Path to commercialisation: micro gas turbine technology roadmap

Department of Energy Enegineering School of Engineering - ETSI University of Seville Path to Commercialisation: Micro Gas Turbine Technology Roadmap Giuseppe Tilocca Seville, July 25, 2023 Research work submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy PhD programme in Energy, Chemical and Environmental Engineering Department of Energy Enegineering School of Engineering - ETSI University of Seville Path to Commercialisation: Micro Gas Turbine Technology Roadmap Author: Giuseppe Tilocca Supervisor: Prof. David Sánchez Martínez, University of Seville Co-Supervisor: Prof. Miguel Torres García, University of Seville Seville, July 25, 2023 Research work submitted to the Department of Energy Engineering, School of Engineering, of the University of Seville in partial fulfilment of the requirements for the degree of Doctor of Philosophy Acknowledgements I express my profound gratitude to Professor David Sanchez for his invaluable guidance, mentorship, and inspiration. His impact surpasses this project and has significantly influenced my personal growth and development. I am also grateful to Professor Miguel Torres for cosupervising this work and to the Thermal Power Group (GTMS) and the NextMGT consortium for their support. In particular, I would like to thank the soon-Doctor Antonio E., together with whom we started this programme, who was a source of motivation and inspiration to grow and multiply the impact of our work. I extend my thanks to Christer B. and the ETN team for providing me with the opportunity to learn, grow and stand out, as well as for their inspiring guidance. Additionally, I am grateful to Dr Simon M. and Challoch’s team for their helpful hosting, direction, and knowledge-sharing. Furthermore, I would like to thank Tirreno Power and the University of Genoa for hosting the secondment. Finally, I want to thank my family, especially my mother, for her unwavering support and belief, her teachings and upbringing and for planting the seeds for my academic and personal development. I am also grateful to Sacra, my girlfriend and life companion, for walking with me hand-in-hand along this journey, always supporting and believing in me. Seville, July 25, 2023 G. T. i Abstract Micro gas Turbines are small fuel-flexible units for on-site power and heat generation. The scientific community has often recognised their potential as a technology to address the energy trilemma. However, despite being in the market for over two decades, they have yet to achieve significant market success. The industry and scientific community acknowledge the existence of this problem, but any remedial action so far proved unsuccessful. In fact, the scientific literature does not contain any study tackling this matter holistically and scientifically. This study aims to fill this gap by devising a methodology that could define the problem, identify the root causes, and propose solutions in a scientific manner. The author initially investigated two qualitative methodologies that could lay the foundations for such purpose - traditional process-based Root Cause Analysis and system-based Theory of Constraint - and found the latter to be more suitable. After performing the problem definition through gap analysis and the root cause identification through the Current Reality Tree, the author validated the identified root cause with a study in patent data and innovation trends. Further, the authors developed a numerical tool to measure innovation; the study performed in existing market niches confirmed the conclusion of the Current Reality Trend and measured the position of micro gas turbines in the market against competing technologies. Finally, the author defined competitiveness as a combination of an absolute and relative term. This final concept is applied to the methodology above to produce a simple tool. This ultimate tool aims to gauge the current position of technologies in the market and to differentiate feasible and unfeasible technology innovation paths. This study finally suggests some final work which involves implementing the proposed innovation paths and refining the utilised methodologies employing ongoing research resulting from the NextMGT project. Key words: Micro Gas Turbines, Root Cause Analysis, Theory of Constraint, Hydrogen, Energy Storage, Market, Innovation, Energy iii Executive Summary - ES En las últimas décadas, el énfasis en la sostenibilidad del sistema energético ha sido creciente. No obstante, eventos recientes han resaltado la importancia de la seguridad y la asequibilidad energética, el conocido como trilema energético. Las micro turbinas de gas son sistemas de producción de potencia de pequeño tamaño capaces de generar electricidad y energía térmica in situ. No obstante, a pesar de que la comunidad científica reconoce a las micro turbinas de gas como una posible solución para el trilema energético, estos motores aún no han logrado un éxito comercial significativo. Existe un vacío en la literatura técnica y científica actual en lo que respecta a estudios que identifique con rigor científico las causas fundamentales de esta situación y proporcione soluciones efectivas para revertirla. El autor comenzó esta investigación utilizando el método tradicional de análisis de causa raíz (Root Cause Analysis, RCA), identificando el problema a través del enfoque de "qué, cuándo, quién, dónde, cuánto". Empleando un diagrama de espina de pez, el problema se dividió en cuatro categorías: oferta (referente al producto), demanda (referente al mercado), y contexto regulatorio y de políticas. Luego, el árbol lógico (metodología de las 5 por qué) permitió realizar una investigación de RCA más profunda con el objeto de descubrir las causas a un nivel más alto. Sin embargo, el análisis de causa raíz del problema no aborda adecuadamente las complejas interdependencias entre las causas. Además, no tiene en cuenta los impactos variables de cada entidad involucrada y carece de un enfoque riguroso en algunos pasos. Si bien este enfoque permite la creatividad y la exploración, produce una representación del sistema desorganizada. Como consecuencia de lo anterior, el autor investigó métodos alternativos para abordar estas limitaciones, en particular la Teoría de las Restricciones (Theory of Constraints, TOC). Esta metodología sigue un conjunto de reglas llamadas la Categoría de Reserva Legítima (Category of Legitimate Reservation, CLR) y utiliza un procedimiento específico llamado el Proceso de Pensamiento (Thinking Process), que incluye seis árboles lógicos y sus reglas. El proceso de resolución de problemas comienza con un análisis de brechas utilizando el Mapa de Objetivos Intermedios, que justifica y cuantifica el problema a través de los Factores Críticos de Éxito y las Condiciones Necesarias. Luego, se utiliza el Árbol de l a Realidad Actual (Current Reality Tree, CRT) para representar la cadena de causalidad. Este enfoque estructurado proporciona una comprensión clara del sistema y del problema. Según el estudio de la teoría de restricciones, la principal restricción dentro del ámbito de influencia es la falta de innovación impulsada por el mercado. Las conclusiones preliminares xi Executive Summary del arbol de la realidad actual se confirmaron con un estudio sobre patentes e innovación. El análisis de patentes distinguió dos fases separadas de innovación y desarrollo de productos. Cada fase tuvo un enfoque tecnológico diferente e involucró a empresas también diferentes. La Fase 1 alcanzó la etapa de madurez en 2007, mientras que la Fase 2 está actualmente entre las etapas emergentes y de crecimiento. Esta interpretación de los datos de patentes encontró confirmación en la investigación de mercado y productos y en los escenarios de políticas en evolución. Este estudio confirma el esfuerzo discontinuo de las principales instituciones para innovar el producto, revelando que la mayoría de los productos comerciales han estado en el mercado durante dos décadas sin mejoras significativas en el rendimiento. Por el contrario, las tecnologías competidoras evolucionaron continuamente. Según los informes, esto se debe no a la calidad insuficiente de la propiedad intelectual, al menos en comparación con tecnologías similares y competidoras, sino más bien a la falta de esfuerzo en innovar. Sin embargo, mejorar el producto a través de la innovación puede potencialmente obstaculizar a otras entidades, creando un conflicto reflejado en la Nube de Evaporación de la teoría de restricciones. Además, cada aplicación nicho tiene requisitos específicos en cuanto a costes de capital y operativos, características del producto y requisitos del mercado. La combinación de estas entidades determinará cómo compiten los productos en diferentes nichos tecnológicos y de mercado, creando una barrera para resolver un arbol de la realidad actual único y general. El autor desarrolló un enfoque numérico para superar las limitaciones del proceso cualitativo de la teoría de restricciones. El enfoque utiliza un sistema basado en penalizaciones con funciones de penalización ponderadas lineales para evaluar la competitividad de múltiples productos en el mercado, emulando el árbol de la realidad actual de la teoría de restricciones. El primer estudio analizó parámetros económicos, técnicos, regulatorios y operativos en un único Indicador (Key Parameter Indicator, KPI). Confirmó que una herramienta numérica podía imitar el principio de la teoría de restricciones y que las micro turbinas de gas solo son competitivas en nichos con requisitos particulares. Sin embargo, el primer método numérico hace uso de hipótesis arbitrarias "a priori" en la definición de las funciones de penalización y la asignación de pesos objetivos. Ante esto, el autor introdujo un segundo marco agregado de indicadores para abordar esta deficiencia. La nueva metodología tenía como objetivo aplicar el concepto de suficiencia de causa (es decir, "¿es una causa suficiente para generar el efecto?") en la propia función de penalización y hacer innecesaria la ponderación arbitraria de los pesos objetivos. El marco numérico refinado se aplicó a un caso de estudio sobre energía renovable y almacenamiento de energía basado en hidrógeno para la electrificación de un pueblo en el sur de Gales. El estudio comparó cuatro tecnologías de energía de respaldo: micro turbina de gas regenerativa (MGT-R), micro turbina de gas reenerativa y con refrigeración intermedia en la compresión (MGT-ICR), motores de combustión interna alternativos y pilas de combustible. El estudio produjo una representación probabilística del escenario de competitividad mediante la cuantificación de la incertidumbre de los datos de entrada. La evaluación se basa en un análisis de deficiencias/debilidades entre las tecnologías de última generación y los requisitos del mercado en cuanto a aspectos económicos, fiabilidad, disponibilidad y emisiones. Este estudio concluyó que las micro turbinas de gas regenerativas convencionales y las pilas de combustible no son competitivas para dichas aplicaciones en el período hasta 2030. Sin embargo, existe un gran potencial para aumentar la competitividad mediante la implementación de estrategias innovadoras, lo cual se demuestra por el hecho de xii Executive Summary que las micro turbinas de ciclo regenerativo y con refrigeración intermedia de la compresión recientemente desarrolladas son la tecnología más competitiva para tales aplicaciones. La etapa final de esta tesis doctoral aborda la transición desde el análisis de la realidad actual de la industria de las micro turbinas de gas a la identificación de posibles soluciones que la ayuden a alcanzar el éxito tecnológico y comercial. Evaluar entidades en conflicto y cuantificar sus impactos mediante inyecciones proporciona información valiosa sobre la dinámica de los posibles micro turbinas de gas en el mercado. Para llevar a cabo esta tareas, el autor desarrolló una herramienta secilla que utiliza un indicador de competitividad para ofrecer un mapa de la realidad actual e identificar las direcciones en las que la tecnología debe evolucionar para ser competitiva. La competitividad se define como absoluta, en función de las demandas del mercado, y relativa, en comparación con las tecnologías competidoras. Este concepto se implementó en el "mapa de competitividad" y fue probado utilizando un modelo existente en la literatura. Esta evaluación demostró cómo la herramienta permite diferenciar soluciones competitivas y no competitivas siguiendo el mismo principio del análisis de la teoría de restricciones presentado en esta disertación. El estudio sobre una microturbina de gas regenerativa tradicional reveló posibles soluciones para hacer que estos motores sean competitivos en nuevos ichos de mercados, por ejemplo, aplicaciones descentralizadas de almacenamiento de energía basados en hidrógeno. En última instancia, este marco no se limita a las micro turbinas de gas y se puede aplicar a otras tecnologías y productos. Permite evaluar y cuantificar la competitividad, identificar limitaciones tecnológicas, descubrir áreas de mejora y alinear la innovación con las necesidades del mercado y los usuarios. Para avanzar en el campo de las micro turbinas de gas y lograr el éxito de estos sistemas en el mercado, es esencial centrarse en implementar las acciones correctoras propuestas en este estudio. El siguiente paso es evaluar y planificar estrategias de implementación a través del proceso de pensamiento de la teoría de restricciones. Finalmente, este trabajo proporciona un marco y unas herramientas numéricas que transforman datos técnicos y modelos complejos en ideas para los responsables de tomar decisiones. Palabras clave: Micro turbinas de gas, Análisis de causa raíz, Teoría de restricciones, Hidrógeno, Almacenamiento de energía, Mercado, Innovación, Energía xiii Contents Acknowledgements i Abstract iii Abstract (ES) v Executive Summary vii Executive Summary (ES) xi List of figures xix List of tables xxiii Nomenclature xxv 1 Introduction 1 1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.1 The NextMGT Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.2 The role of Micro Gas Turbines and Distributed Generation in the energy trilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.2 Motivation for this research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.3 Novelty and aim of the work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.4 Data sourcing and stakeholders involvement . . . . . . . . . . . . . . . . . . . . . 8 1.5 Structure of the dissertation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1.6 List of scientific publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1.7 Other dissemination and training activities . . . . . . . . . . . . . . . . . . . . . . 12 2 State-of-the-art of micro gas turbine technology and commercialisation 17 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2.2 Micro gas turbine technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.4 Economics of micro gas turbines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.5 Competing technologies for decentralised power . . . . . . . . . . . . . . . . . . 25 2.5.1 Reciprocating internal combustion engines (ICEs) . . . . . . . . . . . . . 26 2.5.2 Fuel Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 2.5.3 Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 2.6 Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 2.6.1 Original Equipment Manufacturer (OEMs) of micro gas turbines . . . . . 35 xv Contents 2.6.2 Commercialisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 2.6.3 Market analysis summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 2.7 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 2.7.1 Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 2.7.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2.7.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.7.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 2.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 3 Methodologies to problem-solving 53 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 3.2 Problem-solving methodologies for business cases: a literature review . . . . . 54 3.3 A process-focused approach to Root Cause Analysis . . . . . . . . . . . . . . . . 55 3.3.1 Tools for the Root Cause Identification . . . . . . . . . . . . . . . . . . . . 57 3.3.2 Define the problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 3.3.3 Understand the system: technical and economic features of commercial micro gas turbines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 3.3.4 Root Cause Identification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 3.3.5 Discussion of results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 3.3.6 Preliminary conclusions and future work on the application of traditional Root Cause Analysis Methodologies . . . . . . . . . . . . . . . . . . . . . . 72 3.4 Theory of constraint (TOC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 3.4.1 The history and principles of TOC . . . . . . . . . . . . . . . . . . . . . . . 73 3.4.2 The Logical Thinking Process and Goldratt’s logic trees . . . . . . . . . . . 74 3.4.3 The Categories of Legitimate Reservation . . . . . . . . . . . . . . . . . . . 75 3.4.4 Problem definition: the IO map and the undesired effects . . . . . . . . . 78 3.4.5 Root cause identification and analysis: the current reality tree . . . . . . 80 3.4.6 From root causes to solutions . . . . . . . . . . . . . . . . . . . . . . . . . . 87 3.4.7 Preliminary conclusion on the application of the Theory of Constraints for the lack of success of Micro Gas Turbine systems . . . . . . . . . . . . 88 3.5 Summary and Comparison of the two methodologies . . . . . . . . . . . . . . . 90 3.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 4 Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study 93 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 4.1.1 Background and literature review . . . . . . . . . . . . . . . . . . . . . . . 93 4.1.2 Novelty and aim of the work . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.2 Data Sourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.2.1 Patent search strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.2.2 Data cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 4.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 4.3.1 Micro gas turbine IP history and growth . . . . . . . . . . . . . . . . . . . 98 4.3.2 MGT patent classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 4.3.3 Analysis of MGT patent Technology Diffusion Speed . . . . . . . . . . . . 103 4.3.4 Analysis of MGT applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 4.3.5 Analysis of MGT countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 xvi Contents 4.3.6 Analysis of MGT sub-technologies and trends . . . . . . . . . . . . . . . . 106 4.4 Discussion of Results and Innovation Paths . . . . . . . . . . . . . . . . . . . . . . 110 4.4.1 Definition and classification . . . . . . . . . . . . . . . . . . . . . . . . . . 110 4.4.2 Technical specifications and target market . . . . . . . . . . . . . . . . . . 111 4.4.3 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 4.4.4 Applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 4.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 5 Numerical methodologies based on the Theory of Constraints 117 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 5.2 Method 1: A penalty-based approach for the identification of potential markets 120 5.2.1 Penalty Factor Definition and Modelling . . . . . . . . . . . . . . . . . . . 120 5.2.2 Parameters modelling and sourcing . . . . . . . . . . . . . . . . . . . . . . 121 5.2.3 Configurations with Multiple Engines . . . . . . . . . . . . . . . . . . . . . 122 5.2.4 Applications and Requirements . . . . . . . . . . . . . . . . . . . . . . . . 122 5.2.5 Discussion of Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 5.2.6 Conclusions and Further Work . . . . . . . . . . . . . . . . . . . . . . . . . 128 5.3 Method 2: A penalty-based approach to quantify competitiveness . . . . . . . . 130 5.3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 5.3.2 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 5.3.3 Technical specifications under uncertainty . . . . . . . . . . . . . . . . . . 135 5.3.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 5.3.5 Conclusions and further work . . . . . . . . . . . . . . . . . . . . . . . . . 146 5.4 General and specific conclusions, and contribution to the scientific community 147 6 Methodologies to assess innovation requirements for market-driven innovation 149 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 6.2 A sensitivity study to quantify causality . . . . . . . . . . . . . . . . . . . . . . . . 150 6.2.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 6.2.2 Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 6.2.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6.2.4 The resolved Current Reality Tree . . . . . . . . . . . . . . . . . . . . . . . 159 6.3 Methodologies to evaluate corrective actions . . . . . . . . . . . . . . . . . . . . . 159 6.3.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 6.3.2 Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 6.3.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 6.3.4 Evaluation of potential innovation pathways . . . . . . . . . . . . . . . . . 169 6.4 Conclusion and further work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 7 Conclusions 177 7.1 Critical Review of Assumptions and Methodology . . . . . . . . . . . . . . . . . . 177 7.2 Overall and Specific Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 7.3 Future Research Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 A Engine database 199 B Patstat Queries 205 xvii Contents C Patent family results 209 xviii List of Figures 1.1 NextMGT work-package structure and individual topics of each ESR. . . . . . . 2 1.2 Flow of information within NextMGT. . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3 Energy trilemma Index. Source: World Energy Council [2]. . . . . . . . . . . . . . 5 2.1 Benefits of Combined Heat and Power with respect to the independent production of power and heat. CHP is shown to operate at 75% global energy utilisation whilst the independent production of power and heat makes use of 50% of the primary energy supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.2 Contribution to total capital cost per installed kW for CHP installations based on micro gas turbines [ 25 , 24 ]. Equipment costs are plotted in shades of blue, whereas installation and other costs are plotted in shades of red. . . . . . . . . . 23 2.3 Comparison of the data gathered for micro gas turbines and their relative cost functions. Figure (a) shows the equipment and installation cost functions. Figure (b) shows the maintenance and service cost function. . . . . . . . . . . . . . . . 24 2.4 Lifecycle cost for some representative power applications. The assessment considers a 100 kW MGT and the assumed working life is ten years. Figure (a) analyses different fuel prices ranging from 0.015 US$/kWh to 0.075 US$/kWh, with an operational availability of 95%. Figure (b) considers different full-load equivalent operating hours annually (expressed as a percentage of the total hours in a year, i.e., Capacity Factor) with constant fuel prices set to 0.025 US$/kWh. . 25 2.5 Cost data and functions for ICEs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 2.6 Overview of fuel cell types and their main characteristics. Data and diagram adapted from [37]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 2.7 Evolution of installed Fuel Cell capacity from 2015 to 2020 (and forecast for 2021) [39, 43]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 2.8 Comparison of electrical efficiency for different technologies. Figure (a) shows rated efficiency, and figure (b) shows four representative part load efficiency curves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2.9 Comparison of the cost functions obtained for micro gas turbines and reciprocating engines. Figure (a) compares the equipment and installation cost. Figure (b) compares service and maintenance costs. . . . . . . . . . . . . . . . . . . . . 32 2.10 Comparison of lifecycle cost for MGT and ICEs. The assessment considers a 100 kW installation with ten years of assumed working life. This bar chart analyses two fuel prices: 0.025 $/kWh to 0.075 $/kWh with an operational availability of 95%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.11 Comparison of available exhaust waste heat for different technologies. . . . . . 