Areva T&D: Team on tour

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The building site of the third generation reactors in Areva T&D's native France.

Areva T&D's top executives were in the region last month, opening offices and talking positively about their prospects in the region.

Areva T&D, short for transmission and distribution, is a French company that describes itself as one of the big three players in its particular area of the energy sector. It's executive team, including chairman and CEO Phillippe Guillemot, was in the region last month talking up the company's prospects for the year ahead.

Thanks to a full order book, they were able to do a pretty good job. The company has enough work to keep it at full output capacity for the next few years and is subsequently buoyant about riding out the current storm.

The company's arena is a busy one. In 2006 Areva estimated the size of the worldwide transmission and distribution market at a value of 43 billion euro. It also anticipates that investments in transmission and distribution projects will double over the next 30 years, thanks to growing energy demands, which will drive a need both for new equipment and upgrades to aging infrastructure.

"The need for what we do is huge," said Guillemot.

Areva T&D's products and expertise are an important part of the infrastructure mix. For example, electricity produced at medium voltage is ‘stepped up' to high voltage for transmission over long distances.

High voltage transformers perform this step-up, altering the current from medium to high voltage. Electricity is then transmitted through the network from point to point where a distribution transformer will step the current back down to medium voltage, so it can be used by regional utilities and industries.

The demonstration of how important this is can be seen in the figures. The Middle East and Africa represent 35% of Areva T&D's market and the company claims a position as ‘leading supplier' in the key infrastructure component of high-voltage sub stations for the Middle East. It is primarily a turnkey project market for the company.

"Here, the proportion of systems to products is very different, with a high proportion of systems," said Guillemot.

The revenue this business generated in 2007 was 1.2 billion euros. Not without reason, Areva T&D expects that as the region continues its development, major transmission projects will be a source of growth.

"We were anticipating revenue growth when we added a lot of capacity in the last two years and we're going to end of that capacity to deliver what we have in our order book," said Guillemot. "Electricity consumption has not reduced that much, in fact in Qatar they are having the highest consumption, in winter, ever.

"Our mission is to be a leader in our industry and it's impossible to be a leader without a strong presence in the Middle East."

In this context it's no surprise that one reason for the flying visit - Guillemot visited Doha and Dubai on the same day - was the opening of a new regional office in Qatar. Between 2007 and 2008 the company increased it head count in the region by 60%, mostly engineers.

During a press briefing the executive team on display were keen to push the fact that the company had been working in the region for some 30 years, they felt the new office reinforced this commitment.

While the usual reasons explaining the business's presence may fit - global business, long-term strategy - there is one thing that stands out. While growth in the region's conventional power infrastructure may be assured, speculation and interest in the development of the nuclear alternative is rife.

Areva's nuclear experience is substantial - it is the only company currently building two new third generation nuclear plants - and Guillemot was clear that his company would love to be involved in any regional nuclear power projects. On the subject of which of the company's current customers would be first to have a successful civilian nuclear programme, he was more coy.

"So far, everybody seems to be in pole position; but it's a long process" he said. No doubt that is at least some of the reason for his company's widespread presence in the Middle East.

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