Wärtsilä has been in India from the early 1980s and has contributed immensely to the power segment of the country. Today, with rapid changes in the energy landscape, Wärtsilä is leading from the front in providing cost-effective solutions to address the rapidly changing energy dynamics. In this exclusive exchange, Ventakesh R., Managing Director, Wartsila India Pvt Ltd, tells us more on how Wärtsilä Energy is leading the transition towards a decarbonised and 100 per cent renewable energy future.
Let us start by understanding, in brief, what decentralized energy is. What is the role of battery energy storage systems, and how does this all grow into microgrids?
Decentralization, digitalization, and decarbonization (3Ds) form as three pillars of the global energy transition.
The rapid rise of renewable energy across the world has undercut fossil fuel’s growth, cementing its dual purpose of reducing carbon emissions and providing access to clean energy. Frost & Sullivan expects that between 2020 and 2030, renewable energy will outshine fossil fuel capacity additions by a 3:1 ratio, with approximately 400 GW of renewable capacity added to the electricity grid. The rise of distributed energy resources (DER), typically below 10 mw and located close to the consumption site, further vindicates a green growth story.
There are, however, a few challenges to overcome before fully realizing a true hybrid energy solution value proposition. These include the diversity of technology options available for hybridization, integration of a wide range of hardware optimization systems to cater to grid code flexibility requirements, and energy life cycle services that ensure hybrid systems are functioning at above par levels throughout their lifetime. In order to properly overcome these, business and technology value propositions ought to be tuned to provide hardware integration and optimization, together with life cycle services; such tuning demands best-in-class, unparalleled expertise in DERs. Additional challenges include meeting regional regulatory demands, addressing customer needs, offering favorable pricing, and showcasing tangible return on investment (ROI) for the customer.
“The energy storage market is evolving rapidly. Right now, most energy storage systems are used to balance the grid for renewables, but this is only a small portion of what storage is capable of.”
Wärtsilä’s global project pipeline of 1.5GW+/2.2GWh+ installed, contracted and under construction base continues to grow, underpinning the progress the company has made in the ESS market since the Wärtsilä-Greensmith M&A in 2017, and the maturing of its GEMS software and next-gen hardware technology.
Wärtsilä has made significant advances in the energy storage market since the Greensmith Energy acquisition, with expertise across microgrid and renewable integration applications, as well as an expanded focus on real-time dynamic market bidding via their 2021 GEMS IntelliBidder technology. Their islanded projects are hallmarks of the path to 100 per cent renewable energy.
For example, the Graciosa Island project mentioned earlier came online in late 2019. The hybrid system sees a diesel plant now work more like a backup system and the use of fossil fuel for electricity consumption has been reduced from 100 per cent to 35 per cent with energy storage technology, saving 190,000 liters of diesel fuel per month. In 2020, there were even 128 days where the island was entirely and reliably powered by renewable energy.
The energy storage market is evolving rapidly. Right now, most energy storage systems are used to balance the grid for renewables, but this is only a small portion of what storage is capable of. Storage is a highly flexible asset that can fulfill multiple functions at the same time. For example, it’s able to simultaneously balance the grid when renewable sources are in use while also supplying power to the grid, especially when paired with emerging sophisticated market-bidding software.
“Wärtsilä Energy leads the transition towards a decarbonised and 100 per cent renewable energy future.”
Please orient us with the role that Wartsila plays globally in the decentralized energy business. What is the scope of activities in India?
Wärtsilä Energy leads the transition towards a decarbonised and 100 per cent renewable energy future. The focus for achieving this is on the development of market-leading technologies, from future-fuel enabled flexible power plants and hybrid solutions to energy storage and optimisation technology, including our energy management platform.
Wärtsilä’s leadership in the hybridization of systems involves Wärtsilä engines, in addition to complex expertise in projects that combine multiple assets. The key industry differentiator lies in the flexibility of Wärtsilä’s GEMS optimisation capabilities to integrate, control and optimise generation assets seamlessly at both site level as well as under a single portfolio.
The energy market landscape is in transition and is moving towards more flexible energy systems with a rapidly increasing share of renewable energy and wider applications of energy storage technology, resulting in a decrease of inflexible base-load generation. The declining cost of renewables has begun to reduce new investments in coal and other inflexible baseload technologies. This transition will eventually enable renewables to become the new baseload, which will require flexibility and storage to ensure reliable power generation.
“When renewables are producing most of the electricity a lot of excess renewable energy will be available, which can be used as raw material to produce future fuels, such as green hydrogen, synthetic methane, methanol, or ammonia.”
