Article
Gas engines emerge
from the shadows
Introduction
With gas back in vogue as the fuel of choice for power
generation, one of the oldest established engine technologies
– gas engines – is newly resurgent as a power source. Plentiful
supplies of natural gas and the increasing availability of
‘alternative’ gases such as biogas and anaerobic gas encouraged by policies favouring clean, renewable energy - is
driving the take up of localised power.
Energy security has climbed to the top of the business
agenda, as shifting government policies towards other fuel
sources are persuading industrial users to invest in localised
gas generation.
n
Gas Engine Oil Manufacturers (selling lubricating oil
for gas engines)
n
Gas Engine Oil Additives Manufacturers (selling
additives to gas engine oil manufacturers)
The gas engine market
There is no reliable public domain data for sales of gas
engines as trade statistics are not (discretely) logged. Also
engine manufacturers are understandably nervous about
sharing data because recent acquisitions have concentrated
manufacturing capacity, prompting a 2011 EEA
monopolies investigation.
The economic case is compelling. Combined Heat and Power
(CHP) has become one of the most profitable ways that
companies can use to reduce their energy bills, providing heat
to the site and achieving cost savings of between 15% - 40%
over conventional electricity. (Source: CHPA).
Manufacturing plants and major new office buildings which
strive for security from the grid, can embed gas engines on
site, positioned close to suitable heat loads and/or sources of
low cost fuel.
EMEA demand
It is in Europe where the use of gas engines for power
generation is growing rapidly.
Andrew Stone, Director of Energy Solutions at Cummins,
says EMEA is their biggest sales region for gas engines
globally. Stone believes in keeping the proposition to new
customers simple “We are not selling an engine, we are selling
a solution”.
Richard Holdsworth, Global Marketing Manager, Lubricants
at Shell believes there is a shift towards independent back up
power and a real move away from heavy fuel towards gas. He
believes LNG will become an alternative option to heavy fuel
in many parts of the world.
But the focus of this particular research is on the expanding
use of gas engines for the power generation market in
Europe, where two thirds of all gas engines are sold,
accounting for some 3800MW of power. (Source: TSW). To
study whole of market, The Strategy Works conducted in
depth interviews with 25 companies involved in different
parts of the supply chain split into these defined sectors:
n
O&Ms (operating and maintaining fleets of gas
engines)
n
OEMs (manufacturers of gas engines)
18 Power Engineer September 2013
Annual sales (In MW) of Gas Engines
over 500kW = 6,000MW/year
Combining desk research with interviews conducted, TSW
estimates that global annual gas engine sales (over 500kW in
power) exceed 6,000 MW per annum, of which 64% is in
EMEA at over 3,800 MW. (Chart Source: TSW)
In fact Europe, apart from accounting for two thirds of global
sales, is also the epicentre for production of gas engines with
CAT having relocated their excellence centre (for gas engines)
to MWM in Mannheim and GE confirming that 90% of their
worldwide sales of gas engines are manufactured by Jenbacher
in Austria. Another large USA manufacturer Cummins has
42% of its gas engine sales in EMEA.
Germany is a particularly important market for biogas with
rapid take up because of feed-in tariff incentives. This is
confirmed by Sharanie Patterson, Category Portfolio Manager
for Power Generation, Natural Gas Engine Oils at PetroCanada. “Our largest market would be Germany, which is the biggest
market in biogas, followed by the UK. Germany has large potential
with some 7,000 gas engines right now running on biogas. Our focus is
www.idgte.org
Gas engines emerge from the shadows
going to be on Germany, UK, France, Spain, Italy. Gas Engines is a
category that is growing double digit every year.”
The growth in biogas is recognised by Philippe Poudou,
Product Line Manager IEO Specialities EAME at Oronite “In
Germany the production from biogas increased by almost 20% in 2011.”
Source: Biogas Barometer, EUROBSERV’ER December 2012
Kirill Chervyakov, Industrial Marketing Advisor, Mobil
Industrial Lubricants, agrees: “Germany, Italy and Benelux are our
main markets for gas engine oils in Europe. Germany has developed a
strong biogas market and Benelux is using gas engines extensively for their
greenhouse operations.”
