Could Ansaldo/ Shanghai Electric be the inheritors of Alstom’s sequential combustion gas turbine technology

July 30, 2015

There are reports that GE may have offered to sell off some of Alstom’s sequential combustion gas turbine technology to Ansaldo /Shanghai Electric:

PowerTechnology:

US-based General Electric (GE) has confirmed it is prepared to sell parts of Alstom’s gas turbine assets to Italian Ansaldo Energia in order to gain European Union approval for the proposed $17bn acquisition of Alstom’s power business.

Sources have been quoted by Bloomberg as saying that GE informed the EU that it is willing to divest some of Alstom’s sale and servicing activities to the Italian firm, along with certain intellectual property.

Alstom has also agreed to lower the prices of its energy assets to support GE’s efforts to win anti-trust clearance from the European authorities.

Even with Shanghai Electric’s deep pockets I don’t see that Ansaldo could come out with a sequential combustion engine in less than 5 years and perhaps not for a decade. Ansaldo does not have a tradition of breakthrough innovation and neither does Shanghai Electric. The current Ansaldo engines could not be easily modified to cater for sequential combustion. They would have to come out with a completely new machine. More importantly they would need new compressors for the higher pressure ratio that sequential combustion demands. And I don’t see either Ansaldo or Shanghai Electric developing – or even having the capability to develop –  a brand new compressor anytime soon.

However if the EC’s requirements are seen as helping the Chinese (via Ansaldo) gaining a clear foothold in Europe, the EC will not be very popular in France or even with Siemens. In fact this is the argument being used by the French government to urge the EC to approve the deal quickly.

In any event GE’s “remedies” must contain two elements I think

  1. a “sale” of some IP or of that IP being made open source – and this might well involve the sale of some IP to Ansaldo /Shanghai Electric,
  2. a divestment of some of Alstom’s service business and this could be either by a divestment of a small part (not more than 10 installed engines in my estimation) of the service business for Alstom’s GT26 (probably not GT24) fleet, or by a complete or partial divestment of Alstom’s service business for non-Alstom machines.

It is conceivable that Alstom (not GE) has agreed to exclude their subsidiary PSM from the GE deal and then to sell this unit to a 3rd party. But a buyer other than Ansaldo could probably pay much more for this unit which offers an entry into the US marketplace. I am not sure that GE would be party to allowing the Chinese into the US market place to service “GE Frame 6B, 7E/EA, 9E and 7FA machines, the Siemens/Westinghouse 501F (SGT6-5000F) engine and the Mitsubishi 501F engine.”

Whatever actually transpires, the heavy duty gas turbine playing field is seeing upheavals of a kind not seen since ABB divested to Alstom in 2000. With a GT market cycle of 7-8 years, that was two market cycles ago. The next 2 decades (3 market cycles) will probably be dominated by an era of relatively low gas prices. A gas glut and a gas turbine boom could well see the market grow such that entry barriers are reduced and we may see some new players being able to break in.

Previous posts on Alstom/GE deal

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Posted in Business, Energy, Engineering, Gas, Technology | 4 Comments »

The Cecil Hypocrisy: Tourists (mainly American) kill 600+ lions every year for trophies

July 29, 2015

Cecil in life – image BBC

Walter J. Palmer, a Minnesota dentist, allegedly baited Cecile the lion out of a national park by dragging a dead animal behind a car at night. Palmer shot it with a crossbow. The wounded lion escaped and wasn’t found by Palmer and his fellow hunters until 40 hours later, when they killed it with a rifle.

There is uproar on the internet. Palmer is the subject of much abuse and even threats. I find this kind of slaughter (and it can hardly be called hunting) quite pathetic but this uproar about Cecil is just a little hypocritical. As the WaPo reports, tourists legally kill over 600 lions every year. The US Wildlife Service – with no doubt some lobbying from the trophy hunters – has lions only as a “threatened” rather than an “endangered” species, so that makes it all OK. There are some 30,000 lions alive, so 600+ is only a little over 2% and quite sustainable. (Translating that into human numbers, it would be perfectly justified for alien hunter-tourists – in the name of conservation and maintaining a healthy human population – to take trophies from the killing of about 140 million humans every year).

