STEAG GmbH

The large battery systems of STEAG GmbH in Essen/Germany were officially commissioned in mid-November 2016 with two ceremonies in Quierschied-Weiher and Duisburg-Walsum. Together with Minister-President Annegret Kramp-Karrenbauer, Joachim Rumstadt, Chairman of the Executive Board at STEAG, pressed the symbolic red button at the power station in Weiher, Saarland (Figure 1). This means that the three systems in Bexbach, Fenne and Weiher are now available to compensate for fluctuations in the power grid. The official commissioning of the three additional locations then took place in North Rhine-Westphalia on 17th November. During the opening ceremony in Duisburg-Walsum, NRW Minister of Economics Garrelt Duin performed the symbolic act together with Joachim Rumstadt.

In her speech Kramp-Karrenbauer said: “The large battery system project serves as a sign that STEAG is at the cutting edge of technological progress.” She also welcomed the initiative for securing grid stability.

NRW Minister of Economics Duin was also keen to stress the significance of the project in Duisburg: “The battery storage system makes an important contribution to managing the change in energy policy: Not only does it stabilise the power grid and increase the reliability of supply, it also allows emissions to be reduced through a reduction in the use of fossil fuels. In the current energy environment, which is characterised by powerful dynamic forces of change, we truly welcome the investment of STEAG – particularly since the project was implemented without subsidies. It shows that good ideas can quickly be developed to market maturity through decisive action.”

Rumstadt was also keen to stress: “Grid stability, and the reliability of supply associated with this, is currently the most important factor for successfully managing the change in energy policy. The power grid is being subjected to increasing levels of stress as a result of the ever greater proportion of volatile electricity from renewable energy sources. I am proud that we are not only the technological pioneer with our large battery system, but also that we were able to make our investment on a market basis, i.e. without any public funding.”

To date, the so-called primary control for equalising grid fluctuations has primarily been performed by conventional power stations. For the first time ever, STEAG has now made it possible for large battery systems to perform this same task. Their systems compensate for frequency fluctuations in the grid within seconds by feeding in energy when the frequency is too low or extracting energy when the frequency is too high. The largest battery system in Germany was up and running within just twelve months following the investment decision.

Within the scope of the event in Duisburg-Walsum, the large battery system supplied by STEAG was also qualified as a reference project for the KlimaExpo.NRW climate exhibition. Rumstadt accepted the “We are on board” certificate of the State Climate Protection Initiative in Duisburg from Duin and KlimaExpo.NRW CEO Heinrich Dornbusch (Figure 2). Dornbusch also believes the project has great potential: “The STEAG system not only makes an important contribution to guaranteeing grid stability and reliable energy supply. We also see further potential applications for battery systems, both for performing system services within the scope of the change in energy policy and for cost optimisation and risk management at industrial locations. It is therefore clear that this project should be included in the exhibition as an ‘engine for driving climate protection’.”

STEAG began preparations for implementation of the six large battery systems with a total output of 90 MW in November 2015 (Figure 3). The total investment was around 100 m €. All work was completed on schedule and within budget in collaboration with the suppliers Nidec ASI and LG Chem.

The large batteries are deployed and marketed via the “STEAG OneOpt” optimization network through the Trading & Optimization division at STEAG. With the investment in this new and innovative technology, STEAG is making a contribution towards implementing Germany’s change in energy policy. (STEAG, Si.)

STEAG GmbH, Essen/Germany, and Australian financial services provider Macquarie are strengthening their activities in Southeast Asia. To this end, the two partners established a joint development and investment platform in November 2016 to develop, implement and operate energy projects in Southeast Asia – focusing primarily on Indonesia, the Philippines, Malaysia and Thailand. Clive Turton, the director previously responsible for the Asia-Pacific region at APR Energy, was appointed CEO of the platform.

The mutual undertaking, which operates as Asia Power Development Platform Joint Venture Pte. Ltd. (APDP-JV), will handle the entire value added chain of project development and implementation in a way that minimizes risk for external investors, i.e. from development, through financing and construction, all the way up to operation of power station projects. In terms of technologies, the focus is on gas, coal, wind, solar, water and thermal waste treatment in the mid-capacity segment (50 to 300 MW). Approximately 500 m US$ of equity is to be invested. Many meetings are currently being held with prominent financing partners to secure the capital.

“There are many emerging countries in the Southeast Asia region, i. e. countries that have a growing need for an energy infrastructure and reliable energy supply,” explained Joachim Rumstadt, Chairman of the Executive Board at STEAG GmbH. “STEAG knows all about power station projects in emerging nations of this kind. Establishing a common platform for power station projects with a partner like Macquarie, with proven expertise in organizing investment capital, is therefore a great way for us to secure successful projects in the region. Everyone involved – whether developers, electricity consumers, investors or governments – will benefit from the pooling of skills and knowledge.”