Frank Merbitz, (Chief) Applications Consultant at Addinol
echoes these views. “Europe is most important to us as there are
more gas engines than in other places, especially in Eastern European
countries like the Czech Republic, Bulgaria or Estonia, but also in Italy
and in Germany. Nowadays it accounts for a large share of our total
turnover and it’s growing still.”
Michael Wagner, Marketing Director of leading engine
manufacturer Jenbacher explains: “Western Europe and secondly
Eastern Europe are still our traditional segments. Germany and Italy
are historically among the important segments for us.”
T-Po 101 Gasmotor Jenbacher
supplied by ExxonMobil
Maxim Donde, LLK (Lukoil) General Director in Russia also
sees the growth in gas engines. “The dynamics of sales is positive.
Market volume of these oils around the world is growing at about 5%
per year, which is associated with an increase in the number of working
gas engines.”
David Burke, Service Director of leading O&M Clarke
Energy who maintain 300 engines in the UK and has installed
units with over 2,750 MW capacity worldwide, confirms the
drivers in the UK “The two big markets now are natural gas for
combined heat and power and the anaerobic digestion biogas markets.”
“In general we see that there is a lot of growth in gas engines and
especially on the natural gas side” says Mark Hensen, Senior
Product Line Manager – Energy, of Q8Oils.
Installed capacity – 40GW
TSW estimates that to total installed capacity of gas engines
in EMEA is 40GW and is growing at around 8% per year.
www.idgte.org
Based on average oil consumption figures this equates to over
270 million litres per year for gas engine oil within EMEA
making the EMEA market alone worth around £500m
($750m) for lubricant.
The use of gas engines
In EMEA the main application for gas engines has
traditionally been and continues to be for power generation,
whereas in North America it is for pipeline applications such
as gas transmission and compression. In fact GE produces its
Waukesha gas engines range in the US, primarily for gas
compression and the European built Jenbacher gas engines
range for power generation, reflecting their different profiles
and are offering those to worldwide customers. The rapid
availability of low cost shale gas in the USA produced by
fracking could change the market dynamics there in the
future but gas generation will remain the dominant driver
within EMEA.
Examples of embedded generation
On-site energy demand
On site “free” fuel
Factories,
Hospital Energy Centres,
Broadcasting Studios,
Hotels, Leisure Centres,
Horticulture, etc
Farms with organic waste,
Meat or vegetable
processing plants,
Water/Sewage treatment
plants
Landfill sites, Waste
recycling plants
Disused and operational
coal mines
Operation and maintenance companies play a pivotal role in
the market as power generation is rarely the business of the
enterprises where the engines are installed. Therefore the
work is farmed out to specialist operation and maintenance
providers (O&Ms) as plants can be required to operate 24/7
and at full power. Many companies who sell plant also seek to
secure the O&M contracts.
Any loss of output is lost revenue, so choosing and buying
the right gas engine oil is a critical decision (for the O&M)
Gas engine oil approval/trial procedures
Alan Beckman, Natural Gas Engine Oil OEM Liaison of
Oronite in California, USA outlines the lengthy process that
gas engine oil companies are required to navigate to get their
oil on an approvals list. “Each OEM has its own specific approval
process that you need to satisfy, so there’s a lot of coordination and
careful planning that has to go into running the field test and putting the
data packages together and then making the presentations to the
OEMs.”
The process starts with the gas engine manufacturers (OEMs)
specifying the performance parameters of the lubricating oil
their engines require. Some go further and also provide a
‘long list’ of approved oils allowing the end user - typically
the O&M - to select from the list according to the type of
application and gas. They strive to provide a wide choice of
Power Engineer September 2013 19
Article
approved oil brands, so the lists are generally comprehensive
and OEMs strongly avoid ‘recommending’ any particular
brand from their list and rarely ‘specify’ that a particular gas
engine oil is used solely.
There are some OEMs like Cummins who also have their
own brand of oil. Stone explains: “We have a marketing
agreement with Valvoline. If you had a maintenance agreement with
Cummins we do have a preference for Valvoline but have the option to
use other specified oils dependent on availability, application etc.”