This would all be perfectly legal had the lion not been a resident of Zimbabwe’s Hwange National Park, a protected area. The International Union for the Conservation of Nature estimates that trophy-hunting tourists legally kill some 600 lions each year. Jane Smart, the global director of IUCN’s Biodiversity Conservation Group, said in an interview that the 600 figure is several years old and the actual number is probably a little bit higher than that. Given that there are only about 30,000 lions left in Africa, this represents an annual loss of roughly 2 percent of the total lion population to legal hunting, and a considerably larger share of the population of healthy adult male lions, which hunters typically prize.

American tourists — wealthy ones, given the high costs involved — account for the majority of lions killed for sport in Africa. ……… Last year, the U.S. Fish and Wildlife Service declined to list African lions as “endangered,” which would have banned the importation of recreational lion trophies to the United States. Instead they listed lions as “threatened,” which allows the domestic trade in lion trophies to continue.

Needless to say the hunter-tourists argue that they are helping conservation.

In reality, lion hunting doesn’t appear to require much in the way of skill. As the photos above show, many hunter-tourists are guided by teams of locals and professionals. Adult lions are not particularly afraid of humans, making it relatively easy to get close to one. They spend the majority of their day sleeping.

Hunting groups like Safari Club International maintain that hunting lions helps conserve them. They promote the positive effects of hunting in African communities. They argue that “hunting plays a role in raising the value of the African lion and discourages poaching.”

I don’t much care for false (and often mindless) conservation, but I like hunter-tourists even less.

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Posted in Conservation, Wildlife | 1 Comment »

Alstom and GE trim the scope of their deal by €300 million to ensure EC approval

July 29, 2015

The “remedies ” that GE has proposed to the European Commission to meet the EC’s concerns about their acquisition of Alstom’s power and grid businesses have not been disclosed. Now it has been announced that the Alstom Board has approved a reduction of €300 million in the sale price to GE. Since I suspect that GE’s proposed “remedies” are in two main areas (technology and service business), it would seem that the €300 million is made up of Alstom retaining some “balance sheet items” and some profitable business that will not, now, be transferred to GE.

Alstom shareholders will be looking at the numbers. Alstom has 309,419,350 shares with a nominal value of €7 each, giving a paid up share-capital of €2.165 billion. The current market cap is €8.22 billion with a share price of €26.6. The original deal with GE was for a sale price of €12.35 billion (€39.9 per share). This has now been reduced by just under €1 per share. Since the deal was originally announced Alstom agreed to pay a fine of €695.4 million ($772 million) to the US to settle past bribery charges. GE had also agreed to pay Alstom an additional €400 million for further, unspecified, commercial arrangements. Since the announcement of the deal therefore the Alstom shareholders have taken a net hit of €595 million (-695+400-300) or €1.9 per share. Estimates of what could finally be received by the shareholders varies between €3.2 and € 3.7 billion ( c. €10-12 per share).

Just as a number crunching exercise I assume that the €300 million reduction is made up of – say – €150 million of balance sheet items (assets to be retained by Alstom) and €150 million is for ongoing business (with a profit potential of about €15 million per year) which will remain in Alstom’s hands. If some of the assets to be retained are IP then their “value” will probably have to be written off by Alstom (as “goodwill”?). Whether Alstom can sell such IP to any other buyer (Shanghai/Ansaldo?, Doosan?) is doubtful but could be a little bonus for shareholders if it does transpire. If some real assets are retained, then presumably they could still generate some profit for Alstom. It occurs to me that a “smart” way out for GE could be with Alstom retaining PSM (Power Systems Mfg., LLC.) a wholly owned subsidiary. This unit is Alstom’s “pirate” company for performing service on non-Alstom machines. This might kill 2 birds with one stone. In 2000 Alstom lost its GE licence and acquired ABB’s gas turbine business. PSM was formed in 2000(?) and acquired by Alstom in 2007. As a “pirate” it is involved with the service of  GE Frame 6B, 7E/EA, 9E and 7FA machines, the Siemens/Westinghouse 501F (SGT6-5000F) engine and the Mitsubishi 501F engine. The loss of competition in the service business is one of the particular areas of concern for the EC. Moreover, GE does not really need PSM. It could well be that Alstom retaining PSM may provide the necessary concession regarding competition in the service business and the entire business may well have a value as an ongoing business of €150-200 million.