Turton commented that it was a pleasure to establish this new player in the Southeast Asian energy market with STEAG and Macquarie Capital. The first few steps have already been taken and it is becoming increasingly clear that there are excellent opportunities for expanding the business in Southeast Asia.

STEAG has been a majority investor in coal-fired power plants in Columbia (1999), Turkey (2003) and the Philippines (2006) for many years. With its expertise, the company stands for reliable energy generation in the international arena. STEAG has already been working with Macquarie for many years on various projects. (STEAG, Si.)

In mid-November 2016, STEAG GmbH, Essen/Germany, signed a contract to acquire the shares of energy supplier Vattenfall in the Lauta thermal waste treatment facility in Saxony (T.A. Lauta, 74.9 %), as well as the industrial power plant (IKW) in Rüdersdorf near Berlin (100 %). Together, the two plants have a waste incineration capacity of 475,000 t/a. The two parties have agreed not to disclose the purchase price paid. The German Federal Cartel Office has already approved the acquisition.

For STEAG, the incineration of waste and special fuels is already a familiar business area. Indeed, STEAG had already held a 25.1 % stake in T.A. Lauta since it was commissioned in 2004 and operates the Leuna refinery power station, which generates electricity and heat from the refinery’s production waste. “STEAG specializes in generating electricity and heat using challenging fuels and sophisticated technologies. We have decades of experience in operating and optimizing power stations, as well as in the disposal of power station production waste,” explained Joachim Rumstadt, Chairman of the Executive Board at STEAG GmbH. “Having acquired these facilities, we are able to extend our portfolio to include additional base-load-capable generation capacities that are 50 % CO₂-neutral. This brings us two key benefits. Firstly, we are increasing the proportion of renewable energy sources in our portfolio for the production of electricity and heat. Secondly, we are also extending our business activities in the waste-to-energy market through the strategic market entry.”

In future, all activities associated with the waste incineration market will be bundled at a new subsidiary, STEAG Waste to Energy GmbH. With its subsidiary STEAG New Energies, STEAG is also one of the key players in the thermal biomass utilisation sector. At its eleven facilities located throughout Germany, the company currently processes approximately 550,000 t of biomass per year, primarily scrap wood. The heat generated in this process is fed into district heating grids or supplied to industry as process steam.

However, STEAG’s generation portfolio is not the only one to benefit from acquisition of the plants. Rumstadt sees further potential for the company’s subsidiaries STEAG Power Minerals (SPM) and STEAG Technical Service (STS): “STEAG Power Minerals is market leader in the sale of power station by-products, such as fly ash, FGD gypsum and melting chamber granulate. It now has the chance to use its expertise in a new market with this project. This also applies to STEAG Technical Service, which offers a broad range of services in the field of maintenance. In the future, we are also keen to position this in the waste-to-energy market.” (STEAG/Si.)

The framework conditions for producing electricity in conventional large-scale power plants have changed substantially for the long-term as a result of the revised German energy policy. Prioritising renewable energies triggers economies of scale and price effects that place the owners and operators of fossil-fuel power stations in particular under considerable pressure in terms of earnings. In response to this, the STEAG Group has chosen to take early action by optimising the cost and earnings structure. Thanks to a holistic project taking all business areas into account, STEAG is now able to adapt more comprehensively to the effects of the politically determined energy market. As part of the STEAG 2022 project, the company’s current positioning was examined and areas for future orientation identified. The objective of STEAG 2022 is to safeguard the economic performance and development of medium-term growth prospects.

The STEAG 2022 project comprises six core elements, each of which reinforce and distinguish the company’s future role:

• Operator and optimiser of group-owned power stations in a dynamic market environment;
• diverse stakeholder in the energy trading markets relevant to STEAG;
• competitor in the international market for energy services and power station operations;
• provider of safe decommissioning of nuclear facilities;
• growing developer and operator in the field of decentralised energy supply; and
• driven competitor in new projects, acquisitions and regional project development in attractive growth markets.

STEAG 2022 is the Essen-based energy company’s response to the rapid, lasting changes in the market climate, both in Germany and around the world. In the past few years, STEAG was able to confront this foreseeable development successfully using active optimisation and flexibilisation measures. However, the financial figures are now increasingly coming under pressure. “STEAG is therefore improving earnings, reducing costs and creating scope for investments by increasing the number of growth projects and measures in its portfolio and its overall efficiency. In future, services will contribute further towards continued development. International operations remain extremely important because they offer better opportunities than the declining business in Germany,” says Joachim Rumstadt, Chairman of the Executive Board at STEAG GmbH.

