Following the sun
BlueSky Process Solutions are looking to the solar industry
BlueSky Process Solutions are looking to the solar industry for exponential revenue growth. Product development vice president Zvonko Milanovic talks about the market potential for his products.
The Middle East has long been a place where companies supplying the energy industry come in search of growth, and BlueSky Process Solutions makes no exception here.
But the Canadian firm has diversified its product range to supply solar, nuclear and geothermal installations, enabling it to benefit from the trend towards alternative energy that is gaining momentum in the region.
The company was established in 2000, selling high pressure piping components for enhanced oil recovery (EOR). Its ball joints were designed to cater for expanding pipes used for pumping steam into the ground, which in turn pushes heavy oil towards the surface.
Steam pipes used in EOR can expand lengthwise by up to a metre, necessitating a flexible system to reduce pipe stress. As BlueSky came to realise, a similar mechanism is needed in concentrated solar power (CSP) parabolic trough installations.
The CSP troughs create energy by reflecting sunlight onto a tube running down its middle, heating up the liquid inside, which is then used to power a steam turbine.
The troughs move to follow the sunlight during the course of the day, and the holding mechanism thus needs to cater for this movement by allowing for a great amount of flexibility.
The need for flexibility is increased by the fact that, like EOR piping, CSP tubes expand as they are heated up. These similarities made it easy for BlueSky to develop its SolarBall ball joint.
The company is looking to strike it big in alternative energies, says Zvonko Milanovic, vice president of product development: “We expect solar become 50-60 percent of our business.”
This is partially a function of size. As a young company, Blue Sky is still expanding rapidly, with an annual growth target of 25 percent. In addition, the size modern CSP installations are such that winning a contract to equip them would equal a significant jump in revenue.
“One solar installation is twice our annual sales right now. Its a huge potential,” says Milanovic.
Another reason why the vice president believes the company’s solar ambitions will be met with success is the fact that renewable energy is some way off from becoming as cheap as fossil fuel based power generation. Technological advances that improve performance and reduce costs will therefore be lapped up by sector.
“The only reason solar viable is because of all the government money that has been put into it. Its really not competitive compared to the conventional fossil fuels. So our job as suppliers is to reduce the costs and better its performance, to make it more viable,” he says.
Other than falling production costs for renewables, rising prices for oil and gas will make alternative energies more cost efficient. Milanovic points to the steady upwards trajectory of the oil price over the course of the last year.
“Oil prices are going up, but that is also good for solar industry, as it makes solar more feasible,” he says.
Rising oil prices have also been good news for BlueSky. On the back of increased activity in oil extraction, the company is expecting a year-on-year (yoy) increase of around 80 percent.
Another area in which the company is hoping to expand into is nuclear. Last year, it gained its nuclear certification in its native Canada, and BlueSky is producing a BlueLock clamp collector that can be used in reactors. The company is now exploring the market potential in other parts of the world, including the Middle East.
Milanovic is not getting excited just yet about getting orders from nuclear projects in the region.
“Its not going to happen very quickly, but that not something we are nervous about. Solar energy is a lot quicker. There is a lot going on, and people are really looking at new plants.”
So solar is set to become an important aspect for the company’s drive to expand in the Middle East. BlueSky has been marketing the region in the past two years, with its products being distributed by Stevens Supply International. It has won an EOR order in Oman, and has done business in Egypt, but so far only a small amount of the company’s revenue is generated here.
The situation is likely to improve, says Milanovic: “I expect to have about 10 percent of our business here in five years. That’s not unrealistically optimistic.”