Power boats

By bne IntelliNews October 21, 2011

David O'Byrne in Istanbul -

It's such a beautifully simple idea, it's a wonder nobody thought of it before. Take an existing cargo ship, install generators and transformers in the cargo area, and then dispatch it to wherever there's a ready availability of fuel and a ready market for power.

For Kares, the energy subsidiary of Turkey's Karadeniz Holding, it's proving to be a highly profitable business, with the company launching it's fifth power ship since the first was produced less than three years ago. The latest vessel, the 110-megawatt (MW) Irem Sultan fitted out in Istanbul's Tuzla dockyards, has just been sent to Iraq to join two previous launches that are meeting the needs of Iraq's gas and oil rich, but power starved, Basra province.

With effectively limitless volumes of associated gas currently being flared from the province's oil wells and equally no shortage of fuel oil cheaply available, Iraq's southern port is a prime target market for Kares, despite the country's plans for rapid development of its power sector. A blueprint for the construction of a slate of massive new combined cycle gas turbine plants, which will both end the ubiquitous power cuts and meet growing demand, was unveiled earlier this year. However, bureaucratic obstacles coupled with dissent among the partners in the country's fractious coalition government have stalled the necessary investment decisions, opening the door to temporary solutions such as Kares' floating power plants.

Quick refit

According to Kares CEO Ugur Soku, it takes only three to four months to reconfigure and kit out an existing cargo ship as a power ship using off the peg generators, transformers and transmission gear. After this, it's a simple matter to sail the ship to the required location, hook it up to the local grid via three simple cables scarcely thicker than a child's wrist, and power up with whatever fuel is available. "Our plants can operate on natural gas, or on a range of fuel oils and bunkering fuels - whatever the Iraqi government wants to supply us with," he tells bne.

By the end of October, Kares will have three ships operating in Basra; the 110-MW Irem Sultan is set to join the 144-MW Dogan Bey, which arrived in early 2010, and the 200-MW Rauf Bey, which arrived six months later in August 2010. All are operating on three-year contracts between Kares and the Iraqi government in Baghdad, and these are expected to be extended for as long as required, explains Karadeniz Holding's commercial manager, Nuray Atacik

Two other ships - the 220-MW Kaya Bey and the 110-MW Ali Can Bey - began operating in Pakistan in October last year and January this year, respectively. All the ships are suitable for meeting either general base load or peak demand, depending on the needs of the customer, says Atacik, adding that with an expected generating life of 30 years each ship could serve a number of customers.

While all of the five ships completed so far have been mid-sized vessels and power plants, Atacik explains that the company has also prepared designs for off-the-peg vessels of both larger and smaller capacity. Smaller plants of 10-40 MW could be built in three to four months and made available on short-term contracts of between three and nine months; larger vessels of 500-1,000 MW, which would take two to three years to kit out, could be made available on longer-term contracts of 15-25 years.

For Kares, the economics have improved after it abandoned using Far East shipyards in favour of Turkish yards, meaning the cost per MW compares favourably with that of normal land plants, Atacik explains.

Little wonder then that Kares has already registered interest from a number of potential new customers, with the company hosting several interested groups on board the Irem Sultan before it set sail. "After the earthquake in Japan earlier this year, we were contacted by the Japanese, but we didn't have a ship ready and available," she says, pointing out the suitability of Kares power ships to meeting emergency power needs after natural disasters of all kinds.

Karadeniz' interests don't stop at floating power plants - the company is also at the forefront of developing Turkey's huge potential for geothermal energy, having won a tender last year to prospect a 310-hectare site in Turkey's southwestern geothermal hotspot of Aydin. "We think the area has the capacity to generate 100 MW," says Karadeniz's head of energy investment, Ali Can Takunyaci, explaining that the company plans to start test drilling this year for an initial 15-MW plant and is targeting having the full 100-MW up and running within three years.

Power boats

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