With the implementation of STEAG 2022, the company is able to position itself as an innovative and agile provider for the operation of power generation plants, energy services and domestic and international trade that is open to different technologies.

Operating power stations
STEAG has decades of experience in operating group-owned power stations. Over the past few years, the company has established its competitive advantages by combining expertise and technical skills, such as measures for lowering the minimum load, with flexibilisation of fuel use and the interaction of business operations. These competitive advantages have made it possible for the STEAG Group to keep its power stations in the market. In spite of these ongoing optimisations and stable utilisation of capacity, the deteriorating market situation is now leading to significant shortfalls in revenue. Some consideration is therefore being given to the idea of withdrawing those power stations that no longer generate a positive income from the market, either on a temporary or permanent basis. This would result in the STEAG Group having to cut hundreds of jobs. The possibility of selling off assets that have now reached peak added value, such as district heating in Germany and wind farms around the world, in a timely manner is also being explored – i.e. exploiting the development of a sellers’ market to generate liquidity.

Marketing energy
Once its long-term electricity supply and reserve capacity contracts with RWE expired, STEAG swiftly adapted to the asset-based marketing of group-owned power station output and set up its own sales and distribution organisation. This business model, in which individual market assessments are made and market developments are anticipated early in compliance with a specified conceptual risk framework and taken into account for the implemented strategies and products, has been continuously further developed to great success. However, the decline in output from domestic power stations will have to lead to a reorientation in the trade sector. As part of STEAG 2022, a targeted and successive expansion of marketing foreign production capacities is in place.

Providing energy
Services, investments and acquisitions are at the centre of the focus on growth – in a wide variety of markets and in many cases also in cooperation with partners. Owing to the particular expertise of STEAG, services are an exceptionally attractive growth area. STEAG has pronounced expertise in many fields of the power industry that will not only benefit group-owned power stations in future, but will also be offered increasingly to third-party companies and power station owners in the national and international markets. This includes planning and construction, operation, maintenance and marketing of power stations and their by-products.

Decommissioning nuclear facilities
There are new, promising projects to be found in decommissioning nuclear technology, i. e.. This market is experiencing extremely strong growth both in and outside of Germany and therefore offers great market potential. STEAG is already in demand as a service partner for the safe decommissioning of nuclear facilities – a position which should be developed further in terms of group expertise and by collaborating with specialist partners.

Developing and operating a decentralised energy supply
Over the past year, STEAG has achieved well-documented market successes in the decentralised energy segment with the Ford Saarlouis and TU Darmstadt projects. The company plans to use projects of this kind as part of STEAG 2022 to further expand its positioning for decentralised contracting projects. This primarily involves opening up additional market potential in smaller plants, as well as new customer groups.

Acquiring new projects
In the past two years, STEAG has invested approximately 600 m e and thereby expanded the production portfolio by some 450 MW – particularly in the field of renewable energies. Clear emphasis was placed on wind farms, which received roughly 500 m e of investment. Business operations in the onshore wind sector are due to be expanded further as part of STEAG 2022. Expansion in Germany and France will focus increasingly on involvement in earlier project phases and possibly the value-enhancing sale of projects to third parties. District heating projects in Poland are also attractive opportunities for growth. STEAG will be active in the market and open to different technologies for any new projects. Owing to its existing expertise, the key focus for these projects will be on coal, wind power, geothermal and waste-to-energy plants. Projects for the balancing market – such as the six innovative large-scale battery systems that STEAG installed at sites in the Ruhr and the Saarland – should also be explored. In addition to this, acquisitions are gaining considerable weight when it comes to achieving short-term earnings and liquidity contributions.

All these elements should help transform the Group extensively in order to guarantee STEAG’s economic performance and develop a sustainable structure that preserves value for the Group as a whole. (STEAG/Si.)

Dr. Arndt Neuhaus has been appointed as a new member of the Supervisory Board of STEAG GmbH, Essen/Germany. The management consultant joins the supervisory body of the energy company and succeeds Dietmar Bückemeyer on the Board of Management of Stadtwerke Essen AG.

On 1st February 2016, STEAG Energy Services do Brasil Ltd. (SESBR) took over responsibility for managing the operation of a gas treatment plant owned by Parnaiba Gas Natural S.A. (PGN). The Brazilian STEAG subsidiary was awarded this contract at the end of last year. Ulrich Sigel, Member of the Board of STEAG Energies Services GmbH, explained that his company’s operations and maintenance concept, based on their internationally recognised expertise in managing operations at thermal power plants, had convinced the customer that they were the right people for the job. For STEAG Energies Services GmbH, this also means venturing into a new field of business – operations management at oil and gas facilities.

