Error message

  • Warning: mysqli_connect(): php_network_getaddresses: getaddrinfo failed: Name or service not known in include() (line 276 of /var/www/www.monocodebase.com/htdocs/sites/default/settings/www.constructionweekonline.com.settings.php).
  • Warning: mysqli_connect(): (HY000/2002): php_network_getaddresses: getaddrinfo failed: Name or service not known in include() (line 276 of /var/www/www.monocodebase.com/htdocs/sites/default/settings/www.constructionweekonline.com.settings.php).
  • Warning: mysqli_close() expects parameter 1 to be mysqli, boolean given in include() (line 300 of /var/www/www.monocodebase.com/htdocs/sites/default/settings/www.constructionweekonline.com.settings.php).

Wired for growth

Dow Wire & Cable global marketing director on infrastructure growth

Dow Wire & Cable, a business unit of Dow Chemical Company, manufactures critical components for wires and cables
Dow Wire & Cable, a business unit of Dow Chemical Company, manufactures critical components for wires and cables
Jon Penrice
Jon Penrice
ANALYSIS, MEP

The Middle East as a developing region is boosting global growth in electricity consumption, which is good news for cable makers. This was the message from Dow Wire & Cable global marketing director Jon Penrice at Middle East Electricity 2010.

Penrice said that, although the global recession has resulted in a dip in electricity consumption, particularly in the West, “We foresee consistent growth in the developing economies of China, India, Latin America, Africa and the Middle East. These are all markets that will grow at plus 5% on average. So that is going to put tremendous pressure on infrastructure. The infrastructure is not there to be able to accommodate that kind of electricity growth today. That 5% consistent growth is going to require 5%, 10%, 15% growth in infrastructure.”

Dow Wire & Cable has entered into a collaborative partnership with local cable manufacturer Ducab.

“Our philosophy is very much that you cannot have a quality cable without quality compounds. The trick in terms of delivering long-term reliability is two companies working very closely together. We are fortunate to have a partner like Ducab, with whom we have been working for 12 years now. The development of that partnership and technical collaboration has been truly exceptional. That is what really lies at the heart of quality.”

Dow Wire & Cable is a business unit of Dow Chemical Company that focuses exclusively on the wire and cable industries. “We do not make wires and cables, but the components that are critical to those cables. We engage across the entire value chain, as we believe in understanding the entire needs all the way through from the industrial end user, and trying to bring that back into our R&D. As a group we spend US$1.5 billion on R&D, so we have a tremendous capability in this regard.”

Penrice pointed to four mega trends that Dow Wire & Cable has identified that will drive future opportunities across all its business interests, which run the gamut from heavy and medium voltage to consumer electronics, automotive and building and construction. These are health and nutrition, energy, transportation and infrastructure and consumerism.

Aspirations

“Some 6.5 billion people have the same aspirations in terms of the cars they drive and the type of air-con they want for their homes, which we believe will drive electricity consumption in a significant and sustained way. There is a huge need for infrastructure development, as very much highlighted in the Middle East. Infrastructure needs will be a long-term mega trend that will drive growth,” said Penrice.

“The issue is not just about growth in emerging markets. In developed markets, the power infrastructure -- especially in the US and many parts of Europe -- is old and needs renewal. The power infrastructure of New York, for example, is 100 years old and is crumbling. So there are investment opportunities not just in developing markets, but in mature markets as well.

“Then there are the new challenges posed by climate change and renewable energy. I think energy efficiency has always been something this industry has not really focused on, in that the 9% average loss between the generation and consumption of electricity has always been one of those things that nobody talks about. As soon as you start putting a price on that 9% in terms of how much you are going to have to pay for carbon emissions, that 9% becomes real money, at which point there is going to be a tremendous focus on reducing it. There is not one magic solution, but we believe that energy efficiency is going to be a major driver.

Another trend is the global investment in renewable energy. “For the cable industry, solar power is an even bigger opportunity. The average yield of renewable energy is 20% due to weather variables, but you still need the same cable infrastructure. Renewable energy also tends to focus on remote locations, which means concomitant growth in the transmission and distribution sectors,” said Penrice.