36 xix Nomenclature ICE Internal Combustion Engine IE A International Energy Agency IO Intermediate Objective IRR Internal Rate of Return IT information technology KPI Key Performance Indicator LCoE Levelised Cost of Electricity LCoH Levelised Cost of Hydrogen LHS Latin Hypercube Sampling LHV Low Heating Value LNG Liquefied Natural Gas LoLE Loss of Load Expectation LPG Liquefied Petrol Gas MCFC Molten Carbonate Fuel Cell MGD Million gallons per day MGT Micro Gas Turbine NC Necessary Condition NG Natural Gas NPV Net Positive Value O&GOil and Gas OEM Original Equipment Manufacturer OpEx Operating Expenditure PAFC Phosphoric Acid Fuel Cell PBP Payback Period PEFC Proton Exchange Fuel Cell PEM Proton Exchange Membrane PM Particulate Matter R&DResearch and Development xxvi Nomenclature RAMS Reliability Availability Maintainability & Safety RC A Root Cause Analysis RCI Root Cause Identification SDG Sustainable Development Goals SG Smart Grid SHP Separate Heat and Power SOA State of the Art SOFC Solid Oxide Fuel Cell SS Spark Spread SWOT Strengths, Weaknesses, Opportunities and Threats TDS Technology Diffusion Speed T IT Turbine Inlet Temperature TOC Theory of Constraints TOT Turbine Outlet Temperature UBH Unburned Hydrocarbons UDE Undesired Effect W DM Weighted Decision Matrix WW P Wastewater Treatment Plants Variables βPressure Ratio ˙ mMass Flow Rate ϵEffectiveness ηEfficiency ΠProbability for an event to occur aPolynomial coefficient (sensitivity) CCost c1 Compressor Cost Coefficient - Proportional c2 Compressor Cost Coefficient - Polytropic xxvii Nomenclature cc1 Combustor Cost Coefficient - Proportional cc2 Combustor Cost Coefficient - Pressure Loss CECI Chemical engineering plant cost index C f Contaminant Characterisation factor dNumber of dimensions (sampling) DALY loss of Disability Adjusted Life Year f(),g() Function HC Heat Consumption HP Heat to Power ratio LB,lb Lower Bound LCoE Levelised Cost of Electricity LoLE Loss of Load Expectation mNumber of points (sampling) MPMT Mean Preventive Maintenance Time MTBF Mean Time Between Failure MT T R Mean Time to Repair NTotal number of requirements PPower pPressure PC Power Consumption PCU Power Control Unit ppm Parts Per Million qPolynomial coefficient (part-load deviation) RGas Constant rRank of the requirement r1 Recuperator Cost Coefficient SD Standard Deviation sd Contaminant Specific Damage xxviii Nomenclature SI Service Interval TTemperature tTime t1 Turbine Cost Coefficient - Proportional t2 Turbine Cost Coefficient - Polytropic T IT Turbine Inlet Temperature TOT Turbine Outlet Temperature UA Unavailability UB,ub Upper Bound WWeight function xContaminant mass Subscripts cCold compr Compressor gGas hHot kIndex of the weight function nIndex of the Requirement pol Polytropic rec Recuperator Re f Reference tTime - Time Index turb Turbine xxix 1Introduction This chapter serves as an introduction to the doctoral dissertation focusing on the potential contribution of micro gas turbines to the decarbonisation efforts and, in particular, on the lack of market success that this technology has experienced. This chapter also outlines the structure of the dissertation, which includes five main chapters. Finally, a list of publications related to this research is provided. 1.1 Background 1.1.1 The NextMGT Project This work is framed in the Next Generation of Micro Gas Turbines for High Efficiency, Low Emissions and Fuel Flexibility - NextMGT project, a Marie Sklodowska-Curie - Innovative Training Network funded by the Horizon 2020 Programme of the European Commission under Gran Agreement No. 861079, and with an EU contribution of € 4,080,240. NextMGT is a consortium of universities, research institutions and companies across Europe with complementary expertise in the area of micro gas turbines and related topics and a common will to unleash the potential of this flexible and versatile polygeneration system. City University of London (United Kingdom) coordinates the consortium, which includes the University of Seville (Spain), University of Genoa (Italy), Aristotle University of Thessaloniki (Greece), Paul Scherrer Institute (Switzerland), University of Mons (Belgium), University of Stavanger (Norway), and Universite Catholique de Louvain (Belgium). The project also involves several industrial partners. NextMGT project is a four-year work programme aimed at advancing multidisciplinary research and development to make a significant breakthrough in understanding MGT systems’ technology and commercialisation aspects. This research programme aims to facilitate the deployment of MGT systems in the energy market and contribute to the low-carbon economy while providing specialised training for researchers to help establish the backbone of an important industry. The NextMGT project is expected to have technological, economic, and societal impacts on the scientific fields and the general public. The project will also have individual impacts on the early-stage researchers’ (ESR 1 ) employability and development. The research output will be disseminated widely through a well-defined plan, and highly trained early-stage researchers 1In the context of the MSCA programme, ESRs are junior researchers in the first four years of their careers 1 Chapter 1. Introduction will be ready to join a workforce that implements the EU principles, including clean, affordable and secure energy, through increased innovation capacity. The wide-ranging industry involvement and the programme’s commercial dimension will facilitate bringing ideas to market. The NextMGT project emphasises the link to EU research/policy goals, such as Horizon 2020 Societal Challenges or Industrial Leadership Pillar, Research Roadmaps, EU sectoral policies, and the transferable skills training programme. The aim of this project is to contribute to the EU agenda on European Research Area by training “a new generation of creative, entrepreneurial and innovative early-stage researchers” who can face future challenges and “convert knowledge and ideas into products and services for economic and social benefit.” In addition, support for and compliance with the United Nation’s Sustainable Development Goals (SDGs) will be at the heart of the training of ESRs and the scientific and economic outcomes of this research. To this end, a cohort of fifteen Early Stage Researchers will carry out a joint, collaborative research programme supported by academia and industry. The final goal is to obtain a doctoral degree from a reputed University in Europe. The research carried out in NextMGT is organised in four technical work packages, each one focused on a particular research theme, Figure 1.1. Figure 1.1: NextMGT work-package structure and individual topics of each ESR. Work Package 4, "Industry Links, IP Management and Commercialisation", comprises three complementary projects covered by ESR13 (this dissertation), ESR14, and ESR15. These are developed at the University of Seville (Spain), University of Stavanger (Norway), and City, University of London (United Kingdom). The primary objective of WP4 is to investigate the enabling measures for the commercialisation of the technology focusing on the dependence of innovation and industry growth on intellectual/industrial property management, energy policy and regulatory framework and standardisation requirements. Work Package 4 (WP4) is one of the essential components of the NextMGT project and plays a crucial role in achieving the project’s objectives. As shown in Figure 1.2, WP4 and, in particular ESR13, collect the 2 1.1 Background information produced by the other ESRs to inform the assessment of the reasons behind the lack of market success of the micro gas turbine industry and the legal, industrial and commercial routes towards a successful market deployment. In particular, the objectives of ESR13 are: • To track the commercial and technological development of micro gas turbines to identify why the market has not accepted the technology to date. • To conceive replicable methodologies that can remove subjective elements when assessing the previous bullet point, enabling the identification of said reasons in an objective, unbiased manner. • To develop objective and systematic numerical tools that quantify the competitiveness of combined heat and power generation technologies for given business cases. • To identify innovation pathways so that the technology becomes competitive against established alternatives. Figure 1.2: Flow of information within NextMGT. 1.1.2 The role of Micro Gas Turbines and Distributed Generation in the energy trilemma Micro gas turbines are decentralised polygeneration systems that can contribute to the decarbonisation strategies of many regions worldwide. In today’s world, energy generation and consumption have become critical issues due to the adverse impacts of climate change. The increase in greenhouse gas emissions from traditional energy generation sources such as coal, oil, and gas has led to global warming and climate change, resulting in serious threats to the environment, human health, and the economy. Therefore, the transition to a low-carbon economy is essential for mitigating the adverse effects of climate change and securing the sustainability of future generations. Such is the case of the European Union, whose Green Deal announced in 2019 aims to make Europe the first carbon-neutral region in the world by 2050 [ 1 ]. This ambitious target requires 3 Chapter 1. Introduction laying out a legal and regulatory framework to be implemented in the coming years, along with actions to incentivise this transition. For instance, amongst other measures, the Green Deal is set to reduce greenhouse gases by 55% from 1990 levels by 2030, encouraging all Member States to adopt strategies against the effects of climate change. The main actions that are mentioned in the EU Green Deal to achieve the ambitious goal of climate neutrality involve six different sectors and areas: • Technology: investing in environmentally friendly technologies. • Industry: promote industry innovation. • Transport: gradually switching to cleaner, cheaper means of transport (both private and public). • Clean energy: decarbonising the energy sector. • Buildings: Improve the energetic efficiency of buildings. • Food and agriculture: sustainable food (Farm-to-Fork) and common agricultural policy. Nevertheless, reducing GHG emissions is only one side of a three-faced problem [ 2 ]. The so-called energy trilemma includes: • Environmental Sustainability of energy systems represents the transition of a country’s energy system towards mitigating and avoiding potential environmental harm and climate change impacts. • Energy Security measures a nation’s ability to reliably meet current and future energy demands, withstand and recover quickly from system shocks with minimal supply disruption, and effectively manage domestic and external energy sources. • Energy Equity assesses a country’s ability to provide universal access to reliable, affordable, and abundant energy for domestic and commercial use. Healthy energy systems must be secure, fair, and sustainable for the environment. They must balance the three dimensions of the Trilemma carefully. Transitioning towards decentralised, decarbonised, and digital systems is seen as one way to achieve an optimal trade-off. The World Energy Trilemma Index from the World Energy Council, Figure 1.3, ranks energy performance on the three dimensions based on global and national data. It includes recommended areas for improvements in policy coherence and integrated policy innovation, which help to develop well-calibrated energy systems. The Index provides insights into a country’s relative energy performance regarding Energy Security, Energy Equity, and Environmental Sustainability. It highlights the challenges in balancing the Trilemma for each country and opportunities for improvements in meeting energy goals now and in the future. The Index is useful for policymakers, energy leaders, and the investment and financial sector. The rankings provide comparisons across countries on each of the three dimensions, while historical indexed scores offer insights into the performance trends of each country over time. The Index also considers a fourth dimension: the Country Context. It focuses on the factors contributing to a country’s ability to successfully create and implement energy policies that can achieve energy-related objectives. This dimension considers the country’s macroeconomic and governance conditions, as well as the strength and stability of its economy and government. Additionally, it evaluates the country’s appeal to investors and its innovation 4 1.1 Background potential. Figure 1.3: Energy trilemma Index. Source: World Energy Council [2]. As the name says, micro gas turbines are small power units in the so-called microgeneration sector. This scalability to small power outputs is a good fit into distributed generation applications, which is the reason for their possible utilisation as a technology to help transition from the current centralised paradigm using reliable and clean technology. Indeed, Distributed Generation (DG) can be defined as “electric power generation within distribution networks or on the customer side of the network” as stated by Ackermann et al. [ 3 ], even though a definition accepted univocally does not exist. It is nevertheless understood as opposed to centralised generation (CG), characterised by a few large-scale plants and a complex, extended transmission and distribution grid to enable power generation far from the consumption nodes. Centralised generation sits at the heart of the current energy distribution system for historical and economic reasons such as exploiting the economy of scales [ 4 ]. In contrast, decentralised generation offers some advantages such as modularity, location flexibility both in urban and remote sites, the possibility to use/produce waste heat for combined heat and power generation, and contribution to grid stability, reliability and power quality [ 5 ], reduced distribution losses [ 6 ], and the capacity to shave peak loads and contribute to the overall load balance of the grid [7, 8]. Micro gas turbines can be used in different modes of operation depending on the grid requirements. For example, in peak shaving mode, MGTs can supply power during peak demand periods, reducing the load on the grid. In island mode, MGTs can provide power to critical 5 Chapter 1. Introduction 1.6 List of scientific publications The doctoral candidate has already published certain sections of this dissertation in scientific journals, and he has also presented them at technical conferences, as stated at the start of each chapter. The candidate has produced the following four publications with the aid of their supervisors and peers at the University of Seville and their project partner and secondment host, Challoch Energy. • G. Tilocca, D. Sánchez, M. Torres García, 2023, Application of the Theory of Constraints to Unveil the Root Causes of the limited market penetration of Micro Gas Turbine Systems, Energy (278) 127717. • G. Tilocca, D. Sánchez, M. Torres García, 2022, Root cause analysis of the lack of market success of micro gas turbine systems, Presented at ASME Turbo Expo, June 13-17, Rotterdam (The Netherlands). • G. Tilocca, D. Sánchez, M. Torres García, A. Escamilla Perejón, S. Minet, 2023, A methodology to quantify product competitiveness and innovation requirements for micro gas turbine systems in hydrogen backup applications, Presented at ASME Turbo Expo, June 26-30, Boston (MS). • G. Tilocca, D. Sánchez, M. Torres García, A. Escamilla Perejón, S. Minet, 2023, A methodology to quantify product competitiveness and innovation requirements for micro gas turbine systems in hydrogen backup applications, Journal of Engineering for Gas Turbines and Power (In Press). The candidate is currently working on similar publications for the dissemination of relevant information - methodologies, resultspresented in chapters 2, 4 and 6. 1.7 Other dissemination and training activities In addition to the journal publications listed in the previous section, the candidate also engaged in various dissemination and communication activities to reach a wider audience. These efforts included presenting their research at public events and conferences, participating in outreach programs to promote scientific literacy and interest in the field, and creating accessible and engaging content such as blog posts and social media updates. By actively seeking out opportunities to share their work beyond academia, the candidate committed to advancing their field and fostering greater understanding and appreciation for scientific research among the general public. The candidate authored a series of LinkedIn blog articles to educate readers on the role of micro gas turbines in distributed generation and how they compare to other technologies. In a simple and educational form, the articles provided basic information about the ideal and real thermodynamic cycle of commercial Micro Gas Turbine technology and the inherent limitations to the engine’s performance. The series culminated in an interview with a leading expert in the field of micro gas turbines, who currently serves as CEO of one of the most prominent MGT companies. 12 1.7 Other dissemination and training activities This series of LinkedIn articles summed over 2000 article reads and over 5000 impressions, substantially contributing to the education on the topic and helping to expand social and market awareness. The articles in the series are listed below: • “Reciprocating Engines and Microturbines: a comparison of distributed generation technologies” Published on Jun 22, 2021. • “High-efficiency MGTs: the ideal cycle ”Published on Jul 21, 2021. • “High-efficiency MGTs: The real cycle” Published on Aug 27, 2021. • “High-efficiency MGTs: Interview with Tony Hynes (Aurelia Turbines)” Published on Nov 4, 2021. The candidate contributed to the development and composition of the technical report for the ETN Global Decentralised Energy System Working Group. The report is organised into three parts, with part one providing an overview of Decentralised Energy Systems. This includes a definition of Decentralised Energy Systems, their primary uses, market projections and trends, technological obstacles, and regulatory frameworks. Part two discusses the integration of gas turbine technologies into Decentralised Energy Systems, including both current and potential future applications. And part three included general and specific recommendations to decision-makers. The report’s participants consisted of stakeholders from the GT industry, such as users, system operators, universities, and OEMs. The details of the mentioned report are cited below: • Decentralised Energy Systems: Towards Carbon-Neutral Energy Solutions for Gas Turbines, European Turbine Network Global, 2023. The candidate collaborated with his fellow ESR02 and with the supervisor of both to write a general dissemination article exploring the factors contributing to the fluctuating electricity prices in Spain. The authors discuss the influence of natural gas prices, renewable energy production, and the European carbon market on electricity costs. Additionally, the article highlights the impact of Spain’s electricity tariff structure and taxes on consumer bills. Overall, the article aims to provide insight into Spain’s complex and multifaceted nature of electricity pricing. The article, initially published in "The Conversation", was shared by 13 other online publishers reaching over 27000 reads, thus giving a solid contribution to educating the general public on the structure of the energy market: • A. Escamilla Perejón, D. Sanchez, G. Tilocca, ¿Por qué cambia tanto el precio de la electricidad en España?, The Conversation Spain. The candidate has also been actively involved in disseminating his research findings and insights through various tutorial sessions, panels, and presentations at prominent conferences. At Turbo Expo 2022 and 2023, the candidate conducted tutorials on Micro Gas Turbine Technological Advancements and Market Research, providing valuable information on the latest developments in the field. Additionally, at Turbo Expo 2023, the candidate organised and Chaired a panel discussion involving prominent experts on the Role of Gas Turbines in Decentralised Energy Systems, addressing the Energy Trilemma. Furthermore, the candidate presented the opportunities for small and micro gas turbines in decentralised energy systems at the Annual General Meeting of ETN Global organised in 13 Chapter 1. Introduction Brussels and London in 2022 and 2023, respectively. In front of the major stakeholders in the Gas turbine and Oil and Gas industry, the candidate also highlighted and discussed the role of Young Engineers in shaping the industry’s future. Through his participation in these conferences, the candidate has contributed to the exchange of knowledge and ideas in the field of micro gas turbines and played an active role in promoting scientific literacy and interest among industry peers. List of participation in conferences as a speaker: • G. Tilocca, D. Sánchez, M. Torres García, Root cause analysis of the lack of market success of micro gas turbine systems. Technical Session at ASME Turbo Expo 2022, Turbomachinery Technical Conference & Exposition, Rotterdam Ahoy Convention Centre, Rotterdam, The Netherlands. • A. Escamilla Perejón, G. Tilocca, J. Al-Zaili, D. Sanchez, T. Seljak, Micro-Gas Turbine Technological Advancements and market research. Tutorial of Basics at ASME Turbo Expo 2022, Turbomachinery Technical Conference & Exposition, Rotterdam Ahoy Convention Centre, Rotterdam, The Netherlands. • G. Tilocca, D. Sánchez, M. Torres García, A. Escamilla Perejón, S. Minet, A methodology to quantify product competitiveness and innovation requirements for micro gas turbine systems in hydrogen backup applications. Technical Session at ASME Turbo Expo 2023, Turbomachinery Technical Conference & Exposition, Hynes Convention Center, Boston, MA, USA. • G. Tilocca, J. Kesseli, A. Escamilla Perejón, D. Sanchez, J. Al-Zaili, Micro-Gas Turbine Technological Advancements and market research. Tutorial of Basics at ASME Turbo Expo 2023, Turbomachinery Technical Conference & Exposition, Hynes Convention Center, Boston, MA, USA. • T. Allison, A. Rimpel, N. Smith, G. Tilocca, A, Escamilla, D. Sanchez, Overview of Long Duration Energy Storage Systems and Technologies (Part 1). Tutorial of Basics at ASME Turbo Expo 2023, Turbomachinery Technical Conference & Exposition, Hynes Convention Center, Boston, MA, USA. • G. Tilocca, D. Sanchez, The role of GTs as part of Decentralised Energy Systems to address the Energy Trilemma, Panel Session at ASME Turbo Expo 2023, Turbomachinery Technical Conference & Exposition, Hynes Convention Center, Boston, MA, USA. • G. Tilocca, Opportunities for Gas Turbines in decentralised energy systems. Technical Session, ETN Global Annual General Meeting and Workshop, Le Plaza Hotel, (Brussels, Belgium) 2022. • G. Tilocca, Young Engineers Committee - The Role of Young Engineers. Plenary Session at ETN Global Annual General Meeting and Workshop, Ambitious but realistic pathways to net zero, Imperial College of London (London, UK) 2023. List of participation in conferences as an attendee: 14 1.7 Other dissemination and training activities • ASME Turbo Expo 2022, Turbomachinery Technical Conference & Exposition, Rotterdam Ahoy Convention Centre, Rotterdam, The Netherlands. • ASME Turbo Expo 2023, Turbomachinery Technical Conference & Exposition, Hynes Convention Center, Boston, MA, USA • ETN Global Annual General Meeting and Workshop, Le Plaza Hotel, (Brussels, Belgium) 2022. • ETN Global Annual General Meeting and Workshop, Ambitious but realistic pathways to net zero, Imperial College of London (London, UK) 2023. • ETN 10 th International Gas Turbine Conference, Gas turbines in a carbon-neutral society, (Online due to Covid-19), 2021. • ETN 11 th International Gas Turbine Conference, Angla Hotel (Brussels, Belgium), 2023. • ETN October Workshop 2022, Park Inn by Radisson Hotel on Alexanderplatz (Berlin, Germany), 2022. • 2023 MCAA (Marie Sklodowska-Curie Action Alumni) Annual Conference and General Assembly, University of Cordoba (Cordoba, Spain), 2023. List of participation in workshops, summer and winter schools specifically intended for the training of the Early Stage Researchers in NextMGT: • Workshop 1 WSH1, Introduction to MGTs and their system, 2021 (Online due to Covid- 19). • Summer School 1 SSC1, Introduction to combustion and emissions control, 2021 (Online due to Covid-19). • Workshop 2 WSH2, Commercialisation: IPR management, economics, policy and regulations, 2022 (Online due to Covid-19). • Summer School 2 SSC2, Fundamentals and applications of energy storage, University of Genoa (Savona, Italy), 2021 • Workshop 3 WSH3, Modelling Power Systems, University of Stavanger (Stavanger, Norway), 2022. • Workshop 4 WSH4, MGT system component design and analysis, Aristotle University of Thessaloniki (Thessaloniki, Greece), 2022. • Summer School 3 SSC3, Energy Cultures, City University of London (London, UK), 2023. • International Scientific Conference ISC, European Micro Gas Turbine Forum, ETN Global (Brussels, Belgium), 2023. List of participation in other courses and workshops: • Conversational Workshop "the English workshop C1", Escuela de Idiomas (Language School), Universidad de Sevilla, Sep-Dec 2022. 15 Chapter 1. Introduction • STAGE Academy, Communication and Public Speaking, Vinh Giang, Online Course (2023). • The Basic of Public Speaking, Fernando Miralles, May 11 2023. 16 2 State-of-the-art of micro gas turbine technology and commercialisation This Chapter explores Micro Gas Turbine systems, including their technology, applications, economic viability, and competition with other generation technologies. The market for this technology is also analysed, and a SWOT analysis leads to a conclusive summary. 2.1 Introduction This chapter comprehensively surveys the micro gas turbine market and technology evolution. Micro gas turbines are a promising technology due to their relatively high efficiency, low emissions, and compact size, and they are suitable for various applications. The chapter provides a characterisation of micro gas turbines. It highlights the differences between them and other types of gas turbines, such as small, aero-derivative, and heavy-duty gas turbines. The current and future applications of micro gas turbines are also examined, including their potential in industrial, commercial, and residential sectors. Additionally, the economics of micro gas turbines are analysed, for which the chapter presents the cost functions of micro gas turbines based on publicly available data; these functions will serve in the following part of this dissertation. Furthermore, the chapter explores competing technologies and compares their technical and economic parameters with those of micro gas turbines, along with some preliminary techno-economic evaluations, including their costs and benefits. Finally, the current market for micro gas turbines and their evolution over time are examined, including a discussion on the prominent Original Equipment Manufacturers and their products. The aim of this chapter is thus to provide readers with a thorough understanding of the current state of the art in micro gas turbine technology and its potential for future growth and development. In other words, this Chapter also represents the pool of data and information feeding Chapters 3 to 6. 