·       
 Nuclear Power Plants Will Spend $1.6 Billion for Valves Next Year

·        Race for World Dominance in Air, Water and Energy Will be Won by Companies Not Countries

·        Mergers Create New Leaders in the $340 Billion Air/Gas/Water/Fluids Treatment and Control Markets

·        Hundreds of Active Projects in $19 Billion Canadian Oil Sands Market

·        Demand for Wood Pellets Growing Rapidly

·        “Industrial Boiler MACT - Impact and Control Options” will be the “Hot Topic Hour” on March 21, 2013 at 10 a.m. CDT and again on April 4, at 10 a.m. CDT

·        Headlines for the March 8, 2013 – Utility E-Alert 

·        McIlvaine Hot Topic Hour Registration

Nuclear Power Plants Will Spend $1.6 Billion for Valves Next Year

Nuclear power plants use thousands of valves. Older power plants need to replace and repair valves and in some cases to upgrade them to meet new safety standards. This has created a world market which will exceed $1.6 billion in 2014.  This is the conclusion reached in the new McIlvaine report, Nuclear Power Plant Valve Forecast and Analysis.  (www.mcilvainecompany.com)

The Fukushima nuclear accident in Japan in March 2011 has reshaped the nuclear power industry.  Some countries halted construction for further review. Others decided to phase out nuclear power. A number of countries are now again moving forward.

China is currently leading the world with approximately 26 new nuclear reactors under construction or planned for near-term construction. In January 2013, China started up the first new nuclear reactor to become commercial since Fukishima. Worldwide, there are close to 60 reactors in construction or near construction. 

The total valve investment in a typical 1,000 MW nuclear power plant is in excess of $80 million. There is some variation from design to design.  Nuclear power plants of either PWR or BWR design include more than 5,000 valves per installation.  The valve applications include safety, control and isolation functions, among others.  More than 500 valves are classified as “safety” valves with the balance classified as “non-safety.” These valves reflect virtually all valve types and sizes including ball, gate, globe, butterfly, check, plug, poppet, squib and others.  Valve sizes range from fractions of a gallon per minute for chemical feed regulation to many thousands of gallons per minute for controlling reactor cooling and condenser cooling. 

The future for nuclear power may depend on the trajectory of continuous-improvement in reactor designs already established by the major suppliers including Areva, GE, Hitachi, Mitsubishi, Westinghouse and others sourced from Canada, Russia, China and South Korea.  The two most prominent reactor types today are pressurized water reactors (PWRs) and boiling water reactors (BWRs).  Currently, the PWR predominates in terms of installed and planned megawatts.  Both reactor types have been significantly improved in terms of design simplicity and safety features relative to the early designs of the 1960s and 1970s.  Improvement in valve design has kept pace with the plant improvements.

For more information on: Nuclear Power Plant Valve Forecast and Analysis, click on:  http://home.mcilvainecompany.com/index.php/component/content/article?id=71#n241i

Race for World Dominance in Air, Water and Energy Will be Won by Companies Not Countries

Long-term revenue forecasts in the twenty McIlvaine market reports in the air, water and energy fields are heavily weighted by the projected dominance of companies over countries. The ability of governmental officials in individual countries to shape the markets is more than countered by the abilities of domestic and international companies to shape those markets. 

The emergence of the global company is one of the most important developments in shaping future markets. On one hand, the U.S. is at odds with China over illegal acquisition of intelligence. On the other hand, Thermo Electron has its entire air pollution research activities located in China.  What is there to steal from the U.S. when all the information is already in China?  The question is one of internal company security not country security.

In a world of macro-wikinomics, the more information the global company can share with citizens around the world, the more profitable it will be.  The companies with the best products (those with the lowest life cycle costs) have nothing to lose by the spread of the knowledge.

It becomes difficult to identify many air/water/energy companies by national origin.  Alstom is a French company.  However, its air and energy groups are in the U.S.  It has a new major joint venture with Shanghai Electric in China to create the world’s largest boiler company. This new company with sales of $3.6 billion is registered in Singapore.

Individual companies can shape the energy future of countries as large as the U.S.  Sasol, a South African company, is moving forward to build a 96,000 barrel per day plant to convert shale gas to liquid fuels. It will be the largest manufacturing project in the history of Louisiana and one of the largest ever in the United States. 

