Peter Terwiesch, Chief Technical Officer (CTO) for ABB Group, flew into town for WFES and took some time out of his busy schedule to speak with Samantha Keck on the drive behind ABB’s motivation and innovation.
What technology challenges keeps you up at night? Or if any at all?
Peter Terwiesch
I would not say they are challenges but rather it’s really about innovating and continuing to innovate in the field of power as well as industrial productivity. Of course, we at ABB are always looking at dealing with energy in a more sustainable way.
It really boils down to the ABB tagline – Power and Automation. The tagline was produced in a management workshop some years ago, and that really dealt with the question of what ABB is as a company. Power and Automation represents very much the core of the company, that also guides our technology development.
So how closely do you think ABB ’s development has followed the corporate tagline so far?
Actually, the company can be said to be toeing the line, literally. And nowhere is that more obvious than if you take a look at our energy value chain. Every step along the way of the energy value chain, ABB has something that contributes to reduce the losses in energy. If you conceptualise it, out of the 100% of primary energy content going into the value chain, a good percentage is lost along the way. If you add the different contributions made by ABB’s different technologies along the different stages of energy value chain, you can basically double the energy output. This is not a random result, but really something that ABB has put effort into to help improve the efficiency of the chain. Increasing energy efficiency is desirable not only from a commercial point of view, but also from a sustainability point of view.
What are the particular innovations from ABB that you would like to highlight?
ABB has definitely brought about a few innovations and one of those is the return of DC transmission. This is done to complement AC. About 150 years ago, in the days of (Thomas) Edison, (George) Westinghouse and the likes, AC very much dominated.
Today with technology, both AC and DC really complement each other very well. This is improving the AC network. ABB has technology that uses both AC and DC, and instead of competing with each other they complement each other.
I think it hardly matters to the end user whether it is AC or DC; most importantly, they must work.
I would also like to bring to attention the electric ABB propulsion systems for ships. Hybrid cars have been in the limelight and rightly so. But right now, ships are slowly adopting electric propulsion systems, too. If you take a large cruise liner now, I would also take a bet that that ship has an electric ABB propulsion system. The traditional ship has a diesel engine driving a shaft. We have re-engineered it in such a way that the diesel engine drives the electric generator and you can run a cable with whatever space you have.
Better still, you don’t get the vibration from the area of the shaft. Not only do you save on fuel costs, you also have essentially a propeller that you can direct in any direction with the power rudder as well as the main drive of the ship.
This technology was started with ice-breakers as you needed the boat to do well in ice as well as water, and you had to break ice with a surface area larger than the boat so the ice breaker had to move diagonally.
What are the more notable R&D programmes that ABB is undertaking currently?
We have a large number of R&D programmes, but rather than having to run through each and every one of them, I would rather focus attention once again on our energy value chain.
Take, for example, the inside of a power plant. Often you spend a lot of effort to make a turbine 0.1% more efficient, but very often you waste energy on the inside of the power plant, or what we term as peripheral losses. That is something where we see significant improvement by just applying technology concepts that ABB has developed. And by that, I mean the right kind of equipment, automation system, technology, everything.
We have really driven the integration of automation and electrical systems into the same control system.
Rather than having two different control rooms, one for electrical and the other one for automation, we are able to actually tie it all together. That is essentially what ABB is about – Power and Automation. It is very obvious and natural for us to take the lead and put these two things together.
All our power clients have a need for automation as well. In addition, there are an increasing number of power generation projects and a lot more downstream for oil and. It is a perfect opportunity for even more efforts to combine the power and automation side of things
Are there any plans to establish a R&D Centre in the Middle East?
Our R&D centre in Bangalore focuses on software while the ones in Sweden, Switzerland and Germany concentrate on power and automation. We have labs in Beijing and Shanghai and in North Carolina in the US.
Currently, we do not have plans to set up an R&D centre in the Middle East. But ABB understands the need to be close to our customers, and evolve our technologies and capabilities so that different needs are met. But as a large scale player, ABB has to balance proximity to customers as well as deliver the economies of scale, that is expected of us, rather than the duplication of effort. The duplication of efforts, at the end of the day, make our cost structure unviable. So there in lies the trade off.
What do you see are the challenges to automation in this economic downturn?
I think this period emphasises the need to do more with less. On the one hand, you have to get more out of the existing technology that you have paid for. Very often, you do something on the automation side to improve a plant’s performance with, what is probably, 10% investment of, let’s say, the total amount you invest in primary energy sources. I maintain that as much as this period is generating crisis, it is also generating opportunities.
It is also opening up opportunities for retrofitting for energy efficiency, which is quite fitting to the context here. Energy efficiency is a very high priority right now, much more so than five years ago. The chance to integrate power and automation is something our customers today are demanding much more of than a couple years ago. It is a small investment which has a big return on their overall energy savings. Customers are very interested in ABB’s automation technologies right now given the downturn.
So what actually drives innovation in ABB ?
A combination of customer needs which we are seeing and anticipating that will be there in the present as well as the future. ABB is very driven, as well, to just produce products for a better world.
Has the downturn impacted the R&D budget at ABB ?
Let me first say that ABB will publish the annual report in February 2010 so I don’t have the actual figures on hand.
But, we have demonstrated strong character in the current crisis and as well as in 2002-03. Back then in the previous crisis, we did not cut the R&D budget and it has paid back handsomely for us.
If you look at the trend over the years, you will see that we have never decreased our R&D budget.
For 2010, what technology should we watch out from ABB ?
ABB will continue to put out products that will improve productivity both in the up and down streams in the oil and gas industry, in both power and automation technology. As for the power sector we have achieved many records in recent years and those products will also be beneficial for this region. I am open to the question of how much ABB will contribute in DC transmission in the region, as we believe there is potential in more power from shore to oil and gas installations. Also in terms of automation, there will be more priority for energy efficiency in industrial production. Even though we are in a region where energy seems to be abundant there is still an opportunity cost of not being to sell that extra barrel. We have a competitive offering of products that enhances energy efficiency
