Wärtsilä Energy Solutions is a leading global system integrator offering ultra-flexible internal combustion engine based power plants, energy storage systems, and utility-scale solar PV power plants, as well as LNG terminals and distribution systems. These flexible and efficient solutions offer superior value to customers and provide access to a more clean and modern energy system for future generations. This supports Wärtsilä’s purpose in enabling sustainable societies with smart technologies. As of 2017, Wärtsilä had over 65 GW of installed power plant capacity in 177 countries around the world.
Wärtsilä serves three main customer segments
Wärtsilä Energy Solutions' three main customer segments are Utilities, Independent Power Producers (IPPs), and Industrial customers.
Utilities supply electricity and gas to residential, commercial, and industrial end users. They invest in gas infrastructure projects and various types of power plants to ensure adequate load coverage, and the right palette of cost-effective and reliable products and services for their customers.
IPP’s are financial investors investing in the gas infrastructure, power plants, and in selling the generated power to utilities. Their investments are return driven, and as with utilities, their technical requirements are application driven.
Industrial customers are mainly private companies with energy intensive production operations, such as cement or mining facilities. By investing in captive power, they are able to achieve lower energy costs and can be prepared for any grid reliability issues, thus ensuring security of supply. Wärtsilä serves the top end of this customer group, i.e. large industries requiring a relatively high electrical load.
Focus on flexibility
Wärtsilä’s engine based power plants, referred to as being Smart Power Generation, are used for a wide variety of applications. These include base load generation, capacity for grid stability, peaking and load-following generation, and the integration of wind and solar power.
Wärtsilä’s power plant solutions are tailored according to the specific requirements of its customers, utilising modular products and services. The delivery scope ranges from equipment deliveries to complete turnkey power plants, all of which are supported by Wärtsilä’s superior project management capabilities. The fuel flexibility of Wärtsilä’s solutions enables the choice and utilisation of the most feasible fuels, including natural gas and many other gases, as well as most fuel oils. The customer can also choose to run their plant on multiple fuels. In addition to a broad offering of services to support customers through the lifecycle of their installations, Wärtsilä also provides financial services to help them arrange financing and assemble complex projects.
The increasing level of intermittent renewable energy sources in many power systems has created a rapidly growing need for greater flexibility. Gas fuelled power plants represent the most flexible and environmentally sound alternative for balancing the variability of these renewable sources. Smart Power Generation plants provide the best means of support to the power system by offering the highest degree of flexibility, enabling major savings, and creating an optimised response to rapid changes in intermittent generation.
Growth through energy storage, solar, LNG and system integration
The global transition from carbon-intensive energy sources to low carbon fuels, such as natural gas and renewable source solutions, presents Wärtsilä with many opportunities for growth.
As a forerunner in gas and multi-fuel engines, fuel systems, technology and services, Wärtsilä supports the global shift to gas with its LNG infrastructure projects. The company provides a full range of project and lifecycle support services, from small and medium scale LNG liquefaction plants and terminals, to the delivery of complete Equipment, Procurement and Construction (EPC) projects worldwide. Wärtsilä has the capability, in partnership with its customers, to develop the entire LNG value chain. When providing a complete turnkey solution, an LNG terminal can be integrated with a Smart Power Generation power plant, thereby utilising gas as fuel in places where gas was not earlier available.
Responding to the increasing share of renewables within the energy mix, Wärtsilä has developed its offering to include utility-scale hybrid power plants that unite large fuel-based power stations with solar PV power plants. Wärtsilä’s hybrid solutions are provided on an EPC basis, with solar PV modules sourced from leading module suppliers. The aim of engine-solar hybrids is to save fuel, which results in lifecycle cost savings and environmental benefits. The two assets are optimised in such a way that the amount of solar energy is maximised, with the engines providing a secondary source of generation. The solar hybrid plant can be part of a retrofit project, where solar modules are combined with an existing Smart Power Generation plant.
The acquisition of Greensmith Energy Inc., USA’s leading energy storage software and integration service provider, enables Wärtsilä to take the leading position in the emerging energy storage market and further strengthen its energy system integration capabilities. As a combined solution, Wärtsilä’s Smart Power Generation, solar PV and energy storage, together with Wärtsilä’s integration capabilities, decades-long experience in delivering complex turnkey engine power plants, and a wide palette of services, will provide sustainable, reliable, and affordable power — particularly in countries and regions with isolated or weak electricity grids.
Energy Solutions' operating environment
The main drivers for Wärtsilä's Energy Solutions business are:
- Economic growth, electrification and improving standards of living
- Growth in sustainable energy, reducing carbon emissions
- Rapid growth of intermittent renewable generation and escalating demand fluctuation
- Replacement of other fossil fuels with natural gas
- Ageing installed capacity driving investments in new technologies
Economic growth, improving standards of living, and consequential electrification are jointly resulting in an increase in electricity consumption in non-OECD countries. The demand for flexible baseload power plants, as well as for industrial self-generation, is driven by the price of electricity purchased from the local grid, and by fuel price projections. The introduction of gas supply networks to the emerging markets is resulting in increased demand for gas and dual-fuel driven power plants, solutions in which Wärtsilä has a leading position.
In the OECD countries, tightening emissions legislation is forcing the closure of ageing capacity, which in turn drives the demand for new investments. Another driver is the political emphasis towards low carbon power systems, resulting in rapidly increasing levels of renewable generation. This has already created a substantial need to add flexibility into power systems. Wärtsilä’s Smart Power Generation power plants represent the most efficient solution for integrating intermittent renewable energy, thereby enabling the transition to a sustainable, reliable, and affordable low carbon power system.