Shell, with headquarters in the Netherlands, is also planning a gas-to-liquids plant as well as LNG and other investments in the U.S.  If the two companies (South African and Dutch) proceed with these plants, it will boost the U.S. self sufficiency in liquid fuels by more than many of the U.S. publicized governmental policies being so hotly disputed.

The companies making $10 billion decisions on plant investment will shape the energy future.  If these companies gamble on cheap gas availability and build these plants, the power companies will not have a competitive gas source.  There will be pressure to build new coal-fired power plants. This is already happening in Germany, a leading advocate of greenhouse gas reduction.  The high cost of electricity has forced the country to approve some new coal-fired power plants.

The environmental industry continues to globalize at a rapid pace.  Nederman, Andritz and Doosan are just three examples of companies whose recent acquisitions make them global environmental players.  Yokogawa, Emerson and ABB are three examples of companies making automation and instrumentation which are already global but are focused on growth in the regions where they are weakest.

For more information on McIlvaine air, water, and energy market reports, click on: www.mcilvanecompany.com.

Mergers Create New Leaders in the $340 Billion Air/Gas/Water/Fluids Treatment and

Control Markets

Pentair has emerged as the new leader in the market that treats and controls liquids and gases (including air).  Ecolab/Nalco has moved into second place.  This is the conclusion reached in Air/Gas/Water/Fluid Treatment and Control: World Markets published by the McIlvaine Company.  (www.mcilvainecompany.com)

Air/Gas/Water/Fluids Treatment and Control Markets

With the addition of Tyco valve revenues, Pentair pump and filtration revenues generated a combined $7 billion in sales in 2012.  The corporation anticipates a 3.5 percent increase in 2013. This will create revenues of $7.2 billion in the treatment and control sector.

Ecolab has acquired Nalco. With an expected revenue increase of 5 percent in 2013, the company will move into second place with treatment and control revenues of over $5.2 billion. The former leader, Flowserve, will drop to third place.

There was another significant merger last year.  Colfax acquired Howden. Most of the Howden revenue is in control (fans) and some is in treatment (heat exchangers). Colfax supplies pumps, but also has substantial business outside the treatment and control sector. So Colfax only moved to number ten in the ranking.

Xylem is a divestiture of ITT.   It is, therefore, a smaller player now than previously. GE is the largest company in the sector.  Its acquisition of Dresser boosted its treatment and control revenues. Nevertheless, treatment and control is a small portion of total revenues.

The total market for treatment and control is forecasted to rise five percent to $340 billion in 2013.  The leader will only garner two percent of the market, so the market will remain quite fractured. 

The treatment and control is increasingly being recognized as a discrete market. Various players, however, view the market slightly differently.  Parker Hannifin sees a $100 billion market in which it is the largest player at $13 billion.  With its filtration, hydraulics and pneumatics products, it is a major participant in treatment and control but is not among the top five. 

For more information on Air/Gas/Water/Fluid Treatment and Control: World Markets http://home.mcilvainecompany.com/index.php?option=com_content&view=article&id=71

Hundreds of Active Projects in $19 Billion Canadian Oil Sands Market

There are hundreds of active capital investment projects in the oil sands sector in Western Canada. Last year investment was more than $19 billion with even greater expenditures on the horizon.  This is the latest forecast in Oil, Gas, Shale and Refining Markets and Projects published by the McIlvaine Company.  (www.mcilvainecompany.com)

The investment is not only for expansion of the total production, but also for environmental improvements at existing facilities. The 2012 expenditures exceeded those in any of the last four years.  To meet the expansion from 1.7 to 3.7 million bbl/day by 202l, will require annual expenditures twice the $19 billion spent last year.

The investment in new facilities comes in multibillion dollar chunks.  For example, Sunshine Oilsands Ltd. has budgeted about US$3.5 billion for capital investment in its Canadian oil sands projects.

The expenditures to improve the environment are significant. The Quest Carbon Capture and Storage Project will reduce CO₂ emissions from the Athabasca oil sands operation by 35 percent, or more than one million metric tons a year.  The Scotford upgrader plant near Edmonton, Alberta, processes bitumen into synthetic crude oil. The steam-methane reformer units at Scotford produce hydrogen for upgrading bitumen, a process that releases carbon dioxide.  Quest will capture CO₂ from Scotford using an amine solvent, a liquid comprising water and amines, then transport it via an 80 kilometer underground pipeline to a storage site north of Shell’s Scotford facility to the northeast of Fort Saskatchewan, Alberta.  Captured CO₂ will be injected more than two kilometers underground into a porous rock formation called the Basal Cambrian Sands, which is located beneath layers of impermeable rock. According to the Quest project website, “Sophisticated monitoring technologies will ensure the CO₂ is permanently stored.” Shell Canada executed a contract with Fluor Corp for engineering, procurement and construction (EPC) of the Quest project.  Fluor Corp total cost of the project is estimated at USD1.35 billion.

