European Business: Mr. Himmighofen, can you please introduce your company to our readers?
Thomas Himmighofen: KGE is a 100% subsidiary of KHI in Japan. We represent its business unit energy and plant construction, providing gas turbines and gas engines to the European market. We have been located in Bad Homburg since 1998, when KHI decided to establish KGE in Germany as a hub for local sales and service activities. Since our foundation, we have installed around 80 plants within our region, with a staff of 70 employees and annual revenues of about 30 million EUR.
European Business: What kind of plants are we talking about?
Thomas Himmighofen: Our gas turbines and engines are generally used in cogeneration plants. With the gas turbines, we provide the heart of the plants as a so called Genset, comprising the technology you need for the combined heat and power applications. We perform the planning, assembly, installation and maintenance of the Gensets here in Europe, making sure that they comply with specific requirements and regulations. Plants with performances ranging from 1.7 to 30 MWel are mainly used in industries processes in the area where the heat and the power are consumed concurrently. They use energy more efficiently by utilizing the exhaust heat produced during generation. Examples are the paper industry, the food sector, the chemical industry and public utilities, which use cogeneration to feed the heat produced from electricity generation into their district heating networks.
European Business: Why is it worth investing in cogeneration using your gas turbines?
Thomas Himmighofen: Cogeneration is an efficient technology because it recovers otherwise wasted thermal energy for heating purposes. In our cogeneration system, natural gas fuel is used as the primary energy, to produce electricity and heat. With our products an overall efficiency up to 90% can be achieved, compared to just about 65% in conventional plants with separate generation of electricity and heat. This makes it a highly efficient technology, which can help to reduce fuel consumption and limit the environmental impact of power generation.
European Business: But there still is a significant environmental impact as you use fossil fuels to power the gas turbines?
Thomas Himmighofen: Yes, we do still use fossil fuels, but we do that in the most efficient way. However, we are in the process of reaching a turning point when it comes to the energy we use. We are looking into hydrogen as an alternative fuel. I think that the Japanese are a little bit further ahead in this area and KHI in particular is one of the leaders in providing hydrogen technology along the entire value chain. From generating hydrogen to its storage and transportation right through to power generation, all technologies are developed within our group. This way, we are able to show our customers that we are prepared for their future needs. Our plants will be able to burn a certain proportion of hydrogen and the company is already running tests with a plant which uses 100% hydrogen.
European Business: So, cogeneration plants running on hydrogen provide significant future potential?
Thomas Himmighofen: The hydrogen topic is becoming more and more important, but there are still a lot of uncertainties that will have an influence on our business. We have to wait and see how hydrogen will establish itself in our society and industry. Right now, there is a huge gap between hydrogen generation capacity and demand from the different sectors, in which hydrogen can be used. Hydrogen is currently prohibitively expensive and many legal conditions are not regulated. In addition, we need an up-scale effect, which means the availability and price of hydrogen needs to become more economic by strongly expanding its capacities. I think this will happen in about ten years. However, hydrogen will be an important part of our future. Our current plants can be easily adapted to use hydrogen technology so our customers can react to the trend at any time.
European Business: In which markets do you see the greatest potential for KAWASAKI Gas Turbine Europe?
Thomas Himmighofen: Even if we are located in Germany, the German market has one problem. Almost every politician talking about energy only refers to electricity and not to heating. But much more primary energy is used for the generation of heat than for power generation. In this context, laws have been changed continuously and doing business has become increasingly difficult for us in Germany. We are currently seeing an uptick in demand in Germany though, and Italy has always been the biggest market for our gas turbines. When it comes to innovative and efficient technologies, we are perfectly prepared for the future.”