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di Davide Canevari __from Houston (Texas)

Kevin Kosisko, managing director of ABB’s global power generation businessThe power generation sector will require investments totaling more than $13 trillion worldwide over the next 20 years, according to the International Energy Agency.
Nuova Energia spoke with Kevin Kosisko, managing director of ABB’s global power generation business, to get his views on the current and future prospects of the power sector.

Despite much investment in energy efficiency, the demand for power is expected to increase in the medium and long term. Do you share this analysis?

**Yes, the demand for electricity is still far greater than the power generated. Despite the recent turmoil in the global economy, the investment pipeline in power generation is quite healthy over the coming years.
Asia continues to lead demand, accounting for 60 percent of the total spend. Among the fossil fuels, coal is still expected to feature prominently in the energy mix of most regions. The figures show that there are more than 3,200 power plant projects under construction with a combined investment value of around $980 billion. And the number of announced projects - at which construction has yet to start - is more than 99,800, valued at some $13.66 trillion.

How do these figures translate into new generating capacity?
**The analyses forecast a compound annual growth rate of 2.6 percent. 768 gigawatts (GW) of capacity will be retired, while 2,740 GW will be built between 2015 and 2025. This means an addition to capacity of 1,972 GW by 2025. To put that in perspective, 1,972 GW is almost double the current generating capacity of the United States.

Which are the biggest growth regions?
** Asia will continue to attract the most investment, with an estimated increase of 1,477 GW of capacity by 2025. In other words, Asia will account for about three-quarters of the projected growth in the world’s generating capacity over the next nine years.

Very often Africa is referred to as the continent with the highest potential for development.
However, 600 million people there still have no access to electricity. How can this development potential be turned into reality?

**Africa consists of more than 50 countries with a wide range of cultures and history. When attempting to answer this question we should bear this diversity in mind and be careful not to make sweeping generalizations. However, we can say that Africa as a whole needs more education, stability and financial funding for it to develop strongly and exceed world average growth.
All three of these requirements go hand in hand; if one of them is missing, prosperity will most likely fail. When we look at funding, some African countries will need the support of the World Bank and other organizations to finance their infrastructure projects. These projects There are more than 3,200 power plant projects under construction with a combined investment value of around $980 billion.

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Il mondo ha ancora fame di energia! Una fame che si misura in centinaia di GW di nuova potenza (tradizionale e rinnovabile) che dovrà essere installata nei prossimi anni. Per fare un punto sulla situazione a livello globale, numeri alla mano, Nuova Energia ha incontrato Kevin Kosisko, managing director della business unit power generation di ABB.
“Attualmente ci sono più di 3.200 impianti in costruzione per un valore complessivo pari a 980 miliardi di dollari; i progetti annunciati o ancora allo studio sono addirittura poco meno di centomila, e potrebbero movimentare 13,7 trilioni di dollari di investimento. L’Asia si conferma come l’area più dinamica; nei prossimi nove anni ospiterà circa i tre quarti della nuova generazione messa in servizio”.
Occhi puntati anche sugli States. “Per il solo quadriennio 2015-2018 saranno effettuati investimenti pari a 134 miliardi di dollari, destinati soprattutto alle centrali a gas naturale”.
Sotto i riflettori finiscono inevitabilmente le rinnovabili, ma sarebbe un errore sottovalutare il ruolo che ancora giocano le fonti fossili.
“Le FER hanno raggiunto nel 2015 un traguardo storico, riuscendo a superare per capacità installata tutte le altre fonti. Non dimentichiamoci però che nel solo biennio 2016-2017 inizierà la costruzione di oltre duemila centrali a carbone, con un investimento atteso nell’ordine di 1,1 trilioni di dollari”.
In questo scenario, l’innovazione resta un
pillar di fondamentale importanza e certamente uno dei punti di forza di ABB. “Siamo da sempre pionieri in questo campo. Quale altra azienda con il nostro profilo spende 2 miliardi di dollari ogni anno in ricerca e sviluppo?”
E c’è anche un prestigioso riconoscimento per l’Italia e per il suo ruolo strategico come hub di ricerca e come ponte verso tutta l’Europa meridionale e la regione mediterranea.
E anche oltre, come dimostra il recente successo in Sud Africa...