Projects to improve water quality are also requiring significant capital investment.  Grizzly Oil Sands ULC selected GE’s (produced water evaporation technology for its Algar Lake project near Fort McMurray, Alberta, Canada).  Phase 1 of the Algar Lake Steam-Assisted Gravity Drainage (SAGD) project will produce 5,000-6,000 barrels per day of bitumen and, by using GE’s produced water evaporation process, will recycle up to 97 percent of the produced water.

Grizzly’s Algar Lake is one of three projects, including Harvest Black Gold, to choose GE’s patented evaporative technology to treat and recycle its SAGD wastewater.

For more information on Oil, Gas, Shale and Refining Markets and Projects, click on:  http://home.mcilvainecompany.com/index.php/component/content/article?id=72#n049

Demand for Wood Pellets Growing Rapidly

Wood pellets are proving to be a good export product for the United States. McIlvaine tracks the boilers using wood pellets in Renewable Energy Projects and Update.

The U.K.’s Largest Coal-fired Power Station Switching to Wood Pellet Fuel

The Drax Group Plc., Britain’s biggest source of carbon dioxide emissions, is converting its coal-fired plant in the northern English town of Selby to what will probably be the largest biomass plant in the world and will thereby become one of the leading producers of renewable energies in Western Europe. “We see a key part of our future as converting from essentially a coal station to a biomass station,” said Drax CEO Dorothy Thompson in a report of the Bloomberg news agency.

According to the Bloomberg article, Drax Power plans to invest $1 billion by 2017 to convert the U.K.’s biggest coal-fired plant to burn wood pellets. One of the six generating units will be fully converted to wood pellets, with two additional units switching to wood at a later date. The Drax Group is investing in the modernization of its boilers and the construction of facilities to store 700,000 metric tons of wood pellets. In addition, the Group is designing special railway carriages for transporting the pellets. Each converted unit will burn 2.3 million tons of biomass annually.

The conversion of whole generating units to burn wood pellets goes far beyond the Group’s previous plans for co-firing with wood pellets. The current generating capacity in Selby is 4,000 MW. If, in the future, half of this capacity if generated from biomass, Drax would be on a par with the biggest hydropower plants in Europe, and Selby would be larger than any existing biomass plant, wind farm or solar park. In this case, approximately four percent of Britain’s power would come from burning wood pellets.

Viaspace Green Energy Signs Its First Supply Contract for Giant King Grass Pellets

Viaspace Green Energy Inc. announced that it has signed a five-year contract to supply Giant King™ Grass (GKG) pellets to a home-furniture manufacturer located in the Guangdong Province of China. This will be Viaspace Green Energy’s first supply contract for its pellets. The customer will burn the GKG pellets in its boiler, which currently requires over 2,000 metric tons of fuel per month, for generating heat and energy to be used in its manufacturing process.

Viaspace Green Energy (VGE) anticipates supplying at least 12,000 metric tons of pellets per year to this specific customer which is expected to generate approximately $7.5 million in revenue over the term of the contract. The company will begin delivering pellets immediately which will result in 4^th-quarter revenues from pellet sales.

Enova Energy Group Announces Wood Pellet Projects

Enova Energy Group, LLC, a vertically-integrated developer and asset owner of renewable energy projects, has announced that it will build three wood-pellet projects in Georgia and South Carolina beginning in the 1^st quarter 2012. Enova has created a subsidiary, Enova Wood Pellet Group LLC which has a dedicated management team solely focused on the wood-pellet industry.

Enova will develop these plants to produce wood pellets to be used as a renewable fuel for export to the European Union under long-term contracts with public and private utilities. The facilities will each produce 450,000 metric tons each for a total of 1.35 mm metric tons by 2014 from the facilities to be exported out of Savannah, GA. Each project will create approximately 150 jobs during construction and an additional 70 jobs directly at each facility for a total job creation of over 450 jobs during construction and over 200 permanent jobs. The wood-pellet projects are expected to cost $330 million and Enova will meet 80 percent of this with debt.