2.2 Micro gas turbine technology Micro gas turbines are usually defined according to their power output though there is no absolute consensus on the boundaries between microturbines and small gas turbines. Some authors set the microturbine output range between 30kW and 400 kW [ 17 ] whilst others reduce the upper limit to some 300 kW [ 18 ]. In the market, micro gas turbines are offered from as 17 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation little as 3.2 kW to 400kW, with modular systems comprising several units to achieve greater power outputs: 1MWe (Capstone C1000S - five C200S, and Flex Energy GT1300S - four GT330S). Conceptually, micro gas turbines are very similar to gas turbines and share the same thermodynamic principles. Nevertheless, some differential features of micro gas turbines set them apart from larger gas turbines on the megawatt scale. These differences affect both the working principle and the characteristics of the constituents components: • Due to the low volumetric flow, micro gas turbines use centrifugal and radial turbomachinery for compression and expansion. • These machines exhibit a large per-stage pressure ratio but a moderate to low overall pressure ratio because they are single-stage. Multi-stage centrifugal compressors usually incur higher inter-stage losses in the return channel and suffer additional losses due to scaling (low Reynolds) effects. • These machines exhibit a large per-stage pressure ratio but a moderate to low overall pressure ratio because they are single-stage. Multi-stage centrifugal compressors usually incur higher inter-stage losses in the return channel and suffer additional losses due to scaling (low Reynolds) effects. For these reasons, they are rarely used. • Radial turbines cannot be cooled, except for some conceptual proposals of cooled radial inflow turbines based on additive manufacturing. Hence, these engines feature low turbine inlet temperatures of about 950°C, whilst heavy-duty and aero-derivative gas turbines range from 1200◦Cup to 1700◦C1. • The combination of low-pressure ratios and moderate turbine inlet temperatures limits the thermal efficiency of a simple, unrecuperated cycle configuration (approximately 15%). Furthermore, the reduced size of micro gas turbines harms turbomachinery efficiency, as well as heat losses and internal leakages, which ultimately leads to a decrease in engine performance [ 21 , 22 , 23 ]. Therefore, micro gas turbines often resort to recuperative layouts to enhance thermal performance, also because this cycle layout achieves peak efficiency at much lower pressure ratios than standard cycles without heat recovery. Hence, recuperation or regeneration raises efficiency to around 30%, but it requires a recuperator to preheat combustion air. Although some big gas turbines use recuperative layouts, this option is not frequent due to the high cost of these bulky heat exchangers. • The low firing temperatures of micro gas turbines ensure moderate NOx emissions, making it unnecessary to incorporate NOx abatement solutions in the combustion process, like pre-mixed combustion or water injection. • Micro gas turbines operate at high, variable shaft speed. Therefore, electricity is generated at a variable frequency by a permanent magnet synchronous generator, and downstream power electronics condition the power output to meet the requirements of the grid. Contrarywise, larger gas turbines make use of a simpler configuration. Table 2.1 summarises the technological differences between MGTs and other types of Gas Turbines. 1 Values taken from Siemens [ 19 ], estimated from the exhaust temperature and pressure ratios of heavy-duty, industrial and aero-derivative gas turbines, assuming representative values of expansion polytropic efficiency [ 20 ]. 18 2.2 Micro gas turbine technology Table 2.1: Breakdown of technological differences between Micro and Small, Aero-derivative and Heavy Duty Gas turbines. Gas Turbines Micro Small Aero-derivative Heavy Duty Turbomachinery Stage Count Single Stage Single Stage Multi-Stage Multi-Stage Flow Path Radial/Centrifugal Radial/Centrifugal Axial Axial Cycle Pressure ratio <5:1 <5:1 >15:1 >15:1 Blade Cooling No Yes Recuperated Yes No Intercooled Some cases No TIT [°C] <950°C 1700 °C >1400 °C Electric Generator Permanent Magnet Generator Two-pole PCU Expensive - Techno- Economics Rated Power [MWe] 0.001-0.4 1-10 10<100 50<600 Equipment Cost [USD/kW] 1000-2000 1000-2000 600-1200 600-800 USD/kW Maintenance Cost [USD/kWh] <0.035 <0.035 <0.035 <0.035 Electric Efficiency [%] 22-33% <25% 35-43% 33-44% Waste Heat Grade [°C] 250-350°C (Mid) >500°C (Mid) >400°C (Mid-High) >500°C (High) Heat to Power Ratio >2 High >2 High <1.5 Low-Mid >2 High Emissions (NOx) <15ppm <20ppm <10ppm <10ppm Mechanical power Low Torque Low Torque Mid-High Torque High Torque Fuel Flexibility Mid-high Mid-high Mid-high High Load Responsiveness High High Mid-High Low Availability >95% >95% >95% >95% 19 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation 2.3 Applications Microturbines are compact and versatile devices that can be used for various decentralised power generation applications. One of the main advantages of microturbines is their flexibility, as they can be used for different purposes, such as: • Primary power generation. • Backup power. • Ancillary services. • Combined Heat and Power (CHP) and Cooling (CCHP). Primary power generators produce electric power on demand, typically according to a local end-user and not upon request of centralised grid operators (in which case, larger, more efficient power plants would typically be used). These units likely operate for continuous power generation under variable load settings; therefore, operating costs are a primary driver in these applications. Backup units are secondary power generators expected to come online when either the primary generator or the grid is off-duty. In addition, they can operate when the power demand is unusually large and cannot be satisfied with the primary generator. As a result, this kind of application implies short intervals of operations with long shut-down periods. The main requirements for backup units are fast response, reliability and low capital costs. Operating cost is irrelevant, given the short operating intervals; in this case, having a low capital cost is crucial to succeeding in this market. Ancillary power is somewhat similar to the previous case. However, the system comes online as a response to needs set by the grid and not the end user. These needs depend on power balance: load balancing (active balancing or power reserve), voltage and frequency control, etc. These ancillary services are usually highly paid and constitute an opportunity for fast-reacting power generators that can come online shortly after receiving the request (such as gas turbines in general and, in particular, micro and small gas turbines). Therefore, the primary cost driver is low capital cost and responsiveness, whereas operating cost (fuel economy) is less relevant. Ultimately, CHP refers to the simultaneous production of electricity and heat. Centralised schemes would inevitably disperse waste heat to the environment, as from the underlying thermodynamic principles. On the contrary, in decentralised systems, such heat can be converted into useful forms of energy or process heat, as shown in Figure 2.1. For this instance, the electric and thermal efficiencies of the CHP unit are set to 30% and 45%, respectively. For the independent production of power and heat, boiler efficiency is 80%, and power generation efficiency is 33%. The residual heat can be used to produce steam, hot water, or even cooling power through an absorption chiller (in which case, the application is called Combined Heat, Cooling and Power CCHP or, simply, trigeneration). 2.4 Economics of micro gas turbines To evaluate the economic viability of microturbines, it is important to understand the various costs associated with their deployment and operation. System costs for microturbines can be broadly categorised into: 20 2.4 Economics of micro gas turbines Figure 2.1: Benefits of Combined Heat and Power with respect to the independent production of power and heat. CHP is shown to operate at 75% global energy utilisation whilst the independent production of power and heat makes use of 50% of the primary energy supply. • CapEx: capital expenditures. • OpEx: operational expenditures. The sum of the two over the system life represents the total cost. The variability amongst different products, manufacturers and applications, along with confidentiality-related aspects, make it difficult to provide an accurate estimate of cost breakdown. CapEx is the investment capital with two main contributions: equipment and installation cost. For the Original Equipment Manufacturer (OEM), the equipment cost relates to the constituent components of the engine: compressor, expander, shaft and bearings, lube-oil system (if any), motor generator and power electronics. For the end-user, equipment cost is the lumped cost of the power generator (i.e., gas turbine engine). This sum sets up the ex-work cost of the equipment, which means the cost of the unit ready for shipment at the seller’s premises. Ex-works (EXW) and Free-on-board (FOB) are commonly used to refer to the cost of a product. They are very similar, but whilst FOB includes shipment by the seller on the method of transport selected by the buyer, EXW does not, and shipping and installation costs aggregate downstream. Fuel conditioning equipment is usually added as a separate cost since this is a mandatory part of the facility tailored to each installation. Then, the balance-of-plant components add to the necessary equipment for a typical application. They include piping, valves, insulation, control panels and instruments, and a container for outdoor utilisation. 21 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation at some 80ºC. The electrolyte is a proton-conducting membrane made of polymer that prevents the transport of electrons and the flow of gas (cross-over). • AFC: alkaline fuel cells operate at some 90ºC. The electrolyte is a solid matrix flooded with an aqueous alkaline solution, for instance, KOH, which enables the conduction of OH − from cathode to anode. These fuel cells can achieve high efficiency but strictly need to operate on hydrogen and oxygen. Otherwise, they require a CO 2 removal system as this gas will chemically deteriorate the electrolyte. • PAFC: phosphoric acid fuel cell operates at a hotter temperature (150-200ºC). As deduced from the name, the electrolyte comprises phosphoric acid stored in a matrix resistant to a harsh environment that enables the conduction of H+ions. • MCFC: molten carbonate fuel cell operating at a much higher temperature of about 600-650ºC. Again, the liquid (molten) electrolyte is a mixture of lithium and potassium carbonates (Li 2 CO 3 /K 2 CO 3 ) or, more recently, lithium and sodium (Li 2 CO 3 /Na 2 CO 3 ). In either case, ionic conductivity is enabled thanks to the transportation of CO = 3 . The high operating temperatures (550-650ºC) enable ionic conductivity and direct operation on unreformed natural gas (which is reformed internally to hydrogen and carbon dioxide, harvesting the heat released by the endothermic hydrogen-oxidation reaction). • SOFC: solid oxide fuel cells use a solid electrolyte made of ceramic material and operate at very high temperatures (600-1000ºC). Ionic conductivity across the electrolyte is enabled by the transportation of O = ions. Also, it is to note that high-temperature operation makes it possible to replace the very expensive catalyst on the electrodes, needed to promote the oxidation/reduction half-reactions, with more economical metals, thereby reducing capital costs. Without going too much into technical details, a common classification of FCs is according to the operating temperature, namely low and high temperatures. 1. Low-temperature: PEFC, AFC and PAFC. PEFCs operate at the lowest temperature, so their compactness is very suitable for mobile and small applications. Alkaline fuel cells operate at a slightly higher temperature, and they have already been used in aerospace applications (Space Shuttle) to produce electricity on board; nevertheless, except for these niche markets, the applicability of these cells is limited due to the unresolved CO 2 - poisoning problems. Finally, PAFCs are characterised by more complex fuel processing and expensive catalysts. They are suitable for stationary applications and have been available in the market for a long time. Also, as said, the slightly higher operating temperature makes cogeneration an interesting capability of these devices. 2. High-temperature: MCFC and SOFC. Given the higher operating temperature, they are most suitable for stationary or larger mobile applications (e.g., ships). These systems can run at atmospheric conditions or be pressurised to increase efficiency. As for PAFCs, high temperatures make cogeneration very interesting and pave the way for integration into downstream thermal engines like gas turbines, which harvest the available waste energy at the fuel cell exhaust. In this regard, MCFCs have been used mostly for demonstrative applications and tend to have lower power density than SOFCs. Although they target different applications, SOFCs and PEFCs are the most promising fuel cell technologies. Whereas the simple, small, low-temperature PEFCs are suitable for small and portable applications, SOFCs are more suitable for larger, stationary applications with 28 2.5 Competing technologies for decentralised power Figure 2.6: Overview of fuel cell types and their main characteristics. Data and diagram adapted from [37]. expectedly higher complexity but also higher global efficiency. In particular, SOFCs can reportedly operate integrated with MGTs, namely SOFC-MGT hybrid systems, reaching an efficiency of over 60%. Such is the case of the Mitsubishi Heavy Industries SOFC-MGT [ 38 ], a 250kW hybrid system which delivered a 55% net electrical efficiency. In these cases, though, the high operating temperatures and, very importantly, large temperature gradients built up during transient operation stem as the main challenges impacting control and responsiveness. FCs are by far the most expensive technology amongst those considered in this work [ 25 ]. However, what makes them interesting is that no combustion is taking place, and it is thus considered a clean technology. Given the strong momentum that FCs have been slowly gaining over the last decade and the huge investments they are receiving, the situation can change soon. Indeed, the total installed power of FCs was estimated to be 1.1 GW in 2019, almost four times the installed power in 2015 [ 39 ] as shown in Figure 2.7. To put things into perspective, the larger manufacturer of micro gas turbines, Capstone Green Energy, installed an equivalent capacity of almost 1GW in 2020 [ 40 ]. Surely, FCs are increasing in popularity, and according to some predictions, their capital cost is set to decrease dramatically, thanks to sales volumes from the automotive compartment [41, 42]. This is, nevertheless, yet to be confirmed. 2.5.3 Comparison The microturbine engines specifications are taken from the manufacturers Ansaldo Energia [ 44 ], Bladon Turbines [ 45 ], Aurelia Turbines [ 46 ], MITIS [ 47 ], MTT [ 30 ], Flex Energy Systems 29 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation Figure 2.7: Evolution of installed Fuel Cell capacity from 2015 to 2020 (and forecast for 2021) [39, 43]. [ 48 ] and Capstone Green Energy [ 40 ]. The list of micro gas turbine engines, including a comprehensive recompilation of their technical data, is available in Table A.1 (Appendix A). Internal Combustion Engines specifications are sourced from Adveco, MTU, Cummins, and CAT [ 49 , 50 , 51 , 52 ]. The list of reciprocating engines, including a comprehensive summary of their technical data, is available in Table A.2 (Appendix A). Efficiency Electrical efficiency is a critical parameter since it strongly affects energy costs in primary power and cogeneration applications and CO 2 emissions in all applications running on fossil fuels. Figure 2.8 (a) presents the rated electrical efficiency (efficiency at rated power condition) for a wide range of MGTs reciprocating engines and compares that with the performance range for several fuel cell types. The efficiency range for PEM, PAFC, MOFC and SOFC are sourced from [53]. Micro Gas Turbines increase their rated electrical efficiency for increasing rated power outputs. This behaviour is due to a gain in component performance improvement and loss reduction with the size of the engine [ 21 ]. Reciprocating engines present similar behaviour. However, recuperated MGTs have significantly lower rated efficiency than reciprocating engines. In contrast, Intercooled Recuperated MGTs (MGT-ICR) achieve electrical efficiency comparable to reciprocating engines. On the other hand, fuel cells exhibit a significant variation in system net efficiency, depending on fuel cell type, but generally perform better than reciprocating engines and MGTs. High-temperature fuel cells proved more efficient globally than low-temperature fuel cells. Figure 2.8(b) shows the part load efficiency curves for engine systems representative of the different technologies. The selected reference cases are 400 kW engines. The part load efficiency curve for the recuperated MGT is taken from the specifications of the Capstone C200 engine [ 54 ], with the efficiency corrections developed by Galanti and Massardo to upscale from 200 kW to 400 kW [ 21 ]. The efficiency curve for the intercooled-recuperated MGT is taken from the specifications of the Aurelia A400 engine [ 46 ]. The ICE part-load efficiency curve is from literature [ 25 , 55 ] and is deemed representative of a broad spectrum of ICEs. The part load 30 2.5 Competing technologies for decentralised power (a) (b) Figure 2.8: Comparison of electrical efficiency for different technologies. Figure (a) shows rated efficiency, and figure (b) shows four representative part load efficiency curves. efficiency curve for the FC is selected from the European Scenario for stationary FCs of Hydrogen Europe and The National Renewable Energy Laboratory database for large PEMFC [ 56 , 57 ]. MGTs’ low-rated electrical efficiency penalises their part load performance. Their part load efficiency depends on the control strategy, but generally, it is not better than reciprocating engines. MGT-ICR configuration with generators on two spools presents a flat efficiency curve, which outperforms reciprocating engines. Generally, most Fuel cell types have the best offdesign performance thanks to a very flat efficiency curve. Costs Figure 2.9 presents the logarithmic cost functions for both MGTs and ICEs. On the other hand, Fuel Cells are not included in the comparison since they still present significantly higher capital costs [ 25 , 56 ]. Accordingly, they are not closely competitive with the other two technologies. The cost comparison between micro gas turbines (MGT) and reciprocating engines for combined heat and power (CHP) applications shows that MGTs have significantly higher equipment costs. On the other hand, MGTs have lower service costs due to their longer service intervals, while reciprocating engines require more maintenance and present shorter service intervals. In backup and emergency applications where equipment cost is the primary factor, reciprocating engines are likely the best choice. The presented cost functions and engine performance are used to produce the case presented in Figure 2.10, showing that, besides the lower capital costs, ICEs also present lower energy costs than MGTs for primary power applications. This difference is due to their better electrical efficiency and results in a drastic reduction of lifecycle costs. 31 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation (a) Equipment and installation cost. (b) Service and maintenance cost. Figure 2.9: Comparison of the cost functions obtained for micro gas turbines and reciprocating engines. Figure (a) compares the equipment and installation cost. Figure (b) compares service and maintenance costs. Reciprocating engines are more cost-competitive in most applications when compared to micro gas turbines. The better performance of internal combustion engines in applications where energy costs are relevant favours their cost-effectiveness. Moreover, when capital costs are relevant, the low equipment cost of ICEs makes them a more competitive alternative. While MGTs feature low maintenance costs, in most cases, they represent a small fraction of both lifecycle and operating costs. Overall, the cost-effectiveness of these technologies is highly dependent on the specific application, energy costs, capital costs, and other factors which must be considered for optimal system design. While this analysis is simplified and not exhaustive, it provides an overview of the current status of power generation technologies for decentralised applications. Proper modelling of these energy applications will be performed in the following chapters of this manuscript. Fuel flexibility Fuel flexibility is the faculty of burning different fuels. It can be intended in two different ways. The possibility to be designed or adapted to burn a certain fuel. Alternatively, the capability of switching fuel during operation. The latter is often called dual-fuel mode. FCs original fuel is hydrogen. They can operate on conventional and biofuels with internal or external reforming and fuel treatments. Fuel Cells might require fuel processing due to very low tolerance to contaminants. This could add significantly to the total cost. Reciprocating engines for energy applications tend to operate on diesel for small applications. NG is more common for higher installed powers, possibly running on biofuels. Small engines (<100kW) running on gaseous fuels often adapt their diesel versions. Finally, microturbines usually run on liquid and gaseous fuels. MGTs can run on waste and 32 2.5 Competing technologies for decentralised power Figure 2.10: Comparison of lifecycle cost for MGT and ICEs. The assessment considers a 100 kW installation with ten years of assumed working life. This bar chart analyses two fuel prices: 0.025 $/kWh to 0.075 $/kWh with an operational availability of 95%. biofuels with variable LHV and low methane content. A thorough review of CHP technology for Wastewater Treatment Plants (WWP) has been given by [ 58 ]. Some models, like the Ansaldo AE100E and B+K Clinx, employ external combustion, which allows running on solid fuels, like biomass. Tolerance to contaminants is one crucial parameter to compare fuel flexibility, especially for unconventional and renewable fuels. Table 2.2 summarises the maximum tolerated level of contaminants. Microturbines have a very high tolerance, making them suitable for waste, residuals, biofuels and flare gases. Moreover, even in these applications, MGTs can hold long maintenance intervals, which is not necessarily true for reciprocating engines. Nevertheless, ICEs still are the most common technology for WWP [ 58 ] thanks to their reliability, availability and market acceptance. Moreover, the equipment size also has an influence. Microturbines are limited to WWP applications within a 1–10 MGD (<0.5 m 3 /s) flow rate. However, they only produced 18% of the power of this segment in 2015. Hydrogen is constantly gaining momentum as a clean fuel, and many countries -including the EU- are planning investments to develop a hydrogen framework [ 59 ]. Fuel cells are a natural fit for hydrogen, though microturbines and internal combustion engines can also play a role in future scenarios. Hydrogen-fuelled reciprocating engines are currently under study, as hydrogen’s different physical and chemical characteristics raise several barriers to its adoption [ 60 ]. Currently, many big companies are investigating and testing the implementation of H 2 as a fuel for heavy-duty transport using reciprocating engines running on spark-ignited [61, 62, 63, 64] and diesel cycles [65, 66]. Concerning H 2 for microturbines, the R&D community is currently exploring the feasibility of using hydrogen as a fuel for MGTs, which is not yet a commercially available option. According 33 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation to a recent study by Banihabib and Assadi [ 16 ], a T100 (100 kW) MGT was operated on pure H 2 and NG-H 2 blends using a FLOX ® combustor designed by the German Aerospace Centre (DLR). The study found that NOx emissions did not increase significantly, and performance was not affected when running on pure H2. To have a role in the H 2 market segment, MGTs must prove some advantages compared to FCs. Cost is currently one of them, but, as anticipated, the situation can rapidly change in the following years. Nonetheless, they could act as complementary technology in hybrid applications. Indeed, hybrid SOFC+MGT systems (or even some experiments of MCFC+MGT) use a microturbine to pressurise the fuel cell, which runs - partially or totally - on the heat and fuel coming from the FC exhaust and possibly produces extra power. This increases the overall efficiency and power output of the system. High capital cost and system complexity can be considered barriers to such hybrid systems. Also, the control of the hybrid system is one important technological challenge that the scientific community and industry are facing now [ 67 , 68 ]. Prime mover Impurity Hydrogen sulfide H2S Silicon compounds Ammonia Halogenated Micro gas turbine <70,000 ppm <10 ppm <200 ppm Gas ICE <545 ppm <9 ppm <400 ppm Fuel Cell <1 ppm <0.1 ppm <5 ppm Table 2.2: Prime mover tolerance to biogas contaminants [58]. Emissions The comparison in terms of emissions depends on some factors such as fuel, application and exhaust treatment. Table 2.3 gives an overview of the different emissions of distributed generation (DG) technologies [ 58 , 36 ]. In comparing emissions of DG technologies, several factors, such as fuel, application, and exhaust treatment, must be considered. Fuel cell (FC) technology is known for its low emissions, with NOx, SOx and particulate emissions not being a concern. Additionally, for conventional fuels like natural gas, CO 2 emissions are lowest due to the high electrical efficiency. For hydrogen applications, the byproduct of the reaction is pure water for most types of FCs. In contrast, ICEs emit high levels of NOx and CO and require expensive after-treatment of the exhaust gas, which can add to the total installed cost. On the other hand, microturbines (MGTs) emit lower levels of NOx, CO, and particulate matter, making them a cleaner option, especially for lower installed powers. The overall CO 2 emissions of DG technologies depend mainly on their operating efficiency, which is often confused with the overall fuel utilisation factor. For cogeneration applications, the CO 2 savings for combined heat and power (CHP) installations are typically assessed by combining the electric and thermal efficiency [69]. 