The one exception is Guascor owned by Dresser Rand who
recommend only its own brand of gas engine oil “We
incentivise the use of our oil which has been tested and designed for our
engines and the specific applications that we’re in. During the warranty
period we will not warrant the engine unless our oil is used.”
comments José Maria Bilbao, Sales Director, Power
Environmental Solutions
David Burke of Clarke Energy confirms that O&Ms have a
wide list of oils to choose from “GE Power & Water’s gas engine
business leave it open for you to select from their approved oils list.” If a
choice is made from outside that list without the OEM’s
agreement, then the warranty may be invalidated.
“They won’t favour one oil company over the other. In their field trials
they are simply concerned whether the oils are suitable for use in their
engines” says Addinol‘s Merbitz.
However, once outside the OEMs’ warranty period (around
12 months), O&Ms are then free to choose the gas engine oil
that they use, but they usually won’t switch oils until they
have run trials to prove that the new oil is better for them in
their fleet. These trials conducted over many months are
often funded by oil manufacturers. “As part of the product
development process, ExxonMobil will sponsor field tests to obtain
OEM approvals and provide lubricant proof of performance, including
oil supply, power cylinder assembly installation, borescopic inspections
and in-service oil analysis.” says Kathleen Tellier, Commercial,
Marine & Gas Engine Oils, Product Research & Technology,
ExxonMobil.
confirmed by Praveen Nagpal, Global Product Application
Specialist, Lubricants for Shell: “There are extensive field trials
involved before we finally secure approval for a product.”
Arevon Energy who operate and maintain 35 mature landfill
sites in the UK with a total output of 64 MW explain how
the trial procedure works from their perspective as an end
customer. Mark Woollams, Asset Manager explains that if the
oil is less expensive, then the first stage is a like for like trial,
without altering oil change intervals; if satisfactory, they will
adopt the new product but run further tests to see what
benefits can be achieved by increasing oil change intervals.
Woollams confirms initial trials can take six months to a year
with the oil company usually underwriting the commercial
risks, and providing the test oil either free or at a reduced
cost, allowing O&Ms to benefit from effectively being the
trial resource for oil companies.
This detailed testing process is confirmed by Stone at
Cummins “There are a number of tests and a number of gates that
the oil companies have to pass, some of them are static, some of them
are dynamic.”
Hensen of Q8Oils explains the step by step process. “How
they [OEMs] approve their oils is done through a trial, so we agree it
with them, we find an engine, we agree on the test conditions, test length,
number of samples, at the end usually inspection or intermediate
inspections are required.”
The conclusion is that the O&M will only switch oil suppliers
if the oil is first trialled on engines in its fleet and it reduces
operating costs.
EnerG plant in situ at Tesco
Types of gas
Mobil SHC Pagasus
supplied by ExxonMobil
Paul Nadin-Salter, Technical Manager at Chevron emphasises
this point: “Everything in this business is about trials”. This is
20 Power Engineer September 2013
Sub-sectors exhibit different growth characteristics; the
consensus of those interviewed is that anaerobic digestion
and biogas are both increasing and following the trend of
natural gas.
David Hatherill, Head of Power Technologies & Engineering
Manager, at Finning (UK) Ltd. part of the world’s largest
www.idgte.org
Gas engines emerge from the shadows
The majority of O&Ms and OEMs interviewed did not
regard natural gas as a problem; the major technical issues
were always around biogas and other contaminated or ‘sour’
gases; these present the greatest challenges for the O&Ms
and also the OEMs in the design of the gas engines.
The chart below demonstrates the % fleet by types of gas for
the OEM’s interviewed. This shows that (on average) 60% of
their UK fleet runs on contaminated gases.
