As part of the Russia Power 2015 exhibition and conference held on March 3–5 in Moscow, we met with Mikhail Lifshitz, CEO of ROTEC. We talked about gas turbine units and the company's repair and service maintenance commitments.
Mr. Lifshitz, the construction boom in high-power modern CCGT units in Russia is fading away, and the issue of maintenance of installed generating capacity is coming up, particularly with respect to foreign equipment considering the unstable geopolitical situation. How do you assess the situation in the Russian services market and what is your company's portfolio of service contracts?
The program for commissioning new capacities under CSA is really coming to an end. Last year, about 5 GW of CSA capacities were put into operation, and the total capacity commissioned in the country was a record high for the post-USSR Russian power sector, coming up to 7.6 GW. This year we expect an even higher amount of new capacity to be commissioned, while in 2016 it will drop significantly.
Our company participated in the construction of new power units, providing engineering services. Specifically, we provided technical support for the erection of turbines at seven power plants, and work is still ongoing on the projects to build CCGT units at Nizhneturinskaya GRES and Akademicheskaya CHP plants. Commissioning of new capacities will dwindle, and such challenges will come to the fore today as ensuring quality service of newly commissioned equipment and modernization of outdated turbines.
With regard to the Russian services market today, the situation is gradually changing. Owing to the supply of imported equipment, service contracts for its maintenance were signed mainly with foreign companies; therefore, many world-famous service companies are present in the Russian market. But Russian companies are beginning to prove worthy competitors.
Our company on its own and in partnership with Sulzer provides services in Russia for as many as 20 gas turbine units with a total capacity of more than 2.5 GW. We service and repair gas turbines from the world's leading producers: General Electric, Siemens, Alstom, Ansaldo, as well as GTE-160 turbines of Siemens and Power Machines joint venture. In addition to long-term GT service contracts, and these contracts are normally signed for 8–10 years. We have contracts for one-off scheduled works, including minor inspection, hot gas path inspection, major inspection, supply of spare parts, and refurbishment of gas turbine components. Our clients include such companies as Inter RAO, Volga TGC, MosEnergo, TGC-1.
Every manufacturer of power equipment offers long-term service contracts for their equipment, and any new alternative service provider is met with a mixed reception. How does ROTEC manage to stay competitive amid fierce competition with foreign suppliers? Could it be because of your price?
The price plays an important but not a crucial role. It is not the price that helps us win as ours is the market average, but the fact that we offer an integrated package of services with a center of competence in Russia, without engaging foreign professionals.
It is a typical situation when while signing a contract for the supply of high-tech equipment a turbine manufacturer also offers a service contract which focuses on the supply of new sets of spare parts and refurbishment of the hot gas path components. However, today the technology of production of turbine blades and hot gas path components is not only the property of the manufacturer. We see independent vendors emerging who have the technology and equipment that is comparable and often superior to the original models. Competition is growing both in maintenance services and in terms of the choice of technology for repairs of turbines and associated equipment. With the emergence of alternative service providers the market becomes more flexible, which ultimately has a positive effect on the end consumer.
For purposes of the service and management of the situation, it is important to have information on the performance of the gas turbine unit and energy facility as a whole, which requires modern methods of monitoring and diagnostics. What kind of technologies are implemented and used at ROTEC?
When carrying out our service contracts we are supported by our own Remote Monitoring and Forecasting Center, which uses software developed by our very own professionals. Analysis showed that standard remote monitoring systems used by global manufacturers of gas turbines basically calculate the number of equivalent operating hours and allow for deviations from nominal parameters to obtain all the information from the power plant's DCS. In developing our own remote monitoring system, we set ourselves the task not only to monitor the operation mode, but also assess the condition of the equipment, predict the remaining life of parts, and warn of any risks.
The information obtained through the remote monitoring and prognostics system allows the operator to effectively plan the timing and scope of repairs, as well as the required spare parts and materials. This makes it possible to increase the time between repairs, reduce the time of repair, and optimize the scope of purchases.
Our monitoring center is located in Russia in the Moscow suburb of Khimki, which is also important in this situation.
What are ROTEC's maintenance and production capabilities today?
Many of the technologies for production and refurbishment of turbine components and competence in servicing foreign gas turbines have become available to us thanks to partnerships with Sulzer, who supplies and repairs the most critical assemblies and parts of most modern gas turbines. Currently, under existing service contracts, we repair the blading of foreign gas turbines in the factories in Venlo and Rotterdam, but soon we will open our own production facility in Yekaterinburg. Over the past few years, Ural Turbine Works, part of ROTEC holding, has been implementing a large-scale program for upgrading and modernization of the main process equipment, mastering the manufacture of new products, and now we are building a new line at UTW to produce stator and rotor blades and hot gas path parts of gas turbine engines.
In addition, ROTEC has a certified nondestructive testing laboratory and extensive experience in fault detection on rotating, transformer, and other equipment.
In maintenance of gas turbines do you mostly rely on Sulzer technology?
Yes, we do. Sulzer Turbo Services, the turbine service division of Sulzer, is our key partner in projects for service maintenance of gas turbines. Sulzer employs technologies to refurbish materials used in the production of gas turbines of all generations, including F-technology gas turbines. Sulzer has been in the global market for more than 35 years and is an independent supplier of maintenance services and spare parts for gas and steam turbines, so it would certainly be a good idea to learn from them.
Which are the priority projects for ROTEC right now?
Our priority is an investment project to commission a production line to refurbish GT hot gas path parts and components. In the next phase we will organize the production of a full cycle for the production of hot gas path components, including the development of documentation, production of models and molds, foundry, machining, and application of functional coatings. It will take at least three years.
In addition, as I mentioned, we have just brought our own Remote Monitoring and Prognostics Center to the market.
Another important area and part of our business strategy is promotion of export contracts for the supply of UTW steam turbines in foreign markets. In March, we completed a major project for the construction of a 125 MW turbine generator on Ulaanbaatar CHP-4. Ural Turbine Works acted as the general contractor, and ROTEC as the project manager. Ural Turbine Works also implements projects for the construction of new and modernization of existing power units in Kazakhstan (a total of approximately 700 MW), and it participates in tenders in Belarus.
Interviewed by Alexander Smirnov