The technology group Wärtsilä has signed a 5-year performance-based agreement for a 20 MW power plant combined with a 40 MW plant extension installation at a gold mine in Africa. The agreement was signed in March and as normal with the company’s service agreements, Wärtsilä books expected net sales for the next 24 months to its order intake and order backlog.
By guaranteeing the availability of power, Wärtsilä delivers crucial support to the mine’s operations. Matching power availability with operational demand is required, monitored and incentivised on a daily basis. The agreement further covers the generating engines’ optimised usage and fuel consumption.
“This is an isolated mine with no grid connection, so a reliable source of electricity from the captive Wärtsilä power plant is essential for maintaining the mine’s productivity and operating revenue-earning capability. After analysing the customer’s needs and how we could meet them, we developed the performance guarantee as an assurance of plant availability, while minimising fuel consumption and running hours as important cost-saving benefits. We see performance-based agreements becoming widely utilised as an effective solution for our customers,” commented Marc Thiriet, Energy Business Director, Africa West, Wärtsilä.
The power plant featuring four Wärtsilä 32 engines commenced operations in 2016, after which the extension project with a further four Wärtsilä 32 engines was added and commissioned in 2021. Wärtsilä has had an earlier Operation and Maintenance (O&M) agreement with the customer since 2017, which has now evolved into becoming this performance-based agreement.
Long-term service agreements are an important element within Wärtsilä’s lifecycle services providing value-adding customer support. Performance-based service agreements include quantifiable targets, which are mutually agreed based on the customer’s business needs. The measurable indicators can include, for example, power availability, reliability, fuel consumption, and emissions. Furthermore, Wärtsilä shares the risks and rewards with the customer.
Globally, Wärtsilä currently has 14 GW of power plant capacity covered by long-term service agreements, of which 2 GW is in Africa.
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Image: Performance-based agreements are becoming increasingly utilised as an effective service solution for Wärtsilä’s power plant customers. © Wärtsilä Corporation
Wärtsilä Energy in brief
Wärtsilä Energy leads the transition towards a 100% renewable energy future. We help our customers in decarbonisation by developing market-leading technologies. These cover future-fuel enabled balancing power plants, hybrid solutions, energy storage and optimisation technology, including the GEMS energy management platform. Wärtsilä Energy’s lifecycle services are designed to increase efficiency, promote reliability and guarantee operational performance. Our track record comprises 76 GW of power plant capacity and 110 energy storage systems delivered to 180 countries around the world.
Wärtsilä in brief
Wärtsilä is a global leader in innovative technologies and lifecycle solutions for the marine and energy markets. We emphasise innovation in sustainable technology and services to help our customers continuously improve their environmental and economic performance. Our dedicated and passionate team of 17,000 professionals in more than 200 locations in 68 countries shape the decarbonisation transformation of our industries across the globe. In 2021, Wärtsilä’s net sales totalled EUR 4.8 billion. Wärtsilä is listed on Nasdaq Helsinki.