1%
Cogenco
90%
Edina
50%
20%
5%
25%
Finning
12%
5%
72%
11%
Clarke Energy 26%
6%
55%
5%
Arevon
30%
LPG
60%
Other biogases
ENER-G
Anaerobic digestion
gas
O&M
Landfill gas
The consensus is that landfill gas is declining in the UK,
where no new sites are permitted (the move is now to
anaerobic digestion) but, in contrast, landfill is increasing in
the rest of the world. However, this creates an opportunity
for the UK to export its expertise to other markets. “The good
thing for UK people involved in landfill is that they’re taking that
experience out to the world now, with hindsight, to countries like Mexico,
Brazil, Mauritius, and they’re recognising that landfill is a viable
technology” says Nadin-Salter of Chevron.
All O&Ms use regular oil analysis to ensure that the oil never
fails to protect the engine and is changed in good time. So
they are well aware of the effect of different gases on the oil.
Coal mine/coal bed
methane gas
Edina only entered the UK market about 5 years ago, but has
grown rapidly. Tony Fenton, CEO, attributes part of the
growth to their focus on anaerobic digestion biogas:
“Anaerobic gas has many problems and no two sites are the same.
Along with our CHP business we took the strategic decision to focus on
AD and have seen major business growth as a result.”
Problems caused by contaminated gases
and the role of additives
Natural gas
Caterpillar distributor, Finning International Inc, confirms
their investment in the potential of biogas from anaerobic
digestion: “We have just finished our first anaerobic digestion
plant for a major customer in the UK, so we are expanding the
scope of our Caterpillar distribution business in a complementary
manner with our Clean Power, Contracting and Technologies
division. We firmly believe that there is a growing demand and that
will continue for gas power generation in the future.” Finning’s
UK Power Generation business contributes £50m in
revenues to the Group.
3%
5%
1%
10%
8%
100%
% of fleet (in MW) by gas type (Source : TSW)
A measure of the difference between clean natural gas and
the dirtier biogases is that O&Ms typically analyse the
engine oil monthly, if it runs on natural gas, but weekly if
it runs on biogas.
Landfill installation in Finland 4 2032 15MW
supplied by MWM
The decline in the UK landfill market is endorsed by Julian
Packer, Director at Cogenco. “The whole drive away from dumping
landfill, moving to recycling and making use of these materials means
that there will be no great prospects for landfill.” Cummins who
have a global perspective confirm this “….elsewhere in the world
landfill is booming” adds Stone.
Trends in the UK are confirmed by David Burke at Clarke
Energy: “In the UK, landfill operators may have excess capacity on
their engines”
The gas type also affects the specification of the engine.
Wagner of GE’s Jenbacher gas engines explains: “There are
about 13 or 14 different types of engine, all differently optimised for
differing gases and customised for differing applications”
www.idgte.org
There was widespread agreement that the main contaminants
that condemn engine oil were hydrogen sulphide and
siloxanes. Without additives in the oil, the hydrogen sulphide
would make the oil acidic, attacking the engine, and abrasive
deposits from the siloxanes, would cause extreme wear,
particularly on the cylinder surface.
For engines operating on landfill gas, siloxanes, which form a
silicon dioxide deposit, are usually the worst offender.
Unchecked these deposits on the inside of the combustion
chamber would raise the operating temperature and increase
nitrogen oxide emissions.
For engines operating on gas from anaerobic digestion and
other biogases, hydrogen sulphide was usually the worst.
Hydrogen sulphide in biogas reduces oil life by creating acids
in the oil that must be neutralised by additives.
The key purposes of additives are:
Power Engineer September 2013 21
Article
n
Protection against corrosive substances such as acids
that form in the oil
n
Improving upper cylinder and head lubrication and
reduce valve recession.
n
Protection against harmful compounds that are
abrasive
Stone of Cummins sees the benefit of the additives to
combat these problems “It’s the secret of that additive package and
how it deals with the siloxanes and the hydrogen sulphide that is the
unique selling point.” This is endorsed by a leading independent
oil analysis laboratory, Spectro whose Global Power Systems
Advisor Don Wootton, comments “There is definite evidence that
in high silicon engines certain additive types can reduce the friction caused
by the silicon in the combustion chamber.”
