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SIEW 5Qs Interviews

By Wärtsilä | 13 October 2016

SIEW 2016: 5Qs with Timo Koponen, Vice President, Flow & Gas Solutions, Wärtsilä

About Timo Koponen

Timo Koponen is an experienced business leader with a strong background in marine, ship building and oil & gas industries. He is one of the main architects of Wärtsilä’s shift to the gas age, advocating the benefits of wider use of LNG in marine and related industries. Timo graduated in 1994 from the Turku School of Economics, MSc Econ. and has been with Wärtsilä Corporation since October 2004.

1. In Wärtsilä’s opinion, what is the role of gas in the future energy mix?

The long-term outlook for the global LNG market is bright. Gas is a critical element for a sustainable, low-carbon future. Not only does it enable significant emission reductions, it is also a competitive option – and we believe it will remain so, whether we talk about it as transportation fuel or as fuel in power generation.

Wärtsilä believes in a multi-fuel future that reflects the “fuel flexibility” ethos. We need to be open-minded in facing the energy needs of the future, whether this is met by LNG, ethane, biogas or renewables such as solar. This is the mindset that is driving our approach to developing the right energy technologies to suit each of these fuel sources.

2. What is Wärtsilä doing to develop more widespread usage of LNG as a marine fuel?

The main challenges to wider adoption of LNG as a marine fuel are the regulatory environment and infrastructure.

To help address this, Wärtsilä recently announced our involvement in SEA/LNG, an industry coalition formed to accelerate the development of LNG for marine application. In doing so, we are offering our expertise to the coalition in its focus areas, which include supporting the development of LNG bunkering in major ports, educating stakeholders on the risks and opportunities in using LNG, and developing globally consistent regulations for cleaner shipping fuels.

We also collaborate with industry partners on joint industry projects/joint development projects (JIPs/JDPs) related to the use of LNG as a marine fuel. For example, we recently signed a joint cooperation agreement with Gasum, which aims to develop the use, distribution, and service solutions for natural gas in marine and onshore applications.

Wärtsilä’s longstanding commitment to developing LNG as a marine fuel was recognised by the Society for Gas as a Marine Fuel (SGMF) earlier this year, when John Hatley, Vice President, Wärtsilä Marine Solutions in America, was elected to their Board of Directors. This underlines and strengthens our efforts to advance the marine industry into a new gas fuel era.

3. What do you see in the future for small- to mid-scale LNG in light of the global oversupply?

The long-term outlook for the small- to mid-scale LNG market is positive, and there are multiple factors contributing to this.

Firstly, small- to mid-scale LNG will bring energy access to remote areas, such as disparate islands in Indonesia which are not covered by the power grid. Unlike the traditional large-scale model, small-scale LNG shuttle tankers, bunkering vessels and barges enable smaller users and ports to secure a reliable supply of LNG.

Secondly, as part of the global shift to a low-carbon future, power plants and fuel suppliers will be looking to secure reliable LNG access, resulting in a growing demand for small-scale supply.

That said, further investments in infrastructure are needed to meet and grow this demand. Floating regasification is one of the application areas that we are seeing a lot of development in, both in large volumes and in smaller barge mounted solutions, and is a space that we should be watching closely.

4. How are business models in the gas industry being affected by digitalisation?

I would say business models in every industry are being affected by digitalisation in one way or another – and the energy business is no different. We have to come to terms with ‘the new normal’ and figure out how to leverage the opportunities digitalisation brings. These opportunities include: improved operational efficiency and flexibility throughout the value chain, and enhanced service quality and customer relationships as a result of advanced analytics.

The ability to unlock these opportunities is in itself a potential business area. Wärtsilä, for example, has designed a new area of expertise that helps customers optimise their operations and seize the opportunities offered by digitalisation.

More significantly, digitalisation encourages business to invest more in R&D and innovation, to push the boundaries of developments and – for us at Wärtsilä – to envision the future of the gas and shipping industry.

5. What are your thoughts on the SIEW 2016 theme “New Energy Realities”?

This theme could not be more accurate for the times we live in now. We need to embrace the reality of a multi-fuel future and work together, cohesively as an industry, to ensure we build a future where access to reliable, affordable and sustainable energy is ensured on a global level.

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