34 2.6 Market Components Emissions (g/kWh) CO2SO2NOx CO PM10 HC Gas ICE 625 0.032 0.5 1.8 0.014 0.54 Diesel ICE 695 1.25 2.13 2.8 0.36 1.65 Micro gas turbine 725 0.037 0.2 0.47 0.041 0.14 Fuel Cell 477 0.024 0.015 0 0 0 Gas turbine 625 0.032 0.29 0.42 0.041 0.42 Table 2.3: Emission levels for different decentralised generation technologies without including exhaust treatments [ 36 ]. FC emissions refer to phosphoric acid fuel cells running on NG (with a reformer to turn NG into hydrogen), assuming a 38% efficiency. Combined heat and power applications Both reciprocating ICEs and MGTs are based on thermodynamic cycles. Nevertheless, as discussed in the previous chapters, the two differ significantly. Microturbines’ Brayton cycle operates with excess air and relatively low efficiency. In a recuperated cycle, most waste heat is in the exhaust gas, which can reach temperatures of around 300 ◦ C degrees. Conversely, Otto and Diesel’s cycles operate with way lower airflow. However, the waste heat is spread amongst different sources: cooling fluid, lubricating oil and exhaust gas. The exhaust is at a relatively high temperature (500-600 ◦ C), with a lower mass flow and oxygen concentration than GT and MGTs. Microturbines can achieve way higher heat rates when comparing exhaust gas heat (typical CHP installation), as shown in Figure 2.11. Indeed, they appear to operate in a completely different area of the chart. The Aurelia A400 engine and its hypothetical installation in parallel are the only exceptions. They operate in the same area as ICEs. Since the oxygen concentration in MGTs is way higher than in ICEs (because of the higher air mass flow rate), a higher level of post-combustion is possible. For this reason, Brayton cycle machines are more suitable for applications requiring higher grade heat or heat-to-power ratios than ICEs [ 70 ]. Despite this, most of the applications in the market do not have stringent requirements in this sense. In reality, only 23% of industrial applications are estimated to require heat at 200°C-300°C, whereas 66% per cent of them just require heat below 200°C [ 71 ]. In contrast, the heat found in the lube oil and water cooling systems of ICEs is at low temperature, below 100 ◦ and is suitable for cooling or other low-heat applications. An example would be feeding heat for biogas [72] or domestic heating. Overall, reciprocating engines are the most widespread CHP technology [ 73 ], given their low cost, high availability and market acceptance, and capability to fulfil general heat requirements. This aspect is more thoroughly discussed in Chapter 5. 2.6 Market 2.6.1 Original Equipment Manufacturer (OEMs) of micro gas turbines Original Equipment Manufacturers (OEMs) play a critical role in developing and commercialising micro gas turbines, as they are responsible for designing, manufacturing, and supplying these systems to end users. This section aims to overview the OEMs involved in micro gas 35 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation Figure 2.11: Comparison of available exhaust waste heat for different technologies. turbines, highlighting the leading players. These include commercial companies, institutions that have already left the market, and those developing new products close to commercialisation. Understanding the evolution and current state of the OEM landscape is crucial for assessing the potential of micro gas turbines as a viable alternative to conventional power generation technologies. Amongst these companies, Capstone Green Energy is the current market leader and one of the pioneer institutions in the micro gas turbine industry. Figure 2.12 represents the development and commercial stages of the main products in the market. The data has been gathered, complementing publicly available material with the stakeholder interviews. Ansaldo Energia Ansaldo Energia is a big energy company based in Italy, owned at 88% by CDP Equity and 12% Shanghai Electric, which mainly operates as a gas turbine OEM. They used to have a microturbine division [ 44 ] they acquired from The Turbec Microturbine, a former joint venture of Volvo and ABB [ 74 ]. The microturbine division has been inherited by Anslado Green Tech, an Ansaldo Energia spinoff focusing on the renewable energy business. They commercialise the AE-T100 system, derived from the Turbec T100 [ 75 ]. It is a 100 kW machine, available in three different configurations: natural gas (AE-T100NG), biogas (AE-T100B) and external combustion (AE-T100E). Aurelia Aurelia Turbines [ 46 ] was founded in 2013 in Finland and developed the A400 engine with the collaboration of Lappeenranta University of Technology. This 400 kW microturbine stands out from most single-spool recuperated microturbines in the market. It adopts a generators on two spools configuration with an Intercooled, Recuperated cycle. This innovative design allows the A400 to break the 40% efficiency barrier. Moreover, it yields a flat efficiency curve at part-load operation compared to other MGTs. 36 2.6 Market Figure 2.12: Historical Overview of Micro Gas Turbines products, OEMs and main related events. Bladon Jets Bladon is a British OEM that developed a product specifically for off-grid telecommunication installations [ 45 ]. The Bladon Micro Turbine Genset (MTG) is rated with a 12 kW power output, and their datasheet does not specify the corresponding electrical efficiency. The engine operates on diesel and biodiesel; paraffin is also possible, according to a recent report on the micro gas turbine market [ 74 ] and as confirmed by the private interviews with Bladon. In the company’s financial report (released in 2020 concerning the year ending 31 December 2019) [ 76 ], the directors acknowledge the risk associated with their business growth due to product launch delays and high operational costs. However, in the private interviews with Bladon, they confirmed some big orders in place for Telecommunication applications. In 2021, Bladon moved to a new plant with an increased production capacity [45]. 37 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation product. However, after an initial surge in orders, the interest in MGT systems plateaued, and the company, like the other players in the market, had to realign their commercialisation strategies. 2.6.3 Market analysis summary Getting accurate numbers on the market size is not an easy task. Most available market reports are from private consultancy companies that offer reports for different fields, including predictions for years to come. Unfortunately, this data cannot be validated elsewhere if not by cross-comparing various sources. Also, the reports are not available for each year. Grand View Research [ 86 ] reported 134 million US$ in 2015, with a compound annual growth rate (CAGR) of 10.8%, yielding an estimated 224 million US$ in 2020. Fortune Business Insight reported 180 million US$ in 2018 with a CAGR of 9.8%, which produced an estimated 217 US$ in 2020 [ 87 ]. Brand Essence Research and Imarc 2020 values are 210 US$ (CAGR 10.3%) and 214 million US$ (CAGR 10%), respectively [ 88 , 89 ]. From here comes the market value estimation for 2020 of roughly 210 US$ and a CAGR of 10%. Despite the provided estimations being comparable and the predictions being consistent with the actual results, the interviews with stakeholders discredited the reliability of these results. Taking Capstone Green Energy as the established market leader, it can be observed that its revenue is just a small fraction of the predicted sum, and its CARG is close to zero, way far from the expected 10%. Capstone Green Energy’s financial data are freely available as a public company. Considering the other active companies (Section 2.6.1), Ansaldo is possibly amongst the most established players in the market but, not surprisingly, no extraordinary activity from Ansaldo has emerged from the stakeholder confrontation. The financial statement does not disclose the performance of Ansaldo’s microturbine division, now part of Ansaldo Green Tech, but still, following the previous considerations, the authors can safely assume a CARG comparable to Capstone’s. From the available information, Flex Energy stopped production recently, and the company only focuses on maintaining the existing fleet. As a result, it is reasonable to assume that its revenue will not increase but, rather, decrease with time. On the other hand, some new companies that joined the market recently could potentially feature a positive CARG. These companies are Aurelia Turbines, MTT and Bladon Jets. The author of this research has no available estimations of Aurelia’s performance, as they were not disclosed during the interviews. However, the author estimates that Aurelia is slowly entering the market, with 5-15 annual orders for their 400 kW turbine. MTT joined the market recently with their 3.2 kW system. Following some declaration of MTT to the NextMGT project, the authors estimate around 150-300 orders per year, with a positive CARG in the following year. Considering Bladon, they recently moved to a new factory with a capacity of several thousand units per year [ 45 ] and closed several contracts with communication firms recently. Following some contacts with the company, the author estimates they will soon reach between 1000-3000 orders per year. The other companies listed in Section 2.6.1 are either not commercial or their contribution to the MGT market is considered marginal. Following the aforementioned considerations, Figure 2.15 presents the author’s estimates for 44 2.7 SWOT Analysis the MGT market based on OEMs revenue. The error bar is computed by subtracting the verified revenue from the total value. The present estimations are 50% lower than what external companies report, reaching only 100 million US$ in revenues. Figure 2.15: Evaluation of the market size from the OEM’s revenue. The prediction (orange) is based on a linear regression of each company’s last 3-year trend. Nonetheless, this difference is irrelevant when comparing these values with reciprocating engines. Therefore, the accuracy of these data is considered sufficient for this comparison. It is indeed adequate to give an estimation of the difference between the markets of the considered technologies. The reciprocating ICE 2020 global market size is estimated at around 240 billion US$; i.e., three orders of magnitude larger [ 90 , 91 ]. Both Credence Research [ 90 ], and Research and Markets [ 91 ] agree on the 2017 estimate of 197 billion US$ with 6,5% CAGR, which generates an estimate of 240 billion US$ for 2020. Of this 240 billion US$, 85 billion US$ from the automotive sector [ 92 ], 20 billion US$ from the power sector [ 93 ] and 34 billion US$ from the marine sector [94]. Indeed, even examining the US Combined Heat and Power segment -a combination of market niche and region that MGTs specifically targetthey have almost ten times less total installed power than ICEs for applications up to 1 MW rated capacity [ 73 ], see Figure 2.16. The charts also highlight a surge in CHP installations in correspondence with the beginning of MGT development (1985-1990) and market deployment (2000-2005). This indicates that the drivers for investing in MGT technology are likely linked to the interest in cogeneration and microgeneration in general, as anticipated in Section 2.6.1. The chart also shows the minor role of FC applications in the cogeneration sector. 2.7 SWOT Analysis This section will list, analyse and mark the most important strength, weaknesses, opportunities and threats for microturbine technologies. For each entry, a score from 1 to 5 is assigned, 45 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation Figure 2.16: Technology classification of the cumulative Combined Heat and Power installations below 1 MW in USA [73]. where 1 is "not impacting", and 5 is "highly impacting", as shown in Table 2.4. A SWOT analysis is a widely recognised strategic tool used to evaluate the internal and external factors that can impact the success of a product or business. By examining the product’s inherent strengths and weaknesses and the opportunities and threats present in the market, this analysis aims to provide valuable insights into the product’s current standing and potential for future growth. This section summarises all the technical and economic features reported in this Chapter. Through a systematic examination of these factors, decision-makers can identify areas of advantage, areas that require improvement, potential avenues for expansion, and potential risks that need to be addressed. 2.7.1 Strength This sub-section delves into the inherent strengths of the product, which are internal factors that contribute to its competitive advantage and market positioning. Identifying and understanding the product’s strengths is crucial for developing effective strategies capitalising on its unique features or attributes. Strengths may include factors such as superior quality, innovative design, strong brand recognition, robust distribution channels, an established customer base, proprietary technology, or efficient production processes. Organisations can enhance their product’s market share and competitiveness by recognising and leveraging these strengths. • High-grade heat: Microturbines deliver a high-temperature, high-oxygen exhaust, making them suitable for many applications requiring high-grade heat and high heat-to- power ratios. This is one big advantage of MGTs that makes them a strong product in some particular niches compared to FCs and ICEs. • Fuel flexibility: being able to run on many fuels, even with relatively low heating value and withstand a higher degree of variability in fuel composition, all without penalising significantly reliability, availability and maintenance costs, make microturbines a competitive technology for waste and gas and biogas applications. The actual possibility of burning very different fuels without changing configuration is not yet available, and it is to be verified that this could unlock some more niches. The possibility of running pure 46 2.7 SWOT Analysis hydrogen is an aspect from which MGTs should gain market and regulative acceptance. • Low emissions: following the analysis in Section 2.5, given the lower electrical efficiency, CO 2 emissions are relatively high compared to ICEs and FCs. Conversely, MGTs can offer good performances regarding NOx, SOx, UBH and PM. However, in most regulations and especially for small installed power, no incentive is given for better performance in this regard. Introducing emissions compensation could boost the competitiveness of MGTs against ICEs in some cases [95]. • Long maintenance intervals: this aspect is mainly related to direct and indirect maintenance costs. As discussed before, this is an area where MGTs should hold against the competition. However, the cost and logistics of the highly skilled workforce can have a slight counter effect, partially filling the positive gap MGTs have compared to the competition. MGTs tend to still hold a strong position for natural gas and biogas applications, especially for low installed powers, as reciprocating engines are sometimes not adapted for these applications or still suffer the change in fuel composition. This strength proves to be determinant in applications where maintenance costs add up significantly to the total cost, like remote and off-shore applications. • Compactness is often mentioned as the strength of microturbine. However, for power and combined generation, the prime mover size and weight are just a small part of the whole package. As a result, microturbines do not necessarily have a clear advantage against the competition in the microgeneration market. Additionally, this marginal strength does not seem to have opened any new segment to be targeted as gas turbines did in aviation against ICEs. There, a clear difference in size and weight opened up a strong market niche for commercial aviation, but not necessarily for small aircraft applications, where that difference was not as relevant. Some companies (Section 2.6.1) are currently developing microturbines for small aircraft propulsion; nevertheless, there are no commercial products yet. 2.7.2 Weaknesses This sub-section presents an analysis of the product’s weaknesses, highlighting internal factors that hinder its performance or impede its ability to meet customer demands and market expectations. Identifying weaknesses is essential for devising strategies to overcome them and improve the product’s overall viability. Common weaknesses may involve suboptimal product features, limited brand awareness, inadequate distribution channels, high production costs, poor customer service, or vulnerability to technological advancements. Understanding and addressing these weaknesses can guide decision-makers in implementing targeted initiatives to enhance the product’s performance and address customer concerns. • High capital cost has already been identified as a main barrier to microturbines due to the economies of scale. However, recognising microturbines as a niche product also implies price is not the only thing to watch. Indeed, successful niche products balance it with some strengths and features that make them unique and hook the target market’s interest. • Low electrical efficiency is also considered one weakness of microturbines. As discussed in the previous section, this is a weakness when targeting a segment where high efficiency is what mostly matters. High-efficiency intercooled-recuperated microturbines have been developed to target this sector and open new niches specifically. • Integrating and installing a big and complex system with regulative and bureaucratic 47 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation burdens can retain some clients from adopting this kind of solution. This weakness is common to all microgeneration technologies [96, 97]. • Specialised workforce: microturbines are often branded as a technology that requires low maintenance and service, which is mostly true when considering maintenance intervals. However, the expensive components and highly specialised workforce can play an important role. In this case, the economy of scale has a considerable effect. • Low market acceptance and awareness: when it comes to micro gas turbines - especially when compared to reciprocating engines - one of the major weaknesses is their little public awareness. It is important to educate potential customers and promote the benefits of this technology to stimulate market demand. Additionally, providing available and confirmed operational data proving the advantages of this technology will undoubtedly contribute to overcoming any initial scepticism and encourage wider adoption. 2.7.3 Opportunities This sub-section focuses on the external opportunities in the market and can be leveraged to maximise the product’s potential growth and success. Identifying and capitalising on opportunities is vital for gaining a competitive edge and expanding market share. Opportunities may arise from various factors, such as emerging market trends, changing consumer preferences, technological advancements, favourable regulatory frameworks, untapped customer segments, or gaps in the competition. By recognising and exploiting these opportunities, organisations can position their product strategically to meet evolving market demands and generate sustainable growth. • Renewable fuels like (green) hydrogen are central to the future energy landscape. Many countries like Europe are considering a big framework of investments to follow the ones already in place, possibly using hydrogen to store and transfer energy and partially or fully replace natural gas. Most companies have already stated they have developed products that can -fully or partiallyrun on hydrogen; others are currently working on that. The possibility of converting the existing microturbine fleet from running on natural gas to hydrogen by changing the combustion chamber and injectors has been studied and tested [ 98 ]. Micro gas turbines’ fuel flexibility could open this door; however, the rated and off-design performance will be crucial for competitively operating on such expensive fuel. In this scenario, intercooled-recuperated MGTs could better compete with reciprocating engines and Fuel Cells. • The progressive abandonment of reciprocating engines due to more stringent regulations on emission for automotive applications in favour of electric and hydrogen vehicles could partially overcome some advantages mainly related to the economies of scale and support of a big industry. ICEs may still be strong in their heritage and keep their hold on the market. Their capability to run on biofuels and hydrogen would likely affect their possibility of survival in the long term. • Smart grids and microgrids could be one relevant opportunity for microturbines. Their adoption can help guarantee the flexibility and reliability of power and heat in conjunction with RES and energy storage. Research and development projects like Robinson [ 99 ], funded by the European Union’s Horizon 2020 programme with the coordination of ETN Global and involving many institutions along with the OEM Aurelia Turbines, aim to study the impact of such systems. 48 2.7 SWOT Analysis • Emerging economies can be an excellent opportunity to expand the market for decentralised generation, particularly micro gas turbines, despite the several challenges involved [ 100 ]. In particular, microturbines can reduce the investment in creating or improving the electrical grid in remote locations with no access to the grid or areas with a very unreliable and unstable grid. Africa as a continent could offer some opportunities for MGTs deployment. According to the International Energy Agency [ 101 ], Africa’s energy consumption will rise two times faster than the global average, with natural gas driving the industrial growth in the continent. Moreover, mini-grids and stand-alone generation are considered the lowest cost options for respectively 30% and 25% of the population gaining access to electricity by 2030. • Some interest in using MGTs as range extenders for heavy transports (from ≈ 100kW to ≈ 400kW) re-emerged recently. The automotive industry never deployed range extenders in mass-produced automobiles and trucks, and standard ICEs are used in hybrid cars. Nevertheless, a new generation of range extenders might serve the growing electric vehicle demand. The drivers are a combination of compactness and reliability. The latter could be relevant in situations with a combination of many start-ups and medium-long times with no operation. This and long maintenance intervals can be highly beneficial for the application. Some companies like UAV Turbines and Turbotech are developing similar products for micro and small aircraft applications. • Stand-by power - for data centres or other applications - requires reliable and fastresponding backup power. Low maintenance and high reliability, especially compared to ICEs, would be the drivers in this instance. This is especially true in applications with very long shut-down intervals. In this case, several redundant units are often present to overcome failures in emergency start-ups. The higher reliability of microturbines might bridge the capital cost gap with ICEs by limiting the need for redundant units. • Continuous power in off-grid applications, like remote islands and telecommunication power. This latter case is of high interest to companies like Bladons Jet, which leverages MGT fuel flexibility (burning paraffin) and extended maintenance intervals to decrease total costs. 