Our solutions are at the very core of future energy systems. We understand the role those different technologies play in our customers’ power systems and enhance the assets of the customer through software, EPC offerings, and global service capabilities.
Can you summarize Wärtsilä’s journey in India so far?
Wärtsilä has been in India from the early 1980s, since then we have contributed immensely to the power segment of the country. We have about 40 years of experience in providing smart technologies and complete lifecycle solutions for the Indian marine and energy markets. Wärtsilä is a leading solutions provider of balancing power plants for utilities, industries and independent power producers (IPPs).
Wärtsilä has delivered around 250 power plants to India with a total output of over 3.5 GW. Wärtsilä takes care of the operation and management on behalf of its customers in over 35 power plants with a total output of over 1,300 MW in India.
Also read: Wärtsilä Launches Major Test Programme Towards Carbon-Free Solutions
What factors make India an interesting market for decentralized energy systems? What are the challenges?
India, as a market, has tremendous potential. There are ambitious, yet achievable renewable energy targets, set by the government. All stakeholders in the industry are contributing to it effectively.
At this point in time, the COVID-19 pandemic has turned the world upside down within a very short time. Business processes have undergone a paradigm shift from their traditional mold to a digital landscape. Several sectors have shifted to work-from-home options to create a safe environment. However, the power sector will continue to be significantly different from other industries. It cannot afford such operational changes and need to continue to run the power plants safely and smoothly even during the toughest of times.
The two main challenges we see facing the Indian power sector are fuel supply uncertainty and deteriorating distribution companies (discoms) finances.
“In fact, the pandemic has sped up the transition towards green energy.”
We have seen our customers’ businesses have been impacted by the pandemic. However, recent economic indicators of the country suggest a revival is already underway. As an organisation, we have a very robust strategy and vision that will prevail even after the pandemic and in the future: we will continue leading the way towards a 100 per cent renewable energy future. We will continue working closely with our customers every step of the way, helping them find their optimal path towards renewable energy systems.
In fact, the pandemic has sped up the transition towards green energy. What we have seen in developed countries when COVID-19 hit is that the generation of electricity overall went down, and the share of renewables increased. We created the Wärtsilä Energy Transition Lab where we showcase facts and figures explaining how the electricity markets have been functioning with renewable energy over the past six months.
A crucial part for power utilities when integrating more renewables, is to ensure there is enough flexibility in the grid to cover demand even when renewable energy generation fluctuates. As the sun doesn’t always shine and the wind doesn’t always blow, the importance of having flexible solutions such as fast-starting engine power plants and batteries in the power system increases.
Tell us about Wartsila’s GEMS technology for battery energy storage systems.
Wärtsilä’s GEMS energy management system is a smart software platform that monitors, controls, and optimises energy assets on both site and portfolio levels. Addressing complex technical and economic factors, GEMS supports a wide variety of battery and power electronics to achieve optimal system performance. GEMS integrates and controls individual resources and entire fleets comprising energy storage, renewables, and traditional thermal generation. Using machine learning and historic and real-time data analytics to optimise the asset mix, GEMS enables customers to remotely monitor, operate, identify, and diagnose equipment with unrivaled safety, reliability, and flexibility.
We gather that Wartsila recently introduced a very efficient grid balancing mechanism. Tell us more.
Wärtsilä has launched grid balancing technology, which can ramp up to full load in two minutes – to bridge utilities to a 100 per cent renewable energy future at the lowest cost.
Wärtsilä’s grid balancing technology is part of a portfolio of products designed to cost effectively accelerate the energy transition. The portfolio consists of power plants, energy storage and energy management systems. The first power plant solution in the portfolio is powered by the upgraded Wärtsilä 34SG Balancer engine, optimised for renewable baseload markets; an agile, fast-starting gas engine capable of ramping up to 10.8 MW in two minutes to seamlessly integrate with renewables. The power plant solution is based on lean design, and it can be equipped with features such as unmanned standby, remote control capabilities, 24/7 data streaming and dynamic power management.
Digressing to conventional energy, we understand that Wartsila has delivered power plants aggregating over 3.5 GW. Can we presume that all of these are gas-based? Tell us more.
There are few HFO and LFO plants. All countries, cities and companies have their own path towards decarbonized power systems. Our HFO and LFO engines can be converted to run on gas whenever customers are ready to take the step.
We see that the energy transition gives us an enormous opportunity, and with our flexible technologies comprising gas-based engine power plants, energy storage and energy management systems, we see a great potential for growth.
