Switchgear suppliers are upbeat about business past and present.
Switchgear suppliers are upbeat about business past and present, and are looking to adjust their products to meet the demands of a smarter grid.
Manufacturers of switchgear, an important component of substations, have been richly rewarded by the GCC’s drive to expand their transmission and distribution (T&D) capacities within their boundaries and across the region.
The most ambitious expression of this drive is the GCC Interconnection Grid, which will fully link up the GCC member states by 2011.
Built to tackle the power outages that cause a sweat in several of the members states in the summer months, and with the prospect of an energy trading market in mind, the grid has been a good source of business.
“We’re seeing double digit increases in spending across the region,” says Mohammed Masri, division manager of power products, Middle East & Africa, at ABB.
“What is most interesting is the cooperation that we’re seeing across countries, such as with the GCC Interconnection Grid. This collaborative effort will provide results much more quickly to business and residents who are still suffering from power cuts in the summer.”
ABB supplied six substations for phase I of the interconnection grid that linked up Saudi Arabia, Qatar, Bahrain, Kuwait and the UAE,
Areva T&D, recently acquired by Alstom and Schneider Electric, have also been active with this project, supplying the Middle East’s first high voltage direct current (HVDC) substation, as well as an integrated grid automation solution in Saudi Arabia.
“We are definitely looking at the NME region in general and GCC particularly as a growing market for our company,” says Walter Dussaucy, communications director at Alstom Grid, who took over the transmission-oriented Middle Eastern Areva T&D business.
With all countries investing heavily, it us merely due to its size that Saudi Arabia outstrips its neighbours in terms in terms of the scale of its T&D infrastructure build up.
The Kingdom has pledged to invest a staggering US$80 billion into its electricity sector over the next decade.
To the relief of switchgear suppliers, the gallop towards a comprehensive power infrastructure has hardly been slowed by the recession.
“We’ve noticed that governments in the region have a long term view when it comes to investing in the energy sector. They’re looking twenty or thirty years down the line,” says Masri.
Dussaucy notes that while the recession has not dented business, there has been a shift in the nature of the projects involving switchgear.
“The business outlook, the basics and our assessments show that the market is the same versus the same period before the downturn. We have observed a decline in very huge projects being compensated by an increase of recurrent business.”
Utilities companies did benefit from the increased competition among switchgear providers that resulted from the crisis, as these sought to win business by cutting prices. “We have observed more aggressive competition leading to a clear decrease in prices,” says Dussaucy.
While the region’s power industry seems pretty oblivious to the global recession, key trends in the T&D sector have not passed it by unnoticed.
Smart grids, which enable a real-time monitoring of the energy flow, accurate reading of demand levels and the coming online of renewable sources, are coming to the Middle East. These developments are placing additional demands on switchgear equipment.
“The smart grid will be self-monitoring, minimizing the environmental footprint and provide real-time information to help mange distribution and power generation.
All equipments and solutions needs to take the above facts into consideration when it comes to research and development, particularly the need to phase in renewable energy sources which are unpredictable,” says Masri.
“The growing importance of smart grid objectives have put a strong emphasis on the control of losses, enhanced efficiency, while there is an unprecedented consideration of the ecological footprint of our solutions.
These are evaluated through a thorough life cycle assessment (LCA), which analyses the overall environmental impact of our products from cradle to grave,” says Dussaucy.
Gas-insulated switchgear (GIS) is one aspect where LCAs can be used to minimise the carbon footprint. While GIS is a favoured product in the region due to its robustness, its the use of SF6 gas also raises environmental concerns.
LCA provide a wealth of indicators and a starting point for the development of GIS able to operate with the lowest possible output levels of SF6 gas, manufacturers say.
Another example of how renewables are changing switchgear technology is ABB’s SafeWind switchgear. SafeWind is the slimmest medium-voltage switchgear on the market and small enough to fit through the narrow doorway of the turbine tower, says Masri.
“We’ve had to design such solutions to meet the physical requirements of today’s renewables,” he adds.
Siemens is another company looking to bring smaller designs to the market. “The trend goes towards denser switchgears with even higher ratings and minimized life cycle costs,” says Wolfgang Braun, general manager at Siemens Energy T&D.
“Especially in growing cities, space means money. So we put a lot of effort into the development of space saving designs that offer both a compact footprint for the substation and cost reductions.”
Utility providers are also looking to have monitoring systems built into the existing power network to simplify maintenance and trouble shooting. Demand for such sophisticated management of networks places additional requirements on switchgear equipment.
The R&D departments of switchgear providers have not been idle. “We’ve built protection and control intelligent electronic devices (IEDs) into our switchgear solutions,” explains Masri.
“By doing so, we have enabled communication between the protection and control IEDs of distribution switchgear with the substation control room. Until just a short time ago, this could only be achieved by adding various different specific components to the normal protection relays.”
Every company is working to push the boundaries. “Surprisingly, switchgear technology has not reached its operational limits and there is still room for technological breakthroughs. We are continuously investing R&D efforts to minimize the circuit breaker energy to break higher and higher currents for example,” says Dussaucy.
As new technologies and concepts start shaping the T&D industry, switchgear providers work out ways to adapt the equipment. “The introduction of power electronics contributed to the revision of the concept of a switchgear, and to open new paths of application.”
As consequence of longer distances electricity has to travel though the GCC interconnection grid, and higher load demands stemming from increased consumption, new grids tend to be built to accommodate higher voltage levels.
Utilities benefit from increasing the transmission voltage as it is more cost effective, because infrastructure investments are reduced proportionately to the amount of power transmitted.
Higher voltages are thus another factor that companies providing switchgear to utilities in the GCC have to take into account, says Dussaucy: “Load demand growth, together with the expansion of grids to meet the national development plan of many countries result in higher performance requirements of the switchgear that providers must develop.”
The future is bright
The Middle Eastern market has so far provided companies with plenty of business opportunities, and more than a few challenges.
But what are the projections and plans for the future? Dussaucy believes that Alstom’s newest acquisition will continue strongly under the new banner by expanding into new markets.
“The Middle East last year generated approximately 10 percent of the overall business for Areva T&D. We are planning to re-enhance our presence in several countries among which Iraq remains key for the future.” Masri is similarly ubbeat.
“We’re enjoying the work, even though many companies are facing challenges in terms of manpower due to the increased workload. We believe that for the next ten to fifteen years the energy sector will continually increase investments in power generation, and network expansion and upgrading,” he says.