Dean Clark, Global Segment Manager for Gas Engine Oil
Additives at Infineum agrees: “Regular oil testing and changes
work well but do not provide complete engine protection. For example
damage caused by Silicon dioxide deposits triggered by the impurities in
landfill gas drive frequent and expensive top-end engine rebuilds (costing
~$25,000-$40,000). We are working with our oil company partners to
further develop our additive packages so that they effectively suspend and
disperse these impurities thus reducing both the harmful effects and the
cost of maintenance.”
Holdsworth of Shell stresses that sewage gases, landfill gases
and other non-traditional gas types can cause problems to
engine operation due to their fluctuating quality over time
and from location to location: “For these sour gas applications,
there’s a tremendous variation in the amount of acidity and other
contaminants that comes through the gas and that can really impact the
oil drain intervals.”
Base oils
Gas Engine Oils are carefully formulated blends of base
stock that provides the lubrication, into which are blended
additives that customise the oil to the demands of the
application, unlike automotive oils, where multigrades are
more common. Most base oils fall into one of two categories:
those made by refining crude oil through solvent extraction
(Group I) and those made by a more sophisticated
refinement processes (Groups II and III).
Stone of Cummins sees the benefit of the additives to
combat these problems “It’s the secret of that additive package and
how it deals with the siloxanes and the hydrogen sulphide is their unique
selling point.”
Oil change intervals may vary from 150 hours in the case of
highly contaminated gases to 1,000 to 2,000 hours for clean
gases. To put this in context, 150 hours would be only 6 days
of operation and 1000 hours is 6 weeks.
Nadin-Salter explains that Chevron is striving to extend oil
drain intervals. “Some people want highly improved extended drain
periods, up to 8,000 hours and some in the landfill market are
content if they can achieve 1,000 hours, depending on the quality of
the gas. To combat the very aggressive gases in landfill technology,
our HDAX 6500 can extend drain periods by 50% or more in the
same application, and it is highly resistant to abrasive silicones
produced in landfill.”
But extended life oil is more expensive and some OEMs
believe that changing the oil more frequently is a financially
better solution.
Oil field test inspections
supplied by Oronite
There are split opinions prevalent in the market. There are
companies such as Q8OILS and Lukoil who are only using
Group I. Conversely, Petro Canada produce and use Group II
oils and Chevron has made a strategic decision to move all its
gas engine oils to Group II.
Woollams of Arevon confirms their on-going trial: “Currently,
the whole of our fleet is on Group I products but we’re currently on a
trial with Chevron on a Group II product, if it proves successful we’ll
move all our fleet onto the Group II because of the future long-term life
and availability.”
Poudou of Chevron Oronite believes the decision to switch
to Group II base oils to achieve high performance is correct
‘Mainly in gas engine oil it’s Group I, Group II category, some are
using Group III to make it a bit different...I would say that Group II
oils currently are the bulk of the high performance products in natural
gas engine oils.”
Peter Law, Operations Director at ENER-G is not
convinced about the premium placed on extended life oil:
“The cost of an oil that will do 10,000 hours is massive compared to
an oil that does 1,000 hours, so you may as well go for an oil which
will do you 1,000 hours... we do look at alternative ways of
extending the oil life but we then have to weigh the cost of the oil
versus the benefit it provides you.”
Damian Perez de Larraya, Technical Director, Power
Environmental Solutions at Dresser Rand has concerns
about cost effectiveness of Group II oils “We hold a different
view, group two oils are nice oils, but they may not be cost-effective.”
Shorter maintenance regimes are favoured by other O&M’s.
Woollams at Arevon Energy confirms: “We are actively
shortening the routine maintenance and overhaul regimes to combat the
aggressive nature of the gas.”
Hensen explains Q8Oil’s preference for Group I: “New
developments are more related to the thermal stability of Gas Engine
Oils, deposit control in combination with good dispersancy, so looking at
different components but also different base fluids, that’s really critical for
22 Power Engineer September 2013
www.idgte.org
Gas engines emerge from the shadows
the moment... we know that there are a lot of companies going to the
Group II base oils, we think that Q8 Oils produces one of the best
Group I base oils with very good oxidation stability and therefore very
suitable for gas engines of the newest generation.”
can lead to deposits which in turn change your compression ratio and
impinges on the running of the engine. We clearly state that with
natural gas the ash content must not exceed 0.5% and with biogas it has
to be in a range of 0.5% - 1.0%.”
