Andreas Schell, Chairman of the Board of MTU parent Rolls-Royce Power Systems, explains the strategy that the company has launched to stay at the cutting edge of drive and propulsion technology.
Rolls-Royce Power Systems likes to define itself as a solutions provider. What does that mean, exactly?
Many of us still identify very strongly with the company as a classical manufacturer of diesel engines. But that traditional image is very much passé. We still build world-class diesel engines – and we want it to stay that way – but now we're embedding them in complete drive or energy systems. Take ships, for example, where we're aiming to supply the complete ship system. That means we deliver the marine engines and automation units and also integrate surrounding electronic systems such as the radar, navigation, and ship positioning. So the engine becomes one element in a whole configuration. Or consider MTU microgrids, where our cogeneration module or diesel genset forms just one part of a system that interconnects renewable energies with batteries and control systems. In this new landscape, diesel engines won't always be the answer. Our aim is to find the very best solution for our customer, so it might still be a diesel engine in some scenarios, but in others it could be a gas engine, a hybrid, a straightforward electric drive or, in the future, a fuel cell.
?Where does service fit into this integrated approach?
In the future, the customer's eye will not just be on engine power. He will be looking for a source of driving power or energy that is durable, reliable, and can be accessed around-the-clock at any location in the world. So service will no longer be a 'nice-to-have' accessory, but form an integral and indispensable part of the type of solutions we're offering. Long-term service agreements or what are known here as 'Value Care Agreements', similar to those we recently sealed with Hitachi, are set to become the rule. In Hitachi's case, we didn't just supply the drive systems, but guaranteed their availability for almost thirty years. This trend is principally being driven by digitalization, and our future is going to depend on our ability to interweave the latest digital knowhow with our advanced engineering capabilities. We want to use digitalization to provide new service offerings and new sources of value creation that will help us capture new customer groups and markets.
What stage would you say Rolls-Royce Power Systems has reached in its digital development?
We've made tremendous headway since last year and will be injecting even more pace into digitalization as we move forward. To deal with customer issues, we now have five Customer Care Centers around the world whose experts are on standby across the time zones, 365 days a year. These experts work closely with our Digital Solutions team, which we're planning to expand from 60 to 80 members of staff over the next few months. Its mission is to drive the ongoing digital transformation of our business by digitally integrating all MTU engines and systems and developing digital products and services with tangible customer benefits. It recently created for example the digital tools MTU Go! Act and MTU Go! Manage, which are currently proving themselves out in the field. Big Data and Analytics are also set to play a bigger role for us, and will underpin everything we do in terms of digital value creation and the development of innovative business concepts and models that help us move into hitherto unfamiliar customer groups and markets.
How important are strategic partnerships and cooperation to the PowerSystems 2030 strategy?
Competition on our markets is getting fiercer all the time – especially since industry outsiders with high digital expertise started moving into the arena. So when it comes to our core business and expertise, we have to keep our nose to the grindstone. At the same time, we need to make smart choices in partnerships that let us develop in the direction we want and improve our market position. That means using more external expertise, for example, in R&D. Joint Ventures are another important tool for leveraging our potential on the global growth markets. Take a look at MTU Yuchai Power in China and Goa Shipyard Limited in India which have delivered very pleasing outcomes.
How will our new strategy influence the RRPS portfolio?
We will continue to build diesel engines. But they will be even cleaner and feature more smart technologies. And we will devote more of our energy to meeting ever-growing demands for hybrid solutions, the electrification of drive systems, and the use of alternative fuels and gas power. With our Green and High-Tech program, we have shown that we have a progressive vision on how to meet the huge challenges of the energy turnaround and new trends in mobility.
Could you elaborate on that??
Whether you're talking about ships, trucks or trains, transport operators are faced with increasingly challenging emissions thresholds. But we have effective solutions and recently have even set new benchmarks on the market. Take our first mobile gas-powered Series 4000 units, for example. They're so clean that they've been accepted for service on the Wadden Sea. From 2020, we'll be selling fully integrated MTU-brand hybrid propulsion systems suitable for yachts, workboats, ferries and patrol vessels. Moving on to the railway segment, we have our MTU Hybrid PowerPacks which offer the best of both worlds in terms of diesel and battery-powered rail traction – that means quieter operation, lower fuel consumption, faster acceleration and lower exhaust emissions.
How can Rolls-Royce Power Systems contribute to making the energy turnaround a success?
As the use of renewable energies increases, so do the weather-induced fluctuations to which the public power grid is exposed. To ensure power supply reliability, our electric power infrastructures need massive extension. But the progress made to date lies far behind target. Hence the growing need to generate power locally on site in a way that is reliable, cheap and sustainable. Our microgrids already fit the bill. These are complex, smartly-controlled energy systems that use and interconnect diverse energy sources such as photovoltaics, wind power, hydropower, biomass, diesel power, gas power, and batteries. Microgrids can be operated in island mode or they can be connected to the macrogrid. That makes them ideal for generating on-site power for industry or local communities. From autumn onwards, we will have a pilot microgrid in service in Friedrichshafen and customers will be welcome to view it to gain deeper insights into this technology.
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