Invensys are into key areas of power generation all around the world. Specifically within Russia, what are your key focus areas?
Paul DaCruz: Historically, our footprint in Russia has always been the oil and gas market. We’ve been a very big player in providing automation solutions for the oil and gas sector. However, our big strategic area of development is the power sector.
The grid network in Russia is ageing and in need of modernization. What products & technology does Invensys offer to help upgrade the system and achieve higher efficiency?
Paul DaCruz: Well, we have some very interesting solutions from generation and transmission to distribution and metering. We also offer solutions to upgrade power plants, upgrade networks and also to build new, more efficient assets. But you can’t just look at new assets because these are only adding to the existing systems, and you need to have an overall view of the general situation.
An interesting solution we provide is one that enables all electrical systems to communicate with each other in real time. From a (power) generator point of view, this means knowing what the consumption is going to be. From the consumers point of view this means knowing in advance what the potential prices are going to be so you can better manage your consumption.
One of the main focus areas in the Russian Power sector moving forward is safety and reliability of supply. What is Invensys Operations Management doing to help their customers in this area?
Paul DaCruz: One thing that we’re focusing on as a company is to provide what we call control and safety solutions. This includes protection of the assets, protection of the environment and protection of the people. We don’t consider this to be just a technology offering, but more of a philosophy; we are however totally committed to the technology side as well. In fact our control and safety systems are considered the best in the industry. They probably are the most widely used systems for nuclear power stations around the world. In Russia, I reckon that one of the major problems is not just the lack of Control and Safety systems that are deployed, but also the necessity to develop best practices that help in the overall culture of safety.
We also provide systems that can help companies simulate what-if scenarios: thus showing potential outcomes based on the practices that have been implemented.
With the solutions we provide we not only try to offer our clients the best control and safety technology but we also aim at giving them the tools to develop a safety culture within their working environment.
Focussing on the local market, are there any Russian companies that you are competing and/or working with?
Paul DaCruz: Russia is a very complicated market because there are many stakeholders, and the code system is quite complex. But what we tend to do is to build on local expertise. We develop local partnerships; for example we are currently collaborating with INVEL, which has turned out to be very beneficial for us so far. It has given us the opportunity to liaise with different local companies we would like to work with.
On the other hand, the market is well covered by our multinational competitors. Russia is a very dynamic market thanks to the fast growing economy, and for sure the infrastructure will have to be modernised.
You mentioned your partnership with INVEL – what specific benefits does this bring to yourselves and them, and the market as whole?
Paul DaCruz: INVEL’s Executives and stakeholders enlist some of the key power companies in Russia. Its main goal is to bring innovation to the market place both in Russia and abroad. Invensys can help them by providing the innovative solutions they’re looking for, meaning it definitely is a win-win situation for all involved
Significant investment is needed in this sector to achieve goals set out by the Government. How do you see the market moving forward over the next decade?
Paul DaCruz: All the projections today show that by far the biggest energy investments is going to be in the electricity sector.
The electricity sector corresponds to about 50% of total capital investment in Russia and this is more or less equally spread between electricity generation and electricity transmission and distribution. So I think if I recall correctly the International Energy Agency forecasts $26 trillion of total investment up until 2030, with the power sector representing $13 trillion. I know you guys publish ROGTEC (Russian Oil & Gas Technology) Magazine, but I have to say that investment in the Power sector significantly trumps that of oil and gas! Obviously these investments are not just going to be new assets, they’re going to be put into much needed upgrade and modernisation projects. When you have such old assets there is a real necessity to shift from maintaining the asset to potentially thinking about upgrading or replacing it. Currently in Russia there are many modernization projects taking place for this reason.
One of the major challenges faced in the electricity market in Russia is that the largest consumer of electricity is the “loss”. What can Invensys do to stop this worrying trend?
Paul DaCruz: Operators can sometimes fall into a comfort zone in terms of the asset at their disposal and the efficiency and generation they are achieving. The “comfort zone” is going to happen whoever the operator is, no matter what their ability or capability. Now, if you put some Intelligence into the control of this asset using advanced process control, predictable control, neuron networks and other such clever stuff you can achieve large cost savings and huge increases in efficiency and power generation. The problems an operator has to face are quite complex, so by trying to model the optimum way of operating the assets, we can generate some fantastic benefits. As an example, we achieved improved efficiencies of about 2% on a boiler for a coal fired power station, which is significant. The problem in the boiler was an excess of oxygen; the operator was adding more oxygen to increase combustion, but this excess of oxygen led to huge inefficiencies. So, if you reduce this excess of oxygen you increase the efficiency immediately. And in power generation, increasing efficiency equals a reduction in emissions.
In Russia specifically, do you target the conventional or nuclear sector, or do you look at the Power Generation sector as a whole?
Paul DaCruz: We are currently enabling 20% of world power generation through our automation and control solutions, functional systems, functional room sensors and instrumentations. There are 5,500GW around the world, so we enable roughly 1,000GW around the world. That’s power generation as a whole: nuclear, conventional and renewable. We have today, for example, contracts in our hands for several control systems in Asia-Pacific for 140GW. As an idea, 140GW is twice the size of the available generation of the UK! In the nuclear sector there are 440 reactors around the world and our functional and safety solutions are in 160 of those systems.
We are in early discussions with a number of nuclear power plants at present, and we believe Russia is a very interesting nuclear player. Together with China, they are by far the countries that are developing extensively their industry not only for domestic usage, but also for export.
It has been great to speak with you on this exciting market sector. Do you have any further comments for our readers on Smart Grids?
Paul DaCruz: The big question here is what is and what isn’t a smart grid. The concept of a “Smart Grid” is very interesting. It is also very broad! When looking at this concept we have to consider the overall chain from generators to stakeholders, politicians, regulators etc.
From a regulator point of view, monitoring what’s going on in the system is important. So I would just make sure that people realise that smart grid isn’t just smart meters, it’s not just grid. It’s also the generators and a “total value chain”.
Another important point is that we are now moving into an era where energy is expensive. Historically it has been relatively cheap – but look at the current price of an oil barrel. At the start of the crisis it was down to 33$; what I’m saying is that there is serious fluctuation there. I think this instability will potentially help in the development of the smart grid. One thing we also have to remember is that the concept of the smart grid developed two, three years ago when an oil barrel was $150. Smart grid development has slowed down with the decrease in the oil price; however with sharp increases in the price of a barrel, smart grid development could increase massively because energy efficiency is something that will yield better returns.
