MAN Ferrostaal expands business with renewable energies

Focus on biofuels and solar power plants - Solid growth expected

Essen, (PresseBox) - MAN Ferrostaal is currently focusing on the core businesses of energy and fuels. The traditional business in the petrochemical, power plant, and oil and gas segments is now being complemented by new business segments for solar and biofuel plants.

The driving force behind the markets for solar power and biofuels are the desire for security of supply, climate protection and the fact that fossil fuels are finite. “In the medium to long term we expect strong growth rates for both solar thermal plants and biofuel plants,” said Dr. Matthias Mitscherlich, Chief Executive Officer of MAN Ferrostaal and member of the Executive Board of the MAN Group. “Merely to implement the political plans which exist and are foreseeable today it will be necessary to construct a total of over 1000 biofuel plants worldwide by 2020, and by 2030 around 600 billion US dollars will have to be invested in expanding the existing power plants on the basis of renewable energies.”

MAN Ferrostaal plans to participate in these markets and has therefore created the requisite conditions. In the solar sector the company established holdings and joint ventures with three different technology providers in 2007: two in the field of solar thermal power plants and one in the solar refrigerating plant sector. MAN Ferrostaal is cooperating with Solar Millennium AG. Both companies hold a 50:50 joint venture concentrating on the project development and construction of solar thermal parabolic trough power plants for generating up to 250 megawatts.

A second technology partner is the Solar Power Group, which develops power plants based on Fresnel technology. In Fresnel plants flat mirrors are used, which can be produced at very low cost. These power plants only require about half the area of equally powerful parabolic trough plants. Overall they are therefore becoming extremely interesting in economic terms. MAN Ferrostaal is currently checking the practical feasibility of this technology in a demonstration plant in Almería, Spain.

The third technology partner is the SOLITEM Group, which has developed a method of solar cooling. Cooling energy is obtained from solar power without any detours via electricity. The markets for SOLITEM technology are in regions where a large proportion of the electricity consumed is used to operate conventional air-conditioning systems. In countries in the Middle East this amounts to 80 per cent in the summer months.

In recent years MAN Ferrostaal has entered the market for biodiesel: The first biodiesel plants are being built or have already been supplied; other projects are being planned. When constructing biodiesel plants, the company puts its faith in large-scale industrial production. This is more cost-effective and competitive than the small-scale plants constructed previously because of the production volume. The target regions for these projects are Eastern Europe and Southeast Asia.

MAN Ferrostaal is currently rapidly expanding the bioethanol segment. The focus here is on the markets in Latin America and Southeast Asia. The principal raw materials the company is concentrating on are sugar cane and cassava. In the future the company is planning to extend its range in two steps: first by manufacturing bioethanol using lignocellulose, and then by employing biomass-to-liquid technologies to produce biofuel. With these so-called second-generation biofuels, plant matter based solely on sugar, starch or oil will no longer be utilized, but rather entire plants which can be synthesized to produce biofuels. This will increase the yield several times over and decisively improve the ecological balance. It will also be possible to process large quantities of other raw materials which could otherwise not be used, such as straw and waste wood.

The company bases its market assessment on its own analyses, which in many points match those of renowned institutes: the International Energy Agency (IEA), for example, assumes that renewable energies have the highest growth rates in the energy business: According to its forecasts, solar, wind and geothermal power will grow at an annual rate of 8.2 per cent. While renewable energies currently account for 18 per cent of the power generated worldwide, the IEA expects the figure to reach 29 per cent in 2030. For Europe the agency anticipates a share as high as 38 per cent. This means that renewable energies will grow to become the second most important energy source for generating electricity after coal.

According to the IEA the biofuels sector for worldwide mobility is growing even faster, but starting from a very small basis: from the equivalent of 31,000 megawatt hours (19 Million tons of oil equivalent - Mtoe) today to 267,000 megawatt hours (164 Mtoe) in 2030. By 2020 it is planned that biofuel should make up 10 per cent of the fuels used in traffic within the European Union. The USA is aiming for 15 per cent by 2022, and by 2020 China and India want to replace as much as 20 per cent of the crude oil they require by biofuels. “Serious forecasts estimate that in 2020 15 per cent of global fuel requirements will be covered by biofuels,” added Mitscherlich. “That amounts to 300 billion liters per year.”

In the biofuel plant segment, MAN Ferrostaal is concentrating exclusively on projects that are ecologically sustainable. Mitscherlich sees this as a prerequisite for long-term business: “When developing projects we only consider those in which no rainforest needs to be cleared and the raw materials do not compete with food production. Raw materials also need to have a good greenhouse gas balance, like sugar cane. This is what we focus on. Under these conditions, biofuels play a major role in climate protection because they improve the CO2 balance when motor vehicles are used.”

Ferrostaal GmbH

MAN Ferrostaal is a worldwide supplier of industrial services for the construction of large-scale industrial plants and machine supply. As a general contractor for plant construction, the company offers project development, project management and financing solutions for turnkey plants in the areas of solar thermal power plants as well as biofuels, petrochemical and industrial plants. In cooperation with manufacturers of machines and production lines, MAN Ferrostaal offers sales and services in the areas of automotive industries, print and packaging, piping and ships. With 4,200 employees MAN Ferrostaal is represented in more than 60 countries. The company achieved a turnover of EUR 1.4 billion in 2007.

MAN Ferrostaal is a subgroup of MAN Aktiengesellschaft, Munich. The MAN Group is one of Europe's leading manufacturers of engineering equipment and vehicles, generating annual sales of around EUR 16 billion. MAN supplies Commercial Vehicles, Diesel Engines, Turbomachines, Industrial Services and employs approx. 55,000 people worldwide. MAN is a member of the DAX German Share Index, Germany's top 30 public limited companies. More

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