As the European power market becomes increasingly volatile, Wärtsilä is supplying a large-scale combined heat and power (CHP) plant to Kraftwerke Mainz-Wiesbaden AG (KMW) in Germany. The new Smart Power Generation solution plant will support KMW’s profitability in a market that is becoming more and more dominated by renewables. Find out how.
It is the objective of the European Union to transition to a low-carbon economy by 2050. To this end, it has committed to reducing emissions and increasing energy efficiency by 20 per cent by 2020, with renewable energy set to play a key part.
Nowhere is this trend more visible than in Germany, which has Europe’s highest penetration of wind and solar energy. Furthermore, the German government intends to increase the share of electricity produced by combined heat and power (CHP) plants to 25 per cent by 2025. This is because CHP plants recover the heat generated from power production and deliver it to the district-heating grid, thereby ensuring multiple revenue streams.
Kraftwerke Mainz-Wiesbaden AG or KMW, in Germany, is one of the first utilities to take advantage of this new opportunity. Last year, it signed an agreement with Wärtsilä for a 100 MW CHP plant that will supply district heating to the city of Mainz and power to the grid of the region. The new plant, which will be fully operational by the end of 2018, is based on an agile, low-carbon system that will complement the use of green energy assets.
Contract signing ceremony. People in the image from left to right: Mr. Frank Kettig, Business Development Manager, Wärtsilä Energy Solutions, Mr. Thomas Becker, Managing Director, Wärtsilä Deutschland, Mr. Melle Kruisdijk, Vice President Europe, Wärtsilä Energy Solutions, Dr. Lars Eigenmann, CEO, Kraftwerke Mainz-Wiesbaden AG, Mr. Stephan Krome, Board Member, Kraftwerke Mainz-Wiesbaden AG.
“This is a landmark deal, in part because it’s one of the first major power plants to be ordered in Germany since the turn of the century,” says Frank Kettig, Business Development Manager, Wärtsilä Energy Solutions, who was responsible for sealing the deal with KMW.
Kettig says the new highly efficient plant, which consists of ten Wärtsilä 34SG engines operating on natural gas, will be one of the first of its kind in Germany.
“It will also be the first German power plant that is engine-based instead of turbines, which is not a replacement but an add-on capacity.”
Wärtsilä’s engines can go from zero to full load in two to three minutes with close to no extra start costs. This explains why Wärtsilä’s Smart Power Generation is the ideal solution for a system that needs to ramp up quickly.
Melle Kruisdijk, Vice President Europe, Wärtsilä Energy Solutions explains that this creates a unique opportunity for utilities to take advantage of energy price fluctuations.
“When there’s plenty of sun and wind, the cost of energy is very low. But when this energy supply suddenly drops off, the price peaks. The winners in this volatile market will be the flexible utilities who can respond the fastest,” he says, adding that regulators in Germany have changed the rules governing the energy market to ensure that the price better reflects the real-time supply and demand.
In total, the plant will provide 100 MW of electrical power and up to 96 MW of heating power to the citizens of Mainz, where the district-heating network delivers heating to equivalent to 40,000 households.
“We chose Wärtsilä to provide this solution because it has a proven technology and is already the leader in its field all around the world,” says Dr. Lars Eigenmann, CEO at Kraftwerke Mainz-Wiesbaden AG. “Moreover, Wärtsilä really took the time to listen to our needs and help us find the best solution.”
Dr. Eigenmann confirms that speed and flexibility are emerging as the key competitive differentiators on the European energy market.
“With more than 1,000 starts a year, we need to ensure that we have the best technology and a proven, reliable partner,” he adds.
“With market prices fluctuating at intervals as short as 15 minutes, it’s crucial for us to be extremely flexible and quick to start up in order to capture the peak prices. Only the engines built by Wärtsilä have the flexibility to start up in two to three minutes, making us very well prepared for the future,” he continues.
“KMW is ahead of the competition,” concludes Kruisdijk. “The current market will see more and more price peaks and Wärtsilä will deliver a plant that is able to ramp up at peak times, along with a comprehensive service and maintenance package tailored to KMW’s requirements.”
Wärtsilä’s scope in the agreement with KMW covers the engineering, procurement and construction (EPC) of the plant, as well as a 15-year service agreement for the maintenance of the power plant including performance guarantees.
Simon Widd, Support & Development Manager for Power Plant Agreements in Wärtsilä Services, explains that the guarantees enable the customer to ensure that the financial targets of its investment will be achieved for the entire duration of the 15-year contract.
“Customers need predictability and, with this agreement, KMW is able to determine how much it will cost to run the plant for the coming 15 years,” says Widd.
Wärtsilä’s Guaranteed Asset Performance is a solution that offers customers guaranteed operational reliability. Throughout the duration of the contract, Wärtsilä will, based on measured data, maintain the asset and ensure that the performance targets and guarantees are met.