2.7.4 Threats This sub-section presents an analysis of the external threats that pose risks to the product’s success and market position. Identifying and understanding these threats is crucial for developing proactive strategies to mitigate potential negative impacts and maintain a competitive advantage. Threats may include factors such as intensifying competition, changing market dynamics, economic downturns, evolving consumer behaviour, technological disruptions, or regulatory challenges. By anticipating and addressing these threats, organisations can adapt their strategies, enhance product resilience, and safeguard their market share against potential risks. • Reciprocating Internal Combustion engines have historically been the main threat to MGTs, due to their high market acceptance, superior performance and lower cost. • Electrification will seriously threaten microturbine combined heat and power applications. This would possibly apply to commercial, residential and part of the industrial sector. However, some industrial segments will need high-temperature heat, and electrification will be nearly impossible. The progressive abandonment of natural gas in favour of electrification could pose a serious threat on microturbine technology, this being 49 Chapter 2. State-of-the-art of micro gas turbine technology and commercialisation one of the main fuels in its applications. The two contrasting forces are the resilience of fossil fuels for this application versus the incumbency of hydrogen. MGTs role in penetrating emerging markets where the abandonment of fossil fuel is not yet regarded and fitting into an incoming hydrogen framework could be key to avoiding this threat. • FCs dropping price due to increased production rate will make this technology way more competitive than it is now, as discussed in the previous chapter. For MGT producers, finding applications where they can exploit their product ´ s features to fill the gaps in fuel cells is key. Table 2.4: SWOT analysis. Entries are marked on a scale from 1 to 5, where 1 is "not impacting", and 5 is "highly impacting". Analysis Entry Rank Strength High grade heat 4 Fuel Flexibility 4 Low Emissions 2 Long maintenance intervals 2 Compactness 1 Weakness High capital cost 4 Low efficiency 3 Integrability 3 Highly specialised workforce 2 Low market acceptance and awareness 4 Opportunities Hydrogen 3 ICE: decreasing support from automotives 2 Smart grids and microgrids 2 Emerging economies 4 Range extenders for heavy transport 2 Stand-by for power data centres 2 Off-grid 3 Threats ICE competition 5 Electrification - Dismissal of NG 5 Fuel cell dropping price 3 2.8 Conclusion Microturbines for on-site generation could be an effective technology to support energy transition strategies. Distributed generation and combined heat and power applications could help reduce the energy sector’s environmental footprint. Moreover, they could help generate power and heat in remote locations and improve grid stability and power quality. The technological and economic aspects of MGTs have been introduced and compared to other technologies to interpret their impact. It emerged that, due to the high component costs, the capital costs of MGTs tend to be higher than those of competing technologies. At the same time, the low electrical efficiency also penalises MGTs from the energy cost per- 50 2.8 Conclusion spective. Conversely, service and maintenance cost is lower than the competition and is considered a leverage for MGTs’ competitiveness. In this section, the author gathered statistical cost data and developed some cost functions based on the regression of such data. These inputs will serve for more in-detail analyses in the following Chapters of this manuscript. The presented work primarily focused on the market, providing an overview of the major players and a detailed history of the MGT industry. The strategies discussed for commercialisation were direct sale, distributor sale, leasing, renting, and EaaS. In addition, the discussion delved into the market and niches of microturbines, which included heat-driven, waste fuels, as well as remote areas applications. The presentation also introduced the theory of market evolution, exploring the factors that enabled microturbines to target these niches. The final section summarised the content of this work with a SWOT analysis, where all the elements were listed and scored. A SWOT analysis of micro gas turbines reveals several strengths: fuel flexibility, low emissions, long maintenance intervals, and compactness. However, they also have some notable weaknesses, such as high capital costs, low electrical efficiency, and integrability issues; they require a highly specialised workforce and have low market awareness. The opportunities for micro gas turbines include hydrogen, the dismissal of internal combustion engines in the automotive sector, the emergence of smart grids and microgrids, range extenders for heavy-duty transport, reliable standby power for data centres, and highefficiency applications. On the other hand, threats to the market include the dismissal of the natural gas framework, increasing electrification, and the dropping price of fuel cells. This chapter provided an overview of the State of The Art of Micro Gas Turbine technology and the market, providing a preliminary analysis of the current state. The following chapters of this research will analyse the system in more depth, introducing both logical and numerical methods. 51 3Methodologies to problem-solving This third Chapter presents the methodology for a sound corrective action scheme. Since real systems never operate at their optimum, they require a continuous improvement process. This Chapter will define the steps and actions necessary to achieve the predefined target of a system. It includes setting the system’s goal, analysing the current reality, finding the root causes of the problem and evaluating the possible solutions. For this, two concepts - Root Cause Analysis and Theory of Constraints - are compared and combined to provide a structured, holistic and objective approach to problem-solving. The contents of this Chapter are partially available in: Tilocca G., Sánchez D., and Torres- García M., 2023, Application of the theory of constraints to unveil the root causes of the limited market penetration of micro gas turbine systems, Energy (278) 127717. 3.1 Introduction As framed in Chapter 2, despite the claimed winning features of micro gas turbines, these systems have always been relegated to niche applications like Auxiliary Power Units in aircraft [102], burning of flare gas in oil and gas installations [103] and others. This marginal market penetration has often been blamed on the higher costs of micro gas turbines compared to reciprocating internal combustion engines, which would be at the heart of a classical chicken-and-egg problem. The lack of volume production yields higher costs which, in turn, are the reasons for the low sales. This fact emerged from the stakeholder’s interviews and the extensive literature search in Chapter 2. Nevertheless, without disregarding the known link between sales volume and system cost, the author believes this interpretation of the market is simplistic. All the efforts to analyse and solve this situation proved ineffective with time. Most studies on MGT focus on cost reduction, techno-economic analysis or performance improvement alone. The literature on MGT does not include any holistic research that gives an objective and pondered analysis of the problem, followed by a long-term solution. This dissertation aims to fill this gap, and this Chapter seeks to lay the foundations for this work. The author assumes the problem in the MGT market is only partially relatable to cost. The methodology used in this work - the Root Cause Analysis (RCA) - will validate this hypothesis and carry on the logical cause-effect analysis. 53 Chapter 3. Methodologies to problem-solving 3.3.3 Understand the system: technical and economic features of commercial micro gas turbines Understanding the process implies stepping back and taking a broad view of the problem before jumping to its possible causes. Chapter 2 comprehensively overviews the technology, market and stakeholders involved. It concluded that the MGT industry is not just a process but a complex system, including companies, legislators, end-users, etcetera. To simplify the analysis, the system is split into: • Offer: commercial products that are -or werein the market and those that are under development. •Demand: market needs, divided into sectors and niches. • Context in which they operate comprises macro and micro sides. The macro side includes global policies and markets (energy spot prices, interest rates). The micro side is more about local regulations, social acceptance, and impact on local communities. 3.3.4 Root Cause Identification Root cause identification aims to break down the problem and identify possible causes expansively and creatively. This work utilises a combination of the fishbone chart and logic tree. The fishbone chart or cause-effect diagram serves to break down the problem. Following the concept described in the previous section, the categories are product,market and context. In turn, the context is divided into the macro -Energy framework and macroeconomics- and micro -Regulations- categories. The cause-effect diagram in Figure 3.4 shows the category breakdown with the preliminary assumptions for low-level causes derived from Chapter 2 conclusions, which will be the starting point of this RCI process. For each category, a logic tree will expand the causal chain. Figure 3.4: Fishbone diagram. The microturbine market The low sales volume might be considered one of the most prominent symptoms of the problem. It combines many different factors. 60 3.3 A process-focused approach to Root Cause Analysis First, the market structure. MGTs abandoned the automotive industry after a few unsuccessful attempts [ 78 , 81 , 125 ]. In the marine industry, only a few examples are present in history [ 126 , 127 ]. In aviation, UAV Turbines [ 128 ], Sentientblue [ 129 ] 1 , and Turbotech [ 130 ] are currently developing propulsion systems for small and unmanned applications. Microturbines currently target the energy sector, mostly O&G and micro-CHP applications (Section 2.6.2). Micro-CHP is a relatively small market with moderate growth. Micro CHP is considered a fraction of the whole CHP market whose global share, as reported by Cogen Europe, has been constant in Europe in the last years [131]. MGT and ICEs have comparable inputs and outputs and target similar applications. Markets based on established technologies with vast market share -like ICEs in this casetend to raise barriers like collective preferences, policy alignment, technical performance, and adequate supply chain[ 85 ]. When competing with ICEs, MGTs have longer payback periods and higher capital costs (Chapter 2). Moreover, they do not provide any practical advantage (see Section 3.3.4), making them more competitive than other technologies. The targeted market is, therefore, fragmented and composed of many small niches [ 84 ] comprising several applications with specific requirements, such as O&G, industrial and commercial mid-grade heat, biogas and biofuels with low and variable LHV. Still, their penetration was insufficient to lead to a significant expansion. Their technical characteristics were inadequate or ineffectively exploited to lead to more substantial market penetration. Inadequate commercialisation strategies waste precious resources by targeting areas where the product is weak. They are often due to the lack of knowledge of the product and its potential markets. In the context of this research, the stakeholder interviews confirmed that MGTs initially had a volume-based approach to the market rather than the market-niche one illustrated by Schot in [ 85 ]. They agreed that ineffective strategies hindered the commercialisation at the early stages of the MGT market deployment. The unwillingness to invest in energy technologies is another factor limiting sales. Cutting energy costs requires a big commitment and does not yield significant economic benefits. A study for domestic microgeneration in the UK [ 96 ] found that high costs with long payback periods, lack of trustworthy information, and installation concerns are the main barriers, according to rejecters of the technology. For microgeneration, the same concept applies to the commercial and industrial sectors. According to the MGT and ICE operators interviewed, companies tend to be reluctant to operate actively in energy since it is not their core business. They are discouraged by the long payback periods, installation and integration hurdles, and contractual and regulatory implications. Additionally, according to the interviews relative to this dissertation, many end-users do not consider MGTs a green technology. Currently, MGTs running on renewable fuels represent the minority of the total applications due to an undeveloped framework of renewable resources. These conclusions align with the European Commission’s "An EU Strategy for Energy System Integration" [ 97 ] for local energy sources not being efficiently and sufficiently exploited because of: "Insufficient awareness and knowledge about these solutions, the reluctance of companies to enter into a new business that is not their core activity, lack of regula- 1Sentientblue reportedly ceased activity during the redaction of this manuscript. 61 Chapter 3. Methodologies to problem-solving tory and contractual frameworks to share the costs and benefits of new investments, and barriers related to planning, transaction costs, and pricing signals." Moreover, all installations are complex and different, especially for CHP applications. They often imply higher installation costs than primary power, significant commitment, indoor/outdoor space occupation, and new interconnections/pipings. Figure 3.5 shows the resulting logic tree for the market, which integrates all the information above. Figure 3.5: Logic tree for the market. Items for this tree are highlighted in orange. Items from other trees are represented in blue (product), green (energy), and grey (regulations). Energy sector and macroeconomics This section analyses the energy sector as a whole. The breakdown includes the energy market, long-term policy framework, and macroeconomics. In this scenario, the interest in DG technologies, particularly MGTs, has been characterised by short spikes. However, it never took off except for "renewable" microgeneration systems like solar and wind. For micro-thermal generation and microturbine applications, three main drivers for the adoption of microturbines can be identified at the macro level: • Value of the investment. • Necessity. • Lowering greenhouse gases and other emissions. The single decision, i.e. at the micro-level, depends on the balance of these three drivers and on how that solution compares to other technologies (more deeply analysed in Sections 3.3.4.1 and 3.3.4.4). Effectively, the value of the investment combines the capital (CapEx) and operating (OpEx) costs of the product (Figure 2.4). This combination bounds the savings/profits compared to the separate heat and power production. 62 3.3 A process-focused approach to Root Cause Analysis For large gas turbines -like CCGT plants-, the metric to assess the economic feasibility in terms of energy costs is called Spark Spread (SS), the difference between the electricity price and the fuel price, multiplied by the heat rate of the engine [ 132 , 133 , 134 ]. The higher the SS , the larger the margin for additional operational expenses (e.g., service) and the room for profits. For a CHP system, the conceptual approach remains with few other considerations. Smith et al. [ 135 ] reviews CHP economics, including spark spread and payback period. The payback period evaluates the investment feasibility. It indicates the time needed to repay the initial investment by the overall profits or savings [ 136 ]. Many companies started the MGT business in the 1990s and 2000s (Figure 2.12). At that time, the oil price was about 20 US$/barrel, and in the next decade, prices rose to over 140 US$/barrel (July 2008), Figure 3.6, The price of Natural Gas increased by a factor of four in the same period, and the rise in electricity prices in many countries could not compensate for the surge in gas price, having their price ratio and spread going down. From a macro perspective, this did not favour on-site generation solutions. More specifically, this brings back to the product characteristics and the market needs. Figure 3.6: Spot price history of Crude Oil (WTI) and Natural Gas (Henry Hub) [137]. The second "macro" item is necessity. The need for such technology can depend on indirect financial or social benefits. Alternatively, the unicity of a product feature can make it the only possible solution. An example of an indirect benefit is the drive to install Decentralised Generation technology to avoid production stops due to blackouts and brownouts resulting from an unreliable grid. Significant events with a sizeable mediatic resonance can trigger this perception of necessity, such as the Oil Crisis in the ’70s [ 138 ] or the Western Energy crisis of the 2000s [ 139 ]. Nevertheless, the actual quality of the power grid - for countries targeted by microturbines - has been good during these last two decades, according to The World Bank’s Quality of Electricity Supply index [ 140 ]. Moreover, in many cases, their integration requires and depends on external frameworks and technologies of inherently slow adoption, like smart grids [ 14 ]. The contribution of decentralised energy systems to grid stability, reliability and power quality [ 5 , 7 , 8 ], and the capacity to shave peak loads [ 7 , 8 ] may play a more prominent 63 Chapter 3. Methodologies to problem-solving role in the future. Indeed, a "fast-moving energy framework" [ 13 , 14 ] with increased production of renewable energy can create new drivers of necessity. The last macro driver is the reduction of greenhouse gas (GHG) and other emissions. Several countries and regions, like the EU, are pushing for a drastic cut in GHG emissions. In particular, the European Green Deal [ 1 ] aims to reduce GHG emissions by 55% by 2030 (compared to the 1990s emissions) to become carbon neutral by 2050. The UK and US emission reduction plans have similar targets to that of the EU [ 141 , 142 ]. In line with the aforementioned objectives, the average GHG intensity of EU countries is steadily decreasing. Above 500 g CO2 /kWh in 1990, it is currently below 300 g CO2 /kWh with the target of 100 g CO2 /kWh for 2030 [ 143 ]. Figure 3.7 shows that, in most European countries, commercial MGTs do not provide any tangible CO 2 savings for power-only and CHP applications. In this plot, GHG savings for CHP applications are relative to the separate electricity and heat production, taking electricity from the grid and using a natural gas boiler to produce heat: (GHGIntensity)MGT =(GHGIntensity )NG µ1 ηel −HP ηboiler ¶(3.1) where the GHG intensity of natural gas is GHGIntensity ) NG =180 gCO2 /MWh, and the Boiler efficiency is ηboiler = 90%. The electrical efficiency of MGTs ηel is taken from two engines in the market [ 44 , 46 ] and the heat-to-power ratio HP is computed as the rated thermal power divided by the rated electric output. The author assumed that the application could recover all the heat available for each configuration, representing the best-case scenario. Even in this favourable case, there is no apparent reduction in GHG emission compared to the independent production of power and heat in most countries and for the EU27 average. The emission levels are average values. In practice, there are daily and hourly variations due to the change in the energy mix necessary to follow the variable demand. Accordingly, there could be times when adopting CHP, and on-site thermal generation would be beneficial for CO 2 emission reduction. Regulations This section looks into legislation, regulations and standardisation. The low-level causes from which to develop the logic tree are: • Lack of uniform regulations and standards. • Insufficient incentives towards decentralised energy generation technologies and MGTs in particular. The first cause is the lack of uniformity within the EU and worldwide. This element quickly emerged during the private interviews with OEMs carried out by the author, which is in agreement with the hurdles recognised by the European Commission: "New or changing technical regulations in different countries can create unnecessary and unjustified technical barriers to trade. Discrepancies between product rules can impose additional costs on exporting enterprises and restrict inter-EU trade [144]." 64 3.3 A process-focused approach to Root Cause Analysis Figure 3.7: This chart compares European greenhouse gas (GHG) emissions for Primary Electricity Generation (PG) and CHP burning natural gas (NG) using an MGT. The data is calculated for two MGT models using their rated electrical efficiency (30% and 40% respectively) and the thermal output specified by the original equipment manufacturers (OEMs) [44, 46]. Internationally, the only standard that applies to MGTs is standard ISO 19372:2015 [ 145 ] (most recent update in 2020). In Europe, manufacturers must make sure that their products comply with the applicable directives 2 and harmonised standards 3 [ 148 ]. The EU harmonised standards relative to MGTs are mainly the Low Voltage Directive 2014/35/EU [ 149 ], the Electromagnetic Compatibility Directive 2014/30/EU [ 150 ], and the Machinery Directive 2006/42/EC [ 151 ]. This last one, dating from 2006 originally, is in the process of being replaced by a new one [ 152 ] given the following problems identified by the impact assessment carried out by the European Commission [ 153 ]: (i) new risks originating from emerging technologies not sufficiently covered; (ii) legal uncertainty due to a lack of clarity on the scope and definitions and possible safety gaps in traditional technologies; (iii) insufficient provisions for high-risk machines; (iv) monetary and environmental costs due to extensive paper-based documenta- 2 A directive is a legislative act of the European Union setting out a goal that all EU countries must achieve. However, it is up to the individual member states to devise their laws to reach these goals [ 146 ]. Directives usually intend to control the effect of products and processes on people, for instance, laying down the requirements or Essential Health and Safety Requirements (EHSR) for OEMs and operators willing to commercialise their products in the EU. 3 A harmonised standard (HS) is a European standard developed by a recognised European Standards Organisation. Manufacturers, assessment bodies and operators can use HS to prove that products, services, or processes comply with the respective EU legislation. [147]. 65 Chapter 3. Methodologies to problem-solving Figure 3.8: Logic tree energy. Items for this tree are highlighted in green. Items from other trees are represented in: orange (market), blue (product), and grey (regulations). tion; (v) inconsistencies with other pieces of Union product-safety legislation; (vi) divergences in interpretation due to transposition. Additionally, the equipment and processes for on-site generation in different countries must comply with local emissions, noise, and fire prevention regulations. These may differ at a national, regional, and community level. These discrepancies may harm product development costs since adapting products and processes to different regulations is necessary. It also increases the complexity of distribution strategies through a heterogeneous territory. Concerning grid codes, Bründlinger reported some differences between the national requirements of different countries and the uncertainty concerning the implementation, testing, and certification procedures [154]. This barrier is particularly relevant for emerging technologies (such as MGTs). Robinson, an EU Horizon 2020 project integrating local energy sources in industrialised islands, has recently highlighted that the policies for getting operation permits throughout Europe are not uniform [ 155 ]. This non-uniformity tends to raise barriers to the adoption of decentralised systems. Moreover, the framework for the definition of nonexclusive requirements 4 is not sufficiently inclusive for the deployment of decentralised energy systems. Other industries like solar and wind might contribute to conforming grid standards, for which talks are already in progress [154]. Regarding the second branch of the tree, insufficient incentives, investing in micro-CHP is 4 In the Network Code on Requirements for Generators (RfG NC) by the Member States (Commission Regulation (EU) 2016/631) [156], standard N 50549 1/2 [157, 158] 66 3.3 A process-focused approach to Root Cause Analysis generally not attractive within the current policies and regulations, as highlighted by Carrero et al. [159]. The abatement of specific harmful contaminants like NOx, CO, HCI, TOC, SOx, and particles is often not regulated and incentivised in the same way as CO 2 . Such is the case of NOx, which is widely recognised as a dangerous emission [ 160 ], especially in urban areas [ 161 ]. For instance, Bennato and Macor compare the emission limits of Italy and Germany [ 162 ]; in all cases, the emissions of NOx, CO, HCI, Total Organic Carbon, SOx, and PM have specific thresholds (depending on fuel, technology and installed power). Assuming that two technologies (e.g., MGTs and ICEs) are below these limits, there is no competitive advantage in having the lowest emissions. Moreover, Macor and Benato found that NOx produces 90% of human health damage amongst all emissions of ICEs [ 72 , 163 ]. Consequently, reducing the toxicity of biogas and natural gas emissions requires cutting NOx. Additionally, biogas effects are three times higher than natural gas due to the higher NOx emissions. Nevertheless, most biogas installations rely on ICEs [ 162 , 73 , 164 ]. Microturbines could help reduce NOx emissions and other harmful contaminants thanks to lean premixed or flameless combustion [ 165 ]. In a study, Chiaramonti et al. test a liquid fuel (diesel) micro gas turbine with different first-generation biofuels, such as vegetable oil and biodiesel [ 166 ]. They show that MGTs can successfully operate with biofuels without significant penalties for emissions. Promoting the cleanest technology overall could raise the competitiveness of MGTs, as shown by Rodriguez et al., who found that NOx incentives could make MGTs more competitive than ICEs [95]. From the information in this section on regulations, the root cause of the logic tree redirects to the energy framework, Figure 3.9. Since ICEs perform better in CO 2 emissions, these technologies have an advantage for incentive schemes with a premium on tax reductions proportional to CO 2 savings (like the UK CHPQA scheme [ 167 ]). Accordingly, the low efficiency of MGTs -a product featureis the other high-level cause in the regulation tree, which stops here as all highest-level causes redirect to other logic trees. Figure 3.9: Logic tree for the regulations. Items for this tree are highlighted in grey. Items from other trees are represented in: orange (market), green (energy), and blue (product). The product This last section of RCI will discuss the cause-effect relationship on the offer side, as shown in the log tree presented in Figure 3.11. Three different factors are potentially causing the lack of interest in MGTs: 67 Chapter 3. Methodologies to problem-solving • High capital cost (CapEx). • Investing in MGTs is not profitable, feasible, or attractive. • The features of MGTs do not appeal to the market or satisfy any of its needs or requirements. High capital cost is -by itself- a considerable barrier. It can stop many potential projects, especially for private investors and Small and Medium Enterprises who cannot invest large sums. In addition, investment feasibility is a relevant decision factor (See Section 3.3.4). The (equipment) cost of MGTs tends to be higher than other competing technologies like reciprocating internal combustion engines (ICEs), and the potentially lower maintenance does not suffice to keep to total cost and other economic indicators in a competitive range, as already demonstrated in Figure 2.4. Energy and maintenance costs are the main constituents of OpEx. High energy costs are due to the high fuel price combined with the lower efficiency of MGTs. When MGT joined the market, they had already suffered a gap in performance with ICEs. Most of the products that entered the market in the 2000s, see Figure 2.12, had little to no evolution in performance. Conversely, ICEs, which already could benefit from decades of development, kept innovating and improving [ 168 , 169 , 170 ]. Therefore, fuel costs can be either an absolute problem (competitiveness of decentralised systems versus centralised ones, Section 3.3.4) or a relative one (competitiveness of MGTs versus other decentralised technologies). The other component of the operating expenditure is the cost of service and maintenance. MGTs can benefit from extended maintenance intervals (around 8000h), which are roughly an order of magnitude larger than ICEs’ and bring about lowers maintenance costs. However, they can be negatively affected by two main factors: higher specific maintenance costs and reliability. The workforce for the service and maintenance of microturbines is highly specialised and typically lies with the OEMs, which negatively impacts service costs despite the longer maintenance intervals. On the contrary, maintenance labour for reciprocating engines is relatively cheap and straightforward and can rely on third parties due to economies of scale. Moreover, according to some sources, some MGTs did not perform well in terms of reliability [ 171 , 172 , 173 ] and availability of spare parts [ 173 ] 5 ; these factors can lower availability, increase costs, and reduce savings; furthermore, reliability-related problems also may impact the reputation and perception of the technology. Capital costs divide into installation and equipment costs, Figure 2.2. The high equipment costs are due to two phases of the product: design and supply chain. Product Design includes R&D, prototyping, testing, and IP acquisition and management and takes much time and financial effort. Indicatively, the journey from the initial concept to a commercial product can take years (Figure 2.12), affecting the product costs. Another aspect to consider is the cost structure of MGTs (Section 2.4), where the contribution of the core mover is only a fraction of the total generator-set cost. Finally, OEMs often rely on external companies to provide additional components (i.e., generator, recuperator), meaning manufacturers can profit on a small portion of the equipment cost. The interviews with stakeholders confirmed this structural problem. 