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And the number of announced projects is more than 99,800, valued at some $13.66 trillion 1 8 are needed to create jobs, skills and better education. Some countries will need a return to high oil and gas prices, as their economy depends on this income.
The threats to stability are war, civil war, riots, drought and starvation. Poverty could also lead to instability. Countries with governments that focus on increasing the prosperity of the population generally have a higher degree of stability, which in turn has a positive impact on prosperity. Investment in education is needed in order to generate prosperity, development and a strong economy.
Many countries in Africa have shown in the past that development is possible.
We will see further African development and growth in the future that will lead to power generation projects. ABB is optimistic about African development in general. A few countries have challenges, but I am sure those will be overcome in time.
We expect to see Africa develop and grow in the future and invest in more power generation projects to produce the energy it so badly needs.

And what about Europe? Are there opportunities for growth in power generation there, and if so in which technologies?
**In Central and Eastern Europe there is a general trend away from centralized to decentralized power generation.
Greenfield growth opportunities are mainly in renewable and distributed energy. Decentralization triggers demand for SCADA (supervisory control and data acquisition) applications like remote and virtual power plants. Throughout Europe, investments in fossil-fueled power plants are focused on increasing efficiency and reducing emissions of existing brownfield assets. Cyber security software and consulting will grow, due to the increasing need to protect critical power generation assets and the power grid from cyber-attack. It is very clear that coal will continue to decline and be replaced by renewables and natural gas.
Solar and wind subsidies are being removed, but despite this wind has the fastest investment growth of all energy sources.

What about the United States? Which trends are defining the market there?
** Over the past few years, the power generation sector in the US has been very active. This activity includes significant power generating capacity retirements, which is driven by environmental regulations as well as other market and competitive reasons. According to GenerationHub [Editor’s note: a business of the PennWell Corporation], since 2010 more than 37 GW of power generation capacity has been retired. This has been, or will be, replaced by new generating capacity, currently planned or under construction or already in operation.
Natural gas and utility-scale wind and solar power generation dominate the new capacity landscape. In 2015, GenerationHub tracked at least $134 billion of new power generation investments in the US for the period 2015- 2018. Most of these new investments are for natural gas-fired power plants (about 119 GW). Wind generation is the second largest source of new generation with about 33 GW of new generating capacity. Solar power is the third largest source of new generation with about 14 GW of new capacity.
The remaining new generating capacity in the US for this period (about 11 GW) is made up of nuclear, hydro, and other less significant forms of power generation. Over the next two years, the majority of new natural gas-fired power plants in the country will be in two of NERC’s (North American Electric Reliability Corporation) eight regions: RFC (Ohio, Michigan, Indiana, Pennsylvania and parts of West Virginia and Illinois), and WECC (which covers roughly the western third of the US).

2014 saw an historical milestone: there were more new installations (in MW) of renewable power plants than conventional power generation.
Is this trend irreversible, or can we still expect some surprises?

**Although renewable generation has increased and reached historical milestones like the one you mention, it is still dwarfed by coal and natural gas. For the 2016-17 period alone, 2,061 coal-fired projects with an expected investment value of $1.1 trillion have already been announced.
At the same time, lower natural gas prices are boosting the number of gas-fired power plant projects. The latest figures show that about 1,400 natural gas projects, with an investment value of $339 billion, are in the pipeline.

In the power generation industry we often think in terms of “additional power”, as if power plants were evergreen. But there is also a need to revamp aging plants, manage end of life disposal and improve the energy efficiency of existing plants.
How important is this field of asset management for a global company like ABB?

**Service of our installed base remains our prime focus and is a core strength of ABB. We were the first - and are still perhaps the only one - in the power industry to offer permanent support for a power plant control system. Our Evolution without obsolescence policy for Symphony Plus, our total plant automation platform for power generation and water applications, provides life cycle support for the plant control system, all the way from initial start-up to final shutdown.
Protecting the investment of our customers in a Symphony Plus system over the lifetime of the plant is the defining feature of our business.

Power generation could be described as not very innovative. In the past 50 years nothing new has been invented and the technologies for renewable generation are the same as half a century ago. The only big innovation on the horizon is nuclear fusion, which is as far away as ever.
What has changed or evolved in recent times, and what can we expect in the near future?

**Power generation has evolved in a big way especially in recent years with the advancement of renewable automation technologies. Even if you consider the old technologies for nuclear or coal based fuels, there are major innovations that have been developed to make the plants safer and more efficient.
Perhaps the changes are not always visible to the layman, but the power generation technologies behind the scene have evolved notably.

