1st National Conference on LNG for TransportItaly and the Mediterranean area

FUTURE AT FULL POWER

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FUTURE AT FULL POWER

Marco A.G.GolinelliVice President, Power PlantsWärtsilä Italia S.p.A.

Roma 11 Aprile 2013

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Our roots and heritage

Passion for engines.

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Passion for engines.

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Today we are much more than an engine company

Passion for optimising lifecycle value for our customers with modern and sustainable power

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customers with modern and sustainable power solutions.

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This is Wärtsilä

POWER PLANTS

SHIP POWER

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SERVICES

SHIP POWER

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This is what we bring to the market

ENVIRONMENTAL FUEL

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EFFICIENCY ENVIRONMENTAL

SOLUTIONSFUEL

FLEXIBILITY

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Our offering

Lifecycle

Services solutions

Ship Power integrated solutions

Equipment

CU

STO

ME

RS

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Lifecycle solutionsFrom spare

parts to service agreements

Power Plants customized solutions

Equipment sales

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STO

ME

RS

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We provide superior value to our customers with our flexible, efficient and environmentally advanced en ergy

solutions, which enable a transition to a more sust ainable and modern energy infrastructure.

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We provide superior value to our customers with our flexible, efficient and environmentally advanced en ergy

solutions, which enable a transition to a more sustainable and modern energy infrastructure.

Market trends and drivers

• GDP growth, electrification and increasing standard of living drive the growth of electricity demand

• Demand for sustainability and focus on climate change • Rapid growth of intermittent renewable generation• Increasing daily, weekly and seasonal demand

fluctuation increase the need for flexibility• Changing roles of fuels

– New coal power plants difficult to permit in the

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– New coal power plants difficult to permit in the western countries

– The future of nuclear is uncertain– Increasing role of gas, especially as a balancing fuel

The world needs affordable, clean, flexible and reliable power.

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The role of gas

• Recent technical breakthroughs and commercialisation of shale gas have lead to:– Substantial increase in perceived lifetime/availability of gas reserves

globally– Reduction of gas price in the US – Rapid decline in demand for LNG in US and consequential surplus of

supply. US will become an exporter of LNG instead of the major importer. – The new competitive situation is leading to

• Deindexation of gas prices from oil (LFO) • Small scale LNG becoming commercially interesting• Huge interest in LNG in locations with no gas infrastructure

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• The use of gas in power generation will increase as it is competitively priced and is a low carbon fuel

• The role of gas in power generation is covering multiple segments – Base load to intermittent, in systems with low share of installed wind

capacity – Peaking to system balancing, as the share of wind capacity increases

and the net load to thermal plants decreases – This is because gas power plants:

• Can be constructed rapidly with a reasonable cost• Produce less CO2 emissions than other thermal dispatchable plants• Can offer favourable dynamic characteristics

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Smart Power Generation – unique features

Energy efficiency• Highest simple cycle electrical

efficiency • High efficiency regardless of

ambient conditions• High plant efficiency over a wide

load range due to multiple generating sets

Competitive generation cost and high dispatch

Energy efficiency

Operational flexibility• Unlimited, super fast, reliable

starting and stopping with no impact on maintenance schedule

• Fast reserve, load following, peaking and baseload

• All ancillary servicesSmart

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high dispatch

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Fuelflexibility

Operationalflexibility

• All ancillary services• Grid support, wind enablingMulti-tasking plant prepared for future markets

Fuel flexibility• Continuous choice of the most

feasible fuel• Solutions for

– liquid and gaseous fuels– renewables– multi-fuel plants– fuel conversions

Hedge for the future

SmartPower

Generation

Features of Smart Power Generation

• Agility of dispatch– Megawatts to grid in 1 minute from start – 5 minutes to full load from start – Fast shut down in 1 minute– Fast ramp rates up & down – Unrestricted up/down times– High starting reliability– Remote operator access including start &

stop– Black start capability

• Low generation costs

• High plant reliability and availability– Multiple units enable firm (n-2) power

(n=number of installed units)– Typical unit availability > 96%– Typical unit reliability ~ 99%– Typical unit starting reliability > 99 %