5 The information found in the cited papers was confirmed in the round of interviews with OEMs and energy system distributors carried out by the author. 68 3.3 A process-focused approach to Root Cause Analysis High costs within the supply chain relate to expensive components, materials, and manufacturing methods. The reasons for this rely on the economies of scale and the need for costly parts and materials - like recuperators and heat exchangers [ 174 , 175 ]. The impact of production rate on equipment manufacturing cost has been quantified in the Doctoral Thesis by Gavagnin [176] as shown in Figure 3.10. Figure 3.10: Specific manufacturing cost of MGTs as a function of production rate. Adapted from [ 176 ]. Different factors cause high installation expenditures. Logistics and shipment fees can be significant, but they are inevitable and assumed comparable to ICEs [ 25 ]. The workforce needed for the installation is highly specialised and often belongs to the OEMs. Moreover, most applications require ad hoc integration, connection, and equipment. This is especially true for CHP applications where the requirements posed by using heat create unique conditions. A universal plug-in solution is unlikely to exist if not for specific niches. In analysing the Capital Cost side of the chart, most elements point to the economies of scale as the reason for high costs. However, the economies of scale directly result from the low sales volume. It cannot be a cause as it is already a symptom of the problem, leading to a cyclic dependency which cannot be represented in the adopted logic tree. The last part presented in Figure 3.11 is relative to the product features. For each item, the intended statement in the logic tree would be: "The ITEM does not appeal to the market or it does not act as a strong driver." This last paragraph analyses the MGT features identified as possible drivers. • Low maintenance (longer time between overhauls). This item has already been discussed in this section. • High-grade and high heat-to-power ratio: microturbines deliver exhaust gas at intermediate temperature and high oxygen content. This makes them suitable for several applications requiring high-grade heat and high heat-to-power ratios that are not reachable by FCs and ICEs. However, in reality, only 23% of industrial applications are estimated 69 Chapter 3. Methodologies to problem-solving • Is the logic connection tangible? Cause sufficiency The cause insufficiency reservation is raised when a cause is too little to produce the effect. The arrows passing through an ellipse in logic trees represent the combination of multiple dependent causes. This ellipse is also called the “AND” gate. It means that all the entities are necessary to generate the effect. Removing one of the insufficient causes will cause the cause-effect relation to crumble. One important concept to mention when speaking of cause sufficiency is the concept of “Oxygen”. This means an entity or connection is not reported because considered obvious or transparent to the author (as oxygen is always present in the air we breathe). Removing oxygen can sometimes create a cause-insufficiency contentious. Excluding "oxygen" from a logic tree can improve clarity by not crowding the tree. Nevertheless, it must be done with discretion and in situations clear to the audience. Additional cause If two or more independent causes lead to the same effect, the additional cause reservation is raised. If a causal relationship falls into this category, we must remove all the causes to break the cause-effect relationship. Conversely, for cause insufficiency, it is enough to remove one of the causes for the effect to vanish. This category of legitimate reservation does not contest the validity of a stated cause. It only adds another entity that, by itself, can generate the same -or a similareffect. Cause-effect reversal The reservation of cause-effect reversal is based on a distinction that sometimes can be very misleading: why an effect exists versus how we know it exists. Sometimes, this difference can be confused or misinterpreted when representing a cause-effect relationship. Dettmer reported the so-called medical example for cause-effect reversal [182]: “If my body temperature is higher than normal, and I have pain in my lower abdomen, then I have appendicitis.” Are fever and pain causing appendicitis, or is it the opposite? As shown in this example, it may be easy to confuse cause and effect, and sometimes the difference is very subtle and abstract. Predicted effect existence The reservation of the predicted effect existence aims to test and validate a cause-effect relationship. Effectively, the existence of a hypothetical expected outcome can be used to verify a cause-effect relationship. A quick example would be the car engine fails to start: "The engine does not start because the battery is dead". One predicted effect would be: "If the battery is dead, then the engine should not crank". If the predicted effect is true, that will validate our thesis; on the contrary, it will refute it. In this example, we mentioned the discrete effect existence (true or false) that has to match the 76 3.4 Theory of constraint (TOC) expectation (again, true or false). This can also be done by gauging the magnitude of an effect. For instance, if the predicted outcome is more or less than expected, that would refute the causality. Tautology Tautology is a synonym for circular logic. It indicates a statement that is always true and thus of no logical validity. In this category, the effect is often a justification for the existence of the cause. Tautology, like the previous reservation, should never stand alone. They must follow another category of causal reservation, e.g., causal existence. This is because causality must be assured and validated before using any circular logic. The following questions help assess the validity of the cause-effect relationship relative to the tautology reservation: • Is the cause tangible or not? • Is the effect offered as a justification for the presence of the cause? • Do any predicted effects exist so that they could legitimate the intangible cause? Table 3.2: Summary of the six categories of legitimate reservation according to Dettmer [182]. Category Implications Clarity It clears any possible misunderstanding due to communication before even addressing the logical side. The following questions help verify this category: is any additional explanation required for the cause or effect? Is the connection between cause and effect convincing without the need to look deeper for hidden meanings or logical validity? Are intermediate effects missing (also called “long arrow")? Entity existence We can raise a reservation of entity existence when i) a statement is not grammatically correct or a complete sentence, ii) there is an embedded logic statement, iii) the entity does not represent a true statement, it does not exist in reality, or its existence cannot be proved. Causality existence The Causality Existence challenges the validity of the logical connections between entities. Cause sufficiency The Cause Insufficiency reservation is raised when a cause is too small to produce the effect. Additional cause If two or more independent causes lead to the same effect, the additional cause reservation is raised. If a causal relationship falls in this category, all the additional causes must be removed to break the cause-effect chain∗. Cause-effect reversal The reservation of cause-effect reversal is based on a distinction that sometimes can be very misleading: why an effect exists versus how we know it exists. Predicted-effect existence The reservation of the predicted effect existence aims to test and validate a cause-effect relationship. Effectively, the existence of a hypothetical expected effect can be used to verify a cause-effect relationship. Tautology Tautology is a synonym for circular logic. It indicates a statement that is always true and thus of no logical validity. In this category, the effect is often a justification for the existence of the cause. Tautology, like the previous reservation, should never stand alone. ∗ This category of legitimate reservation does not contest the validity of a stated cause. It only adds another entity that, by itself, can generate the same - or a similar - effect. 77 Chapter 3. Methodologies to problem-solving 3.4.4 Problem definition: the IO map and the undesired effects The IO Map lays down the foundation of gap analysis and problem-solving methodology in the TOC. It sets the benchmark for measuring the deviation between the goal and the current reality. That deviation, defined practically in terms of the undesired effect, is the base of the current reality tree (CRT), the ultimate root cause analysis tool. Firstly, the sphere of influence of this study is the microturbine R&D sector, including all stakeholders. The second step is to determine the System Goal: the successful deployment of microturbine technology and fostering of the associated industry. The Critical Success Factors measure to what extent the system succeeds in its goal: the size of the industry and its long-term economic sustainability. A successful industry holds a sensible market share, continues to grow, and is self-sustainable. Therefore, CSF#1 is the size of the microturbine market, and CSF#2 is that the MGT business needs to be remunerative. The next step is determining the Necessary Conditions (NC) to achieve each Critical Success Factor. Then, once all Critical Success Factors and Necessary Conditions are defined, they must be arranged on the map. Micro gas turbines are units for on-site power and heat generation. As previously discussed, the product can achieve high sales if it represents a profitable investment or its technical features satisfy a specific market requirement or need. The MGTs must therefore be competitive from technological and financial standpoints. An active regulatory push towards distributed generation technologies would also become an additional market driver. On the other hand, high margins and reduced costs are conditions for companies to be profitable. In addition, distribution channels must be well developed/established, with commercialisation strategies and business models optimised for the product and its market. Figure 3.12 integrates this information with all the items arranged in the map. The analysis of the Necessary Conditions within the sphere of influence yields the following: • CSF# 1 The market size is comparable with competing or similar industries: the global MGT market estimates are around 100 million US$ (Section 2.6.3), which is very small compared to other sectors. For instance, the market for reciprocating ICE for energy applications [93] is estimated at around 20 billion US$. • CSF# 2 MGTs companies are profitable: to date, Capstone Green Energy, which owns the largest market share, has never been profitable [ 185 ]. According to the company filings, this is due to insufficient units sold (CSF#1) and an inadequate cost structure (NC#7). This characteristic is assumed to represent the entire industry. None of the critical success factors listed above is therefore satisfied. Hence, the analysis of the Necessary Conditions follows, and wherever the conditions are unsatisfied, the Undesirable Effect replaces their respective Critical Success Factors and Necessary Conditions. • NC#3 Strong regulatory and policy push toward DG technologies and MGTs: a study from Carrero et al. [ 159 ] finds that investing in micro-cogeneration is not attractive within the existing regulatory framework and policies. This is mostly because current policies do not support the deployment of DG technologies sufficiently, particularly MGTs. 78 3.4 Theory of constraint (TOC) Figure 3.12: Intermediate Objective map. • NC#2 MGTs represent a viable asset: product costs are high compared to competing technologies (NC#7) and reflect into the equipment costs. Moreover, the electrical efficiency of most MGTs in the market tends to be lower than that of typical ICEs, which raises the cost of fuel over the operating life of the equipment (Figure 2.4). Finally, in conventional applications, the lower maintenance costs of MGTs (compared to ICEs) cannot compensate for the high capital and energy costs. As a result, in most cases, MGTs may not represent a good investment compared to ICEs. • NC#4 The features of MGTs make them the best technological candidate for given applications: MGTs feature some benefits like low maintenance, high-grade heat available and high heat-to-power ratio, low emissions, fuel flexibility and compactness. However, they only allowed them to conquer small niches during the last two decades [ 24 ]. Specifically, high-grade heat and high heat-to-power ratios appeal only to selected applications: in reality, less than a fourth of industrial applications require mid-to-high grade heat [ 71 ], and most commercial and residential applications require low-temperature heat only. In most cases, ICEs maximise the profits for CHP applications [177]. As previously discussed, low emissions cannot become a true market advantage under the current regulatory framework. Concerning fuel flexibility, MGTs can indeed run on many fuels, even with relatively low heating values, but, despite this, most biofuel installations are still running on ICEs [ 162 , 73 , 164 ], whilst the cost-effectiveness of MGT running on hydrogen is yet to be proven. On this last point, Escamilla et al. [ 178 ] assessed Power-to-Power solutions adopting hydrogen and MGT, concluding that increasing the performance of MGT will be essential to attain acceptable round-trip efficiencies. Compactness is often cited as an advantage of gas turbines. However, this does not scale as well for microgeneration applications since, in practice, the cost and volume of recuperators and other bulky components can easily overcome this advantage. The 79 Chapter 3. Methodologies to problem-solving author found that the size and weight of MGTs and ICEs are similar based on the specifications provided by different OEMs (Appendix A). Given these considerations, NC#4 is unsatisfied. • NC#1 MGTs State of the art technology can keep up with competition: this Necessary Condition is not satisfied, considering the conclusions for NC#2 and NC#4. Their causal relationship is further discussed in the next section. • NC#5 Margin: retail margins are estimated to be 20% in case of direct sale, 25% in case of a 5-year Firm Fixed Price sale and going up to 60% for a 5-year rental (this latter solution is being adopted by many MGT companies recently). These data correspond to the Capstone C1000 system [ 83 ], but it is assumed to represent most commercial products. Following the consideration for CSF#2, the cost structure and the number of sales seem to be the issue. Achieving high retail margins is possible, but this depends on how much customers are willing to pay and how many customers are willing to take the technology. In fact, retail margins depend on the expected units sold. In this case, the margins cannot guarantee profitability. For instance, for Capstone Turbine, gross margins were about 10%, way below the average levels from the industry 6 . According to their Fiscal report [ 185 ], this is due to manufacturing overheads and direct material costs. •NC#6 Robust distribution channels: the RCI did not yield any correlation on poor distribution channels leading to undesired effects. The stakeholder interviews confirmed that distribution channels have expanded significantly during the last 20 years. The websites of the companies listed in Section 1.4 also show that their distributors now extend to many regions worldwide. Moreover, distribution channels tend to scale with the industry, so comparing them with those of established technologies would be unfair. • NC#8 Commercialisation strategies and business models are optimised: the interviews confirmed that commercialisation strategies were sometimes not aligned with the product characteristics, mainly targeting a general market and aiming for volume proved to be a wrong long-term strategy. As a lesson learnt, current MGT distributors and OEMs acknowledge the value of focusing on specific niches. 3.4.5 Root cause identification and analysis: the current reality tree The current reality tree (CRT) is one of the initial five thinking process tools for implementing the Theory of Constraints [ 187 ]. In the TOC, the CRT, also called the effect-cause-effect diagram [ 187 ], is a tool that helps the user find the cause-effect link between the problems and the so-called undesirable effects of the core problem. Doggett summarised different thoughts previously expressed in literature [ 180 , 188 , 189 ] by saying that the CRT aims to represent the current state of reality as it exists in a system [ 187 ]. The representation follows the most probable chain of cause and effect links, and, ultimately, it serves to identify a core driver, hence a shared cause, common to several symptoms. The CRT diagram can look very similar to Okes’s logic tree. Still, whilst the latter is based on general causality (question why?), the CRT follows the CLRs (see Table 3.2); in particular, the cause sufficiency marks the significant difference between the two diagrams. The CRT is cre- 6 Average gross margins are 41% of revenue for the Power sector, 35% for the Machinery sector and 34% for the Electrical Equipment sector [186]. 80 3.4 Theory of constraint (TOC) ated top-down, although it is read from bottom to top [ 115 ] using the following construction: "If [cause], then [effect ]". Symbols According to the categories of legitimate reservation in Section 3.4.3, the CRT -like many other Golddratt’s logic treespresents a proper symbology (CLR: clarity). Rectangles with rounded corners represent Entities. Undesirable Effects are considered special entities (coloured boxes). Arrows connect entities: the tail points to the cause, whilst the tip points to the effect. Another difference with other RCA tools is the elliptic "and" connector [ 115 , 180 , 189 ]. It represents interdependent causes according to its relative reservation category (cause sufficiency in Table 3.2). It is equivalent to a logic "and" operator, meaning that the causes must all be present to generate the effect. As stand-alone causes, they are insufficient to cause any consequence. The "magnitudinal and", represented by a bow tie, is another example of insufficient cause. In these cases, the connected entities accumulate to worsen the effect [ 182 ], with the relative contribution of each cause -if knownoften written as a percentage close to its relative arrow crossing the bow tie. The logical "or" with additional cause reservation is represented in CRT with multiple arrows without the ellipse. If the additional causes are self-excluding, i.e. they cannot be present simultaneously, they are marked with an "or". Finally, the CRT also qualifies reinforcement loops. These can either positively or negatively magnify the effect of a cause. A thicker arrow that goes from one effect down to one of the deeper causes represents a reinforcement loop. Figure 3.13: Legend of the symbols in a Current Reality Tree (CRT). Building the Current Reality Tree Building the current reality tree is a top-down approach comprised of the following steps: 1. Placing the Undesirable Effects (UDE) and establishing the first cause-effect connections. 81 Chapter 3. Methodologies to problem-solving 2. Ordering the entities following the correct cause-effect relationship. 3. Appending additional causes. 4. Defining the causal relationships according to the CLRs. The main reasons for not reaching the goal are the two Critical Success Factors. The UDE corresponding to CSF#1 (market size) becomes "The number of sold units is insufficient" since, in practice, CSF#1 corresponds to the revenue of the units sold. The UDE corresponding to CSF#2 (profitability) is "MGT companies are not profitable" owing to gross margins not being sufficient. Indeed, the previous section highlighted that the fraction of revenue going into gross margin is below average in the distributed power generation sector, concluding that manufacturing overheads, direct material costs and low sales yield low gross margins. The manufacturing overheads are the costs incurred to run production facilities that are not linked directly to a product. Direct material costs are high because microturbines need expensive materials and components to achieve acceptable performance [ 174 , 175 ]. The other factor impacting gross margins is production volume to achieve economies of scale. Accordingly, the number of sales affects gross margins in relative (by affecting cost overhead, material and components costs) and absolute terms by reducing the actual values of revenue and margins. Figure 3.10 reveals the impact of sales volume - through production rates - on the MGT equipment manufacturing cost. In this case, an additional cause reservation is the most suitable way to represent these effects since each cause is sufficient to create the effect; nevertheless, the same entities are present in the bottom part of the tree. Their causal relationship will be re-discussed further in this section. The poor sales result from two independent causes: wrong commercialisation strategies and an atomised market comprised of many niches. Even targeting a large market, inappropriate commercialisation strategies still hinder market penetration and conversely, companies may improve sales by appropriately targeting small niche markets. Nevertheless, if the niches are small and have little growth potential, better strategies will not substantially increase sales; this becomes even more so if the market is fragmented and heterogeneous. This last entity explains the lack of success of general volume-based market strategies used in the early years of MGTs commercialisation and the challenges experienced in the recent shift towards more focused commercialisation. Following the cause-effect relationship, the market is small and comprises many niches because of two insufficient causes: "Investing in energy for on-site generation is not a primary interest" AND "the state-of-the-art technology cannot keep up with the competition" (Undesirable Effect of NC#1). The first item, influenced by macro drivers and barriers, relates to the market size. The latter depends on the ability of the product to penetrate the market, so it belongs to the micro world. The chain would break if i) the on-site generation market expanded, with MGT able to keep its market share, or ii) MGTs increased the market share against the competition without a global market expansion. Following the branch on the left-hand side, the low interest for energy investment has two independent causes. One is the "inadequate regulatory push toward distributed generation technologies" (this entity is the Undesirable Effect of NC#3). The second factor is that "investing in energy requires longer-term commitment", economically or practically (i.e., utilisation-wise). This lack of push towards DG technologies and MGTs is a combination of insufficient causes. 