Take the example of a power plant control system.
**In the 1980s and 1990s control systems were analogue, slow and weighed down with wiring. Now, we have state-of-theart control systems that control and monitor each component and each part of the process in the plant to ensure it is working optimally.
They provide operators with precise information when they need it and in the form they need it. Control rooms are no longer drab, cramped environments with lights flashing and alarms ringing. They are equipped with highcapacity controllers for super-fast processing, gray-scale graphics for rapid interpretation of a potentially abnormal situation, alarm management systems to cut out unnecessary alarms, and ergonomically designed rooms and operator stations to eliminate operator stress and fatigue.

How difficult it is to bring innovation to emerging markets, where competition is based primarily on cost?
**There is no doubt that ABB has always faced competition from companies that focus on low price, but the strength of our company has always been based on technological innovation and our capacity to support and deliver on time automation systems and products designed by the finest engineers in the world. Most importantly, our customers know that an ABB system will cost less over its life cycle than those of our competitors. ABB has always been a pioneer in innovation. How many companies with a similar profile spend $2 billion a year on R&D?

For a global player like ABB, how difficult it is to maintain the company’s identity in diverse markets? How do you do that?
**We are a global company with a very strong local presence in roughly 100 countries. Our strength comes from our 135,000 people, who are the soul of the organization and work tirelessly in a disciplined manner. We have a very strong international reputation in issues like health, safety and the environment, corporate integrity, manufacturing and engineering excellence, project execution, and aftersales service. I believe that these values and strengths transcend international borders and enable ABB to maintain the same identity, regardless of country and region.

What role does Italy play in ABB’s power generation business?
**Italy plays a crucial role for ABB and the southern European region. Our Power Generation unit in Italy, with headquarters in Genoa, is one of the cradles of Symphony Plus, our total plant automation platform for the power and water industries. Symphony Plus was recently named the global market leading distributed control system in power generation by ARC Advisory, the international technology research and advisory company.
Italy is also the host country of one of ABB’s three global centers of excellence for steam and gas turbines, serving the EMEA region with its expertise and solutions. And, it is the hub of ABB’s Southern European region, coordinating Turkey, Spain, and Croatia. Our Italian unit has been, and continues to be, a key location from which we execute strategic and complex projects all over the world.
A recent example is the Kusile supercritical power plant in South Africa, which once completed will provide muchneeded electricity for the whole country, Africa’s second largest economy. Another fascinating example is the integrated electrical and automation solution ABB Italy is delivering for the MOSE flood barrier system, which will protect Venice and the Venetian Lagoon from floods and storm surges.
ABB Italy also plays a leading role in the development of advanced applications and services to enhance plant flexibility, improve plant security from cyber-attack, and extend plant digitalization to maximize efficiency and productivity.

Finally, what are the opportunities offered by digitalization and the Internet of Things?
**Digitalization and the Internet of Things (IoT) will bring added-value services and technologies to our power and water customers. This will be achieved through the horizontal integration of business processes that to date have been separate and not well coordinated. In the future, automation will focus on dealing optimally with dynamic requirements in a tightly integrated and more complex environment.
Although we have been providing the Intranet of things in power generation plants for some time through our DCS systems, the opportunities generated by digitalization and big data are tremendous in terms of both new services and solutions.
ABB is investing to create easily applicable products and services that are out-of-the box, support and speed up our customers’ business evolution, and enable a set of new plant and fleet applications. Such services will help to extend the lifetime of plant equipment and optimize plant performance, efficiency and profitability. They will use advanced analytics to, for instance, predict the circumstances under which a component will be likely to fail or identify the component’s stress levels to increase its operating life. Finally, ABB is extending the concept of IoT to the Internet of Things, Services and People (IoTSP), by integrating services and people with technology. Data collected from super-intelligent devices will drive advanced services that make use of actionable information derived from the devices. People will be the recipient of this advanced information in a way that facilitates conscious, speedy and accurate decision-making. For over a decade we have been working to develop and enhance process control systems, communications solutions, sensors and software for the IoTSP.
These technologies are already proving their value. They enable our customers to analyze their data more intelligently, optimize their operations, boost their productivity, and their flexibility, without sacrificing safety, reliability, cyber security and data privacy.


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