A steel company in Indonesia might someday fire up a power plant that was built from refurbished locomotive engines in Roanoke.
A steel company in Indonesia might someday fire up a power plant that was built from refurbished locomotive engines in Roanoke.
American Railroad Equipment will supply the engines to ARE-Energy, which will build the power plants. Both have ties to Cycle Systems, a Roanoke-based recycler of scrap metal.
ARE-Energy today introduces the plant that uses diesel fuel or a combination of 75 percent natural gas and 25 percent diesel fuel to generate electricity.
Each power plant can provide up to 3 megawatts of continuous power, enough to meet the daily needs of 10,000 to 15,000 people in a developing country, or 2,000 to 3,000 people in the United States, according to ARE.
Locomotive engines are normally diesel fueled. A locomotive's power system generates electricity to power the traction motors and drive the wheels.
"We were dismantling locomotives, and the engines were hard to sell in the after-market," also known as the used railroad equipment market, said Jay Brenner, president of ARE and Cycle Systems. "We had lots of engines, and my father found something to do with them."
Brenner's father, Bruce, came up with the idea to take the locomotive's engine and generator and modify them to build a power plant. Bruce Brenner is chairman of ARE.
Enter George Blanar, chief operating officer of ARE. He, with the help of some Norfolk Southern retirees who had expertise in locomotive technology, turned Bruce Brenner's idea into a reality.
The power plant is made up of three parts: a cooling module, housing a radiator system and fans; the engine module, housing the engine; and the electrical module, containing all generator switchgear and controls.
Bruce Brenner began researching potential markets for his new product. He learned that several countries, including Mexico, Bolivia and Indonesia, have rich supplies of natural gas. So, utilities in those countries are potential buyers of the power plants, he said. The plants could supplement power for water treatment plants, food processing plants and other industries.
As Indonesia's oil production has leveled off in recent years, the country has tried to shift toward using its natural gas resources to make electricity, according to the Energy Information Administration with the U.S. Department of Energy.
ARE-Energy hopes to sell 10 to 12 of the power plants in 2006. Commercial production is expected to begin in the fourth quarter of this year, initially creating 15 to 20 jobs in Roanoke.
The Brenners said they can ship their plants by air, rail, truck or ship.
Each power plant is 60 feet long. The plant is packaged in three 20-foot containers. The company has a patent pending for intermodal cargo containers that would transport the power plants.
Ordinarily, financing the manufacturing of a newly designed power plant would be a problem, Bruce Brenner said.
But the Brenners are taking advantage of a Working Capital Guarantee program at the Export-Import Bank of the United States. The program encourages commercial lenders to make loans to U.S. businesses for export-related activities. Bruce Brenner is working with the U.S. Department of Commerce, World Bank and Ex-Im Bank and other international organizations to market the product.
The Ex-Im bank will guarantee the loan for the working capital from a local bank. One of the parameters for the bank's guarantee is that 85 percent of the material used in the power plant is either manufactured or remanufactured in the United States. Also, the U.S. government will guarantee the buyer's note for five to seven years.
A 3-megawatt plant will cost up to $1.8 million to build, including the containers that house the sections of the plant.
ARE is a division of American Railroad Equipment, the sister company of Cycle Systems. To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com.
Source: Knight Ridder/Tribune Business News