82 3.4 Theory of constraint (TOC) The existing regulatory frameworks are heterogeneous and do not promote reducing emissions below certain levels, except for CO 2 [ 162 ]. Such is the case of NOx, which is widely recognised as a dangerous emission [ 160 ] that yields about 90% of the damage to human health amongst all emissions of ICEs [ 72 , 163 ]. This explains why the consequences of using biogas are three times stronger than natural gas, given their higher NOx emissions, and this effect on human health is particularly relevant in urban areas [ 161 ]. Unfortunately, most regulatory schemes provide no competitive advantage in having the lowest emissions. From the considerations in the previous paragraph, it becomes evident that encouraging the adoption of the cleanest technology overall could see MGTs improving their competitiveness [ 95 ], since these engines help reduce the emissions of NOx and other harmful contaminants thanks to lean premixed or flameless combustion technologies both for conventional [ 165 ] and biofuels [166]. On the other hand, the unwillingness to invest in energy constitutes a substantial barrier since reducing energy costs requires a strong commitment that might not yield significant economic benefits. For instance, a study carried out in the United Kingdom found that potential microgeneration users rejecting the adoption of these technologies were pushed back by high capital costs, long payback periods, scarcity of trustworthy information, and operational concerns [ 96 ]. These conclusions align with "An EU Strategy for Energy System Integration" issued by the European Commission [ 97 ] for local energy sources not being efficiently and sufficiently exploited because of: low market awareness, hesitation of businesses to enter a company outside their core activity, absence of appropriate regulatory and contractual frameworks to manage pricing, cost management, and planning. Indeed, companies tend to be reluctant to cut energy costs since it is not their core business and does not yield significant economic benefits if they do not translate into higher margins (i.e. if they come at the expense of higher capital costs or lower reliability). Low emissions of Carbon Dioxide are also critical for market deployment. If MGTs had the lowest CO 2 emissions, they could become the preferred choice in a market pushing strongly to reduce CO 2 . Unfortunately, the carbon footprint is directly linked to efficiency. For the aforementioned reasons, state-of-the-art MGTs can inherently not contribute to decarbonising the grid in most EU countries, as shown in Figure 3.7, neither for power-only nor for CHP applications. Again, this is due to two insufficient causes: "most applications run on conventional fuels", AND "MGTs have lower electric efficiency than other technologies" (ICEs and Fuel Cells). This block is an example of negative reinforcement: if most applications run on carbon-rich fuels and have low electric efficiency, CO 2 emissions are higher. This entity leads to the Undesirable Effect of NC#3: the small MGT market cannot lobby and push towards more fair and convenient regulatory frameworks, which often align with the established technologies [85]. The Undesirable Effect of NC#1 "SOA technology cannot keep up with the competition" is a direct consequence of "MGTs do not represent a viable asset", which is a sufficient cause to generate the effect. In turn, this is because "MGTs features do not meet the needs of the applications". However, this is not a sufficient cause. The entity "MGTs do not represent a viable asset" does not only depend on the product features for the application needs, but 83 Chapter 3. Methodologies to problem-solving it is also a function of economic and financial parameters. The main factors influencing economic and financial performance are "Capital Costs (CapEx) are high" and "Operating costs (OpEx) are high". The combination of capital and operating costs generates savings and profits; it impacts all economic indicators. In this case, the standard logical connectors like the cause sufficiency and additional cause cannot be used. The so-called "magnitudinal AND", defined in Section 3.4.5, is the most appropriate connector instead. Here, the contributions of the connected causes accumulate to create and worsen the effect. A bow tie represents the "magnitudinal AND" (Figure 3.15); in addition, the relative contribution of each cause -if knownis often written as a percentage close to its relative arrow crossing the bow tie. In this case, the supplement of each cause strictly depends on the specific application and is not known a priori. For instance, the high capital cost might be the most relevant component in a particular case, whilst the profitability of the investment (combination of CapEx and OpEx) or the heat requirement could be the ones for other instances. Each case and application is different, and this dependency represents a barrier to resolving the more general Current Reality Tree based on a wide sphere of influence. The sufficient reason for the high equipment cost is the Undesirable Effect of NC#7: product costs are high. In this case, the logical connection combines additional and insufficient causes. The high overhead cost is a sufficient cause. Conversely, the cost structure and cost of components are two insufficient causes (logical AND connector); removing one of the two is sufficient to remove the effect. Unfortunately, the cost structure is inherent to MGTs. Trying to remove this cause by having all components designed and manufactured by the OEM could introduce additional expenditures. Furthermore, insufficient sales volume is the principal entity influencing product costs because low sales negatively reinforce overhead, material and components costs. This complex causal relation highlights that pointing at equipment costs as the root cause does not make logical sense. Effectively, the primary way to reduce costs is to sell more and vice versa. These considerations lead to a complex causal relationship, which can be simplified as shown in Figure 3.14. This analysis will start again from the "OpEx is high" entity. OpEx is acceptable when it is i) lower than the saving or profits, ii) lower than other technologies or iii) repaying the CapEx in an acceptable timeframe. None of these three predicted effects is generally satisfied. Following this consideration, the high OpEx depends on two insufficient causes. The "energy costs are high", AND "the larger maintenance intervals do not significantly reduce service costs". This latter entity is possibly trustworthy for most general applications exemplified in Figure 2.4. However, it might fail in cases of higher maintenance costs, like in remote and dispersed applications. Generally speaking, service costs depend on the number of services and their unitary costs; for MGTs, given that the planned maintenance intervals are considerably longer than for competing technologies, the low number of services drives service costs. Unfortunately, despite this inherent advantage, it is also true that some products suffered from low reliability and low availability of spare parts [ 171 , 172 , 173 ], which eventually resulted in more frequent maintenance of the engines. Moreover, the unitary service costs for MGTs tend to be higher than for reciprocating engines, a well-known technology, inasmuch as MGTs need to be serviced by a highly specialised workforce directly, often belonging to the OEMs; effectively, this last entity is, in addition, negatively reinforced by the low sales volume. 84 3.4 Theory of constraint (TOC) (a) (b) Figure 3.14: Simplification of two equivalent causal relationships. Sub-figure (a) shows the original configuration, while the simplified one is shown in sub-figure (b). In this case, the sufficiency of the reinforcement loop ensures equivalence. Removing the reinforcement loop is the only way to fix the Undesirable Effect on low margins. Given their lower efficiency, energy costs are dominant for many applications, which are higher for MGTs than ICEs. Moreover, most commercial MGTs experienced little to no evolution in terms of performance in the last two decades, as opposed to the continuous performance enhancement of ICEs, which widened the gap between these two technologies [ 168 , 169 , 170 ]. The last entity to analyse is "MGTs features do not represent a market requirement". This case has been discussed thoroughly in a previous section. However, it is not possible to define a representative relation of causality because this configuration is very application-dependent and not subject to generalisation. Further work needs to be done in this regard. A possible approach could be to apply a data-driven numerical method to estimate the contributions to this entity and the marginal AND. By analysing the MGT niches in the first years of their commercialisation, as reported by Schot et al. [ 85 ], and the MGTs existing in the market, these did not evolve to improve the penetration in those niches or to open new ones. It is to be acknowledged that a small industry like that of MGTs cannot compete with established technologies in terms of R&D&I due to limited resources. Still, it must develop technological and market niches leveraging its specific strengths. As discussed for dispersed commercialisation 85 Chapter 3. Methodologies to problem-solving into its components, the Theory of Constraints provides a clear and concise way to identify the system constraint and the root cause of the problem. The analysis in this chapter found that the Theory of Constraints was better suited to solving complex systems involving business, technological, and policy-related sub-systems with intricate causal relationships and reinforcement loops. The methodology’s strength lies in its ability to define several types of causality, allowing for easy tracing of the cause-effect chain and identifying the root cause. Instead, Okes’ traditional approach to Root Cause Analysis provides a better way to break down the problem and the system into its components, allowing for a detailed analysis from several perspectives. This study found the lack of market-driven innovation as the suspected root cause of the problem. While the micro gas turbine industry is under pressure to improve performance and technological features through innovation, this may hinder other entities, such as the already high capital costs. Thus, there is a conflict between improving the product through innovation and potentially hindering other entities. This conflict reflects in the TOC Evaporation Cloud, which presents a graphical representation of the conflicting entities. Moreover, the "Magnitudinal AND" connector was identified as a barrier to solving the general CRT. Each niche application has a specific combination of capital/operating costs and required features. How these entities combine dictates how the technology will compete in specific technological and market niches. To validate the identified root cause, i.e. the "Lack of market-driven innovation", Chapter 4 presents a specialised and in-depth study of the micro gas turbine innovation paths and identifies potential gaps in innovation and IP and their link to technology development and commercialisation. Additionally, the conflict identified by the evaporation cloud needs to be resolved. Chapter 5 presents a numerical framework to model the function of the Magnitudinal AND connector and evaluate separate products and boundary conditions. The same tools will be adapted in Chapter 6 to study the importance of different parameters and to estimate the effect of injections on the identified root cause, with the final aim of finding a suitable solution. In conclusion, the findings of this study provide valuable insights into the challenges of the micro gas turbine industry. Applying the Theory of Constraints and process-based RCA methodologies highlights the importance of a structured approach to problem-solving and the need to break down the problem and the system into its components. 92 4 Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study This fourth chapter of the dissertation delves into the topic of Micro Gas Turbines innovation. The chapter aims to validate the conclusion drawn in Chapter 3 that established a link between the problem of MGTs and innovation. Through the analysis of patent data, this chapter seeks to contribute to understanding the innovation and intellectual property landscape in the MGT industry and to provide insights that can inform future research and development efforts. 4.1 Introduction Innovation plays a critical role in driving success in the modern markets, and products must continue to innovate to remain competitive and relevant. The preceding Chapter focused on the various factors affecting the adoption and diffusion of MGTs. It concluded - through a logic analysis - that the lack of appropriate innovation constrained the system. The link between innovation and market requirement emerged as the most relevant aspect of the problem. It is now necessary to validate the conclusions deduced in Chapter 3 by researching MGTs from the innovation perspective. With this in mind, this chapter aims to assess the innovation path of MGTs by examining the industrial and intellectual property. Patents serve as a proxy to assess the MGT industry’s level of innovation. They are a widely accepted measure of innovation as they represent a tangible output of R&D activities and offer legal protection for intellectual property. In addition, this chapter will evaluate MGT Intellectual Property (IP) trends against the history of MGT product development and commercialisation, as well as the evolution of the technology. The analysis will also compare MGT’s IP trends with those of similar and competing technologies. 4.1.1 Background and literature review This chapter aims to understand the evolution of MGT development and innovation in correlation with their commercialisation and market deployment. The literature currently lacks in-depth studies specifically focused on the intellectual property and innovation of MGTs. For larger gas turbines, the MGT parent technology, the community was very active in assessing innovation paths at the beginning of this century. A 2002 Colpier et al. study [ 190 ] analysed the economics of combined cycle gas turbines based on an experience curve analysis concluding that, at that time, the technology had been in the shakeout phase during the previous decade. 93 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study In 2008 Bergek et al. [ 191 ] produced a study on the industrial dynamics in the advanced gas turbine industry for its shakeout phase (1987–2002). This article demonstrates that most firm performance differences are linked to technological capabilities variations, such as sourcing and integrating knowledge from related industries and after-launch problem-solving. A 2020 study from Steven et al. [ 192 ] assesses the influence of the U.S. government’s Advanced Turbine System Program on the development of innovative natural gas combined cycle technology in the 1990s. Unger et al. [ 193 ] produced a study on Gas Turbines for evaluating the effectiveness of energy R&D spending. They concluded that it is necessary to have a sufficient fundamental research and technology base upon which to build to support innovation and R&D expenditure. For large gas turbines, the military aerospace industry represented this base. Alternatively, R&D can be sustained by a niche market. Even during their earlier commercialisation phase, commercial aviation and power generation effectively maintained the gas turbine market. As a technological niche, large turbines faced no relevant technological competition in fields like commercial aviation. For power generation, the high maintainability and load response rate for simple cycles and the high overall efficiency for combined cycles guaranteed a technological superiority against other technology like steam turbines. Contrariwise, micro gas turbines faced the fierce competition of an established technology already dominating the market. Micro gas turbines arguably struggled to find a protected environment that could eventually support R&D expenditure, and this finally led to targeting a few market niches (Section 2.6.2). On a second note, the literature presents several studies on the innovation path and technological development of ICEs, MGTs’ main competitor in the market. Some studies [ 168 , 169 ] focused on outlining the historical evolution of technologies and performance of reciprocating engines, e.g. compression ratio, displacement, injection technologies and others. A 2021 study by Weiss et al. [ 194 ] mapped the Territorial Adaptation trajectories of ICE Technological Innovation Systems. They analysed the technological dimension of mature Technological Innovation adaptations as changes in the dominant technological course over time and across Technological Innovation Systems territories. Beaume et al. [ 195 ] analysed the relationship between product project management and innovation in the automotive industry. They proposed an analytical framework that assesses the correlation between new products and innovative features. Such a framework is based on innovation life-cycle management to compare the evolution of features from their early emergence to their cross-product deployment. The study reveals significant differences in how firms manage this interplay and the results they achieve regarding time to market as customer value. Zapata et al. [ 196 ] reviewed the innovation in the automotive industry, specific to new technologies for cleaner transportation. This study examines the idea of innovation in the modern automotive industry, with a particular emphasis on regulatory innovation in alternative fuels and powertrain technologies. The examination focuses on radical and incremental innovation concepts and their application to current alternative fuels (such as biofuels) and powertrain technologies (e.g. hybrids, hydrogen power). Lastly, a paper from Sinigaglia et al. [ 170 ] performed a patent data study to evaluate the technological evolution of vehicles powered by ICEs. Their research aimed to gauge the technological advancement of ICE technology and understand the significant trends using patent data. They establish the level of technological advancement using a Logistics model. The study also analysed the most relevant sub-technologies. 94 4.2 Data Sourcing 4.1.2 Novelty and aim of the work This work is partly inspired by Sinigaglia’s innovation assessment through patents, with some substantial differences that aim to fill gaps in literature. Firstly, this paper reviews the micro gas turbine segment. A correlation between the MGT market deployment and the lack of continuous market-oriented innovation has already been preliminary recognised in Chapter 3. This aims to correlate some specific innovation features with the historical development and deployment of MGTs. Effectively, this Chapter leverages upon the information gathered in Chapters 1 and 2, including a thorough market and product research deriving from a combination of literature review, industrial property and interviews with stakeholders. In addition, this study compares the metrics and events concerning MGT innovation with those of larger turbines - i.e., the most similar technology - and ICEs - i.e., the competing technology -. For this set of reasons, the author believes this original work presents a high novelty and is enormously beneficial to the whole value chain, including industry, academia, research institutions and regulators. The Chapter has five sections comprehensively covering the micro gas turbine technology and market. This first section overviews the motivation for this work and analyses previous related work in the literature. The second section focuses on the data-sourcing process and outlines the methods used to gather information for the patent analysis. The third section presents the results of the patent analysis, including trends and patterns of innovation in the Micro Gas Turbine market. The fourth section discusses innovation paths, examining the future direction of Micro Gas Turbine technology. The final section provides conclusions and suggestions for further work, including future research directions and potential Micro Gas Turbine technology applications. 4.2 Data Sourcing Chapter 2 is the primary source of information concerning products, costs, and stakeholders. This chapter analyses this data from an innovation standpoint and compares it with patent information. The objective is to identify connections between patent analysis and market research. Following comprehensive analysis and extensive engagement with OEMs and experts in the MGT industry, Table 1.1, the MGT product history presented in Figure 2.12 has been enriched with information regarding IP transfer, as depicted in Figure 4.1. This visual representation illustrates the evolution of products and the passage of intellectual property among different products, companies, and divisions. It highlights the distinct stages of development and commercialisation for each product and the related technology utilised. The figure highlights significant events within the MGT industries, such as mergers, acquisitions, ceased activities, and pivotal occurrences that substantially impacted the microgeneration sector. 4.2.1 Patent search strategy The database used for this analysis is PATSTAT Autumn 2021 [ 197 ]. PATSTAT Global is a patent database managed by the European Patent Office (EPO). It contains bibliographical data relating to more than 100 million patent documents worldwide. It also includes the legal event 95 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study Figure 4.1: Representation of the development and commercial of MGT, including IP transfer and main technological features. Information sourced from OEMs website, complemented and validated by the interviews with stakeholders (Section 1.4). 96 4.2 Data Sourcing data from over 40 patent authorities from the INPADOC (the EPO worldwide legal event data). In the IP world, patents relative to certain technologies are assigned a class code. Classification codes classify a patent’s content uniformly. Different types of classification codes exist, some of them being jurisdiction-specific. The Cooperative Patent Classification (CPC) is an extension of the IPC. It was introduced on January 1 st 2013, becoming the official patent classification system for the EPO and the US Patent and Trademark Office [ 198 ]. The CPC comprises nine sections, A-H and Y, which, in turn, ramify into classes, sub-classes, groups and sub-groups. Gas turbines (including jet propulsion plants) are assigned the CPC sub-class F02C, within the class for combustion engine F02. On the other hand, reciprocating internal combustion engines are assigned the sub-class F02B. Despite the several dissimilarities listed in Chapter 2, MGTs do not belong to any specific sub-class or group of the F02C, making the patent analysis more complex and a more refined search strategy necessary. Given the precedent comments, a keyword search is the only possible way of scoping patents related to MGTs. The author selected the union of these two queries to analyse the trend in micro gas turbines innovation and IP: • Query 1: "Micro Gas Turbine" or "Microturbines" either in the title or the abstract. • Query 2: Applications from companies or divisions that focused exclusively on developing microturbines. The list gathered in the market research is listed in Table 4.1. Table 4.1: MGT companies with relevant IP. Query Company Name Type Active Capstone Turbine CP Capstone Green Energy [USA] O&M Commercial Ingersoll rand energy systems IR Energy Systems [USA] O&M No Flex power generation Flex Energy [USA] O&M Commercial Bladon jets Bladon Micro Turbine [UK] O&M Commercial Turbec AB Turbec AB [SW] O&M No Locust USA UAV Turbine [USA] O&M Development Microturbine MTT [NE] O&M Commercial Sentient blue Sentient Blue [IT] O&M Development Mitis SA, Mitis Mitis [BE] O&M Development Turbotech, Turbotech IND Turbotech IND [FR] O&M Development Intelligent Power Generation LTD IPG LTD [UK] O&M Development Brayton Energy Brayton Energy [USA] R&D Yes Query 2 searches for Patstat DOCDB Harmonised names. These names come from the standardisation of applicant names for the DOCDB worldwide database to avoid difficulties and duplicates due to different forms of the name for the same applicant [ 199 ]. The reason for including Query 2 is that companies sometimes use names different from the "standard" ones searched in Query 1. Nevertheless, terms like "turbogenerator" or "small gas turbine" could include unwanted inventions in the results, and it is not wise to use them for a search. This study will analyse mainly data based on patent families. A patent family is a set of patents filed in different countries to protect the same invention [ 200 ]. This work uses the Patstat 97 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study DOCDB simple patent family, which according to EPO definition, is a collection of patent documents that cover a single invention [201]. 