Partnerships key to power industry progress

13 February 2012 (Last Updated February 13th, 2012 18:30)

With the International Power Summit (IPS 2012) just around the corner, industry leaders are gearing up for a busy year. In the run up to the event Rowan Watt-Pringle casts his eye over some of the trends likely to feature heavily, including the rise of emerging markets in Asia, burgeoning renewable energy markets, the fracking debate and the ongoing central importance of oil.

Partnerships key to power industry progress

Industry trends

"At IPS 2012, Ilkka Venäläinen, sales manager at Finnish company Bioenergy Systems, will pinpoint energy challenges and solutions."

The controversial practice of 'fracking', or hydraulic fracturing, has caused outrage in many sectors due to its severe environmental impact, but it looks like it's here to stay, with companies relying on speedy innovation to allow them to adopt more environmentally-responsible measures to fit into a strict regulatory framework.

During 2011, industry observers noted that utilities were placing increased demands on their supply chain organisations to lower costs, improve supplier performance and improve market expertise.

The global expansion of utility companies and the on-going development and redevelopment of power plants (particularly in China but also across Asia and Eastern Europe) has led to a fertile climate for the development of international partnerships, with both utilities and suppliers having to develop new market expertise in areas like commodity brokerage, while simultaneously delivering supply chain operational savings.

Partnering for a better future

This has brought the establishment of new partnerships to the fore, while a backdrop of ever-increasing global expansion has opened up new areas for potential development.

Bringing together buyers and suppliers from traditionally strong Western and American markets with members of emerging markets such as Central and Eastern Europe, India, China and South East Asia, this year's summit is perfectly placed to serve as a highly effective platform for levering industry partnerships at both a technical and strategic level.

Expert analyses abound at IPS 2012

Following on from the success of last year's summit, IPS 2012 - which will be held from the 22 to the 24 February in the renowned Spanish city of Madrid - boasts some distinguished keynote speakers, who will analyse a range of topics pertinent to the international power sector going forward.

"The controversial practice of 'fracking', or hydraulic fracturing, caused outrage in many sectors due to its severe environmental impact."

One of these speakers will be the European Commission director-general, Philip Lowe, who will evaluate the competitiveness of the largely coal-based Central and Eastern Europe power markets in the context of the European Union's (EU's) current energy and climate change policy.

Frontier Economics director Dr. Fernando Barrera, meanwhile, will examine capacity markets and whether the next steps taken by the EU will be sufficient enough to deliver an integrated energy and climate strategy to determine future electricity generation outputs and capacities in Europe.

It is also important to note that emerging markets have begun to realise the potential for low-risk energy supply in the West, while ongoing investment continues to narrow the distance between traditional and emerging markets.

With this in mind, Ravi Krishnan, managing director at power industry-focused law firm Krishnan & Associates, will tackle the increasing role being played by Asian countries in his presentation on new energy challenges, solutions and predictions in India and the rest of Asia.

Renewable energy

No discussion of the power industry would be complete without including the increasing importance of renewables as a way of filling the gap that will inevitably be left by dwindling fossil fuels.

At IPS 2012, Ilkka Venäläinen, sales manager at Finnish company Bioenergy Systems, will pinpoint new energy challenges and solutions, including the use of biomass and gasification.

"Lately, the emphasis of new projects has been on developing CHP and high efficiency plants," Venäläinen said previously, adding that plans for the utilisation of biomass for biodiesel, synthetic natural gas, gasoline and ethanol production are becoming increasingly concrete.

Energy efficiency

"Advanced Power MD Michael Steiner will speak on new builds in Europe, analysing whether or not markets are still providing the right investment signals and if not, what regulation is required to alter this.

In June 2011, the EC proposed an Energy Efficiency Directive, bringing forward measures to step-up efforts of member states to use energy more efficiently at all stages of the energy chain, from the conversion of energy and its distribution to its final consumption.

The overall aim of the EC's energy related directives is to guide member states to reduce emissions and fossil fuel dependency in a cost-effective manner. Because of this, a cornerstone of the upcoming directive is the development of local district heating plans based on combined heat and power (CHP).

This effectively means local authorities will need to develop these heating plans, while power companies will need to install new CHP power capacity in the near vicinity of heat demand points.

With this in mind, Ramboll Energy's Mogens Kjær Petersen will look at new opportunities presented to European power companies by this legislation, based on 35 years of Danish experience in this field.

Petersen will highlight the opportunities provided by CHP production in a future power market with a high share of fluctuating renewable power production from wind energy, based on results achieved since the first Danish Electricity Supply Act, adopted in 1976.

The coordinated energy efficiency planning of CHP and heat supply in Denmark has achieved remarkable results.

As Petersen noted: "The consumption of fossil fuels for the heating sector has been reduced to 40% in 30 years, in the most cost-effective way for the society of Denmark. Furthermore, total Danish energy consumption has been almost constant despite annual economic growth of 2-3%."

Importance of public acceptance

Maria João Duarte, policy officer for the European Power Plant Suppliers Association (EPPSA), asks the question: "How can public acceptance influence the development of future European energy systems?"

Duarte will examine various case studies and drivers of public acceptance, as well as looking at the activities being conducted at an EU level to support both effective permitting and public acceptance.

Investment and new-builds

Finally, Advanced Power MD Michael Steiner will speak on new builds in Europe, analysing whether or not markets are still providing the right investment signals and if not, what regulation is required to alter this.

This will be vital as the global power industry moves forward in 2012. Using the example of Europe, Steiner will suggest regulatory approaches that could eventually be used to ensure targeted new build investments and cement the stability of power generation in the region.