GN Energy Solutions Acquires Forest Fuels

GN Energy Solutions, a newly-formed holding company focused on the U.K. and European energy sectors, announced it has acquired an award-winning and market-leading wood fuel specialist, Forest Fuels. The terms of the transaction were not disclosed.

Forest Fuels supplies premium-grade wood chip and pellet nationally from a network of 15 local depots, supported by a central office and customer service team. Forest Fuels, which also undertakes consultancy and advisory work, anticipates further growth within the wood fuel sector in the U.K.

The company provides local fuel to local boilers, which reduces the haulage costs and carbon emissions while stimulating local economies and employment. “We are delighted to announce this acquisition in Forest Fuels. The U.K. heat supply market has great potential; the use of biomass for heat and power generation offers significant potential to provide renewable energy to commercial and industrial end-users. This acquisition strengthens our already attractive existing position and further signals our commitment to the biomass sector,” said Goran Nylin, Chairman, GN Energy Solutions.

GN Energy Solutions incorporates Forest Fuels as a wholly-owned subsidiary, and is in the process of also acquiring GG Eco Solutions, a leading U.K.-based renewable energy supplier to the educational, industrial and commercial sectors. Both businesses will continue to focus on ambitious growth within their own market sectors.

There are strong synergies between GG Eco Solutions and Forest Fuels. GG Eco Solutions’ renewable energy supply business will complement Forest Fuels’ supply capabilities, and as a result the group’s evolving business model.

For more information on Renewable Energy Projects and Update please visit

http://www.mcilvainecompany.com/brochures/Renewable_Energy_Projects_Brochure/renewable_energy_projects_brochure.htm

The “Industrial Boiler MACT - Impact and Control Options” will be the “Hot Topic Hour” on Thursday, March 21, 2013 at 10 a.m. CDT and again on Thursday April 4, at 10 a.m. CDT

Because of the strong interest in this subject, we have scheduled two sessions. Persons that register for the first session will automatically be registered for the second session.

On December 21, 2012, the EPA finally issued its long delayed “final” rules for reducing toxic air pollution, including mercury, HCl and particulates from industrial boilers, process heaters and certain incinerators. The revised regulations target the largest polluters, approximately 2,300 industrial boilers (especially the 600+ coal-fired industrial boilers) and 106 incinerators in the U.S.  The revised rule also gives operators more time to comply – three years and four years in some cases for both existing and new sources.

After years of delays, the finalized Boiler MACT standard may end the uncertainty and allow boiler operators to move forward.  However, some industry groups have already signaled that they will contest this rule in court. A possible reason is that industry groups estimate the capital cost of compliance at almost three times the $5.1 billion estimated by the EPA.

The following speakers will help us understand the “final” Boiler MACT rule, the legal situation and the potential for additional delays due to litigation. They will also discuss how boiler operators might meet the challenges of the MACT, identify the optimal control strategy of each boiler configuration and the required reduction targets and discuss potential control technologies available for operators to achieve compliance and the advantages and disadvantages of the various control technologies as well as criteria for selecting specific technologies – existing facility configuration, existing control equipment installed, fuel type and others.

Presenters for Industrial Boiler MACT Impact and Control Options on March 21, 2013

Bill Liegois, P.E., Vice President and Senior Project Manager at Stanley Consultants Corp., will provide an overview of the engineering approach and critical considerations needed to evaluate, select and implement a solution for the Industrial Boiler MACT.  Topics to be covered will include a summary of the Big Three Boiler MACT outcomes – Control, Repower, and Retire.

Amy M. Marshall, PE at URS Corp., will present “An Evaluation of Boiler MACT Control Costs.” URS Corporation (URS) worked with the Council of Industrial Boiler Owners (CIBO) and its members to develop an estimate of the initial capital cost of complying with the Industrial Boiler MACT for coal, biomass, liquid and process gas boilers and process heaters that will be subject to emission limits under the rule.  Our initial cost analysis assumed that each unit would install emissions controls if needed to achieve the Boiler MACT limits, and resulted in an industry-wide capital cost estimate of $12 billion (higher than EPA’s estimate of $4.7 billion).  A recent refinement to the cost analysis has examined how many units may instead switch from coal or oil to natural gas and what factors sites will consider when considering whether to install controls or fuel switch. This presentation will discuss the analysis.