Energy Solutions’ competition
Wärtsilä is facing new types of competition while broadening its offering portfolio. The main competitors in larger gas-fired projects are gas turbine manufacturers, such as GE and Siemens. In smaller gas power plant projects, and in the heavy fuel oil power plant market, the competitors are mainly other internal combustion engine suppliers, such as MAN Diesel & Turbo, GE Jenbacher, Caterpillar (MAK), and Rolls-Royce.
When competing against gas turbines, Wärtsilä’s combination of high efficiency, greater fuel flexibility, and superior operational flexibility enables better value propositions to many customer projects. Wärtsilä’s systematic market development is shaping the energy sector by utilising a value based market approach, which builds on monetising the benefits of Smart Power Generation.
Wärtsilä’s advanced gas and dual-fuel engine technology, optimised modular power plants, superior project management capabilities, and the global service support provided throughout the lifecycle of installations, have led to Wärtsilä’s market leading position in the gas and liquid fuel combustion engine power plant markets.
In the utility scale solar PV business, independent, regional, and local EPC companies are the main competitors. The competition in LNG infrastructure projects comes mainly from contracting companies.
When looking at energy system integration, software and battery storage systems, the competition comes from companies such as NEC and Tesla, among others.
Energy Solutions and sustainability
The development of a more sustainable energy infrastructure is being driven by climate policies, energy security, and economics. Carbon-intensive energy sources are being replaced by low carbon fuels, such as natural gas and renewable source solutions. Energy savings and efficiency improvements are encouraged, and even legally enforced, at every level. This development is evident on a global scale, even though short-term actions can vary in different regions.
In line with its commitment to sustainability and responsible business conduct, Wärtsilä has taken an active role in the development of markets and solutions. This includes advising national decision makers on changes in the power markets and on relevant technical and commercial norms. In this way, Wärtsilä helps and enables the transition to more sustainable power systems. Wärtsilä strives to maintain a deep understanding of market requirements and drivers, and to develop its solutions in a way that enables them to contribute effectively to improved energy system performance in the various regions of the world.
Wärtsilä's solutions for the energy sector offer a unique combination of flexibility, high efficiency, and sustainability. Many different fuels, including bio-fuels, can be used efficiently, which helps to reduce greenhouse gas emissions. Thus, Wärtsilä's Smart Power Generation technology enables the development of a reliable and sustainable energy infrastructure. The integration of wind and solar energy with flexible Smart Power Generation capacity is already reducing carbon emissions across the globe. In addition to this, Wärtsilä's strong capabilities to offer energy storage, utility-scale solar PV power plants and hybrid solutions, including the most advanced software for energy management, enables maximising the share of renewables into the energy mix, which in turn ensures the widest optimisation of the different assets and the reliability of the system.
Towards sustainable power systems
The challenges associated with climate change require a dramatic decrease in baseload coal based power generation and a major increase in low carbon power generation, including wind, solar, and natural gas fired plants. In future power systems, the majority of the electricity will be generated by wind and solar power, while thermal power generation will be increasingly used for system balancing and back-up. The inherent variability of wind and solar sources requires operational flexibility from the thermal capacity. Current and earlier power systems were not designed for this purpose, and in order to meet the required capacity, new flexible power generation assets need to be added to the system. Such flexible capacity is based on three elements: operational flexibility, energy efficiency, and fuel flexibility.
Operational flexibility is needed for reacting to the rapid changes in wind and solar output and for sudden power system disturbances. Power plant requirements include the following features:
- Frequent and fast starts and stops without negative wear and tear consequences
- Cyclic operation with high up and down ramp rates
- High full and part load efficiency
- A broad load range
- Minimal CO2 emissions.
Energy efficiency means that less fuel is needed to generate electricity. In combined heat and power generation, energy efficiency can be significantly improved. Lower fuel consumption results in lower CO2 levels from power generation.
Fuel flexibility enables the transition to more sustainable fuels whenever they become available. This feature becomes increasingly important when investing in new power capacity, because the plant is not fixed to any particular fuel where more sustainable fuels may be available in the future.
These three elements form the cornerstones of the Smart Power Generation solutions. Such solutions enable maximised utilisation of valuable renewable power, smooth operation of inflexible baseload thermal power plants and, according to the results from future power system modelling, a dramatic reduction in system level CO2 emissions.
Wärtsilä's Smart Power Generation power plants allow true operational optimisation of the entire energy system in an affordable, reliable, and sustainable way, and offer benefits that include:
- The achievement of extremely low carbon emissions from the entire power system
- Enabling high penetrations of wind and solar power without power system issues
- Enabling baseload plants to operate at high output and efficiency, thereby lowering CO2 levels
- Enabling wind curtailment to be minimised while helping to avoid negative price developments
- Reducing the amount of spinning reserve required
- Enabling the efficient use of bio gas- and liquid bio-fuel resources.
By removing the abusive cyclic load from plants that are not designed for it and providing high efficiency over a wide load range, Smart Power Generation plants allow the entire system to operate in the most cost effective way and ensure system reliability even during extreme wind variations and contingency situations. They also enable decentralising the intermediate and peak load capacity with flexible plant sizing and installing generating capacity in load pockets to reduce grid losses, while helping to avoid investments in new high voltage grid expansions. The ability to deliver Smart Power Generation solutions on a fast-track basis enables local capacity deficits to be rapidly overcome.