Located in the state of Maranhao in northern Brazil, the treatment plant conditions and cleans the natural gas from multiple gas fields. This process involves removing condensates (water and hydrocarbons) and filtering out solids. The natural gas is then compressed, conditioned and conveyed to a power plant approximately 1 km away, owned by the Brazilian operator ENEVA. The contract with the Brazilian STEAG subsidiary SESBR has been agreed for an initial term of two years. (STEAG/Si.)

November 2015 saw STEAG GmbH, based in Essen, commission the last eight turbines at its wind farm in Süloglu in the north-west of Turkey. A total of 20 wind turbines, each capable of generating 3.0 MW of electricity, have been put into operation there one by one since September. This huge on-shore wind farm project by STEAG comes just over a year after the company commissioned the Crucea Nord wind farm in Romania, which generates 108 MW in total.

Joachim Rumstadt, Chairman of the Management Board at STEAG, remarked on the project‘s strategic importance: „The thrust of our strategy is to set up profitable on-shore wind projects both inside and outside Germany, thereby promoting the wider use of renewable energies.“ Now that the Süloglu wind farm has been commissioned, STEAG boasts the ability to produce over 300 MW of wind energy in Germany, France, Poland, Romania and Turkey. The next building phase will soon see another 50 MW of wind energy – the majority of which will be generated in France – added to this total.

The commissioning of the wind farm in Süloglu marks multiple milestones in STEAG‘s company history. Its large power station in Iskenderun (1,320 MW) has enabled STEAG to offer the Turkish energy market a reliable supply of electricity since 2003. The new wind farm constitutes the firm‘s first investment in the renewable energy sector in Turkey and has laid the foundations for STEAG to continue expanding its activities in the Turkish electricity market. The company is now operating for the first time via its subsidiary STEAG Turkey Enerji, which is marketing electricity generated by renewable sources directly in Turkey. Once STEAG had started producing electricity, it immediately started trading with the EPIAŞ, the Turkish spot and intra-day stock exchange.

The project is also making use of the subsidies that the Turkish government has instated to promote the generation of renewable energies: Wind projects in Turkey are entitled to a fixed feed-in tariff that can be paid over a ten-year period. This remuneration, which can start to be claimed at the beginning of 2016, helps to ensure that wind farms are economically viable. Farm operators are also able to sell the electricity they generate on the free market. STEAG will be following both of these routes to market in Turkey in the future. (STEAG/Si.)

A programme set up on behalf of the German Ministry for Economic Cooperation and Development (BMZ) by the German Society for International Cooperation (GIZ) and the Indian Central Electricity Authority (CEA) has resulted in annual CO₂ savings of 1.6 million tonnes (which corresponds to around 1.2 million tonnes of Indian coal or a complete train with over 50 carriages full of coal every day). As a consultancy and efficiency service provider, STEAG GmbH in Essen played a key role in the programme. At a meeting in New Delhi at the end of June, representatives from the CEA and the Bureau of Energy Efficiency (BEE) thanked STEAG for its efforts.

The Indo-German Energy Programme (IGEN) “Power Plant Optimisation Component” launched in 2009 with the aim of reducing fuel consumption and emissions in India. As part of this programme, STEAG trained over 100 engineers from Indian public utility companies, conducted feasibility studies for energy-saving measures at 30 plants, and implemented model energy reduction initiatives at four selected pilot power plants. When it came to identifying potential efficiency measures, STEAG’s own software EBSILON® Professional played a key role. Developed in-house at STEAG, it is a tool for modelling thermo-dynamic cycles. This software enables users to map various types of power plant processes and evaluate them with regard to their efficiency and part-load performance.

Some of the improvement measures implemented at the pilot power plants were presented at the IGEN meeting: Using the STEAG software for support, areas of low efficiency could be identified and corresponding energy-saving measures could be set up at Indian power plants. The Suratgarh pilot power plant, located in the state of Rajasthan, north-west India, also installed an intelligent rust blowing system which led to improved boiler efficiency levels within a short space of time.

Dr. Winfried Damm, Director of the GIZ’s Indo-German Energy Programme, emphasised the success of these measures in the closing report for the IGEN programme: “Over the past six years, the IGEN team, supported by the Indian Electricity Authority and the consultants from STEAG, has made huge progress in the area of energy efficiency at Indian power plants.”

(STEAG/Si)