Such a solution would mean a much smaller hit for the Alstom shareholders since Alstom could probably continue with the this very self-contained business especially since it is not concerned with the Alstom range of Heavy Duty Gas Turbines. The profitability of this continuing business should not be much impaired by remaining in Alstom ownership. PSM should be “saleable” and could be quite attractive to an aspiring player.

Of course this is speculation, but perhaps Alstom shareholders need not be too despondent over the latest Alstom concession of €300 million. If most of that is due to the retention of PSM then the value of that ongoing and profitable business will not be lost.

Previous posts on the GE/ Alstom deal.

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Posted in Business, Energy, Engineering, European Union, Gas, Technology | 1 Comment »

A short break during a miserable summer

July 24, 2015

It has been cold and wet this July.

On a short break but without any great expectations of much warm weather, but with high hopes of meeting warm friends. Unlikely for any day to have a temperature above 19ºC.

Warm clothing, no shorts.

 

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Pachauri finally sacked by TERI

July 24, 2015

RK Pachauri, former head of the IPCC, has finally been sacked by his home institute (which has operated as his fiefdom for over three decades), following allegations of sexual harassment against him.

Since the IPCC is entirely a political body, the behaviour and transgressions of its former head does bring disrepute on the the organisation itself. His transgressions are not the only example of the manner in which the IPCC has operated.

ToI: Ajay Mathur, technocrat and one of the members of the Prime Minister’s council on climate change, will be the new director general of The Energy and Resources Institute (Teri), replacing Rajendra Kumar Pachauri who, facing sexual harassment changes, was removed as its chief by the institution’s governing council on Thursday. …….. 

The move comes as many existing employees of the institution strongly resented Pachauri’s decision to resume his work as its chief this week after getting a court order for the same on last Friday. Employees of Teri — the institution involved in research on energy, environment and sustainable development issues — are learned to have also flagged their concerns to the governing council which has many prominent names as its members. …. 

A case of sexual harassment was registered against 74-year-old Pachauri by the Delhi Police after it received a complaint from a woman employee of the Teri in February. Though the court had granted him anticipatory bail, he was restrained from entering his office premises and contacting officials at the institution.

Thereafter, Pachauri — the then chairman of the UN’s intergovernmental panel on climate change (IPCC) — had to proceed on leave, pending police investigation against him. He was, however, on Friday allowed by a Delhi court to enter his office premises except the head office here and a branch in Gurgaon.

Pachauri’s removal from Teri has come nearly five months after his resignation from the IPCC as its chief and also as one of the members of the Prime Minister’s council on climate change — a body which advises the government of India for all issues relating to adaptation and mitigation measures in the country to deal with the challenges posed by global warming.

Of course, the IPCC itself ought to be disbanded for the murder of science in favour of advocacy.

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Will Trump or Corbyn step down?

July 24, 2015

The clowns went in when the Labour party in the UK and the Republicans in the US both found their own audiences were deserting them. Just some light entertainment thought the aspirants for leadership. In the UK some actually nominated the clown to “widen appeal” and liven things up, thinking he was a no-hoper.

But the respective electorates are in no mood for the clowns to be just a relieving act before the main show. They are inclined to make the comedy act the main show.

The clowns are still in the lead.

