In Conversation with Willi Meixner, Power & Gas CEO at Siemens

Interview

During the last years several upgrades of the SGT-800 have been released. What is the driver for these and what is the philosophy behind these design improvements?

The main driver is to continuously improve the Combined Cycle efficiency, but also improving operational and fuel flexibility. One very important corner stone in the philosophy is reliability. We have a proven track record of high reliability, well in access of 99% year after year and in the last 12-month period as high as 99.6%. The evolution of the SGT-800 is built on a continuous development strategy, using proven technology and extensive testing. Everything to secure the outstanding reliability numbers in spite of regular release of improved ratings

Have you already gained operating experience from the recent upgrades that have been released?

Yes, we have very good feedback from the units already installed at the customer sites. We have sold more than 60 units of the ratings we introduced to the market only two, three years ago. About 15 of these units are already in commercial operation and several more will go into commercial operation during the first half of 2018. With already more than 50 000 cumulated operating hours and with the fleet leader being running for about a year, we feel very confident with the design improvements that we introduced. To have this experience as a solid ground considerably reduces the risks for the most recent upgrades being made.

Have we seen the final rating of the SGT-800 now or are there further steps in progress?

The SGT-800 is a very mature product with extensive fleet experience with more than 6 million operating hours. More than 340 units have been sold worldwide and the SGT-800 has been the clear market leader with over 50% market share in Combined Cycle applications in its power range for the last six years. No, we are not at the final rating yet! We continuously keep improving the SGT-800 and we are now aiming for above 60% Combined Cycle efficiency level.

What is the track record for the past uprates of the SGT-800 when it comes to on-time delivery and meeting performance targets?

The track record shows that also the first units of a new rating have been delivered on-time with excellent examples for projects in Thailand and China. Furthermore, the promised performance has been achieved or even exceeded in many cases. During the last three years our Siemens Finspong site in Sweden has shipped 114 SGT-800 units with 100% on-time delivery. This includes three different ratings selected by customers all over the globe. Our proven concept for decentralized power is really a success in countries like Thailand, China, Bolivia and Argentina just to mention a few regions in the world. This shows that Siemens truly is a reliable partner.

This may not always be the case as seen from other suppliers, what are you doing different within Siemens regarding the SGT-800?

We have a clear strategy that we have followed ever since the first introduction of the SGT-800 twenty years ago as a robust and reliable industrial 43 MW gas turbine. Each uprate step has been done based on proven operating experience and extensive test campaigns. The small step improvement philosophy means e.g. that we improve system by system staying close the original design and validate each improvement in full load engine testing. Moreover the tests are not only for validation of the design but also for validation and calibration of our advanced design tools. The Finspong site is also quite unique in the sense of having core engine and package development, production and assembly, test facilities and service center, all within walking distance. This creates a great advantage when it comes to turnaround time for development and issue resolving.

It is not that uncommon that some suppliers give promises they know are hard to achieve, given the development phase of the product rating, with the hope of negotiating a settlement at a later stage to compensate the client for the delay or lack of performance.

Siemens lives by the rule to only promise what we can actually deliver. This is how you build long term relationships!

But still, you emphasize the very high reliability and meeting or exceeding performance targets as a sort of signum for the SGT-800. But isn’t that what your competitors also would claim?

First of all, I do welcome the competition and new challengers showing up during the last 2-3 years. That makes us better and stronger to the benefit of our customers. The main differences are that our numbers and results are based on real and proven facts. Why do you think the Oil & Gas customers always ask for proven design by operational experience? Because they know that no matter how good you are in your R&D work, particularly on a completely new frame, you will always have product introductory issues. Accumulation of operating experience is key to identify and resolve the issues. The huge fleet of operating SGT-800 gas turbines in different countries, different environments from very cold regions like north Russia to very hot in the Middle East, different fuels and operating conditions, has allowed us to identify market specific improvements which we are already bringing in to new deliveries.

What makes you so sure that the most recent upgraded ratings can meet the improved performance such as increased efficiency right from the beginning and not with long lasting upgrading/exchanging procedures at the customer site which is sometimes seen in the market from other suppliers?

When we first introduced the SGT-800 to the market 20 years ago, we did the performance validation at a customer site. This was also the case 10 years later when we introduced the next platform of the SGT-800 gas turbine. But with the market demand for increased flexibility of the SGT-800 we invested not only in further design improvements but also in increased test capabilities at the production facility in Finspong in Sweden. We have full load testing capabilities of the core engine in the mechanical running test rig (MRT-rig) as well as capability of complete string test of the whole package. These possibilities of performance validation at Siemens Finspong Test Center are of course used for the upgraded ratings. Testing is not only made prior to shipment of the first unit. We are also investing in test engines with the upgraded design to make validation and further improvements such as performance, operational flexibility and emissions.

I understand that you have a very strict product development process, with reviews and gates. But do you also perform external reviews of the upgraded ratings?

Yes we actually do. All of our recent upgraded ratings have been thoroughly reviewed by an external insurance company. With the certificate of insurability received all normal insurances, including machinery breakdown insurance, can be granted. The insurability notes received shows that the upgraded ratings are insurable under same conditions as the other SGT-800 ratings, and that the insurance community has confidence in our step-by-step low risk evolution development approach.

It would be difficult not to talk specifically a bit of the tremendous success with the SGT-800 in Asia. We heard, for example, that you have sold more than 70 units of the SGT-800 just in Thailand. What would you say are the three most important factors behind this success?

The Small Power Producer (SPP) program in Thailand needs to compete with the modern utility and IPP grid structure based primarily on high efficiency combined cycles, currently exceeding 60% full load efficiency. Energy prices are high and the SGT-800 Combined Cycle provides the highest efficiency in its class to reduce the gap to its market peers.


Co-generation is a key to the success of the SPP program in Thailand and with the high exhaust energy of the SGT-800 we also have a perfect match to the market requirements. Siemens has built up a strong local service setup, including field service personnel, tooling and a spare core in the region. Further investments are being made with workshop capabilities and spare parts. All to serve the fleet of SGT-800s in this region.