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In an interview with BiznesAlert.pl, Beata Stelmach, CEO of GE Poland talks about innovations in the power sector and energy security in the context of EU’s ambitious climate policy.
BiznesAlert.pl: How does minister Morawiecki’s “Responsible development plan” create opportunities for GE in the area of innovation in Poland?
Beata Stelmach: We are currently celebrating 25 years of GE in Poland; our annual R&D expenses here amount to USD 100 m. This proves that together with Polish engineers, in Polish labs under the GE banner, we implement very advanced projects that are utilized for the corporation’s global needs. These mostly include initiatives in the aviation sector where our engineering center EDS employs almost 2 thousand engineers who participate in designing, testing and improving the latest aviation engines or their parts. However, innovative solutions are also created by the conveyor belts. In Poland, GE produces generators as well steam turbines. We respond to both, economic and environmental challenges. We are ready to introduce technologies that are currently indispensable. We do not assess which technologies are better, be it wind, natural gas or coal. Every state, every market has its own preferences, strategies and challenges. Today’s competition is about delivering advanced and innovative solutions that our clients expect. No turbine, generator, wind farm, aviation engine, or other advanced equipment functions without sophisticated software that allows to better and more effectively use a given technology, manage an entire fleet, forecast unplanned events, malfunctions, or prevent delays in repairs. This means producers are looking for solutions to improve the effectiveness of the delivered technology. In case of coal plants, an improvement in efficiency by 1% means a decrease in carbon dioxide emissions by 2%. In practice this means a new 1000 MW block uses over 100 thousand tons of coal a year less (and emits 180 tons of CO2 less) than an older generation block. GE’s technology allows an average power plant to improve its efficiency even by 1.5% through digitalization alone. And this means real savings.
Technology is just one side of the coin, we also need political decisions to point us in the right direction. Is it possible to advance energy security on the basis of EU’s climate policy?
Over a billion people around the world don’t have access to electricity at all, so the first thing we need to do is level out this disproportion. We are present on 180 world markets, so we always have to follow a strategy that is implemented in a given place. As a technology provider we respect the local political and legal situation. As much as 40% of world energy is generated from coal and considering the existing deposits of this raw material, it does not seem likely we will stop using it in the nearest future. Our goal is to propose solutions that are safe, have an acceptable price and limit negative impact on the environment. After all, the modern technologies in coal power plants are completely different from those from 20-30 years ago. Poland’s problem is that a large portion of its power infrastructure in outdated and needs to be either modernized or replaced. The new solutions offer greater efficiency, and thus respond to calls made by regulators and environmentalists to protect the environment. When it comes to the decisions about investments that are being made in Poland today, I think that as long as they are about choosing smartly the latest available solutions, they will be justified. It would be wrong if investors chose solutions from older generations at the expense of quality. This would mean Poland is investing in something that is old from the get-go. I call it the benefit of late entry: today we can introduce state of the art technology into our economy.
At the EuroPOWER conference you mentioned that the Polish power sector is running out of time. This is because according to different estimates, in 2019 we will be already at risk of energy blackouts. On the other hand, it is difficult not to talk about the cancelled tender for the construction of the power plant in Puławy. Suddenly it turns out that instead of a gas block, a coal one will be built. How does GE see this investment? Will you participate in the new tender, but this time for constructing a coal block?
As a provider of world class technology, we always respond to the existing demands. We are interested in projects that can contribute to better quality energy, including new generation coal blocks. What you are asking about is the consequences of protracted decision processes. It is true that energy demand in Poland is on the rise and simultaneously we will not avoid the need to shut down outdated blocks. Therefore, there is no time to delay investments. However, the array of solutions is very wide and even the “Responsible development plan” talks about, e.g. distributed power generation. The construction and project preparation cycles differ and depend on whether the investment is about huge conventional blocks or distributed power generation with small centers. So, I think that this is a question especially to our energy companies and investors who are responsible for power supply. All of these decisions need to be coherent. Naturally this is costly because such projects are not cheap. All Polish concerns are on the stock exchange, so investors are interested in rational investment decisions. It is not good when an ongoing tender that is about to close is abruptly called off. At that point, the participants – both the tender organizers and the bidders have already incurred certain costs.
So can we say that GE was surprised by the Puławy Power Plant’s decision? Are you expecting a similar change when it comes to the expansion of the Żerań Heat and Power Station?
As long as the game is on, we believe we can participate in it. We are sure that our experience as well as our verified, state of the art and innovative technology, which is produced in Poland to a high degree, can also benefit the Polish economy. Naturally we have to face our competitors and respect the free market rules. So, we will see what projects will crop up in the nearest future. We are ready to face each and every one of them today.
Interview by Piotr Stępiński
