The European market for hydropower refurbishments is expected to nearly treble from EUR 2.3 billion to EUR 6.1 billion during 2006 to 2016. Norwegian hydropower suppliers are looking to parlay their century of experience and underground technology expertise into a share of this lucrative market.
(Top photo: The Ruacana hydropower project onthe Kunene River, on the border between Namibia and Angola. Credit: Statkraft)
Norwegian companies have more than a 100 years’ expertise in the hydropower industry. In 1895, the Norwegian state paid NOK 23,245 to buy its first waterfall, Paulenfossen, to supply electricity to the Setesdalsbanen railway line, according to Statfkraft, Norway’s largest hydropower producer and European leader within renewable energy. By 2007, Norway had become the sixth largest hydropower-producing nation, based on International Energy Agency rankings.
Today Norwegian suppliers make up all parts of the hydropower value chain, from project development, construction, plant operation, to research and development and governance. “Hydropower Norway: A Competence Map”, recently published by INTPOW, lists two-dozen Norwegian companies as suppliers in its hydropower competence matrix: Agua Imara, ABB, Agder Energi, BKK, DNV, Ekportfinans, Eltek Valere, Energi Teknikk, GEIA, GIEK, Hydroenergi, Jacobsen Elektro, Multi-consult, Navita, Nexans, Nor-consult, NLI Innovation, NORPLAN, OneCo Teksal, Powel, Rainpower, SN Power, Statkraft and Trønder-energi.
Western Europe Potential
Pöyry Management Consulting believes the largest potential for Norwegian suppliers abroad in general lies in Western Europe. The company presented the findings of their study on the potential for hydropower refurbishment and upgrading at INTPOW’s hydropower conference in March at Statkraft’s headquarters in Lysaker, Norway.
Pöyry was commissioned by INTPOW, a non-profit organization established in co-operation between the Norwegian authorities and Norway’s renewable industry business, to look at the potential for upgrading the ageing hydropower facilities in 13 European countries. The study is based on the implied technical potential from the age of the installed capacity.
Most Western European countries have an ageing installed capacity, but only three (Austria, Italy and Switzerland) have an identified refurbishment rate of some size. For Eastern European countries, the age of installed capacity is more mixed. The refurbishment rate only includes projects where a new turbine or generator has been installed.
France has the largest installed capacity and an estimated market size of 13,146 MW, as defined as installed capacity times the share older than 40 years. Italy has the second highest market size at 11,994 MW, while Switzerland has the oldest installed capacity and the highest refurbishment rate.
“This is only an implied technical potential because the installed capacity is getting old,” said Cecilie Seem, consultant at Pöyry Management Consulting in Oslo. “It doesn’t take into account for example economic factors and licensing, which are also important.
Statkraft's Tyssedal hydropower station in Norway dates back to 1906. (Credit: NORPLAN)
A Perfect Fit
One of the Norwegian companies that have made most inroads in international markets is Rainpower, an industrial group supplying turbines, generators, control, and governing equipment for hydropower. In recent years, the Kjeller-based company has established a presence in Turkey, Peru, Switzerland and North America. It won a USD 3.5 million contract in April to supply four 10 MW Pelton turbines with electric governors and high-pressure units to the Peruvian company GCZ for two power stations Runatullo II and III.
Rainpower sees Switzerland as one of the potential upgrade and rehabilitation markets with new projects coming up, according to comments made by Ingar Hovdelien, vice president sales and marketing, during the panel debate at INTPOW’s hydropower power conference. The company established an office in Aargau, Switzerland in January, citing its design experience in mountainous regions in Norway as a “perfect fit” for working in the similar natural conditions Switzerland.
Switzerland has the oldest installed hydropower capacity of the countries in the Pöyry study and also the highest refurbishment rate in MW. The country has a total installed hydropower capacity of 13,918 MW comprised of 644 hydropower plants with 1,044 units.
Hovdelien also highlighted Sweden as a very interesting market along with China, where Rainpower has started to look at upgrading and refurbishment market possibilities. Some of the issues the company considers before it enters a new market are the tax incentive structure, the length of time for licensing and approval, financial instruments for investors, and requirements for local content.
One area where Norwegian suppliers have shown a strong advantage is underground technology. The country is one of few that have many underground hydropower stations, naturally because of its mountainous regions. The Oslo-based engineering and development consultancy NORPLAN has a large group of geo technical engineers and geologists specialised in this area.
“Norwegians are strong in underground technology, as is Switzerland and Austria,” said Joakim Arntsen NORPLAN divisional manager for renewable energy, at INTPOW’s conference. “But that’s one area where we can compete on.”
That competence was one of the key reasons it won the Ruacana project in Namibia. The power station is situated some 140 metres underground. To make room for the installation of the generating units, the transformers and switchgear, as well as to provide for entrance and discharge tunnels, a total of 415,000 cubic metres of rock were excavated. Under the USD 2.7 million contract, NORPLAN has provided consultancy services in relation to the detailed design and construction supervision of the fourth unit at the Ruacana hydropower plant.
NORPLAN is also active in other projects in Africa, including a joint venture with Fichtner of Germany for a feasibility study of the 34 MW Nsongezi hydropower project in Uganda. Awarded in February 2012, the study aims to develop the technical design of a proposed run-of-the river power plant at Kagera River to a feasibility level, including relevant technical investigations, financial considerations, and environment social impact assessment.