With a total delivery of over 250 power plants and 3500MW of generation capacity, Wartsila India has had a ringside view of the evolving power scenario in India. The Finnish multinational is now making a strong case for its gas based plants, to balance out demand surges, as renewable energy plays a bigger role. Not just that, Wartsila has its own Hybrid solution with storage now, as the firm adapts to the new opportunities. Wartsila India President and Managing Director Neeraj Sharma shares their plans for the future, in this interview with Group Editor Prasanna Singh. Here’re the excerpts from that exclusive interview published in the Saur Energy International Magazine’s June 2019 edition:
Q. Tell us about the latest at Wärtsilä India.
Wärtsilä is a technology company catering to the marine and energy markets. We are already one of the few multinational energy companies who have a factory locally. We have astate-of-the art factory at Khopoli in Maharashtra. We will belooking at how to utilize the factory for enhancing our business to Make in India and make Wärtsilä more competitive. We are also looking at how we can indigenise more, without dropping the quality of our products. That is apart of the strategy. Another strategy is that if the renewable integration happens, and gas engines play a role in creating the system flexibility, it will open up a big opportunity for us. We are very committed to the India market. Wärtsilä has been in India from the early 1980s, since then we have contributed immensely to the Power segment of the country. We have 30 years of experience in providing complete lifecycle power solutions for the Indian Marine & Energy markets. As a leading solutions provider of rapid and flexible power plants for Utilities, Industry and IPPs, the Wärtsilä name is now synonymous with decentralised energy market.
Wärtsilä has more than 750 employees in India (as of April 2019) and has delivered around 250 power plants to India with total output of over 3500 MW. Wärtsilä takes care of the operation and management on behalf of its customers in over 35 power plants (including Boiler Turbine Generation stations) with a total output of over 1300 MW in India.
In the Marine market, Wärtsilä has delivered engines to vessels belonging to the Navy, Coast Guard, Port Trusts, Merchant Shipping, floating cranes and offshore rigs.
Our factory at Khopoli manufactures auxiliaries/pipe modules and reconditions and upgrades engines, ship propellers and components. It also integrates High speed DG (Diesel Generator) sets for the marine requirements.
Q. As the world transitions to a higher share for renewables, how is Wärtsilä adapting? How’s the feedback been on your Hybrid Solar PV Storage solutions?
It is heartening that India has achieved a certain degree of capacity adequacy at an aggregate level. There is a l s o a visible, determined thrust on meeting the high targets on generation from Renewable Energy sources. However, there are signs, on the horizon, of serious challenges ahead on managing the grid dynamics. Reliable grid management will require system operators to be equipped with a portfolio of supply-and-demandside options. Apart from measures such as widening the transmission network to ensure geographical distribution and demand response management, flexible generation options must be encouraged. Hydro plants are technically the best-suited, but are constrained by site considerations, seasonality and a competing demand from irrigation needs.
To meet this demand for flexible generation, instant-start, fast ramping technologies such as battery storage and gas-powered plants based on IC Engines are growing in popularity in many countries, especially in the context of RE-balancing. And they are proving to be invaluable tools for the system operator to respond rapidly to any contingency. The Indian grid with one of the largest RE content in the world will benefit from such solutions.
We have introduced a new hybrid solar PV and storage solution. It integrates solar PV generation and storage to deliver a true ‘renewables as baseload’ solution that is not only climate-friendly, increases resilience and efficiencies but also can be supported by a power producer’s existing grid infrastructure. As our global energy ecosystem evolves, Hybrid solar represents a ground-breaking approach to electricity production and power generation. Recently, Wärtsilä delivered a 15MW solar PV hybrid power plant – the largest in the world – to Essakane Solar SAS in Burkina Faso, which operates with 55MW Wärtsilä thermal power plant.
Q. India has close to 60GW of captive power capacity, most of it diesel powered. Do you see an opportunity here for the country to convert to renewables? How could that be achieved?
We can see a strong drive for renewables in the energy market, especially solar and wind power. That is predominantly because of the decreasing costs of these technologies. We are welcoming that. We think the energy systems of the world will change dramatically. That is a big change because the energy system will be dependent on the availability of the sun. That puts totally different requirements on other parts of the energy system. This also means that there has to be a balance for the variations in solar and wind.
With renewable energy coming in and coexisting with conventional power generation, you have to be able to integrate renewables with the system. Earlier, when renewable energy’s contribution was small, it could easily be managed. But the government’s targets for wind and solar are of a different order altogether now. Lower prices have also changed the landscape with the price of solar falling by some 80 per cent.
The challenge with renewable energy is the big variations in supply that need to be balanced in real time by the rest of the grid. When solar or wind power peaks, conventional power has to be backed down to absorb it. Integration is a huge challenge because our baseload plants don’t have the flexibility to accommodate these peaks and troughs. Also, since the machinery is not designed to absorb these variations, it causes stresses.
