• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Mitsubishi joins Siemens in combined bid for Alstom but loses to GE; deal not yet finalised

The competition to buy the energy division of Alstom came to a head last week, with GE’s bid being given preference by the French government, subject to agreement of final details. Earlier in the month, Mitsubishi had joined forces with Siemens as the two companies formalised a bid to rival GE’s, the latter being a straight €12.4 billion ($US 15.9 billion) bid for all of Alstom’s energy division. However, during discussions last week with the highest levels of the French government, both bidding parties modified their bids in an effort to win, Siemens/Mitsubishi raised their bidding offer to €8.2 billion ($US 11.2 billion) for smaller stakes in Alstom’s energy business (valuing Alstom as a whole higher than GE), and GE modifying their bid so that it was more along the lines of a joint venture, à la the Siemens/Mitsubishi bid. While government ministers were split about which bid should win, more favoured the final GE bid, under which GE will buy all of Alstom’s gas turbine business and half of Alstom’s nuclear business, while there may be joint ventures in other areas of Alstom’s overall energy business. Meanwhile, GE will sell its rail signalling business to Alstom, in an echo of Siemens’ original offer to make Alstom a ‘European rail champion’.  The French state will also become a 20% shareholder in Alstom as part of the deal. The finalisation of the deal is expected to occur over the coming weeks.

Major northern Iraq oil refinery forced to close amidst conflict

A siege by militants of the Islamic State of Iraq and the Levant (ISIS) group has forced the closure of the Baiji oil refinery in northern Iraq, with workers (including eight Germans working for Siemens) being airlifted to safety. While late last week the refinery had not been taken over by ISIS, and was being guarded by the Iraqi army, ISIS did launch an attack with the intention to fully capture the refinery and benefit financially from its petroleum stocks, as it has done with oil fields in eastern Syria, selling crude oil to middlemen in the region. ISIS has control over most of the northern export oil pipeline of Iraq, which goes to Turkey, and has not been functioning since March. Export forecasts for the country have been downgraded, though oil production remains above that before the US-led invasion in 2003. With the deteriorating situation in the country, there are also concerns that refineries in southern Iraq, run by companies such as BP, Gazprom Neft and Lukoil, will also be put under threat, though that possibility currently seems unlikely.

Global steel output rises to near record high

Global crude steel output rose in May to 141.2 million tonnes, just under the record of 141.7 set in March of this year, according to the World Steel Association. Each of three largest steel producing regions – China (around half of world production), the European Union (15 million tonnes) and North America (around 10 million tonnes) increased their output as demand for steel increased in Western countries. However, supply has increased more than demand, pushing steel prices lower, though steelmakers’ margins have been given some relief by falling iron ore prices. Chinese exports have increased to around 8 million tonnes, putting pressure on their international competitors, and with excess worldwide steelmaking capacity continuing, prices are expected to remain low or fall further.

China increasing industrial involvement in Bangladesh

The Financial Times has carried an article on China’s increasing industrial presence in Bangladesh. With the new government in India not as closely aligned to Bangladesh, China has moved quickly to step up ties, with an eye to outsourcing garment manufacturing to the country. The Bangladeshi Prime Minister, Sheikh Hasina, recently visited Beijing, with the Chinese media describing the two countries’ relationship as being at a historic high. Part of China’s involvement includes plans to build a 1,320 MW coal-fired power plant at Patuakhali, in the south of Bangladesh, which will help to move Bangladesh away from the expensive semi-mobile rental power plants which currently provide 27% of its electricity. (India and Japan are also involved in the development of large-scale coal-fired power plants in the country, which is described as the most vulnerable in the world to climate change). The China Harbour Engineering Company is also set to construct a deep-sea port at Sonadia in the country’s south, which will greatly improve shipping capabilities, particularly of fossil-fuel-carrying ships which currently must stop in India when travelling eastwards from the Middle East. This would reduce India’s political leverage over China.

US Department of Energy awards $US 100 million of grants for innovative energy research

The US Department of Energy has awarded $US 100 million (€74 million) in funding to 32 projects for innovative energy research, 10 of them being new projects and the others continuing. Eight projects were granted to the DoE’s National Laboratories, 23 to universities, and the remaining one to a not-for-profit organisation. There were 200 proposals. Amongst the research topics are gas separation, CO2 storage, biomass catalysis, materials development, solar photovoltaic technology, and batteries. The projects will receive between $US 2-4 million (€1.5-2.9 million) funding per year for four years, and were announced by the US Energy Secretary, Ernest Moniz, who said “we are mobilizing some of our most talented scientists to join forces and pursue the discoveries and breakthroughs that will lay the foundation for our nation’s energy future.”

US National Carbon Capture Centre receives Department of Energy funding

In further US Department of Energy funding news, it has been announced that the National Carbon Capture Centre in Wilsonville, Alabama will receive $US 150 million (€110 million) from the DoE, in addition to $US 37 million from Southern Company, for furthering carbon capture technology development. The goals are to demonstrate “integrated coal-based energy technology for plants with clean coal technology”, develop technology that can be scaled to commercial application, and improving economic efficiency of such technologies. Pre- and post-combustion technologies are included, while there is a focus on coal gasification also. The work is to be managed by the National Energy Technology Laboratory.

Ecotech Institute launches Power Utility Technician training program

The Ecotech Institute, based in Denver in the US state of Colorado, has launched a Power Utility Technician program, with the aim of training technicians in installation, maintenance and improvement of power generation facilities. It will complement the Institute’s seven other programs, giving students access to its boiler simulator and a combustion simulator, as well as a smart grid simulator, transformer and switch gear simulator, and a grid training module, which are to be added in the coming months. According to the program director, “The job prospect is bright and exciting because of an aging workforce and the ever evolving smart grid technology. An aging infrastructure requires young professionals to both maintain and expand the workforce.” The Institute was founded in 2010.

Foster-Wheeler wins SCR contract in Finland

Turun Seudun Energiantuotanto Oy, a Finnish utility, has awarded Foster Wheeler a contract to retrofit a selective catalytic reduction system for NOx reduction to Unit 3 of its Naantali power plant, near Turku in the south of Finland. Foster Wheeler is to design, supply, erect and commission the system, which will include ancillary equipment such as steel structures, an ammonia water storing and feeding system, flue gas ducts and new ID-fans. Unit 3 is a 125 MWe pulverised coal boiler, which works in conjunction with Unit 4, a combined heat-and-power unit. The necessity of the SCR system came about through the stricter emissions limits of the European Union’s Industrial Emissions Directive, and it is expected to be online in October 2015, three months before the directive comes into force.

Enel looks to sell 66% stake in Slovenske Elektrarne

Reuters has reported on Enel’s plans to sell its 66% stake in Slovenske Elektrarne as it attempts to reduce its level of indebtedness from €41.5 billion ($US 56.4 billion) to around €37 billion this year. Enel bought the stake in 2006 as the Slovenian government privatised its assets, but, like many European utilities, is facing financial pressure as electricity demand remains relatively low. Likely bidders for the stake include Russia’s Rosatom and the Czech Republic’s CEZ, while Chinese investors are also interested.