Executive Interview: Viewpoints from the Board Room: Voith Hydro

Kevin Frank was named chief executive officer and president of Voith Hydro Inc. in November 2010. Frank discusses technology, policy and the factors driving the hydropower market.

By Russell W. Ray

Kevin Frank

Voith Hydro is a full-line supplier for advanced hydroelectric equipment, technology, and services to the renewable energy market, including hydro turbines, generators, and plant modernization. More than 40,000 generators and turbines have been installed worldwide by Voith Hydro, positioning the company as a global leader in hydropower generation.

Founded in 1867, Voith Hydro is based in Germany, with its North American headquarters located in York, Penn. In November 2010, Kevin Frank took over as CEO and President of Voith Hydro Inc. in York, after holding a leadership position at Voith’s paper division.

Hydro Review sat down recently with Frank to discuss the North American hydro market, new technology and policies affecting hydropower development.

The following is a transcript of that discussion:

Q. Before joining Voith Hydro, you held a key leadership position at Voith Paper North America. Was this a difficult/easy transition?

Kevin Frank: It was very interesting for me because I didn’t know what to expect coming in the door. The world was pretty wide open as far as expectations go. What I found was that the industries have many similarities. The paper industry and the hydro industry are very similar in nature. They’re established businesses and both are strong in North America. So running an operating unit for paper, in itself, wasn’t that much different when I went over to hydro. What really is great about hydro is all the growth potential and the optimism I see. There’s a strong need for new technology and new development in hydro. That wasn’t necessarily the same in paper. In addition, the Voith family is a very strong, deep group that provides a lot of support when you move like this. When you add the excellent group of established customers, it was just a great transition.

Q. How would you describe the potential for hydropower development in North America? Where are the opportunities?

Kevin Frank: Of the 80,000 dams, not all of them will be suitable for hydropower. But a portion of those dams in the South and Midwest can be developed. The technology gets better every day, so some of these marginal sites are becoming more commercially viable. The potential for growth is very strong.

We want to prioritize our fish-friendly technology at these new sites. There has been incredible new development of fish-friendly technology within the industry and we’re doing a better job with fish passage, and that allows us to tap water’s natural energy while improving our already strong environmental stewardship.

Q. Are you optimistic about efforts on Capitol Hill to encourage more hydropower development in the U.S.?

Kevin Frank: We all know the state of the situation right now with fiscal restraint. We don’t need to be looking for grants so much as we need to be looking for help with policy. What we need is more streamlined processes to get the licenses through.

When I think of a developer that is going to develop a greenfield site on an existing dam, it’s a good five years to get a license and there is no precise road map with time frames. We need legislation to narrow the path, shorten the time frame and create more certainty for investors. Hydro is no different than any other business model. You have to have a certainty. That’s what investors want. The return is good but the certainty is not where it needs to be.

Q. How would you describe the hydropower market? Do you expect the hydro market in the U.S. to grow?

Kevin Frank: The hydro business is too hidden. We do excellent work in North America and around the world… but when you turn that light switch on, the average person doesn’t think about where it comes from and they don’t think about what it means. The beautiful thing about hydro is its small carbon footprint. We’re a good steward of society and there’s so much potential with all the dams that we have. We have 80,000 dams and only 3 percent of them are used to generate power. It’s incredible to me that there’s that much opportunity and we’re not utilizing it. The hydro business is a great business but it’s a business the average person needs to understand better because if they did, they would be demanding the government to support it even stronger than they do today.

Q. In the U.S., we’re seeing a commitment to move forward with new hydro developments. Is Voith Hydro seeing that same commitment and, if so, what do you attribute that to?

Kevin Frank: Customers are committing to expanding their clean, reliable hydropower. The power stations they have in place are some of their best assets. So the customers want to expand it. But the regulatory process doesn’t make it easy to make that happen. Customers are looking at expansion. They’re looking to see how they can do more with the assets they now have.

Q. How would you describe the market for modernizing the existing fleet of hydropower plants in the U.S.?

Kevin Frank: We have a lot of good hydropower sites. The technology is very good at a lot of these sites. The thing is they can be even more efficient. It’s time to make these sites more efficient and expand the energy output. It’s not a guessing game. We know exactly what we can get out of them. The technology, although it was good, is excellent today. The opportunity for expansion at existing sites is great. The fleet we have in the U.S. is relatively aged and it’s time to reinvest in it. I see it continuing to grow in general, not only in conventional hydro but also in pumped storage. As we see additional need for more energy storage, I see pumped storage as a valuable asset in meeting that need. It can take up to 10 years to build a new pumped-storage facility, but to do a retro on an existing plant and get more energy output, we can do that relatively quickly.

Q. Does the fact that more than a quarter of the existing hydropower portfolio in the U.S. is owned by the federal government affect your approach to doing business?

Kevin Frank: They have the biggest sites. They are a very fair group. They want good technology and they want it at a very fair price, as does every customer. So in some ways, they’re not that different. We think their sites are ready for expansion for optimization. And, of course, a lot of these dams are nonpowered dams and we’d like to help them put some generation into some of these sites.

Q. What do you think about the opportunities in Ocean/Tidal/Stream Power? Is it a viable market?

Kevin Frank: It’s a very exciting opportunity. When I think of the size of ocean opportunities, I get excited about it.

The trick is making it commercially viable. We have great technology. We’re getting smarter at it every day. We have some exciting projects ongoing. We have a wave power project (Mutriku plant) in Spain. It’s producing 300 kW. It shows that wave power is starting to become commercially viable.

Q. Describe Voith Hydro’s research and development efforts. What type of innovative research are you doing?

Kevin Frank: We’re doing a lot with simulation to improve the efficiency of our modeling. Whenever you’re making big investments, you want to reduce risk. The more certainty we can bring to our modeling, the better. Fish friendly technology is a big focus of ours. Dissolved oxygen is a big issue and we have leading technology in dissolved oxygen. We’re adding oxygen to the water through our runners and this is a technology that’s very important. There’s also Alden fish friendly technology. That’s a very strong technology for us. It’s a 3-blade turbine that runs at a fairly slow speed and helps pass fish through, and you don’t lose any efficiency.

We’ve got the ocean, wave, tidal, we have fish friendly, we have the dissolved oxygen and we have the simulation. I’d say those are pretty strong areas for us.

Q. Describe Voith Hydro’s policy and public relations work. Is Voith Hydro active in efforts to reform energy policy and improve the industry’s public image? What’s your philosophy in this regard?

Kevin Frank: We heavily support the National Hydropower Association. We also work independently from NHA. We’ve been more active in trying to support the right legislation and doing what we can to get the message out about hydro – that it’s clean, that it’s safe, that it’s renewable and reliable.

Russell Ray is senior editor of Hydro Review magazine

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