In some markets, renewables are competing neck and neck with traditional power generation and lowering the entry barriers for hybrid solutions. Fast-starting, internal combustion engines, integrated with energy storage, offer considerable potential for fuel and cost savings. With these innovative solutions, existing and future customers will be able to utilise energy storage technology together with traditional engine-based power generation
Q. While generation is one aspect of energy use, energy efficiencies are equally important today. How have Wärtsilä products evolved over the years on this parameter? Do you see a strong market for Greensmith here?
Wärtsilä was established in 1834. For over 180 years we have been at the frontier of engineering innovation. This vision and ingenuity means that we deliver ever smarter solutions that keep our customers one step ahead.The energy landscape is in transition towards more flexible and sustainable energy systems. We envision a 100% renewable energy future.
Wärtsilä is leading the transition as the Energy System Integrator – we understand, design, build and serve optimal power systems for future generations.
Wärtsilä recently acquired Greensmith Energy Management Systems Inc., a market leader in grid-scale energy storage software and integrated solutions. This acquisition has enabled us to rapidly expand our footprint in the energy storage market globally and position us as a premier energy system integrator.
We want to grow significantly in the energy storage business and as a systems integrator. Wärtsilä customers will have access to world-class integration platform (GEMS) capability in power generation and energy storage. This in turn will enable our customers to operate their business in a more efficient and profitable way. Energy storage and EMS also enable power generation to reduce emissions.
Q. Energy storage is increasingly becoming a decisive cost in a cost conscious market like India. What’s your view on the price trends, when it comes to storage costs between now and say, 2025?
Energy storage will become an important part of every power system and Wärtsilä’s topmost priority is exactly this. Wärtsilä energy storage solutions significantly improves efficiency by increasing back up capacity and creating new opportunities in electricity markets.
Hybrid power plant and energy storage solutions will utilize storage technology alongside traditional engine-based power generation. Adding energy storage technology to our existing engine based power plants enables our customers to have instant power while saving fuel, maintenance costs and reducing emissions.
The urge of Government to get Electric Vehicles on road is leading to the fall in the battery costs. With the clean energy push in the power sector, the use of RE has also increased which is also contributing to the reduction of costs. With the upsurge in technology, there are many efficient and smaller batteries available.
Q. What are your expectations from India, and your own firm, here, for the next three and five years, respectively? What’s that one policy change or otherwise that could really make growth faster for you?
Renewables are challenging thermal. Thegovernment has ambitious targets for renewables. Onthermal, the plants that are in the pipeline, should expectedlycome up till 2022. Coal usage will become less in India intimes to come but it will remain as solar and wind cannot beavailable all the time. Coal will continue to be the baseloadfor some time to come. At the same time, I will not besurprised if in years to come, renewables too becomebaseload. It is important to understand the means to maximize the use of renewable energy in the system using flexible generation, without compromising system reliability.
More focus is required on renewables, a clear policy on batteries for RE with the exception for solar energy. Earlier, there was a lack of power, but now that India has achieved near adequacy, there is a need to focus on its quality. Batteries can be used in the transmitter for efficient distribution in order to achieve grid stability. They can also be used in another scenario, where say, there is no way to absorb power. Hence, battery manufacturing will definitely play a crucial role going ahead.
We are also in discussion with various States, utilities and regulators regarding the role that renewables can play in meeting future electricity needs and strategies to efficiently integrate renewables in the grid. The industry should holistically look at the net cost of the system and not just at the variable cost.
Q. Does the company have other partners in India for its energy solutions?
Wärtsilä partners with its business stakeholders on a case-tocase and project basis.
Q. Your view on the big policy moves that could support the power sector in general, and the renewables sector in particular going forward ? Does he believe India will reach its 175 GW target for renewable energy by 2022?
India has ambitious targets to have 275 GW of renewable energy installed by 2027. To meet its mid-term target of 175 GW of installations by 2022, the energy ministry plans to accelerate renewable energy reverse auction tenders to up to 30 GW annually for solar and 10 GW annually for wind. It is widely expected that the ambitious target for 2022 would be missed by around 55 GW.
Although there have been Government’s attempts to maximise the contribution of green energy to overall generation, several issues vital to the sector’s growth still remain unresolved. There have been challenges on policy and operational fronts as also issues like low tariff expectations,poor designing of tenders, mandatory BIS standards, amongst others.
Due to over-reliance on coal plants which have a rather inflexible operating profile, the variability of RE generation would need to be tackled either by curtailing it or absorbing it by cycling down coal plants to a technical minimum level with low efficiency. Coal plants are already operating at a poor load factor of 51% and RE addition will only worsen the problem.
A report released by the Ministry of Power on ‘RE integration” in April acknowledges these issues and has, among other things, emphasized the need for more flexible generation in the system. In this context, ‘flexibility’ means a plant’s ability to start and ramp up to desired load within a few minutes (when RE generation falls), stop or reduce generation instantly (to fully absorb RE generation when it picks up), start/stop any number of times without a maintenance penalty and operate efficiently at all loads.