Spectro believes that both additive and oil manufacturers are
moving towards the use of higher quality base stocks for
their new packages, giving advantages such as longer oil
drains, cleaner upper cylinders and reduced volatilisation.
Spectro believe in the importance of calendarisation, says
Wootton “I'm aware that there’s a desire to calendarise oil change to
synchronise with service intervals because, particularly with natural gas
engines where the oil change cycles are getting longer and longer,
synchronisation with the service cycle is a more appropriate emphasis
than simply the longevity of the oil change.”
Merbitz of Addinol also believes that the attributes of the oil
need to match the type of gas. “It is better if you can offer a tailor
made oil for the situation it is needed for. There is a huge difference
between the demands biogas makes on an engine and natural gas”
Some lubricant manufacturers like Addinol use highquality mineral and synthetic base oil components for
longer life products.
However the consensus from manufacturers is clear in that 5
or 6 different oil products were needed in an oil company’s
gas engine oil portfolio in order to meet all of the various
needs, including some with extended life.
The role of additives
Gas engine oil companies create their unique gas engine oil
formulations to suit different applications by blending their
selected additives into the chosen base oil. The additives must
be carefully blended together first before they can be mixed
into the oil. This process, to create the additive cocktail, is
complex and an additive mixture that works well in one base
oil will produce different results in another.
When a lubricant burns in the combustion chamber it will
form a carbon deposit and the additives form ash. All OEMs
will have specifications for the permissible amount of ash
and oil companies therefore determine how much ash their
oil contains (e.g., medium ash, low ash, etc.) and their
products are marketed in this fashion.
This point is confirmed by Woollams at Arevon Energy:
“The additives introduced to the oil to combat the siloxanes create ash
and ash causes problems within the engines”. David Burke at
Clarke Energy explains: “Ash is there primarily as one of the
safeguards against the acid increase, it adds some absorbency to
protect against acid build-up, so that would be the reason why you
would normally see a medium ash oil for a non-natural gas
application or a low ash oil for natural gas”. Lube Oil Ash is an
essential component for the effective ‘lubrication’ of the
gas engine exhaust valve seat & face.
Engine design is driving the development of gas engine oil
and hence the choice of additives and base oil, as explained
by Hensen of Q8Oils. “OEMs are pushing towards higher
efficiency engines, and this means that temperatures and pressures in the
engines will go up. Of course this is also important for the lubricant
because if pressure and temperature goes up we have to deal with more
thermally stable additives.”
Iban Bascones Oset, Power Plants and Cogeneration
Lubricants Expert for REPSOL in Spain explains that: “We add
detergent/dispersant additives for cleaning and to prevent the build-up of
engine deposits, antioxidants to prolong oil life, prevent corrosion/wear
to protect the engine, de-foamers etc.”
Additive packs versus components
Oil companies have a choice how they create their additive
mixtures; they can buy the additives either as pre-formulated
‘packs’ or as individual chemical components to make their
own additive packs in-house if they have the equipment and
expertise to do so. Whether produced in-house from
components or bought-in, the additive pack contains all of
the components to create the final gas engine oil when
blended into the chosen base oil.
Beckman at Oronite in California explains the difference: “An
individual piece of an additive package would be termed a component.
A particular type of detergent would be a component; a formulated
additive would contain all of the components necessary for the final
product to be blended from the customer’s base oils”
ExxonMobil (acknowledged by most to be the market leader)
is firmly in the components camp and sees it as a point of
difference with competitors. “Mobil Pegasus™ gas engine
MWM in Germany (acquired by CAT in 2011) clearly believes
in the effectiveness of additives but they specify the oil not
the additive itself. This is confirmed by Armin Roeseler, Head
of Product Line Management at MWM. “We do not specify
exactly which and how many additives have to be included in the engine
oil; this is done by the oil producers. However, our specialists work very
closely together with the oil manufacturers as they understand additives.”