David W. South, President, Technology & Market Solutions, LLC, will discuss the CHP option for achieving compliance with the Industrial Boiler MACT.  BMACT compliance can be accomplished through retrofit of air pollution control (APC) equipment and fuel switching.  Compliance can also be achieved by installing a combined heat and power (CHP) or cogeneration system.  Besides being more efficient, CHP systems can also generate revenue by the resale of electricity to the grid, or displacement of purchased electricity by the industrial source.  In either case, grid benefits might arise that will produce additional revenue.  This presentation will outline these benefits and how off-balance sheet financing is available to facilitate CHP installation and BMACT compliance.

Presenters for Industrial Boiler MACT Impact and Control Options on April 4, 2013

Steve Jaasund, Manager, Geoenergy Division at A. H. Lundberg Associates

Steve Baloga, P.E., Southern Air Solutions Corp.

James "Buzz" Reynolds, Vice-president, Wet Electrostatic Precipitators, Siemens Energy, Inc., Environmental Systems & Services

To register for the March 21, 2013 “Hot Topic Hour” at 10 a.m.  (DST), and the April 4, 2013 at 10 a.m. (DST), click on:  http://www.mcilvainecompany.com/brochures/hot_topic_hour_registration.htm.

Headlines for the March 8, 2013 – Utility E-Alert   

UTILITY E-ALERT  

#1115 – March 8, 2013

Table of Contents

 COAL – US 

• Missouri Coal-fired Power Plant closing in September
• Salt River Project negotiating Bigger Share of Coal-fired Power Plant
• Multi-Year Rate Plan for Kemper County (MS) Coal-fired Power Plant gets approval in US
• Dunkirk (NY) Coal-fired Power Plant granted Two-Year Reprieve from Shutdown

COAL – WORLD 

• Alsons and Sagittarius Mines to develop 400 MW Coal-fired Power Plant in Philippines
• Coal India Unit revives Plan for $1.6 Billion Coal-fired Power Plant Mumbai
• Ontario, Canada to quit Coal-fired Power Generation
• RWE to Shut UK 2,000 MW Didcot Coal-fired Power Plant on March 22

GAS/OIL – WORLD 

• GE Oil & Gas receives Contract Extension for Sakhalin-2 LNG Plant in Subarctic Russia

NUCLEAR 

• DOE plans to ship Hanford Nuclear Waste to New Mexico
• Hinkley Point Nuclear Negotiations Strained
• Areva completes Fuel Assemblies for Taishan Nuclear Power Plant
• Westinghouse rumored to be leading in Temelin Nuclear Bid
• Itochu, Mitsubishi and GDF Suez bidding for Turkey’s Second Nuclear Power Plant

BUSINESS

§  CECO Environmental announces acquisition of Aarding Thermal Acoustics B.V.

§  Mitsubishi Plastics enters into NO_x Exhaust Gas Catalyst Manufacturing

§  Construction Permit for CDS System for Michigan City

§  NRG to exit Power Plant Project in Meriden, CT

§  GMR Group (Singapore) sells 70 Percent Interest in GMR Energy to FPM Power Holdings

§  Growth of the Mercury Reduction Market Hard to Predict

§  Huge Variable in Fabric Filter Market Depending on Power Regulations in U.S. and China

§  Xcel Energy reaches Settlement over Clean Air Act Lawsuit

HOT TOPIC HOUR

• HRSG Design, Operation and Maintenance Considerations” was Hot Topic Hour on March 7, 2013
• “Inlet Air Pretreatment for Gas Turbines” is the subject of the Hot Topic Hour on Thursday March 14, 2013 at 10:00 am CDT
• Upcoming Hot Topic Hours

For more information on the Utility Environmental Upgrade Tracking System, click on: http://home.mcilvainecompany.com/index.php?option=com_content&view=article&id=72

McIlvaine Hot Topic Hour Registration

On Thursday at 10 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects. Power webinars are free for subscribers to either Power Plant Air Quality Decisions or Utility Environmental Upgrade Tracking System. The cost is $125.00 for non-subscribers. Market Intelligence webinars are free to McIlvaine market report subscribers and are $400.00 for non-subscribers.

To register for the Hot Topic Hour, click on:

http://www.mcilvainecompany.com/brochures/hot_topic_hour_registration.htm.

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You can register for our free McIlvaine Newsletters at: http://www.mcilvainecompany.com/brochures/Free_Newsletter_Registration_Form.htm.

Bob McIlvaine
President
847 784 0012 ext 112

rmcilvaine@mcilvainecompany.com

www.mcilvainecompany.com

191 Waukegan Road Suite 208 | Northfield | IL 60093

Ph: 847-784-0012 | Fax; 847-784-0061

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