The Business Interview: Mark Wetton, Areva T&D

"The biggest challenge is keeping the lights on. Our infrastructure is at the end of its productive

1. How effective is power transmission and distribution in the UK at the moment?

At present up to 20 per cent of energy generated in the UK is wasted simply by inefficient power transfer and through outdated transmission systems. This is because the industry specifications and standards that we're using today were developed more than half a century ago.

In the mid-Twentieth century, Government and industry cooperated to develop products, which at the time were cutting edge, to solve the problem of moving power from centralised generation in the north to the ever expanding population in the Midlands and the South. This lead to massive investment in research and development (R&D) during the 1950s, and then a surge of infrastructure projects through the 1950s and 1960s. This means that much of the UK generation, transmission and distribution infrastructure is forty to fifty years old.

Today our challenge is to rethink fundamentally what we expect in the future from this critical national infrastructure and how we use the experience we have developed over the decades and the tremendous material and design technologies we have today, to find effective solutions.

2. How can this be done more efficiently?

The original system was based on centralised generation, ie. large fossil fuel power plants, and this is no longer an appropriate solution for a low carbon power generation mix.

Globally, we're facing four major challenges: fast growing energy needs; the race for a low carbon energy mix, volatile energy markets and prices; and the emergence of large regional grids. In the UK this manifests itself in an urgent need for us to replace large centralised coal fired power generation and to build transmission networks with more flexible, smarter, local solutions.

At AREVA T&D we see the solution to these problems as being a revolution not an evolution. We now need to look at future demands as a whole and design a new network to meet these demands as efficiently as possible whilst keeping in mind the key issues of reliability, security, climate change and the optimisation of renewable energy sources - the energy mix.

For us the revolution is the implementation of a global smart grid. This involves the management of the 'Power Generation Mix', including decentralised renewable generation, energy saving solutions at all levels of the transmission and distribution process and the increasingly sophisticated energy choices demanded by UK customers.

4. What is the biggest challenge facing Areva T&D today?

The sale of AREVA T&D, by the Areva Group.

Our focus is always on our customers and maintaining our commitments with all of them is critical to our future success. This is why we are investing so much time in communicating and keeping them up to date on developments.

Our challenge is to continue the tremendous growth we have achieved in recent years as we move through the sale process.

This means maintaining our position as number one global supplier for many critical transmission and distribution (T&D) products and systems, and to do this we need the support of our customers, employees, suppliers and other major stakeholders as we go through the change from AREVA T&D to Alstom and Schneider Electric.

This is the focus of AREVA T&D management around the world.

5. What is the biggest challenge facing the energy sector today? How is the industry coping with the economic current climate?

The biggest challenge is keeping the lights on in the future, it is as essential as that.

Demand is rising rapidly and our infrastructure is at the end of its productive life. In the UK we have to meet this rise in demand with a mixture of new green generation, smart transmission and distribution solutions and optimised energy efficiency.

The current economic climate is impacting on important investment decisions, but we will have to be bold if we are going to avoid major energy problems in the future.

The government and the regulator in the UK are seeking to find solutions to keep us on track to meet ambitious green energy targets, but this will only become a reality if policy is both clear and implemented, and if investment is maintained.

It is essential that we replace the ageing infrastructure before it finally comes to the end of its operational life. This is a major challenge, but also the best opportunity we will ever have to embrace green energy.

I believe this is the biggest challenge facing the government, Ofgem and our industry.

6. What do you think has been the biggest technological advance for the industry in the last five years?

The successful development of solutions for us to be able to connect renewable generation to the existing national grid in a way that is efficient and that minimises the destabilising effects that the variable nature of this power can have.

It is these sorts of technologies and solutions that will enable the smart grid revolution and allow us to meet the green energy targets set by the UK government.

7. What impact has the recession had on Areva T&D? How well placed is the company to weather the downturn, and why?

As we are a truly global organisation, with 31,000 people in more than 80 countries, we can draw on this diversity to limit our risk in regions that have suffered badly during the downturn.

A good indication of the overall health of our business is that the orders booked in 2009 were similar to those of 2008 and growth is predicted in 2010.

8. What makes Areva T&D distinct as a business?

In the UK we are the leading T&D organisation, which to us means that we have the UK's only power transformer factory, along with other extensive manufacturing facilities.

We also have R&D facilities in the UK that support the development of products and technologies used in many areas of the world with some of the industry's leading experts.

We have a massive installed base, we are leading in high voltage offshore substations, and we offer an unrivalled range of products and solutions to customers in the UK.

9. What has been your personal biggest challenge so far, or your proudest achievement?

My proudest achievement is having chosen such a great industry to get involved in.

I have been in T&D for more than 20 years, working in many countries around the world. During that time I have faced many challenges while working on some of the largest infrastructure projects ...but I have to admit that I've thoroughly enjoyed every minute of it!

10. What next for Areva T&D?

Our industry is going through huge changes and to meet this we are investing in our facilities and our people.

We have re-introduced our apprenticeship and graduate schemes in recent years, taking on 10 graduates in 2009, and have launched initiatives to support the development of our experts, engineers and other professionals throughout the business.

The green energy and smart grid revolution has started and we intend to play a leading role in solving the energy problems of the 21st century.