Roeseler also explains the difference in approach between
natural gas and biogas “Generally, the issue is not to have as many
additives as possible, for instance with natural gas you should have only
the amount of additives that you really need in your oil, as too many
www.idgte.org
MWM TCG2020K 350 engine
Power Engineer September 2013 23
Article
oils are component based formulations, and therefore we do
not deploy additive packages like some of the competition.
This approach allows each additive to be specifically selected and
optimised to meet the required performance levels. Types of additives
which are selected include, detergents, dispersants, antioxidants, antiwear, metal passivators to name but a few” says Tellier.
Holdsworth of Shell is another who believes in monitoring
feedback “We get data from the customer locations and specifically
customers with operational issues and subsequently use a ‘demonstrated
value record’ to document what happened to the customer, what we’ve
done, and how that has solved their problem.”
Chevron is the only oil company that has an additives
company (Oronite) within the same group and it believes that
gives them an edge. “It’s that combination of knowing base oil
technology and additive technology and blending them all together and we
can quite confidently say we’re the only integrated lubricant
manufacturer” comments Nadin-Salter.
B2B relationships
Oil analysis
Spectro has an independent view of the market because it
conducts oil analysis for a number of oil companies and
O&Ms, claiming a majority share of the outsourced UK gas
engine oil analysis market and substantial penetration of the
EU market
Spectro is competing with those oil companies who now
provide their own analysis service. It still provides services to
many oil companies (who offer Spectro’s analysis to their
customers), but it has focused strongly on serving the O&Ms
and they actively strive to understand their needs. In this
respect, Wootton sees one of Spectro’s core strengths as the
quality of its technical staff.
Stewart Wilson, Manager, Centre of Excellence, at landfill
operator Infinis comments: “Spectro’s turnaround times coupled
with the accuracy of reporting are excellent. We rely heavily on their
analysis and would find the maintenance task much more challenging
without their input.”
David Burke of Clarke Energy confirms the importance of
oil analysis. “Our primary method for determining oil change frequency
is through lube oil analysis.”
Merbitz at Addinol in Germany is also an advocate of oil
analysis: “The application of our gas engine oils is accompanied by
substantiated technical support and regular oil analyses. Based on
analysis results and comprehensive experience, we determine the optimum
oil change intervals for each gas engine, individually and tailored to the
particular operating conditions. Therefore, operators do not only have
operating and maintenance costs under control, but monitor the state of
the plants and ensure their trouble-free operation.”
“If the customer is used to drain interval of 1,000 hours, we
do regular oil analysis every few hundred hours, an analysis of
1,000 hours, look at the oil quality but still drain the oil and
then the next oil drain we go to 1,100, look at the results, so
just stretch the oil life” says Joris van der List, Research
Scientist at Q8Oils
The relationships matrix below demonstrates where the main
marketing and technical dialogue takes place.
Groups they
generally
talk to
Company groups
O&Ms
OEMs
GEOs GEO As
O&Ms
OEMs
GEOs
GEO As
Good relationship
Limited relationship
No relationship
Relationship matrix
The main oil companies (GEOs) maintain relationships with
the O&Ms because they are their key customers, but also with
the OEM’s because they specify the range of oils that can be
used within the initial warranty period.
Additive companies (GEOAs) have virtually no relationship
with final users of the product, as the product is not added
separately (by OEMs); it’s always part of the gas engine oil
formulation. Therefore the gas engine oil companies are in
effect their customers.
“Generally, it is not recommended to add additives yourself as you
might damage the engine. So, all our additives for gas engines come
blended in the oil. It’s important not to underestimate the expertise
needed to marry oils and additives. We have 20 years’ experience in
doing that for the lubrication of gas engines, our overall experience
in the composition of lubricants reaches back as far as 1936”
adds Merbitz.
Hatherill of Finning also advises against end users blending
additives separately into the gas engine oil: “We would not
recommend anybody did that.”
Woollams of Arevon Energy is another advocate of oil
analysis: “We use condition based monitoring for the oil. It is sent away
weekly to laboratories.”
Bascones of REPSOL is just as strong on this point:
“REPSOL does not recommend introducing any other additives to the
oil or engine as this can alter the original formula of oils and threatens
the balance of the different components of the formula. If this occurs,
any guarantee, assurances or approvals are null and void.”