Urbanisation

Rapid urbanisation is also leading to growth in underground cable installations. “The days of running cables in overhead lines is getting more and more difficult. As big cities grow, underground installations are growing faster. I think in the US now for a new overhead line you need about 12 years from starting a project to getting approval. It really has become such a political process it is almost impossible to get new overhead lines.

“So increasingly as the technology continues to develop, and high-voltage technology in particular, the alternative of transmission underground has grown from what has been a relative niche in the industry to very much a mainstream, and one we believe will become even more competitive and mainstream as a means of transmitting electricity,” said Penrice.

Growth in the global cable industry is predicated on finding solutions for transmission efficiency and longevity. “How do you get more out of your existing infrastructure? How do you put the economic case for reliability and longevity? In terms of installation, it costs roughly three times more to bury a cable than it does to make it. So if we are going to make underground cables more cost-effective, then the cost of installation needs to come down.”

On the issue of environmental awareness, Penrice said that “although green is a very broad subject, it refers to sustainability of materials and energy efficiency in particular. Again this is something that this industry has not really focused on. There are many other industries that have green as almost their number one driver. But we see it as coming in the cable and power industry as political pressure, and climate change in particular, is brought to bear.

Reliability

“What matters to everyone is having a system in the end that is the most reliable and cost-effective. What often happens with a cable buyer is they want the cheapest cable … so is the cheapest cable the lowest cost cable? No. The cost of a cable is around US$3/foot. However, the major cost is not the cable itself, but in the operation. The initial cable costs 14%, what we call the lifetime cost of the cable, while the installation is nearly three times that at 40%. This is where the longevity and reliability issues come in, together with asset management. If you end up in an asset-replacement strategy, you will end up facing significant replacement costs,” said Penrice.

An invisible element of the cost calculation that is often ignored is the issue of energy loss. “The average is 9%, which is a global figure, but it can be much higher if you have commercial losses. Best practice globally is 4% to 5%. In terms of a cable with a 40-year lifespan, that energy loss accounts for about a third of the cost. That is just the cost of the electricity losses; it does not include the carbon costs that may accrue.

“So our philosophy is really to tackle the big picture: the cost of installation, reliability and longevity, and see how we can bring solutions to bear to reduce that cost. Dow Inside is really a strategy aimed to try and raise awareness of the importance of quality in the industry. The lowest-cost, most reliable cable system is built on high-quality manufacture of compounds and semi-conductive all the way through to the cable itself.

“Our approach with Dow Inside is to go to the marketplace itself and point out the importance of these quality standards. Quality standards around the world are very varied: some are demanding, while some are not. Standards tend to be negotiated in committees, which will go for the lowest common denominator, and so standards get diluted. In the end they become minimum standards, which I think is normal.

“But there are better alternatives. We see the opportunity for high-performance cables. Rather than change the standards, which can be a very long process, it is far better to have high-quality cables from the start and say these are the benefits that can be achieved. But this can only work if we have a combined collaborative approach in the industry,” said Penrice.

Ducab celebrates 30 years

Ducab, a leading manufacturer of high-quality power cables in the Middle East, showcased its latest technologies in cable manufacturing at this year’s Middle East Electricity Exhibition at the Dubai International Convention and Exhibition Centre. The company displayed products from its Special Cables Unit, launched a new range of Ducab Connect products, and hosted a series of joint seminars with Dow Wire & Cable and FM Sudafix. “This year Ducab is celebrating 30 years of powering the region as a manufacturing leader,” said MD Andrew Shaw. Ducab has launched a new office in Qatar and is also planning a number of expansions outside of the UAE market.

Most popular

Awards

CW Oman Awards 2020: Meet the winners
A round of the thirteen winning names at the Construction Week Oman Awards 2020 that

Conferences

Leaders UAE 2020: Building a sustainable, 'resilient' infra
AESG’s Phillipa Grant, Burohappold’s Farah Naz, and Samana's Imran Farooq on a sustainable built environment
CW In Focus | Inside the Leaders in KSA Awards 2019 in Riyadh
Meet the winners in all 10 categories and learn more about Vision 2030 in this

Latest Issue

Construction Week - Issue 767
Sep 01, 2020