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On the energy front, the weakened demand caused by the global recession, coupled with the weaker US dollar, provided a limited respite from the longer term trend towards more expensive energy in all its various forms. However, as the world economy recovers, we can also expect that energy costs will again trend upwards. New Zealand has been very fortunate to have substantial hydro generation potential, which has shielded us to some extent from the global energy costs. There was enormous investment in the middle of last century when the major hydro generation schemes were constructed. These investments have provided consumers and industry with relatively cheap electricity for many years. With the discovery of natural gas in Taranaki, the focus shifted to natural gas a source of energy, and then more recently wind and geothermal have had prominence. Investment will be required at a higher rate as our economy rebounds, and many new power stations are in the planning stage. The electricity transmission infrastructure too is requiring significant investment. Fifty years ago we built the 220kV main transmission backbone for the country. This was conservatively designed, and has served us very well for many years without significant enhancement. During the eighties and the early nineties, it was thought that embedded generation was the likely future scenario, and on this basis, significant ongoing investment in the national grid was deferred. As things turned out, embedded generation did not eventuate, and the grid recently has been under enormous pressure, with little capacity to tolerate any equipment failure. Infrastructural investmentIf we look at the situation now, we find that there is an urgent need for considerable investment in both the generation and transmission sectors, and this is likely to push up the mean cost of electricity even further. In New Zealand ABB kicked off 2009 with two diverse engineering projects to get our teeth into and flex our global engineering knowledge and local expertise. The first was the continuing works on the control system upgrade for Genesis Energy at their Tokaanu, Rangipo, Tuai, Piripaua and Kaitawa power stations. ABB has designed and is current constructing and installing a system that provides Genesis Energy with a single operations and engineering environment. This is also a milestone for ABB, as this is the first time the new ‘extended operator workplace’ Industrial IT System 800xA with new flexible ergonomic features has been used in South East Asia. The second project is our works supporting Ontrack with the products and systems engineering services for substations as part of Ontrack’s infrastructure upgrades to accommodate a new fleet of electric trains in Wellington. Again this is a first for ABB in New Zealand, as it gives us an opportunity to get involved in the rail industry. Perhaps the energy efficiency of rail will turn out to be a greater competitive advantage in the future. Another highlight for 2009 has been the ongoing strength of our high voltage switchgear manufacturing facility in Henderson, Auckland. Following on from the 2008 contract win to supply our SafeLink product to the Netherlands, we backed this up with a large SafeLink supply contract to Ireland in 2009. Looking at 2010Looking forward to 2010, I suspect this rate of change will accelerate. Globally, China has a rapidly developing internal market, and with the strengthening global economy will further exert itself as the economic powerhouse of Asia. India too is undergoing a deep internal metamorphosis, and will soon play a much more important role on the world stage. The internal energy demands from countries such as China and India is enormous, and in this interconnected world, we are likely to see energy prices pushed up again. As energy becomes a more valuable commodity, there will no doubt be renewed emphasis on making sure we use it with increased efficiency. Electric motors are the greatest consumer of electricity in industry, and we have already seen the Government issue regulations requiring motors to achieve improved efficiency performance. Throughout major industry there has been increasing focus on the way these businesses manage their energy budget. ABB has a number of technologies that support our customers to achieve increased energy efficiency. One of the most important is the application of speed control to electric motors. Most motors in industry run at full speed, regardless of the load which is often very variable. By using a variable speed drive, the motor’s speed can be adjusted to the process requirement, often with significant savings in electricity cost, reduced maintenance cost and prolonged motor life. I also expect that there will continue to be urgency to improve the state of much of New Zealand’s national infrastructure. Our geography and low population density gives us a number of disadvantages, such as costs associated with transport, communications and electricity transmission. We need to invest wisely to mitigate these so that our economy can remain internationally viable. Again, ABB has some technologies that can support these efforts. Our SmartGid systems allow better utilisation of the electricity network. The ability to provide an information system connecting the power plants with the end users will allow our power system to be used in novel ways, with greater flexibility and efficiency - particularly as more renewable generation is added to the grid. If I had one wish for 2010, it would be that our engineers turn their minds to greater and bolder innovation. New Zealand has a proud history of innovation, and it is this skill that will ensure we can maintain our global position. We need to cultivate our kiwi entrepreneurial spirit, investing much more into research and development. As emerging countries develop their technical capabilities and transform themselves into emerging competitors, local innovation is a necessity of survival.
Energy NZ Vol.4 No.1 Energy Perspectives 2010 |
Looking back to 2009, it was a time of enormous change, not only for New Zealand, but for the world, as we moved from the easy prosperity of the early years of the millennium into a deep global recession. By Grant Gillard, chief executive of ABB New Zealand.