Grontmij energy chief hopes CHP will prosper after German announcement

Date: 30/07/2015

The Managing Director of Energy for European engineering giant Grontmij is hopeful that recent pronouncements by the German government on its intentions for combined heat and power will help revive the technology.

Dr. Bernhard Poos told COSPP that the government’s decision to compromise on the coal levy in favour of supporting more CHP-oriented projects were positive given the industry’s recent stagnation.

“The price of electricity has been so low according to the high production of renewable energy that it has proven very difficult to increase the level of CHP in Germany. I hope due to the new ideas of (minister) Sigmar Gabriel that the CHP production will increase once again.”

“The industry had suffered hard in the last year and some plants had to shut down their CHP plants, sometimes big combined cycle gas turbine plants- which were no longer economical. I hope now that it is not a political announcement. I hope the support for CHP will increase once again.”

Grontmij’s core work for decades had been in the field of trigeneration and combined heat and power, before gravitating to larger power plant projects. Recently it has put in place an agreement with Swedish engineering consultancy Sweco that will see the companies merge to form the biggest engineering consultancy in Europe.

The combined company will allow both companies to accelerate their strategies. The combined company will have approximately 14,500 employees with an annual total turnover of approximately EUR 1.7 billion

Amid that backdrop Grontmij has been highly active in the area of decentralised energy. Just last month it converted the Helsingor combined heat and power plant in Denmark from natural gas to biomass as the latter aims to lower CO2 emissions.

The company’s projects profile are in line with developments at EU and member state level, as Europe, through its recent Energy Union announcement, prioritises energy efficiency in its ongoing bid to decarbonise.

“Even if the market was going down we are extremely strong in CHP and still have a lot of projects in CHP – for example we also renewed the CHP system in Munich Airport. We not only take on big power plants, we cater for other sizes too.”

Grontmij asserts itself as a company that serves individual core or ‘home’ states in Europe rather than putting itself forward as a global corporation. The structure of the company allows it to appreciate the unique individual policies associated with each country, according to Poos.

“To mention Germany for example we have in past decades always made a lot of effort to save energy for our clients with each project we are involved in –energy optimisation and consumption is a priority subject. We are a member of a working group aligned with the big energy-intensive industries sector and we look at assisting energy savings over 20 year timeframes. In energy-intensive industries they don’t currently build new plants. We are talking about brownfield projects, and improving existing sites.

In terms of the company’s work in other core markets, Poland is an obvious client for Grontmij expertise.

With demand for electricity very high along pressure to reduce emissions in Poland, the company has a lot of business in waste to energy plants which are mostly connected to district heating. That business is set to grow further in the immediate future.

“We have in the engineering of waste to energy plants enjoyed a market share of 50 per cent- we are the biggest waste to energy company in Poland and coal will remain very strong there.

“The infrastructure in Poland for district heating must however be improved because of new regulations in housing, insulation and public requirements – so district heating must be renewed and in combination with that we have to think about the existing energy production- if the old coal fired production model isn’t a solution anymore we have to think about it and for each case we have to find a sensible solution.”

“Brussels can support useful usage of CHP. Unfortunately the high increase of renewable energy has led to a situation where the price in power production decrease is so strong that only old coal-fired power plants can be operated in an economical way in Germany for example. The other CCGT and CHP plants suffer under that development. Stricter regulation from the EU can of course support the useful development of CHP. I am convinced of that.

“We are represented in all countries so we know the special advantages and disadvantages of the individual country’s energy policy. We can sign contracts under difficult framework conditions – we can propagate very good fixing solutions but nevertheless it would be easier if Brussels had a more unique view.”

So what of the future for the company, particularly after the deal with Sweco is finalised?

”I believe the energy market situation is very good but we have to change our perspective a bit. In the past we have worked for big public power plants and now we need a stronger focus on medium size and smaller size CHP.”

Source: COSPP