Alstom plans to be at the vanguard of the impending transformation of Middle East power networks.
Countries in the Middle East are on the verge of a sea change in the way they manage the supply and demand of electricity. With a rich history in the region, French powerhouse Alstom intends to be at the forefront of the transformation. Michel Augonnet, senior vice president, commercial solutions, Alstom Grid, talks to Utilities Middle East.
How important is the Middle East to Alstom?
We’ve been involved here since the late sixties and have really accelerated over the last 10 years very significantly in terms of presence. Firstly because of the growth of the market and secondly because we took the decision to develop our own engineering centres, both in substation engineering or in network management.
The work we are doing here is from our offices in Dubai or Saudi where we have our own engineering workforces. We have around 1,200 people working in this region including UAE, KSA, Oman, Qatar, Kuwait, Bahrain, Iraq, Lebanon, Jordan, Pakistan, and Yemen.
In terms of volume this is the biggest of the seven regions for us - it’s around 20% of our volume. You have a lot of turnkey GIS substations that we are doing in Dubai or in Saudi Arabia. But we also work in Iraq where there are significant volumes now.
We’re also doing network management schemes, control centres, and because we sold equipment for quite a few years we have a very large installed base and therefore it also helps us develop our service activity.
Saudi Arabia is probably the market with the greatest volume in terms of investment and growth. The UAE invested earlier but we completed two significant substations here in December for Transco. We’re talking of jobs with an estimated value of EUR 130mn ($148mn), so it’s significant numbers in terms of execution.
We did quite a lot of projects in Qatar when Qatar was investing a lot, so we have, let’s say, a presence that also varies depending on which of the countries in the Gulf is investing.
What stage is smart grid development at in the Middle East?
There’s a very strong emphasis put on smart grids, typically by DEWA. We have built a smart grid centre in Dubai and we are working with DEWA to propose solutions for the market.
But it’s true that it has not been fully implemented here yet, firstly because smart grid development goes hand in hand with renewable development because it helps to optimise loading and consumption. So far there’s been more opportunity to deploy smart grid systems in places like Denmark, where we monitor windfarms and are able to predict the wind and adapt the load in a fairly flexible way.
Renewables create chaos on the network which is an opportunity for companies like us because when you have decentralised generation it’s difficult to manage. In the Middle East you will have solar which is a great opportunity because the complexity will need to be managed by smart grids.
Another example of smart grid use is what we’ve done in the east of the United States. We have a system that’s offset the need to install 10,000MW of power generation – equivalent to 10 nuclear power plants - just by taking people offline and paying them for accepting to be withdrawn from the network or to reduce consumption. You have a contract which enables you either to switch off or reduce load so that you can have a benefit.
These are practical applications where we can make very significant generation savings both in terms of capital cost and operations cost. Here it will happen the same way. So for example you could either decide to do away with air-conditioning for 10 minutes every hour. The temperature will go up but you will catch up afterwards. The question is, who is going to decide? Is it you or the utility? And that debate can last for a few years.
But if you shave peak demand you can avoid having to build a new combined cycle power plant. The basic concept is that you give a tariff incentive to customers to use less power during peak load hours, for example by reducing their bill by 50% during that period.
Smart grids are basically about optimising supply and demand, because storage technology is very limited so you are trying to adjust these two values. We are very sophisticated at monitoring generation but the demand/consumer side is a big mess. You are trying to align something that is well organised with something that is chaotic and smart grids allow you to do that.
Has Alstom developed any innovations specifically for this region?
We have launched a gas called g3 for use in Gas Insulated Switchgear (GIS) pipes. It is an alternative to SF6, with 98% less impact on global warming. In order to reduce the size of the switchgear, you have this gas under pressure between the conductor and the outer casing, which enables you to have a distance of just 30cm insulation at 400 kV, compared to a few metres if you were in the air.
So it enables you to dramatically reduce the size of the equipment and the footprint of the substation. But also, because it’s enclosed you don’t have any weather impact on the conductor, which can be useful in regions where you have salt and sand. So in this part of the world our customers tend to prefer GIS in order to have better protection from the weather.
On top of that these pipes are very often inside the building. What we’ve launched along with 3M is a gas (g3) that will replace SF6 in the long run and not be a source of greenhouse gas emissions. The gas is destroyed by the sun within 16-20 days if it’s released into the atmosphere, whereas it takes 3,500 years for SF6.
The only drawback is that it can become a liquid at reasonably low temperatures but in this region it’s very warm so we don’t have that problem. That’s a very meaningful evolution and probably our biggest innovation.
Other major innovations are in the field of smart grids where we are developing software or acquiring technology in order to move forward in terms of demand response, wide area monitoring, etc. These are functions which are required if you want to operate a network closer to its limits.
And the third area in which we invest in is in the field of cost reduction, trying to reduce the size of our products for the same function to be more competitive. Typically in the past for a 400 kV gas insulated breaker, you needed to put two breakers in series but now we can do the same with one breaker which means a significant saving in terms of cost.