But what was initial amusement at Trump’s antics and Corbyn’s naive Marxism is now becoming a nervous panic within their respective parties. It sounds like the nervous giggling before the catastrophe. It is beginning to sink in that a Corbyn win could split the UK Labour party and keep both parts in the wilderness for decades to come. In the US, the other Republican hopefuls are all united in castigating Trump. But the disillusioned Republican voters in the country are staying with the comedy act. If the opposition to Trump continues, he could go it alone and that would fracture the Republican vote so fundamentally that they could be kept out of the White House for the next 4 terms.

Could Trump or Corbyn step aside and save their parties?

Their parties probably need them to. But that will not happen unless there are other credible and convincing candidates for the leadership position. And such figures are conspicuous by their absence, both in the UK and in the US. The Labour party only has lightweights to offer and the Republicans only some less accomplished clowns. The Republican field of candidates must be quite depressing for party members.

Still, there is little doubt that the clowns are livening things up.

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Only one sentient species at a time

July 23, 2015

Roger Pielke Jr. has an interesting article in the Guardian where he addresses the search for extra-terrestrial life. His primary point is that we do not give sufficient consideration to the consequences of success. We see the search as satisfying curiosity but have no real hopes for success. And we have not really given much thought to the consequences of actually finding extra-terrestrial life.

Politicians tend to stay away from talking about aliens (unless they are “illegal aliens”) for obvious reasons. The United Nations briefly took up the issue of extraterrestrial life in 1977, but has let the issue lapse since then.

Following the 2010 Royal Society meeting, the UN’s Director of the Office for Outer Space Affairs, Mazlan Othman, categorically denied that she was the “the “take-me-to-your-leader person” if the Earth were to be contacted by alien life forms.” It does sound a bit silly. But when pressed Othman “stressed that she did not know what role she would play.”

In fact, it seems unlikely that any policy makers in national or international settings have a clearly thought–through plan for responding to the discovery of extraterrestrial life, whether that be microbes on another body in our solar system or beady-eyed aliens looking to invade. The conversation is only silly if we assume that efforts to detect alien life will never succeed.

But that got me to wondering what would happen not only if we found life but if we found sentient life out there. And I am led to the inescapable conclusion that in the same habitat or space, it is not possible for more than one sentient species to hold sway.

If any of the primate species on Earth displayed sentience, we would wipe them out. Not because humans are so evil as a species but because any sentient species dominating a habitat could not tolerate another less sentient species from challenging that dominance. Unless different sentient species, in the same habitat, displayed exactly the same level of intelligence and mastery over the physical world, then the dominant species would have little option but to ensure that its dominance was not, and could not, be threatened. In most scenarios that would mean wiping out the subordinate sentient species. Live and let live would only be feasible if the two species inhabited completely different habitats. To survive, a sentient species needs to be far below the level of sentience of another more dominant species so as to be “allowed to survive”. As a pet species. Or else it must be the dominant species where all other species sufficiently far below in level of sentience may be allowed to survive.

If any earth species, gorillas or chimps for example, showed signs of becoming sentient and becoming a self-aware, socially coherent group, they would be a more serious existential threat to the human species than any asteroid impact or super-volcanic eruption. Perhaps we might cede the ocean habitat to sentient dolphins, but even that is unlikely. Sentient birds with dexterous appendages with land and the air as their habitat would not long suffer the human race to survive. The Planet of the Apes type of scenario where genetic modifications by humans inadvertently creates a rival, sentient species is, I suppose, not totally implausible. But as soon as two species in a common habitat are close in intelligence and physical capability, the die is cast and there is space only for one to survive. If our pet dogs started challenging our authority and – say – demanding to set the menu for their meals, they are doomed. If we created neo-chimps which started demanding their “rights”, they could not survive. If cows or horses demanded the right to choose their own partners, they would be doomed to extinction or genetic modification to make them more docile.

