Alstom helps boost China energy drive

Alstom SA, France's transport infrastructure and power generation conglomerate, is banking on China to drive growth as it aims to further tap into the country's surging demand for hydropower.

With an investment of 100 million euros ($133 million), Alstom Renewable Power, the French company's division for renewable power generation equipment and services, has completed an upgrade and expansion of its Tianjin hydro facility, Alstom's largest hydro plant.

The project, started in November 2010, includes an upgrade of the existing hydropower industrial facility and construction work for a second phase facility.

This will see a new production area as well as a global technology center. The entire facility has 2,000 employees, including 400 engineers.

The new global technology center will address the research and development needs of the Asian market for various types of hydropower equipment. Its major activities include R&D in mechanics, hydraulics and electrical requirements for hydropower turbines and generators as well as scale model tests of different turbines.

"With the operation of its new global technology center, Alstom will become a full value chain entity in China, carrying out a vast array of hydroelectric activities, including R&D, sales and marketing, engineering and installation, maintenance and service," Patrick Kron, chairman and CEO of Alstom, said on Tuesday.

"Alstom has used its advanced and reliable technological expertise to equip many important power projects in China. The new operation of the Tianjin site represents a key milestone for our development in China. This factory will allow us to accelerate Alstom's contribution to China's sustainable development," Kron said.

China will become the world's largest generator of hydroelectricity, according to the energy development section of the nation's 12th Five-Year Plan (2011-15).

The country will further promote hydropower and by 2015 the capacity of conventional hydropower will reach 260 gigawatts and pumped storage power stations will reach 30 gW.

From its Tianjin site, Alstom recently supplied four 800 megawatt units to the Xiangjiaba hydropower plant on the Jinsha River, a tributary of the Yangtze River in Yunnan and Sichuan province.

With the assistance of its newly completed second phase project, the Tianjin site has 19 critical heavy machines including two new gantries. It will be able to deliver, on an annual basis, up to 26 turbine and generator units.

Liu Shukun, a professor at China Water Resources and Hydropower Institute in Beijing, said after Japan's Fukushima nuclear disaster in 2011, governments are keen to push ahead with all forms of renewable energy: solar, wind, bio-energy, geothermal and hydro.

However, the development of wind and solar energy is slowing down. The State Council began tightening approval for wind power projects in the end of 2011 after a large number of wind resources were wasted because the grid wasn't capable of carrying or sending out the electricity.

In comparison, hydropower makes up 22 percent of the country's installed power base, with many large hydroelectric projects either in the planning stage or under construction.

China's hydro market is in good shape, with installed capacity for hydropower increasing by 15 gW every year, and expected to reach 380 gW by 2020 from under 200 gW this year. The country also plans to gain 11.4 percent of its energy from renewable sources by 2015, of which hydropower will contribute two-thirds, according to National Energy Administration.

"There is also huge potential throughout Asia. Asia has become the world's top source of hydroelectricity in 2012, producing more than 29 percent of the world's total hydropower," Liu said.

Liu said by 2035, Asian countries are expected to account for 85 percent of additional global capacity. For example, there are 10 gW of potential hydropower projects in Laos and more than 30 gW in Myanmar.

Alstom so far has sealed a 20 percent market share of the total Chinese installed capacity of large hydropower equipment. Alstom Hydro China delivered 12 hydroelectric units in 2012, all of which were designed and manufactured at the Tianjin facility, and delivered them to hydroelectric power plants across Asia, including Nuozhadu and Xiangjiaba in China, and Son La in Vietnam.