Packer of Cogenco also believes in regular oil monitoring:
“Every service and in-between services we take oil samples and have
them analysed.”
The universal industry view is that the additive formulations
are the intellectual property of the additive companies and, if
24 Power Engineer September 2013
www.idgte.org
Gas engines emerge from the shadows
they were to release that information into the market, they
would compromise their IP. Therefore they are only
effectively sold as an ‘ingredient’ to oil companies, not for
later use within the end customer supply chain.
This is confirmed by Merbitz at Addinol in Germany. “Every
company has their own secret mix of one or several additives with the
oil. The additives help to increase the base properties in the process and
obviously the lubrication. Our engine oil used for biogas and fermented
gases mainly possesses an outstanding neutralising capacity towards acid
components; it is a so-called high-ash product containing a special
additive package.”
Patterson of Petro-Canada sees it as a partnership “Ultimately,
it’s about a partnership with the additive company.”
“You are only able to make it if you have a good sales staff, good
service, good support and that the customer knows that’s someone taking
care of me”, explains Hensen of Q8Oils.
OEMs - gas engine power bands
Gas engines can be split into two major power bands, over 5
MW which operates almost entirely on natural gas and below
5 MW. The 500 KW to 3.5 MW bands account for 68% of
all new capacity and it is these power bands where there is the
highest use of contaminated gas.
as it will determine which renewable energies profit from subsidies and to
what levels.” says Wagner.
The gas engine still sits below the radar, without an SIC
product code and does not appear in official statistics. Yet
this long established technology has become one of the
most cost effective ways of generating electricity, with over
40GW of installed capacity (over 500kW) across EMEA
and growing.
The market is growing rapidly because it makes
compelling financial sense for investors and helps mitigate
the risk of electricity shortages. Still to come is the
unknown impact of shale gas development which may
secure further investment in distributed generation in
Europe, using gas engines.
All market sectors interviewed for this article stand to
benefit from the projected market growth but gas engine
oil companies in particular face the ‘perfect storm’. They
are secure in the knowledge that oil consumption (per se)
is increasing faster than the market, because of the rapid
growth of biogases in the mix which greatly increase oil
consumption. Gas engines have indeed proved to be ‘the
stalking horse’, silently booming again, some 140 years
after they were first invented. n
Acknowledgements
The Strategy Works acknowledges the support of the
following companies who co-operated in the research
programme for this article:
% of Global sales of gas engines
in MW by power band
The future
Most are optimistic about the future and the prospects for
gas. Thoralf Lemke Director of Marketing at MWM is
positive: “Gas has become, not just in the US, a lot cheaper and in
one or two years the US will become an exporter of gas. Then this lower
cost gas will be available outside the US as well. For the future we are
very optimistic and expect good growth opportunities”
Hermann Kling, Sales Gas Engines Export, of MAN
forecasts a 5% growth in gas engines sales in EMEA. “The
biogas share will grow depending on energy politics and the natural gas
share will become more important.” he adds.
Wagner of Jenbacher, believes that in Germany and Western
Europe biogas will increase further. Going forward,
government energy policies and, in particular the subsidies
and incentives, will have a profound effect on the market. “It
will be very important to watch the debate on energy diversity and safety
www.idgte.org
OEMs
O&Ms
Oil/lab
Additive
companies/
Oil
companies
Cummins
Arevon
Infineum
Addinol
Dresser Rand
Clarke Energy Oronite
Chevron
Jenbacher
Cogenco
ExxonMobil
MAN
Edina
Petro-Canada
Rolls Royce/
Finning
Q8 Oils
Spectro
Bergen Wärtsilä
Repsol
Shell
The Strategy Works
This article has been prepared by Michael Herson
and Bob Bell of London based The Strategy Works - a
strategic marketing consultancy specialising in
market sizing and original business to business insight
on a global basis.
Contact: 44 208 868 0212 or
mherson@thestrategyworks.com
Website: www.thestrategyworks.com
Power Engineer September 2013 25