This also applies to the search for extra-terrestrial intelligence. Suppose we found another sentient species on another planet. It is highly unlikely that it would display a similar level of sentience. Suppose anyway that the species can discern each other and perhaps even communicate. That itself is pretty far-fetched, but not impossible. It is more likely that the “finding” species is higher up in the sentience scale than the “found” species. So if we found a sentient species of inferior ability we might be magnanimous enough to allow it to continue in its own habitat, especially if the habitat was hostile to us. But we would see to it that its habitat was contained and could not expand to ever be a threat to humans. The obvious analogy is with the wiping out or subjugation of the local populations in the Americas or Australia. And that was with populations of the same species.

If we find a species that is superior to us (though it is more likely that they would find us), then it would be best if they were so far superior that the human race was perceived to be a “pet species”. Otherwise we are in for Star Wars and may the best species win. And the worst case scenario is that they find us. That we are found on Earth by a superior – but not too superior – species who find our habitat to be of interest. And the worst of worst cases would be if they found that we did not have the temperament to function as their pets and, moreover, if they found that human flesh, lightly spiced, was a particular delicacy.

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The CAR scandal: Cover-up of incompetence continues at the UN

July 22, 2015

Flavia Pansieri, the UN Deputy High Commissioner for human rights, resigned today after admitting in March that she had failed to follow up on the allegations of sexual exploitation of children in the Central African Republic by French troops and which had been revealed by the Swedish whistle- blower, a UN staff member, Anders Kompass. Initially the UN sought to cover-up by suspending Kompass and putting him under investigation. Even Ban Ki-moon, the Secretary general attacked Kompass for breaking UN rules rather than address the failings of the organisation. Kompass has now been reinstated but still remains under investigation for his administrative misdeeds. He had informed Pansieri about his misgivings but apparently she was too busy with budget cuts at the time and failed to take any action. Now she has resigned “for health reasons”, but the UN High Commissioner himself, Zeid Raad al-Hussein remains. According to Pansieri he also was informed and failed to take action.

Being UN officials, they all have immunity from any liability – even for incompetence and gross negligence. No further action will probably be taken, though Anders Kompass should probably give up any aspirations to promotion within the UN organisation. (I note again that no UN official will ever be held accountable for the negligence which led to cholera being introduced to Haiti by UN troops).

ABC (AP):

The U.N. confirmed Wednesday that Flavia Pansieri has left the post of deputy high commissioner for human rights “for health reasons.” No more details were given.

The allegations by several children as young as 9 of trading oral sex and sodomy for food with French soldiers tasked with protecting civilians in the violence-torn country didn’t become public until late April, almost a year after U.N. staffers first heard the children’s stories. Pansieri’s comments and other leaked documents led the U.N. secretary-general this summer to order an investigation into how the U.N. handled the case.

In a confidential statement for a separate internal investigation, obtained by The Associated Press, Pansieri said she had been distracted from the case by other issues, including budget cuts for several months. “I regret to say that in the context of those very hectic days, I failed to follow up on the CAR situation,” Pansieri said in the statement dated March 26.

She said she and her boss, high commissioner Zeid Raad al-Hussein, had assumed French authorities were handling the allegations, even as France pressed the U.N. for months for more information.

No arrests have been announced, and it appears that the only person who has been punished is the U.N. rights staffer who first notified French authorities.

The French soldiers, who were not U.N. peacekeepers, had been tasked with protecting civilians in a chaotic camp for displaced people in Central African Republic’s capital, Bangui, during vicious violence between Christians and Muslims.

Of course the UN is only as good as its member nations. I sometimes think that the UN, just like the EU, is not a forum for the dissemination of best practices as it should be, but functions instead to level down to the worst standards of a member nation.

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Surge of news articles suggests that EC will approve GE acquisition of Alstom’s power and grid businesses

July 22, 2015

I speculated a few days ago that the remedies that GE had submitted to meet the European Commission’s concerns for this deal could well succeed. I also speculated that GE would have addressed concerns in two main areas; gas turbine technology and the business of servicing the Alstom fleet of gas turbines.

