Wartsila Rides Clean Power Wave in Global Markets Growing from Warm Finnish Roots

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Growing out of their history and natural environment the Finns have a long pedigree of effective design, expertise in the manufacture of efficient heating equipment, and a dogged determination to work until the sun comes up on their enterprises. Watsila Corporation (HELSINKI:WRTAV, BOMBAY:WART) (Helsinki, Finland) has been growing its global presence at a time well suited to their corporate genetics. Having built a profile as a world leader in high powered marine engines they are now gaining in markets for efficient biomass powered power generation, decentralized power generations systems, and 1 to 300 MW peak load power systems support plants.

Wartsila Biopower supplies combined heat and power (CHP) plants designed to run on a variety of biofuels incorporating the patented Biograte technology. Extremely wet biomass, with moisture content as high as 65%, can be used as fuel in these plants. In Finland and far northern climates, the fuel is made up mainly of sawdust, wood chips, and bark and is fed directly into the grate without any pre-drying. It will also be possible to use various recycled and packaging waste and agricultural residues for fuel besides wood products. In warmer southern and tropical regions, biomass fuels such as sugar bagasse, rice husk, olive residues, and forest waste offer huge potential.

Two of these biopower plants have been ordered by Finnforest Corporation for their Vilppula and Renko sawmills. Vilppula, the largest sawmill in Europe, will have a Biopower 5 plant producing electricity and heat and a BioEnergy plant producing heat only. Combined these plants will produce over 70% of the sawmill's electricity needs and 100% of the heat required for drying the wood at the sawmill plus meeting the heating needs in the town of Vilppula. The electrical output of the plant is 2.9 MW and the total heat output is 22.5 MW. The Renko BioPower plant will produce all the heat needed for the drying process at the sawmill and around 50% of the sawmill's electricity requirement. Electrical output will be 1.3 MW and heat output 8 MW. The fuel used in both plants will be byproducts of the sawing process, primarily bark and sawdust.

Finnforest, aided by government subsidies for biopower, has already installed six Wartsila bioenergy plants since 1994 in its drive for environmentally sound solutions. The company, owned by the Metsaliitto lumber group, is Europe's largest wood group with net sales of just under $2 billion. The company operates in 20 countries and employs over 7,700 people. The Metsaliitto group is a co-operative owned by 128,000 forest owning members and in 2001 had a turnover of around $9 billion.

The EU (European Union) is targeting a 300% increase in bioenergy generating capacity and a 1,000% increase in bioelectricity generating capacity by 2010. This will mean renewable energy resources will provide 12% of the region's energy - up from 6% in 1995. This bioenergy push has created enormous market potential in Europe for small size biopower plants for which local sources of fuel already exist.

Wartsila has booked orders for seven biofuelled energy plants in Sweden, Russia, and the Baltic states with an aggregate heat output of 56 MW. A number of the plants will be in sawmill sites and other will be dedicated to community heating requirements.

With generating plants able to run on fuel oil or gas, or both in dual systems, Wartsila is to install two power plants in a $25 million order from the Ethiopian Electric Power Corporation. The 35 MW plant at Awash will be powered by ten Wartsila 200 engines and the 12 MW plant at Kaliti, at an altitiude of 2,500 meters will be powered by four of the same type of engine running on light fuel oil. This represents a significant addition (11.75%) to the country's total capacity where the main grid is fed by 372 MW of hydroelectric and 28 MW of thermal generated power. The secondary, Self Contained System (SCS), comprises 35 diesel plants and three small hydro units. The Ethiopian plants lie in the mid-range of Wartsila's capacities.

In its traditional marine power sector, the company has seen the fist electronically controlled low-speed marine diesel engine built in Japan, under license, completing its test program. The unit will be the main engine in a 105,000 deadweight ton crude oil tanker and has a maximum continuous power output of 12,750 kW (17,340 bhp) at 105 rev/min. The engine provides maximum flexibility and delivers smokeless operation at all operating speeds, lower fuel consumption, reduced maintenance costs and lower steady operating speeds for improved maneuvering. Diesel United, in Japan, is also building under license engines for four post-Panamax container liners. Each will be propelled by a 68,640 kW, 12 cylinder engine built under license from Wartsila.

Wartsila North America (Annapolis, Maryland) has formed a strategic partnership with Stewart and Stevenson Services (NYSE:SVC) (Houston, Texas) to capitalize on marketing and sales efforts. Dual fuel engines of outputs between 5 to 17 MW will be used for the American company's Distributed Energy Solutions division (DES) customers as a source of energy production and utility cost reduction. The two companies have already cooperated during the implementation of the Red Bluff 49 MW peaking plant in California. Wartsila, in the US, is also supported by a number of established partnerships with leading gas compression and processing companies.

Wartsila, with 12,500 employees, operates a Nordic steel engineering steel company and manages substantial holdings to support the core business. Net sales in 2002 topped $2.5 billion.