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Power grids to spend $64 bln on new gear by 2020 -Alstom
July 11, 2013 / 12:26 PM / 4 years ago

Power grids to spend $64 bln on new gear by 2020 -Alstom

* HVDC cables transport up to three times more power

* Technology needed to link remote green projects with cities

* Europe, North Africa 9-13 billion euro market over 5 years

STAFFORD, England, July 11 (Reuters) - Grids around the world are likely to spend about 50 billion euros ($64.3 billion) by 2020 on new equipment to transport power over long distances, including connections to remote renewable energy projects, Alstom estimated.

With the share of renewable energy estimated to grow to one third of global power production by 2035, the need to move electricity from remote dams, wind farms and solar parks to big cities is expected to rise sharply.

“Electricity is going to come from somewhere else in future, but it’s still being consumed in the same places, so you need to remap everything,” Gregoire Poux-Guillaume, president of Alstom’s grid business, said in an interview at the French engineering company’s Stafford factory.

Alstom is one of three major companies, along with Siemens and ABB, that supply high voltage direct current (HVDC) equipment to connect offshore wind farms or remote dams with population centres.

HVDC cables and equipment are used to build so-called supergrids that can transport up to three times more electricity than conventional alternating current (AC) lines and send it over longer distances with fewer energy losses.

“Do you want to remap with secondary farm roads or with highways? The supergrid is this highway,” Poux-Guillaume said.

Over the 2013/14 financial year, the grid business took a record 5.1 billion euros of future orders, including a 1 billion euro contract to connect Germany’s DolWin3 offshore wind farm.

While order indicate the business may pick up, last year its operating income fell 4 percent after demand slowed in India.

The overall market for HVDC technology in Europe and northern Africa is worth 9 billion to 13 billion euros over the coming five years, Alstom has said, two thirds of which due to the need to connect offshore wind farms.

Alstom is competing in the region to connect offshore wind farms, a technology that is subsidised in many European countries because it can produce energy in large quantities.

Poux-Guillaume expects around 60 percent of the unit’s offshore wind business in Europe to focus on Germany, where a transition from nuclear to renewable energy will require huge investments.

German grid companies estimated last year that over 30 billion euros of total investment would been needed over 10 years.

Grid operator Amprion is seeking planning permission to build a 1 billion euro direct current power line to transport electricity to the southwest, where the bulk of nuclear plants will be shut down.

In other regions, Alstom also expects demand for HVDC technology to grow, with demand from Americas amounting 16 billion euros by 2018.

In Brazil, Alstom secured a huge project four years ago to supply technology to connect dams in the west with the south-east where demand is highest.

Alstom had sold off its power transmission and distribution business in 2004, when the group was financially troubled and needed a 2.5 billion euro bailout from the French state.

Alstom bought back the transmission part in 2010, and the unit’s orders and revenue have risen since then. ($1 = 0.7778 euros) (Reporting by Karolin Schaps; editing by Jane Baird)

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