The EC decision is not due till late August but I observe that there has been a surge in speculative reports about a likely approval. These are appearing in the business and in the trade press and my guess is that they must be based on some background, unattributable discussions not only with Alstom and GE officials but also with officials of the EC. It does seem that a conditional approval will come in August and with the time needed for implementing the proposed remedies, financial closure could come early in 2016, Q1. Financial closure by the end of 2015 would be a little optimistic.

Reuters: France sees ‘reassuring elements’ in GE/Alstom bid

Nuclear Power Industry News: GE Proposes “Remedies” In Push For Alstom Acquisition

WSJ: GE Says It Submitted Remedies to EU Regulators for Alstom Deal

Recharge: Alstom CEO says GE deal ‘moving ahead’ as pair await EU verdict

The Street: GE’s $13.8 Billion Alstom Deal Likely to Get EU Approval, Alstom CEO Says

 

 

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One cool summer increased Arctic ice by 30% – another indicator of the coming ice age?

July 22, 2015

A new paper in Nature geoscience confirms that the “cool” summer of 2013 increased Arctic ice volume by a third. It increased again in 2014 by 25%. Two cool summers have increased Arctic ice volume by 1.33 x 1.25 = 1.41 (41%).

The authors claim that this indicates that Arctic sea ice may be more resilient than has been previously considered, but I would  suggest that this also indicates something much more significant. It suggests to me that the conditions needed to trigger a little ice age (lasting 3 – 5 decades) are not so difficult to conceive of. With low solar activity, a few cool summers and a volcanic eruption or two would more than suffice. Even the long term shift from the current interglacial and back to glacial conditions (where interglacials last for 10 -20 millenia and glacial periods last even longer) could also probably be triggered by a few key events occurring together.

It is worth noting that for the last few years, ice cover in the Antarctic has been higher than it is has ever been since records began. The Arctic ice cover reached a very low level in 2012 but has rebounded quite strongly. Arctic ice levels are at the same level as in the 1980s.

By constantly rewriting historical data, the global warming orthodoxy try to show that every year is warmer than the artificially cooled past. Raw data shows no such warming. Satellite records show no such warming. It is only data sets where raw data is recalculated every year by very dodgy algorithms to give a calculated value for “global temperature” that warming shows up.

Global climatic changes must also show up as local weather. And this has been a miserable summer so far. June was colder and wetter – as perceived – than usual and July is proving to be colder and wetter than I have any memory of. My personal empirical observations would suggest that the shift into another little ice age has started.

Increased Arctic sea ice volume after anomalously low melting in 2013

Abstract: ……. Between autumn 2010 and 2012, there was a 14% reduction in Arctic sea ice volume, in keeping with the long-term decline in extent. However, we observe 33% and 25% more ice in autumn 2013 and 2014, respectively, relative to the 2010–2012 seasonal mean, which offset earlier losses. This increase was caused by the retention of thick sea ice northwest of Greenland during 2013 which, in turn, was associated with a 5% drop in the number of days on which melting occurred—conditions more typical of the late 1990s. In contrast, springtime Arctic sea ice volume has remained stable. The sharp increase in sea ice volume after just one cool summer suggests that Arctic sea ice may be more resilient than has been previously considered.

Even the BBC which is religiously fanatic (only exceeded by The Guardian) in its adherence to global warming orthodoxy, has been compelled to report the increase in Arctic ice. But of course they continue to deny that real data in conflict with model expectations can invalidate the models predicting man-made global warming:

BBC:

The volume of Arctic sea ice increased by around a third after an unusually cool summer in 2013. Researchers say the growth continued in 2014 and more than compensated for losses recorded in the three previous years. The scientists involved believe changes in summer temperatures have greater impacts on ice than thought. 

Why do they have to then add pure rubbish?

But they say 2013 was a one-off and that climate change will continue to shrink the ice in the decades ahead.

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Posted in Alarmism, Arctic, Climate | 1 Comment »

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