Rafael Paniagua, President, ABB Brazil
Rafael Paniagua, President of ABB Brazil, gives an insider’s perspective into the country’s strategy for growth in the energy sector, the key problems that lie on what type of technology is required to supply electricity efficiently over vast distances, and how this will provide a more energy efficient and environmentally friendly option for the population of Brazil.
You are recently arriving from Spain and taking over Latin America’s biggest market for energy. As president of ABB Brazil what is on your agenda to drive the company forward?
My appointment to Brazil is very recent. ABB has a very clear direction of travel in Brazil. This is articulated in ABB’s 2010-2015 global strategy for growth. This strategy focuses principally on the automation and energy sectors. We seek to give customers the ability to become more energy efficient. As a business heavily involved in large-scale projects, we are conscious of the need for good environmental management and minimizing our impact on the ecosystem. We seek to improve productivity whilst ensuring energy is clean. That is our basic mission.
One of the key markets worldwide for ABB is Latin America, particularly Brazil. We expect Brazil to continue to grow especially in the automation and power sectors. As President, I must steer ABB to continuing growth by implementing ABB’s commercial strategies. Over the last three years ABB has been exceeding 20 percent growth annually in Brazil. To continue to grow at this rate, we are prioritizing productivity and profitability.
Transmission line systems in Brazil represent the backbone of the national interconnected system SIN, defying technological companies to help transport energy through thousands of kilometers across the country. What is your perspective on Brazil’s transmission challenges?
Brazil still requires more transmission lines. This is because of the fantastic resources Brazil has for hydro which are principally located in the Amazon. Technology today has not found anything better for sustainability, continuity, efficiency, and cost per kilowatt than these hydroelectric plants.
There are some issues raised in transmission to the principle point of consumption. In Brazil, this is represented by the large urban conurbations in the Southeast. The key problems lie on what type of technology is required to supply electricity efficiently over these vast distances. One of the technologies leading this is the High Voltage Direct Current (HVDC). This technology is used on Brazil’s longest transmission line. There is potential for even longer lines as demonstrated by developments in China. ABB is now ready for the challenges associated with constructing these lines in the future. We expect that more power will be transmitted over longer distances. This may require higher voltages, larger than 600 Kv Direct Current lines contemporarily used in Brazil. ABB can deliver 800kV lines already and is planning to produce lines over 1000 kVs. This will reduce further losses and environmental impact.
One of the key constraints in transmission is that the HVDC lines work currently as a point-to-point electricity transmitting system. There is less opportunity to supply power to areas in between the generating station and the end of the line. We are acutely aware of this issue and ABB is developing systems that will allow DC current to be used more locally, in a more dispersed manner. This will have the effect of freeing DC current from being used as a point-to-point distribution system.
Another solution that ABB is developing in conjunction with the Chinese government is the ultra high voltage in alternative current sup to 1,100 kV. This can allow more flexible use of the power flowing through these systems.
What proportion of ABBs activities is associated with the electrical sector?
Energy for ABB is everything. The power system directly represents 60 percent of our volumes whilst oil and gas and other miscellaneous industries represent the other 40 percent. Much of our work in oil and gas, however, is to do with electrifying and automating the oil and gas sector. It is all related, if even indirectly to the electricity and power sector.
ABB is present in various areas and supporting the wind sector, which is supposed to triple by 2016, supplying three new substations and transmission infrastructures. What bet is ABB taking on the wind power sector and other eco-friendly areas?
We have a high market share in different aspects of the electricity and power sector. For construction of substations and transmission of electricity, we have a huge market share. These are related to the means of production, in this case wind. There are no turbines with an ABB logo on them. However, ABB is likely responsible for many of the relevant parts inside; such as generators, converters, transformers, motors, medium voltage equipment.
We work with the key players in the wind industry, such as Gamesa and Vestas. For this reason, we are confident that demand for ABB products will grow in line with the wind industry.
In a country whose energy matrix is 90 percent based on renewable energies, how do your solutions match the ecologically sustainable needs of the country?
Environmental solutions are a major driver of our research and development. We started with ABB’s own manufacturing processes and our own industries, refining them to minimize harm to the environment.
The second aspect is that in designing products, we look to improve efficiency, reduce losses and increase productivity. With regard to Ultra High Voltage distribution systems in particular we have pursued a competitive edge by reducing losses in transmission.
Most of our customers are concerned and interested by environmental impacts too. Interest in this subject is significant, and can determine which company will receive a contract. For this reason, sustainable development is a key consideration for us, especially for commercial and ethical reasons. We are pleased to provide systems with materials, technologies that are proven to give our customers environmentally sensitive solutions. Use and integration of solar and thermo solar systems for example, is a niche where ABB is truly leading.
What do you want ABB to be known for and what key points do you want ABBs reputation to rest on?
There are two main areas where ABB will seek to further our reputation for excellence. Transmission is one element where ABB will push boundaries. In Brazil this is of pronounced importance due to the size and needs of the country. ABB is up to this challenge. We proved this at Itaipu 35 years ago and are repeating our historic successes now in Rio Madeira. We have high technical capabilities in Brazil and can develop essential technologies further using solutions we have learned abroad.
ABB also has a great interest in the oil, gas and mining sector. Brazil is unique in respect to these industries, again due to its size and the scale of operations. We can supply a complete package, with on-site technological solutions in these industries. We are installing infrastructure on a massive scale in this country. It represents a break-through for us. Historically, for example, marine drilling platforms were fixed, but now there are developments of ships that can produce oil whilst afloat. ABB is providing electrical fittings and electrifying these ships.
We are working with Vale on the largest mining facility in the world. This mining and metal processing plant goes forward with ABB technologies, from primary substations to all secondary distribution throughout the mine. It is a modern facility, and is the largest such facility in the world. Vale is very proud of this facility, which has modern production methods, such as trackless production.
At such a strategic moment, including major international events in the coming years, and all eyes are set on Brazil, what will ABB achieve in the next five years?
I hope that ABB will continue to grow. Last year we were a USD $1.22 billion company. I would like to see continued growth similar to that which the company has seen in the last few years and I would like to focus on our customers’ priorities. There is a combination of needs in Brazil for infrastructure, from electrics to roads and airports. There is no doubt that Brazil will continue to invest in these facilities as Brazil’s increasing middle class demand high quality facilities. These demands ensure there will be significant increases in electrical consumption. ABB will be present to facilitate this expansion.
Upgrading the Brazilian electrical system is essential. Large utilities are now talking with the government about how to finance the under-grounding of the power cables so visible in our cities. I hope to see ABB involved in this process.
I hope that the next half-decade will also see ABB develop expertise in smart grid solutions. We need better management of the distribution of energy, as more efficient use of energy will reduce costs to Brazilian business. ABB will be at the heart of this change.