We also learn that Wartsila offers O&M services for power plants built by other suppliers.
With Wärtsilä Lifecycle solutions, we maintain and optimise our customers’ power plant performance. This support encompasses our technology, software, and service expertise as well as our holistic view and understanding of installations on a system level through a long-term service agreement.
A Wärtsilä Lifecycle solution agreement ensures power plant performance and competitiveness through:
- Maximised return on investment
- Ensured operational efficiency
- Safe and reliable operations
- Operation and maintenance optimisation and cost predictability
Our domain expertise and industry knowledge enable us to extend Lifecycle solutions to plants set-up by other industry players.
“We have been promoting our vision of moving towards a 100% renewable future for many years and we have created a good space for ourselves in the conversation of moving towards a more sustainable world.”
Coming back to decentralized energy systems, how do you see the years ahead for you? Would you be focusing on industrial customers?
Already back in the mid-2000s we started to see the potential of renewables and developed our solutions towards that. We have been talking about the use of flexible gas-based engine power plants to help integrate renewables in the power system for the past 15 years, and now the engine power plants are an important element in providing flexibility and reliability to power systems with renewables. We have seen various power systems, in various markets for a long time can provide a lot of insights due to our vast experience.
It’s important for a company like ours to go to our customers with fact-based solutions. That’s where things like the Wärtsilä Energy Transition Lab or the “Atlas of 100% Renewable Energy” comes into play.
For the Atlas of 100% Renewable Energy, Wärtsilä has modelled 145 countries and regions to find the optimal way to produce electricity from 100 per cent renewable energy sources. The map illustrates how the power system of each of these regions would look like if they were to be optimally built from scratch, not considering the burden of existing power plants. Each region has unique solar and wind conditions which makes the optimal energy mix for each region unique.
We have been promoting our vision of moving towards a 100% renewable future for many years and we have created a good space for ourselves in the conversation of moving towards a more sustainable world. It’s a transition with different paths for different countries, cities, and companies. We are working with our partners to create fact-based proposals that utilities and customers can benefit from and use in their own planning.
In India too, we are directly engaging with stakeholders, be it states or utilities, to educate and help them bring clarity to their own planning processes and decision-making. We want to help them in making the right decisions and prepare them for the future, and that is what we will continue to do.
One of the futuristic areas that Wartsila is working, as we understand, is on converting energy into fuel. Has Wartsila started with this activity on commercial scale, in any part of the world?
The urgent need to take action to decarbonise and reduce the global carbon footprint is seen globally. Countries, regions, significant industrial players, and companies are setting renewable energy or decarbonisation targets.
To fully overcome renewable intermittency, energy systems must employ all available flexibility solutions, from energy storage, whose applications include energy discharge over a period of hours – to thermal balancing using future fuels, which can be transported and stored over many months. The influx of renewables entering power systems is creating the right conditions for excess clean electricity to be used as a raw material for new types of hydrogen-based, carbon neutral future fuels.
“Power-to-X is an umbrella term that covers different processes that turn electricity into heat, hydrogen, or renewable synthetic fuels.”
Wärtsilä supports integration of renewable energy through solutions that provide the required system flexibility, i.e. flexible engine-based power generation, energy storage and in the future, new technologies such as Power-to-X. Together with flexible balancing power plants, future fuels can meet the critical demand for long-term storage solutions that balance grids in an affordable and sustainable way. That is why Wärtsilä is investigating, researching future fuels and helping develop Power-to-X technology.
Power-to-X is an umbrella term that covers different processes that turn electricity into heat, hydrogen, or renewable synthetic fuels, such as methane, diesel, gasoline and ammonia. It offers a significant opportunity to speed up the shift to a renewable energy future by ramping up synthetic fuel production, and rapidly reducing fossil fuel emissions in sectors ranging from the transportation, industry and energy sectors.
The technology can also play a key role in solving long-term energy storage challenges, regulating the ups and downs in supply from renewable sources. Green hydrogen will be a key building block in decarbonization. Building this requires time and major investments. Power-to-X can accelerate decarbonization, by utilizing green hydrogen as a raw material to produce other synthetic fuels like methane or ammonia, which already have an existing infrastructure.
Wärtsilä will continue to lead the transition towards a 100 per cent renewable energy future and help our customers unlock the value of the energy transition by optimising their energy systems and future-proofing their assets. Our balancing engines can already today run on synthetic methane and on blends with 25 per cent hydrogen.
(All industrial photographs used in this interview relate to projects and solutions of Wärtsilä. Photographs are for illustration only)
