Cummins Power Generation on rental gensets and emission reductions.
By Murray Pollok22 December 2009
Cummins Power Generation says its expertise in engine design will give it the edge in selling gensets to rental companies. Murray Pollok reports from the company's genset manufacturing plant in Ramsgate, UK.
If ever size brought advantages to a business it is in today's engine and genset market. Given the technology required to meet new emission regulations in Europe and North America - and increasingly elsewhere as well - it is likely to be large, well resourced companies who will prosper over the coming decade.
One such is Cummins Corp, the US$14 billion turnover business that produces many of the portable generators used in today's rental market. It invests hundreds of millions of dollars each year in research and development, sums that makes it a leader in finding ways of meeting the highly demanding Tier 4 (US) and Stage IV (Europe) emission limits, among other technical challenges.
Andy Underwood, European general manager of Cummins Power Generation - the $2.66 billion division that makes commercial gensets, alternators and power generation control systems - tells IRN that it isn't just its technological strength that gives it a competitive edge, but also the fact that it makes everything that goes into its gensets - the engine, alternator and controls. "We see it as a key differentiation that we do all three things", says Mr Underwood. ‘The Power of One' is how Cummins puts it.
The company has a range of gensets for the rental market in the 35 kW to 2 MW sizes, and Mr Underwood says rental will be an important customer base going forward, with around a quarter of genset sales worldwide going to rental.
In that wide range of products, Cummins is strongest and best known for its larger units; "We're pretty well established from 500 kVA and above", he tells IRN, speaking at the company's Ramsgate facility in the south of England at a press meeting to coincide with the group's 90th birthday, "In smaller sizes it's more competitive, but we differentiate ourselves in our [expertise on emissions]."
As well as being competitive, it's also a demanding market, with customers looking for quieter and smaller gensets.
"Nobody likes to see the product, nobody likes to hear the product and nobody likes to smell the emissions", he says. "There are three distinct trends in demand, led by a desire for more power from smaller units, then quieter systems, and then lower exhaust emissions...five years ago we needed a 38 l engine to produce 1000 kVA, while we can now achieve the same from a 30 l engine."
As far as noise reduction is concerned, Mr Underwood says that a large part of what the company does at the Ramsgate factory "is manufacture and install modular noise attenuation enclosures. The trend is for noise levels below legislation, so we are actively working to satisfy those market desires."
Some of these developments are evident in the company's most recent gensets in the 175 to 220 kVA range, using the new QSB7 engine. These can increase power outputs by up to 20% in hotter environments, and a smaller footprint than the previous models means that six units can now be fitted inside a 40 ft shipping container.
The new range of eight QSB7-based sets also comply with Stage IIIA European emission regulations well in advance of the actual compliance date of 2011 (see Box Story for more on emissions regulations). These units, when built for rental customers, have special rental-friendly features, such as heavy duty base frames (5 mm thick steel rather than the 3 mm standard on other units), large dual-skin fuel tanks, two-lifting points and spill containment skids.
One other recent change, which will eventually be seen across the power range (except for the smallest units), are new ‘plug and play' PowerCommand controls that will dramatically reduce the number of different control system used on Cummins' gensets. These will also provide the option of upgrading to higher specification controls without having to modify the engines, and will offer the ability to parallel gensets with utility grids or other Cummins or third-party generators. The smaller sets in the range will use the simpler PowerSmart control system.
Of course, Cummins Power Generation also has a rental business of its own, representing around 2% of the division's revenues last year (equivalent to just over $50 million).
The company's ambitions in this area have been scaled down since the push into rental was first made in 1999/2000, a shift that will no doubt play well with its larger rental customers. From a peak rental fleet size of around 600 MW a few years ago the fleet is now down to 200 MW and is deployed almost entirely in support of larger Cummins power generation projects in areas such as the Middle East, Iraq and South America. There are currently no rental projects at all in Europe, and rental in the US is carried out mainly by Cummins' dealers.
Mr Underwood says Cummins had decided to focus its efforts on supporting rental companies.
One obvious reason for this scaling back of the rental fleet is the fact that one of Cummins' largest customers is rental company Aggreko, which has around four thousand 1 MW Cummins units in its fleet. (With Aggreko, Cummins supplies the engine and alternator with the rental company adding the container and controls itself).
This new rental strategy was also reflected in the decision last year by Cummins India to sell its power rental fleet to Aggreko.
Customers like these like the big gensets that are known for, and Mr Underwood says there is a clear pattern for rental companies to demand larger sets, with those who might previously have been happy to stop at 250 kW now looking for 1 MW units.
It is common to see 20 ft containerised sets with 1 MW, 1.25 MW and 1.5 MW outputs, but there are also signs of growing demand for 2 MW units. "The question is whether 2 MW will be a building block for rental", says Mr Underwood, "It looks like it will."
The problem is that these units can't be fitted inside a 20 ft container. You can make engines more efficient - and electrical efficiency is indeed creeping up to the 40% level - but as Mr Underwood says more generally of diesel engine technology; "There's only so much you can do with physics..."
• Additional reporting by Steve Skinner, Deputy Editor of International Construction magazine.
Understanding the various engine emission requirements is a complicated task, made more so by the differences in approaches taken for constant speed units (like rental gensets) and variable speed engines (such as those used in trucks and off-road construction equipment).
In Europe, constant speed gensets were added to Stage II European limits from 2006, and will shift to more onerous Stage IIIA limits from 2011 to 2012 (for units up to 560 kW). In the US, constant speed gensets have been included in emissions controls since 1996, and the next deadlines here are also in 2011 and 2012 for Tier 4 Interim limits.
These IIIA and Tier 4 Interim limits do not require expensive after-treatment technology and so will not be particularly significant for rental companies looking to invest in new equipment.
After-treatment - which could double the price of a typical genset - starts to come onto the scene first in the US, where very onerous Tier 4 Final limits come into force for sets above 18 kW from between 2012 and 2015. Engines above 560 kW will need to meet Tier 4 Interim by 2011 before shifting to Tier 4 Final in 2015.
In Europe, gensets above 560 kW are not yet included in emission regulations, but these are now being considered by the European Commission and look likely to be added from 2013 onwards and will ultimately require after-treatment.
Richard Payne, manager for European regulatory affairs at Cummins Power Generation, says that portable gensets in Europe will remain at Stage IIIA/Tier 4 Interim, and that it is Cummins' view that gensets should then align with US Tier 4 Final requirements by around 2017.
Stage IIIA and Tier 4 Interim are the lowest emission levels that can be met without sophisticated (and expensive) after treatment systems. So for rental companies, the key dates are when the Tier 4 Final and the European equivalent, Stage IV, limits come into place.