MANmagazine Power 1/2015

man magazine 1/2015
Two
voices
for one
team
Through a strategic
cooperation with engine
expert Fairbanks Morse,
MAN Diesel & Turbo
broadens its access to
the booming natural
gas market in the U.S.
About Fairbanks Morse:
Founded in the late 19th century and now
an EnPro Industries company, power solutions
expert Fairbanks Morse Engine (FME)
is a manufacturer of heavy-duty, mediumspeed
diesel, natural gas and dual-fuel engines
from 0.5 to 3 MW for applications
specifically tailored to marine propulsion,
power generation, pumps and compressors.
FME covers a wide range of municipal, institutional
and industrial applications, primary
customers being the U.S. Navy and
the U.S. Coast Guard: 70 percent of the U.S.
Navy fleet uses FME engines, with supplier
relations dating back more than 70 years.
Based in Beloit, Wisconsin, and represented
through service centers across the U.S.,
FME has been a MAN Diesel & Turbo licensee
for marine turbine technology since
1995. www.fairbanksmorse.com
The U.S. energy market is undergoing
a revolution, a new gold rush
for the 21st century, but this time
the prize is natural gas. Thanks to
technological developments in
horizontal drilling and hydraulic
fracturing, it has become possible to tap natural
gas reserves that would not have been economically
viable using conventional exploration
methods. In 2013, shale gas production accounted
for approximately 40% of contiguous
U.S. Natural gas production, up from about 5%
in 2006, and this number is projected to rise
further over the next 20 years.
The abundance of gas has pushed down its
price, making it far more attractive than before
in comparison with more traditional
sources of energy, primarily coal and nuclear.
New infrastructure is being built to transport
the gas to its point of use, and U.S. energy providers
are replacing existing generation facilities
with distributed power, a network of
smaller gas-powered generators, more efficient
and more environmentally-friendly.
These new market conditions form the
backdrop for a new cooperation between MAN
Diesel & Turbo and Fairbanks Morse, one of the
top three companies in the U.S. energy market
in terms of installed megawatts. Fairbanks
Morse will use their contacts and experience
to bring MDT engines to a new, broader market
in energy production, a synergy with tremendous
opportunities for both parties. We sat
down with Marvin Riley and Howard Barnes to
talk about the future of this bold new venture.
Is it fair to say that this is a new golden
age for gas in the U.S.?
Marvin Riley: Absolutely. We expect 1,900
miles of new natural gas pipelines to be built
over the next two years, and this is primarily
because of the shale gas revolution. The gas
generation market is booming, and we would
like to take full advantage of that. The infrastructure
is being built to support whatever
technologies will take advantage of it. In the
future it could be transportation or other
technologies, but for now, the growth is in
power generation.
Howard Barnes: And this has opened up new
opportunities to expand our existing partnership.
FME has licensed MAN engines for
the marine market since 1995 and they have a
strong footprint and a strong presence in the
U.S.A. So it was a very logical step for us when
Howard Barnes is Senior Vice President at MAN
Diesel & Turbo as well as Global Head of Sales for
the Power Plant business.
Photos: MAN, Stephen Voss
“We have had a
great response
from customers.”
Marvin Riley, President, Fairbanks Morse Engine
we wanted to expand our presence that we
should work through Fairbanks Morse.
How is the newly installed infrastructure
different from the systems it is replacing?
MR: With the change in market conditions,
there are a large number of coal retirements
taking place in the U.S., and the nuclear industry
is basically flat. The real growth is in distributed
power. When you retire a coal plant,
you won’t replace that coal plant with an
equivalent plant that has the same capacity.
You replace the power with smaller, distributed,
more efficient gas-fired power plants,
and these facilities are a perfect fit for reciprocating
engines.
HB: We foresee considerable investment in
decentralized gas-based power plants, varying
in size between 10 and 200 megawatts.
What’s interesting is that we have made a
number of developments in gas engine technology
over the last few years, and these new
gas engines are able to operate in conditions
that are suited to the U.S. The market, going
decentralized, is looking more and more for
peaking applications, and gas engine technology
is very suitable for this.
What do you see as the benefit of this
cooperation, for your company?
HB: Fairbanks Morse Engine is well established
in the marine and power generation
Marvin Riley was appointed President of Fairbanks
Morse Engine in 2012, after holding various
positions at EnPro Industries and General Motors.
sectors, with manufacturing and assembly facilities
in the U.S. They have satellite offices in
many important segments of the U.S., so the
infrastructure is there, and this is infrastructure
that we don’t have. While FME does produce
engines, they are of a much smaller size,
namely in the range of 0.5 to 3 MW. The engines
we make are substantially larger, so
there’s no conflict. There’s really only synergy.
MR: And what MAN brings to the table is not
only a great product, and a great-performing one
at that, but a legacy of engineering excellence.
What has happened since the cooperation
was signed in June?
HB: We kicked off with quite an intensive
training and familiarization program where
Fairbanks specialists in most disciplines have
been visiting us in Germany to get to know
the technology and the gas engine product.
During a second phase, we’re launching this
product in the marketplace directly, with utilities,
with industrial groups.
How has the market reacted to news of
this cooperation?
MR: We have had a great response from customers,
and we’ve been very busy. We have already
met with at least 16 EPC firms, doing
lunch and learns. We have agreed to do much
deeper dives with some of the customers that
have an extensive project list, and we have
also started to bid on a number of projects.
HB: I think the cooperation so far really has
been very good. Fairbanks Morse is also an
engine manufacturer, so we speak the same
language. We understand each other. I trust
that once we’ve passed the five-year benchmark,
we will have established a business that
is profitable and sustainable.
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