Current trends shift company’s focus to IPPs

Current market conditions and trends within the power sector have enabled heat exchanger supplier Kelvion to focus on supplying replacement heat exchange equipment and maintenance products within the existing power plant installed base, as well as focusing on independent power producers (IPPs), says Kelvion CEO Lambert Petersen.

“We have seen a gradual shift over the past few decades . . . in the past, it was easy and cheaper to produce energy, but current times have made power producers rethink the ways in which they approach the production of power.”

Owing to this, Kelvion sales and marketing director Alex Dreyer adds that companies have now considered solutions such as organic Rankine cycles and heat capturing solutions to save energy during production.

“Companies across several industries are looking into recouping energy emitted by their production processes. The easiest means remains the capturing of waste heat. An example is the paper industry, where companies will consider reusing heat emitted from burning bark and wood waste to generate electricity. It remains difficult for the businesses as these operations are usually expensive and payback periods remain quite lengthy,” he says.

Petersen notes that the biggest growth in the industry lies in a two-pronged approach – prioritising the upgrading and maintenance of current power plants while allowing for the gradual rise of IPPs and thermal solar solutions to take place.

He adds that the most detrimental factor remains the capital availability for investment in newer and cleaner power solutions.

“This particular approach is needed for growth in the South African power industry, but could be haltered by a lack of capital investment. The upgrading and proper maintenance of the current power infrastructure will enable State-owned power utility Eskom to deliver efficient cost-effective energy, while the rise in IPPs and solar energy can relieve the grid and stabilise costs,” Petersen points out.

To meet current demand, Kelvion has reasserted itself in the South African power generation market after changing its name earlier this fiscal year.

This comes after the global private-equity investment firm Triton acquired heat exchanger producer GEA Heat Exchangers from the GEA group in April 2014. The acquisition resulted in GEA Heat Exchangers splitting into three autonomous companies – heating, cooling, venting and filtration company DencoHappel, wet cooling tower, dry cooling system and ash handling systems supplier Enexio, and Kelvion.

Kelvion manufactures a wide range of heat exchanger solutions for a variety of projects and applications.

“We have been involved in the South African market for 40 years and have supplied heat exchangers and thermal cooling solutions to projects such as the Tutuka, Arnot, Matimba, Majuba and Medupi power plants, along with several other smaller operations within the steel, chemicals and mining industries,” notes Petersen.

He states that the company retains an established research and development agreement with heat exchanger supplier Enexio, in Germany, giving Kelvion access to the international know-how and design software of Enexio to design and build wet and dry cooling solutions for the power industry. He notes that this agreement ensures that engineering, selection and production are regularly checked for quality purposes by the global controllers.

“The technology has been developed in Germany, but we can use the software to design our own local content – 93% of the content used for the Medupi power station was locally produced, which ensured that we can maximise the supply of local content,” Petersen explains.

Kelvion also works closely with Stellenbosch University, where sponsored PhD students hone their research in the field of heat exchange and cooling.

“When we use new technology or start working on new projects, we collaborate with the students on a commercial basis and not only in terms of student projects,” Dreyer highlights.

Further, Kelvion has received a grant from the European Commission to develop technologies for minimising water consumption on concentrated solar plants.

He concludes that the company’s long-term plans include creating solutions for the proposed shifts to nuclear energy.