• Optimum plant location and size– Location inside load pockets i.e. cities– Flexible, expandable plant size enables

step by step investments – Low pipeline gas pressure requirement (5

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• Low generation costs – High efficiency (46% in simple cycle and

>50% in combined cycle)• High dispatch with low CO2

– Wide economic load range• Multiple units• Any plant output with high efficiency

– No derating enabling higher dispatch in hot climate and at high altitude

– Low maintenance costs, not influenced of frequent starts and stops, and cyclic operation

– Low/no water consumption

– Low pipeline gas pressure requirement (5 bar)

• Fuel flexibility – Natural gas and biogases with back-up fuel– Liquid fuels (LBF, LFO, HFO)– Fuel conversions

• Low environmental impact– Low CO2 and local emissions even when

ramping and on part load

• Easy maintenance

13 © Wärtsilä 6 July 2012 Smart Power Generation

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Average cost reduction with Smart Power Technology.

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CO2 emissions in different scenarios and CO2 emission reductions achieved with Smart Power technology.

We are passionate about optimising lifecycle value b y offering what our customers need. We deliver on this promise beca use we provide the only true total offering of marine products, in tegrated solutions

and services in the industry – worldwide.

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and services in the industry – worldwide. We help our customers find the shorter route to rob ust growth and bigger profits by focusing on operational efficienc y, environmental

excellence, fuel flexibility and services.

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Key trends and drivers

• High oil prices represent a risk for global economic growth; however, they also stimulate investments in exploration and production for oil and gas

• Expansion of emerging economies continues to support growth of demand for transportation of raw materials and energy

• Ship owner base is shifting to Asia• Environmental regulations drive demand

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• Environmental regulations drive demand for environmental solutions and gas as a marine fuel

• Increasing focus on energy efficiency and environmental performance

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The development of environmental solutions and gas technology will be our priority in meeting the evolving needs of our customers.

Ship Power’s focus on growth

EfficiencyGas and dual-fuel

solutionsEnvironmental

solutions

LEA

DE

R IN

OUR STRATEGIC GOALTo be recognised as the leading solutions provider in the marine industry for:

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LEA

DE

R IN

TH

RO

UG

H

OF

FE

RIN

G

• Lifecycle solutions for ship owners and operators• Enhanced system integration for the ship building industry• The best product sales and delivery process for the marine industry

Dual-Fuel applications - References

Power Plants

DF Power Plant� 57 installations� 225 engines

Merchant

LNGC• 108 vessels• 429 engines

Offshore

PSVs/FPSOs• 20 vessels• 93 engines

Cruiseand Ferry

LNG ferries• 1 vessels• 4 engines per

Navy

Coastal Patrol• DF-Mechanical• DF main and

Others

Inland Water way• 1 vessel• 2 engines

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� 6 segments � 183 installations � > 6’000’000 running hours

� 225 engines� Online since1997

• 429 engines

Conversion• 1 Chem. Tanker• 2 engines conv.• Complete gas

train• Complete

design

• 93 engines• Online from

1994New orders:• Harvey Gulf;

the first 4 LNG-PSV to be operated in the Gulf of Mexico!

• 4 engines per vessel

• Complete gas train

• 2800 passengers

• In service early 2013

• DF main and auxiliary engines

• 2 engines• Mechanical

drive

Tug• 2 vessel• 2 engines each• Mechanical

drive

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NGShiP

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NGShiP

80

120

160

200

97.1

159.4174.6

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to

tale

[M

€]

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0

40

80

Gas naturale Olio

combustibile

Combustibili a

basso tenore

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Wärtsilä LNG Movie

W20DFW34DFW50DF

1 MW – 500 MW

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Mini 50Small 50-500Medium > 500

4 TONS/H (bog)

250 TONS /H

Profitable growth by focusing on three areas

Environmental Environmental solutionssolutions

Smart Power Smart Power GenerationGeneration

Gas as a fuelGas as a fuel

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The transition to sustainable and modern energy systems drives the demand for smart power generation.

Environmental regulation and increased focus on optimised lifecycle efficiency create demand in the marine industry.

Economic and environmental reasons increase the growth potential for gas solutions in both end markets.

Gas is SMART

POWER PLANTS

GAS

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SHIP POWER

GAS