Coal

Think globally

Issue 2 and Volume 99.

OPINION

Think globally

Global competition and new information technologies are at the center of the U.S. power generation industry of the 1990s. Costs are falling, schedules are being compressed, and productivity is climbing. That was the message from Robert Ruisch, Black & Veatch managing partner in charge of the energy group, at the recent POWER-GEN Americas meeting in Orlando, Fla.

Why should a utility with a fixed franchise area in the United States care about the rest of the world? It is clear why engineering firms and equipment manufacturers must adapt to global competition, but Ruisch made it clear that utilities are affected just as much. OTo succeed in this new world,O Ruisch told us, Outilities and their suppliers must become global competitors, have an information-based culture, and empower their employees. No one involved in the electric utility business has the option of competing or not competing in the global market. Utilities that elect to focus their efforts in the United States can be assured that the global competitors from both Europe and Asia will be competing against them at every opportunity. The question each utility needs to answer is whether it wants to compete against competitors in markets outside the United States. I believe the successful utilities will be competing on a global basis through nonregulated subsidiaries.O

Global competitors, he warned, will Oattack the industry weak spots with improved processes, fewer employees, better productivity, lower prices and a better understanding of the ultimate customers? needs.O Taking full advantage of the rapidly developing information technology is one of the best ways to improve productivity and your competitive position in the new global power market. Ruisch told the story of a 600-MW combined-cycle plant his firm is building in the United Kingdom. It?s being designed in Kansas City, Kan., USA, constructed in England, and procurement is taking place around the world.

ONo drawings are being mailed,O Ruisch explained. OAll required construction and startup information is being called up at the site from a database located in Kansas City, Kan. This capability has allowed us to reduce the overall schedule for new combined-cycle plants by 25 percent and new coal plants by 40 percent.O Ruisch added, OThis isn?t good enough for the future.O The pressure is on. OTo achieve the next 25 percent to 40 percent improvement in plant schedules, the information systems of all participants on a project will need to be interactively linked. The culture changes necessary for a utility, an engineer/constructor, equipment suppliers and construction contractors to agree to combine their computer systems are significant. Only those who can overcome the legal, financial, technological and cultural hurdles to accomplish this will have a chance for success in the competitive market.O

I couldn?t agree more.