4.2.2 Data cleaning Using keywords as a search strategy introduced patents outside the search scope. The author observed that the keyword "microturbines" introduced noise. Conversely, the fraction of the database derived from searching "micro gas turbines" contained no outsiders. This is associated with the ambiguity of the word microturbine, reportedly used to describe other small devices such as micro wind turbines, hydraulic turbines, drilling devices for dental equipment, special clothing and flow-rate measuring devices. To overcome this issue, the author introduces a filter downstream of the queries to eliminate unwanted patents. The filters are based on the patent classifications of unwanted items. Nevertheless, we must consider that microturbines are a technology often deployed in complex decentralised energy systems comprising many sub-technologies that sometimes belong to the previously listed categories. Indeed, such unidirectional filtering excludes some patents relative to micro gas turbines. To avoid this, the author introduced some counter-filters of CPC categories specifically connected to MGT patents. All patent families that comprise any CPC codes from the filter list without including any CPC codes from the counter-filter list are discarded. The author filtered out 42 families for the union of Query 1 and Query 2. Table 4.2 lists the filters and counter-filters used in this study. Table 4.2: Filters and counter-filters used to exclude irrelevant inventions Filters A41, A43, A46, A61, B24B, E03, E21B 41/0085, F03, G01F, G01R 33, Y02E 10/20, Y02E 10/30, Y02E 10/70, Y02E 10/72, Y02E 10/727, Y02E 10/728, Y02E 10/74 Counter-filters B64, F02C, Y02E 10/40, Y02E 10/46, Y02E 20, Y02E 60/3 4.3 Results 4.3.1 Micro gas turbine IP history and growth Figure 4.2 shows the patent family filings timeline. In total, 873 relevant inventions were filed up to 2020. The yearly filing curve presents two noticeable peaks, one in correspondence with the beginning of the 2000s and the second very close to the recent days. A logistic curve is used to model a technology’s evolution and maturity stage [170]. The logistic growth curve in Figure 4.3 was created using Loglet Lab 4 software, fed with Patstat patent data with the earliest filing year up to 2020. The last years were excluded from the count to avoid noise generated by incomplete data due to the time lapse between the filings and their inclusion into the database. The growth curve was created using n= 2, where n is the number of waves. The number of waves has been chosen to consider the two inflexions visible in the seed data and yields good agreement between the seed data and the logistic curve. The aggregate logistic growth curve predicts the technical saturation point of the patent families, where the saturation point limit is set to 99%, in 2041 with 1521 patent families. This implies 648 potential patent applications (PPA) from 2020 to the saturation date, over 40% of the total number of inventions. 98 4.3 Results Figure 4.2: Patents per year. (a) Logistic growth aggregate for MGT patents. (b) Logistic growth curve phases for MGT patents. Figure 4.3: Logistic growth curve for MGT patents. The technological maturity rate (TMR) for the year 2018 was 47.77%. In comparison, the one for ICEs used in automotive applications is 90% in the study by Yuan and Cai [ 202 ]. The point at which innovation slows down and practically stops is known as the technical saturation point. For ICEs in automotive, this is projected to occur between 2042 and 2052, according to Song [203], and in 2045 according to Sinigaglia [170]. While the aggregated curve analysis provides a good overall picture, the two-curve study better approximates the patent history of MGTs and allows for an understanding of the technological 99 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study development and maturity stage. This representation reveals that Phase 1 of MGTs reached maturity in the early 2000s and saturation in 2007. Each maturity stage of product development has a specific focus, likely representing the industry’s primary focus. Figure 4.4 associates the different stages of maturity with those of product development. In the early stages, the priority is developing new and effective products to improve performance. As products reach maturity and saturation stages, the focus shifts towards enhancing reliability and reducing costs. During these stages, there is limited technological progress and reduced expenditures on research and development, as noted in literature [ 204 ]. The development and commercialisation history of MGT products depicted in Figure 4.1 supports the notion that most commercial products underwent core development during the emerging and growth phases of Phase 1. While some modified versions were introduced during the maturity stage of Phase 1 (around the mid-late 2000s), there has been no improvement in the performance of Phase 1 products in the last decade. In contrast, Phase 2 is marked by the development of new products with varying degrees of innovation as compared to the previous phase. This observation will be discussed further in subsequent sections. Figure 4.4: Maturity phases of a technology based on the number of inventions [204]. 4.3.2 MGT patent classification The patent classification through CPC allows getting information on the invention’s technological area quickly. The most frequent CPC codes for MGTs are in Table 4.3. The classes highlight that most MGT patents are listed under the F02C subclass relative to gas turbine engines. More specifically, some aspects that further define this subclass are the use of (heat) recuperation and regeneration (F02C 7/08), the use of waste heat for cogeneration and trigeneration (FO2C 6/18 and Y02E 20/14) and the adaption and combination with other apparatus for special use (F02C 6/00). Moreover, 42% of inventions are classified as mitigation technologies against climate change. Specifically, 32% of patents target energy generation GHG emissions and 13% the transports sector. Around 22% of patents are relative to turbine-driven engines and machinery (F01D), and 10% of inventions are specific to turbomachinery-driven electric gen- 100 4.3 Results eration. More than 20% of inventions comprise indexing schemes for turbomachinery and gas turbine engines, and 10% of total patent families are classified as micromachines. Finally, 11% is dedicated to combustion processes and apparatus. Youn et al. underline the importance of analysing the co-assignments of classification symbols [ 202 ]. The main goal is to uncover the significance of technological combinations for innovation. The distance between classification codes helps assess the novelty of such combinations. According to EPO resources on combinational inventions [ 205 ], analysing the CPC co-assignments of patent publications can help identify emerging technological trends without a classification symbol yet. The author performed a full analysis of CPC codes and class co-assignments which is summarised in Figure 4.5. (a) Family CPC Class co-assignments. (b) Family CPC code co-assignments. Figure 4.5: Patents CPC co-assignments. The bottom left corner portrays the total co-assignment count. The top left corner depicts the difference in count between Phase 1 and Phase 2. The area of the bubble and intensity of the filling is proportional to the count. The blue and red colours define positive and negative values, respectively. In the top right corner, a negative value implies a reduction in invention from Phase 1 to Phase 2 and vice-versa. The most frequent Cooperative Patent Classification (CPC) class co-assignments for MGT patents include combustion engines (F02) with technologies or applications for mitigation or adaptation against climate change (Y02) and machines or engine plants in general (F01) with indexing schemes relating to engines or pumps (F05). Moreover, technologies or applications for mitigation or adaptation against climate change (Y02) frequently co-assign with the generation, conversion, and distribution of electric power (GCD, H02). This last co-assignment saw a 45% increase between the two Phases, with Phase 2 having 32 more patent families than Phase 1, about 40% of the total. These findings suggest that MGT technology is closely 101 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study (a) Patent family count. (b) Five-year Technology Diffusion Speed. Figure 4.9: Subtechnology count and Technology Diffusion Speed. Several noteworthy results emerge when comparing the patents filed with the overall proportion of subtechnologies. Capstone Green Energy has mainly patented Turbomachinery, GCD, Bearing, and Recuperators technologies. Capstone stood out as a pioneer of MGT technology, having emerged in the 2000s with an innovative and compact design for the turbogenerator section. On the other hand, Ingersoll-Rand focused its research on technologies related to Turbomachinery, Recuperators, and Heat Exchangers. Turbec did not seem to have focused on any specific subtechnology. Figure 4.10 (b) shows the 5-year TDS. The chart highlights that the TDS is mostly evenly distributed among the different sub-technologies in each company. 108 4.3 Results (a) Patent family count. (b) Technology Diffusion Speed. Figure 4.10: Applicant versus subtechnology count Figure 4.11 presents the same subtechnology characterised by the country of application. This chart confirms what was observed before, with US- and China-filed patents leading the IP 109 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study generation in most subtechnologies. Currently, China dominates the overall IP generation in most subtechnologies. Regarding patent quality, the 5-year TDS shows that, in most countries, the highest cited patents are for GCD (8), Combustion technologies (6) and Automotive (5). For the selected subtechnologies, European filed patents average the highest 5-year TDS (6.9), followed by the US (6.2) and Australia (5.7). Japan’s singular score in combustion technology results from a single patent scoring 23 citations in a 5-year time and 166 citations overall; despite this, Japan’s average 5-year TDS is only 3.3 . (a) Patent family count. (b) Five-year Technology Diffusion Speed. Figure 4.11: Priority country versus subtechnology count and TDS. 4.4 Discussion of Results and Innovation Paths 4.4.1 Definition and classification Given the differences highlighted in Chapter 2, MGTs can be considered a parent technology of Gas Turbines. Nevertheless, no specific classification code or terminology leads directly and uniquely to micro gas turbines. The common denominations of "microturbine", "small gas turbine", or "turbogenerator" can be ambiguous. The word "microturbine" also refers to micro wind turbines, hydraulic turbines, drilling devices for dental equipment, special clothing and flow-rate measuring devices. Furthermore, "Turbogenerator" is a broad definition derived from turbocharger terminology. However, micro gas turbines have more distinctive features than just turbocharger generators. For these reasons, the author promotes using "Micro Gas Turbines" to avoid confusion. The classification analysis showed that MGTs are small recuperated gas turbine plants functional for CHP, using micro turbomachinery, and with the potential to mitigate GHG emissions in energy and transport applications. The specificity of this classification and the co-assignments could incentivise the creation of a CPC group specific to MGTs under the F02C class. 110 4.4 Discussion of Results and Innovation Paths 4.4.2 Technical specifications and target market The results from the patent family history and the study of the maturity stage led to the definition of two different phases of product development. The two-curve analysis matches the patent history of MGTs and explains technological evolution and market deployment strategies. Furthermore, the two-phase representation finds agreement with the reproduction of the MGT development and commercialisation history shown in Figure 4.1. Most of the commercial products had their core development in Phase 1. The majority did not change substantially during the last two decades, with some exceptions: • Capstone C60 from the C65 (+8% electrical power, +0 efficiency) in Phase 1. • Elliot going from TG35 (35kW) to TG45/TG45R (45kW, +28%), to TG60 (60kW,+33%), to TG80 (80kW, +33%) and finally to TG100 (100kW, +25%) in Phase 1, now dismissed. • FlexEnergy (formerly IR) GT333 from GT250 (+33% electrical power, +0 efficiency) in Phase 1 to Phase 2. This reality agrees with the later observed fact that companies innovate through patents for very short intervals, an average of 5.6 years. The products, as the technology, reach a state of maturity very soon. This means that companies do not tend to invest any more in improving the products by enhancing features and performance but only in fixing reliability problems and decreasing costs, thus drastically reducing innovation. The micro gas turbine technology comprises a power range that fits diverse applications. The rated power capacity of each product indirectly dictates their technical specification and performance and finally indicates which market segment and application are being targeted. Figure 4.12 shows a timeline of the rated power of commercial, in-development and abandoned products. The pre-packaged modular units like the C600, C800, C1000 (derived from the C200) and the GT1300 (x3 GT333) are excluded from this chart. The rated electrical power rises with time, especially for products developed during Phase 1. One of the main drivers for this could be increasing cost competitiveness by reducing the relative cost per installed power (US$/kW). The OEM’s interviews and company filings [ 83 ] highlighted that the industry struggled to decrease cost overheads; therefore, the easiest way to improve the cost per installed power was to increase to rated capacity. Moreover, there is a two-fold effect of improving electrical efficiency by designing larger engines, which would, presumably, yield a further increase in competitiveness. Nevertheless, other technologies like ICEs also increase their efficiency for higher-rated power; hence correlating competitiveness with size is not straightforward. Phase 2 sees two opposing trends. On the one hand, this phase involved the development of big machines aimed at achieving over 40% electrical efficiency - e.g. A400, C350 and ICR370 -, of which only the A400 reached the market. Some other large-size MGTs are currently under development, e.g. the TurbogenCHP TG250 (250kW) [ 207 ] and the IPC IPG (1MW) [ 208 ]. On the other hand, some micro units - below the Phase 1 power range - have been commercialised: Bladon’s 12kW MTG12 [ 45 ] and MTT’s 3kW Enertwin [ 30 ]. From Figure 4.12, it emerges that some of them fill some gaps in rated power from Phase 1. This new tendency may be made possible by a higher technological maturity that allows designing smaller machines or drivers from specific markets. More specifically, the Bladon MTG12 aims to produce continuous 111 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study Figure 4.12: Evolution and trends of the rated power of MGT products. power for remote telecommunication towers; the Enertwin aims at the residential sector. Other small units currently under development are the MITIS’ µ 10 and µ 20 (10kW and 20 kW) [ 47 ], the UAV Turbines’ Monarch 5 (25kW, aero-applications) [ 128 ], Turbotech’s TG-R55 and TG-R90 (55kW and 90kW, aero-applications) [ 130 ], Cosworth’s Catgen (35kW, range-extender) [209], Sierra Turbines’ CHPgenset (10kW) [210], and TurbogenCHP’s TG40 (40kW) [207]. 4.4.3 Technology Phase 1 saw a firm development of mitigation technologies for energy and transport applications. Specifically, the industry was active in researching cogeneration (CHP). This trend plummeted during Phase 2, which experienced a sustained effort in developing bearing and combustion technologies. Combustion Innovation follows specific paths based on initial conditions and evolves through institutional arrangements where countries’ regulations affect technological trajectories [ 211 ]. The market competition rewards the best options and may crowd out alternative providers. During the last three decades, leveraging cogeneration has been functional for decarbonisation, thanks to a wide range of support mechanisms and incentives [ 212 ]. Looking at US CHP installations below 1MW in Figure 4.13, there has been a sharp increase of installations at the beginning of the 00s for both ICEs and MGTs. Yet, under current policies, investing in small-scale cogeneration is getting increasingly unattractive [ 213 ]. Moreover, following some contacts with policymakers (UK Beis) and CHP and GT associations, it emerged that some cogeneration incentives like CHPQA are in the process of being discontinued. Current policies and schemes are progressively shifting to promote the integration of renewable sources and alternative fuels [ 214 ]. Although this trend is not seen in fuel-specific patents, 112 4.4 Discussion of Results and Innovation Paths inventions related to MGT combustion systems experienced a 27% increase. The combustion system is a critical enabler for MGTs to run on future fuels like H 2 and ammonia, which present very different characteristics from conventional fuels [ 16 ]. In doing this, the aim will be to enable the utilisation of these fuels while keeping NOx and other emissions below the regulative threshold. Figure 4.13: CHP installations per year in the US [ 73 ]. Only installations below 1MW of electric power are considered. Cycle Many companies have developed products with an intercooled recuperative layout during Phase 2. This cycle configuration further increases the cycle efficiency, which is crucial to be economically competitive with expensive alternative fuels. Fuels like green hydrogen and ammonia are expected to be way above the current price of natural gas, making fuel cost dominant in the plant’s overall life costs and LCOE. In this regard, reducing fuel costs by increasing the power generation conversion efficiency is crucial to allow for high round-trip efficiency and low energy cost in green hydrogen applications [ 178 ]. Of these projects, only the A400 engine from Aurelia Turbine reached the market. The ICRTech ICR350 reportedly achieved over 40% efficiency and was applied in several test cases. However, its development stopped several years ago. Capstone C375 was a project financed by the US DOE [ 215 ], discontinued after the end of the DOE program. MITIS 10kW µ 10 and 20kW µ 20 are currently under development and are both ICR cycles. The ICR technological trend emerged in market research but could not be valued from the sub-technology patent analysis. Turbine inlet temperature Another noticeable trend in Phase 2 has been the attempt to increase the Turbine Inlet Temperature, Section 4.14. For recuperated and intercooled recuperated layouts, TIT is the parameter 113 Chapter 4. Objective assessment on Micro gas Turbines’ Innovation and Intellectual Property: a patent study limiting cycle performance. All Phase 1 turbine entry temperatures were below the material temperature limits. The highest TIT recorded is 950 °C for the T100 (now AE100) and C200 series. In Phase 2, products like C370 and ICR350 attempted the break this barrier by using TBC and ceramic materials. Nevertheless, increasing TIT can decrease the hot section reliability. Cooling technologies used for axial turbines, such as convective and film cooling, are not commercially available (or even technically viable) for radial turbines used in MGTs. Some new research investigated the possibility of internal convection cooling of radial turbines; Zhang et al. recently designed and tested an air-cooled radial turbine [ 216 ] which could, reportedly, enable 50°C higher TIT. Moreover, a 2017 patent from Honeywell also introduces a concept and manufacturing method for internally-cooled radial turbines with diverging-converging cooling passages to raise the TIT in small gas turbines [ 217 ]. This technology could be extended to MGT, although it is unknown to what extent of rated electrical power. Furthermore, the effect on the maximum reachable TIT is not disclosed. It is important to note that increasing TIT can result in higher turbine outlet temperatures (TOT), i.e. temperature entering the recuperator. Higher TOTs could thus result in more expensive recuperator materials and design. This aspect is analysed in Galanti and Massardo’s techno-economic study and more in detail in Chapter 6 of this work [21]. Figure 4.14: Evolution and trends of MGT products’ turbine inlet temperature (TIT). TIT against technological evolution of Gas Turbine technologies and TIT limits. 4.4.4 Applicants Another considerable difference between the two phases is the type of companies. Big companies with significant expertise in turbomachinery (gas turbine or turbochargers) and electric systems led Phase 1, e.g. Ingersoll-Rand, Cummins, Volvo, ABB, Honeywell and Elliot. The same investment in Capstone, at the time a startup, saw important firms involved, like Fletcher Challenge LTD, Vulcan Northwest, Merrill Lynch, and Goldman Sachs (Section 2.6.1). Also, companies in Phase-1 were mainly from USA, Europe and Japan. The CPC code assignment 114 4.5 Conclusions shows that during Phase 1, MGTs were seen as a mitigation technology for energy generation and transport (Y02E and Y02T). This fact says a lot about the industry’s anticipation of this technology. This assignment reduced drastically during phase two. On the contrary, companies active during Phase 2 present a different profile. The market research (Figure 4.1) and the analysis of applications and priority countries (Section 4.3.5) highlight that: (i) Phase two sees a more prominent role of Chinese companies, (ii) developers were primarily startups and small companies explicitly created to design and commercialise MGTs. 4.5 Conclusions This chapter investigated micro gas turbine IP and innovation path with a patent study. The study in this chapter validates the distinctions that emerged in Chapter 2, setting MGTs apart from bigger turbines from a technological standpoint and according to specific CPC co-assignment characterisation. The author suggests a more consistent terminology over the "Micro Gas Turbine" definition to differentiate them from other technologies. The patent analysis distinguished two separate phases of innovation and product development. Each phase had a different technological focus and companies involved. Phase 1 reached the maturity stage in 2007, whereas Phase 2 is between the emerging and growth stages. This interpretation of the patent data found confirmation in the market and product research and the evolving policy scenarios. This study also confirms the discontinuous effort of the major institutions in innovating the product. Most commercial products have been in the market for two decades without significant performance improvement. Contrariwise, competing and similar technology continuously evolved in technology and performance. Reportedly, this is not due to the insufficient quality of the intellectual property, at least when compared with similar and competing technology, but rather to a lack of effort in innovating. 115 5 Numerical methodologies based on the Theory of Constraints This fifth chapter introduces new quantification methodologies based on the Theory of Constraints (TOC) to address the limitations of the study in Chapter 3. The processes aim to evaluate the impact of multiple entities contributing to create an effect, represented by the "Magnitudinal AND" connector. These methodologies will also serve as a starting point in Chapter 6 to understand complex interactions and identify potential bottlenecks or constraints hindering solution implementation. The contents of this chapter are partially available in: • G. Tilocca, D. Sánchez, M. Torres García,2022, Root cause analysis of the lack of market success of micro gas turbine systems, in: Turbo Expo: Power for Land, Sea, and Air, Vol. 86021, American Society of Mechanical Engineers, p. V005T09A004, https://doi.org/10 .1115/GT2022-82146. • G. Tilocca, D. Sánchez, M. Torres García, A. Escamilla Perejón, S. Minet, 2023, A methodology to quantify product competitiveness and innovation requirements for micro gas turbine systems in hydrogen backup applications, in: Turbo Expo: Power for Land, Sea, and Air, Vol. 102606, American Society of Mechanical Engineers. • G. Tilocca, D. Sánchez, M. Torres García, A. Escamilla Perejón, S. Minet, 2023, A Holistic Methodology to Quantify Product Competitiveness and Define Innovation Requirements for Micro Gas Turbine Systems in Hydrogen-Based Energy Storage Applications, Journal of Engineering for Gas Turbines and Power. 5.1 Introduction This chapter is part of the corrective actions scheme introduced in Chapter 3. It provides the tools to connect the root cause identification and analysis and the process that aims to propose and implement remedial actions. The objective of this chapter is to create a numerical approach that can mimic the Theory of Constraint process, in particular, the effect of the Magnitudinal AND into the Current Reality Tree. The same tool developed to evaluate the impact of causes in the Current Reality Tree can be adapted to assess potential remedial actions with the Future Reality Tree. In some cases, using the standard logical connectors like the cause sufficiency and additional cause is impossible, equivalent to the logical operators AND and OR, respectively. The socalled "Magnitudinal AND" is found to be the most appropriate connector. In this case, the contributions of the connected causes accumulate to create and worsen the effect. A bow 117