generating plant,
both fuel consumption and atmospheric
emissions are reduced very significantly,
providing an efficient cost-cutting solution
for the power utility or industrial operator.
GOING FOR GREEN
Spearheaded by Siemens and other worldleading power engineering innovators,
high technology systems and equipment
are being developed continuously to meet
the challenging demands of today’s new
breed of lean ‘green’ producers and users
of electrical power and heat. These include
the world’s major power utilities and operators of large centralized CHP facilities,
such as Latvenergo, the energy utility operating the new Siemens SCC-800 2 x 1 power plant in Riga, Latvia, feeding 140 megawatts (MW) of power into the grid and 150
MW of heat into the city’s district heating
system. No less than a quarter of the generating capacity owned and operated by
Essent Energie, the Dutch power utility, is
centered on combined heat and power
installations. There are many similar installations throughout Western Europe and
Scandinavia based on Siemens gas turbine
and steam turbine technologies, providing
base-load power and district heating.
PLAYING IN THE MAJOR LEAGUE
While imposing, the centralized heat and
power plants operated by European municipal energy utilities are dwarfed by some of
the latest cogenerating installations in the
Middle East. Based on five huge SGT5-4000F
gas turbines and two steam turbines, the Al
Shuweihat power and desalination plant
was constructed by Siemens on the Gulf
coast in the United Arab Emirates. The
largest and most efficient of its kind in the
world, the giant plant feeds 1,500 MW of
electrical power into the region’s electricity
grid and supplies steam to power a desalination system, producing pure drinkingwater from the sea at the astounding rate
of 455 million liters per day.
BOOSTING DE AND CHP
Alongside the big players in the centralized
energy arena are the growing numbers of
power producers operating within the decentralized energy (DE) sector. At the end of
2004, DE systems worldwide accounted for
a total of nearly 282 gigawatts of electricity
(GWe), the majority consisting of highefficiency cogeneration systems, mostly
fuelled by coal, natural gas and to a lesser
extent, biomass-based fuels. The European
“The energy efficiency of combined heat and power is a
competitive benefit in a high energy-price environment.
CHP will be helped more than hurt by high fuel costs.”
John Jimison, Executive Director of the
US Combined Heat and Power Association
WADEING IN TO MARKET
Outside the European arena, markets for
DE and CHP are beginning to grow rapidly.
New gas discoveries off the southeast coast
of Brazil, together with some clear incentives within the country’s new Electricity
Law, are providing significant opportunities for new cogeneration investment.
WADE, the World Alliance for Decentralized
Energy, a non-profit research and promotional organization whose international
membership includes Siemens, believes
that emerging markets, particularly in
Brazil, Russia, India and Mexico, offer better overall prospects for the development
of cogeneration and distributed energy
systems than OECD countries. Market opportunities include the development of
biomass-based systems, especially the exciting potential for cogeneration using
bagasse — sugar-cane waste — in India and
many other countries which produce this
crop.
GOING FOR GROWTH IN THE USA
Although the tripling of gas prices in the
USA in 2002 effectively halted the growth
of its cogeneration market, recent moves at
both Federal and State levels look set to
give the industry a major shot in the arm.
A number of States, notably California,
New York and Texas have been reducing
backup charges and barriers to grid-interconnection, while others have initiated
programs to reduce greenhouse gas emissions. The US government's Environmental
Protection Agency (EPA) also recently
backed the use of output-based standards
for air permits for new cogeneration,
which will substantially reduce costs of
emission controls and stimulate cogeneration growth. The US Department of Energy
(DoE) has set targets to double cogeneration levels to 92 GWe by 2010, while Congress is looking at legislation including
clean energy portfolio standards and tax
credits for CHP. The combination of these
measures, together with the memory of
recent major supply outages and rising
power prices, is certain to boost the cogeneration market, offering huge new opportunities for developers and suppliers.
"It's true that soaring and highly-volatile
natural gas prices have hurt the U.S. CHP
market,” says John Jimison, Executive
Director of the US Combined Heat and
Power Association. “Like all energy-consuming investments, you can’t have confidence in the long-run pay-out if you have
total uncertainty about fuel inputs and
costs, this climate also being a barrier to
any major new investments.” “However,”
he continued, “the energy efficiency of
combined heat and power is a competitive
benefit in a high energy-price environment. CHP will be helped more than hurt
by high fuel costs — once these have stabilized. In addition, the U.S. power grid is
highly congested, especially in urban and
highly-populated areas and it’s almost impossible to expand it with new corridors or
additional lines, due to objections by landowners and communities. This often leaves
distributed generation, and CHP in particular, as the only alternative to meet rising
demand for power and power quality.”
NEW DAWN
A growing number of smaller industries decide to
produce their own power: William Grant & Sons
Distillery, Girvan, Scotland, who run their own industrial CHP plant.
Although China represents a massive potential market, government-subsidized
power has made CHP a less attractive
proposition in that country. In contrast,
there is now positive backing for cogeneration, both in Europe and at all levels in
the USA. Who knows, perhaps a bright new
dawn for cogeneration is breaking in the
west, rather than the east.
Photo top left: Siemens. Photo bottom left and right: Florian Sander
market for commercial and industrial combined heat and power systems has grown
at a snail’s pace over the last ten years and
been essentially flat for the last five.
However, encouraged by the EU Cogeneration Directive in 2003 and the launch in
January 2005 of the EU Emissions Trading
Scheme, market activity is once again on a
gentle upward curve, boosted additionally
by the increasing cost of electricity in
Europe. The combined heat and power
installation now under construction at the
Rauma paper mill in Finland is typical of
today’s new clean and highly efficient dedicated industrial cogeneration plants. This
latest ‘total energy’ installation features a
biomass-fuelled boiler and a Siemens SSTPAC 800 steam turbine and generator package rated at 80 MW, which will provide all
the electrical power and process steam for
the factory and district heating for the
neighboring town.
V E N T U R E
M A G A Z I N E _ M A R C H
2 0 0 6 _ D A T E L I N E _ 1 9
Dateline
02–05 April
10TH AFRICA OIL & GAS, (UNCTAD/ United
Nations Conference on trade and Development) Algiers, Algeria,
http://www.ite-exhibitions.com/og/
03–07 April
PAN AFRICAN POWER CONGRESS & EXPO,
Johannesburg, South Africa,
http://www.mbendi.co.za/terrapinn/events/e344.htm
09–12 April
ABTCP (Pulp & Paper), Sao Paolo, Brazil,
http://www.abtcp.org.br
20–23 April
IRAN OIL & GAS SHOW, Teheran, Iran,
http://www.iranoilshow2005.com
01–04 May
OFFSHORE TECHNOLOGY CONFERENCE,
Houston, USA,
http://www.otcnet.org
02–04 May
ELECTRIC POWER, Atlanta, USA,
http://www.electricpowerexpo.com
15–19 May
ACHEMA, Frankfurt am Main, Germany,
http://achema-content.dechema.de
17–20 May
POGEE 2006, 4TH PAKISTAN OIL, GAS &
ENERGY EXHIBITION AND CONFERENCE,
Karachi, Pakistan,
http://pogeepakistan.com
25–26 May
INTERNATIONAL COGENERATION, COMBINED
CYCLE AND ENVIRONMENT CONFERENCE,
Istanbul, Turkey,
http://www.icciconference.com/eng/
30 May – 01 June
POWER GEN EUROPE, Cologne, Germany,
http://pge06.events.pennnet.com
www.siemens.com/venture