The challenge of meeting stringent emissions targets at full output with the Industrial Trent turbine has hit Rolls-Royce results, with the company making a £120 million ($182 million) provision to cover the issue.
The high temperatures and pressures within the Trent engine result in good thermal efficiency, but push the turbines beyond new environmental limits for emissions of nitrogen oxides. Over the past 18 months, Rolls-Royce has developed a solution to the problem and the provision includes the cost of “introducing the new standard into service”, retrofitting new combustion systems to existing turbines and payment of compensation.
Following the redesign of the combustion system, the company believes that it is in a good position to compete with other gas turbine manufacturers, most of whom have encountered problems with their advanced turbines. Rolls expects to sell around 30 Trents annually by 2005.
The new Dry Low Emissions technology will also apply to other gas turbines manufactured by Rolls. Development costs associated with the Trent have now reached £300 million ($435 million), including the latest provision.
The company issued its interim results showing the one-off costing, with a warning that profits are down to £38 million ($57 million), compared with £159 million ($238 million) in 1999. The company also announced that results for next year would be flat. Earnings growth is expected to resume in 2002.
Overall though, energy sector orders are up for the company and, following introduction of the new emissions control system, Rolls is confident that market opportunities are large, notably in distributed generation.
