Koreans move into the driving seat for fossil power...

20 February 2010

The shift in ownership of intellectual property in power plant engineering continues to move inexorably eastwards, with the Koreans in general, and Doosan in particular, emerging as technology leaders – not just licensees manufacturing to other people’s designs.

Through its purchase (completed at the end of last year) of steam turbine maker Skoda Power (capacity 2.3 GW/y, to be increased by 50% over the next five years) and the 2006 acquisition of boiler specialists Mitsui Babcock – coupled with its already formidable presence in the electrical generator business (having an amazing 8.5 GW/y of manufacturing capacity) – Doosan can provide you directly with the three key components of a coal fired power plant. It will be doing exactly this at the Raipur-Chhattisgarh (685 MW x 2) plant in India, for which it signed a $1 billion contract on 22 January.

In a further key step towards increasing its global presence, the Skoda and Babcock businesses have now been placed in a new entity called Doosan Power Systems, which will spearhead the Korean company’s drive into Europe, the Americas and South Africa. The new division, which will include Doosan Power Systems Americas and Doosan Power Systems Europe, will be the “Western arm” of Doosan Heavy Industries and Construction’s power business group, says its CEO, Iain Miller.

And its not just in coal powered technology where Doosan has become self sufficient in recent years. It is also poised for great things in the CCGT business. Already dominant in HRSGs (with the biggest market share in both 2007 and 2008), 2009 saw Doosan complete, albeit with a little help from MHI, its (and Korea’s) first ever big gas turbine (which is being supplied, along with two more, to Yeongwol). The company has also developed its own 3 MW offshore wind turbine, while at the other end of the size spectrum it has recently perfected the manufacture of large HP and LP forgings for USC power plants, and is in fact already a major manufacturer of steam turbines (with a production capacity of 6 GW/y), for nuclear, coal and CCGT plants, under a longstanding licence agreement with GE.

When Doosan purchased Babcock in 2006 they said their goal was to become “the global number one company in the power industry”, so they cannot be accused of lacking ambition. And if the current rate of progress can be sustained, they might just manage it.

…and nukes

Another recent milestone for Korea was its nuclear triumph in the UAE, again involving Doosan, in a consortium led by KEPCO.

Areva was understandably put out by this outcome (see this month’s news), with Areva CEO Anne Lauvergeon recently quoted as saying that buying the Korean APR1400 was like buying “a car without air bags and safety belts.” This is a somewhat misleading oversimplification as the APR1400 is a Generation III design with a very high level of safety and is the culmination of Korea’s 30 year programme of doggedly mastering and evolving PWR technology (building on CE System 80+ technology, now owned by Westinghouse/Toshiba) – see MPS September 2007, pp 15-16, and April 2008, pp 17-20.

It also includes a number of innovative features, including safety injection directly into the vessel and a fluidic device inside the safety injection tank.

But the striking thing about the Korean bid, $20 billion for four 1400 MW units (much of it offered at a fixed price), is that it is around 30% less than the bids submitted by Areva and GE-Hitachi. And judging by the superb track record of the Korean nuclear industry to date, with its strong emphasis on replication, standardisation, modularisation, it will deliver.

It is sometimes forgotten that cost overruns (compounded by construction delays) were a key factor in the decline of the nuclear industry in the 70s and 80s, exacerbated of course by safety concerns in the wake of Three Mile Island and Chernobyl. In view of the numbers currently being bandied about for nuclear new build in Europe and the USA, and the kinds of problems being encountered at OL3, cost reduction, and the related matter of building on schedule, need urgent attention. It also looks like we could learn a great deal from the Koreans in both of these areas.




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