Power Market, Technologies & Acceptance: Status & Perspectives VGB Congress “Power Plants 2011”

www.eppsa.eu

Power Market, Technologies & Acceptance:

Status & Perspectives

VGB Congress “Power Plants 2011”Bern, Switzerland

Franz-Josef MengedeEPPSA President

VGB Congress "Power Plants 2011", BERN, 22nd September 2011

Outline

• About EPPSA

• Policy instruments for energy & climate change

• Power generation demand & Technologies

• Boundaries to Power Plant suppliers

• Conclusions

About EPPSA

The European Power Plant Suppliers Association (EPPSA) is the voice, at European level, of companies supplying power plants, components and services.

EPPSA members, located throughout Europe, represent a leading sector of technology with more than 100.000 employees and annual revenue of over 20 billion euro.

Virtually all existing Power Plants in the EU have either components from or were built by EPPSA Members


About EPPSA

This leading technology sector has more than 100 000 employees and an annual revenue of over €20 billion



Outline

• About EPPSA




• Conclusions


Policy instruments for energy & climate change

1997Adoption of the Kyoto Protocol setting binding targets for reducing GHG to an average of 5%

against 1990 levels by 2012

2007 The EU Heads of State and Government set the "20-20-20" targets including a reduction in

EU greenhouse gas emissions of at least 20% below 1990 levels by 2020They have also offered to increase the EU’s emissions reduction to 30% by 2020 on condition

that other major emitting countries commit to do their fair share under a legally -binding international climate agreement

2009The Copenhagen Accord endorses for the first time at global level the objective of keeping

warming to less than 2°C above the pre-industrial temperature

2010European Commission publishes a communication which revisits the analysis of the

implications of the different levels of ambitions (20% and 30% targets) and assesses the risk of carbon leakage

2011European Commission adopts communication A Roadmap for moving to a competitive low

carbon economy in 2050 setting out a plan to meet the long-term target of reducing domestic emissions by 80 to 95% by 2050

GLOBAL CLIMATE CHANGE POLICY – COPENHAGEN & CANCUN

• Global temperature increase shall not exceed 2 °C

• Greenhouse gas emissions to be limited – concentration

of CO2 equivalent to be stabilised at 450 ppm

• Legally binding targets not defined

• Even not a process to implement binding targets is foreseen



The IPCC recommends 50 to 80 % reduction in global CO2 emissions by 2050



EU GHG emissions over time for selected scenarios

Source: Impact Assessment - Accompanying document to the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions A Roadmap for moving to a competitive low carbon economy in 2050, PRIMES, GAINS, European Commission, 2011



EU ENERGY & CLIMATE CHANGE POLICY

“Climate and Energy Package”

the 20 – 20 – 20 rule became law in June 2009

• A reduction in EU greenhouse gas emissions of at least 20%

below 1990 levels by 2020

• Increasing the share of renewable energy to 20% by 2020

• Improving the EU’s energy efficiency by 20% by 2020



Energy efficiency & renewables could deliver 2/3 of the required emissions reduction

Source: IEA, World Energy Outlook 2010



Losses along the value chain offer significant energy efficiency opportunities

Source: Graphics and pictures courtesy of EPPSA members



But…reducing energy savings by 20% was never a binding target…

Proposal for a Directive on Energy Efficiency

Shall tackle 3 major issues impeding improvement of energy efficiency…

* fragmented regulations and incentives to address waste across supply chain;

* low level of CHP use across the EU regardless fuel savings of 30% for the same amount of heat & power

* Best Available Techniques are not always reflected by new installations


Outline

• About EPPSA




• Conclusions


Power generation demand & Technologies

Source: VGB Powertech, Electricity Generation - Facts & Figures 2010-2011

Worldwide

EU

Fossil fuels remain the backbone of global electricity generation

Source: IEA Source: Eurostat, IEA, VGB


Source: DG TREN, European Commission, EU-27 Energy Baseline scenario Trends to 2030 – update 2007 (2008)


EU 27


Period 2010 -2020

0

10

20

30

40

50

60

70

80

90

100

110GW

New: 91 New: 185

Back-up: 30Back-up: 60

Coal 800 MW Units Gas 400 MW Units


Source: DG TREN, European Commission, EU-27 Energy Baseline scenario Trends to 2030 – update 2007 (2008)

New fossil fuel plants are needed by 2020


nuclear power plants

10.000 MW

renewable energy

295.000 MW

fossil fired power plants170.000 MW

The EU needs a balanced energy

mix


Source: VGB, VDMA and BDEW, Press release VGB study reveals: Until 2020 power plant capacities of 475,000 MW have to be erected (September 2009)


...and all kinds of technologies



Outline

• About EPPSA




• Conclusions


Boundaries to Power Plant suppliers

Power landscape – facing new complexities

Source: Graphics and pictures courtesy of EPPSA members


Source: RWE, Dr. M. Kehr

DeregulationNAP II Financial crisis

Coal

Gas

MW (average)

Year of commissioning

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1961 1967 1973 1979 1985 1991 1997 2003 2009 2015 20302020

Boundaries to Power Plant suppliersUncertainty has ruled the suppliers market since

1960s


Engineering resources based on uncertainty*business as usual*

1) Figures for engineering resources are indicative to show relations only



Steady commissioning based on certainty and long-term business strategy

*EPPSA scenario*

1) Figures for engineering resources are indicative to show relations only



In Germany 17,630 MW coal-fired power stations were planned.

But a capacity of more than 10,000 MW was stopped.

Example: Datteln Unit 4

1050 MWel, bituminous coal fired

Efficiency over 45%

Designed to replace 3 old power plant blocks

CO2 saving of 500 000 t/a

State-of-the-art environment standards

Local population demanded a halt to the Higher Administrative Court

The Court blocked two partial construction permits.



Outline

• About EPPSA




• Conclusions


Conclusions

•Electricity demand in EU27 will increase to 2030 and beyond

•Many new fossil fuel plants are needed by 2020

•Only a continuous ordering of new plants retains suppliers know how

•CO2 emissions from fossil plants must be cut to meet EU targets

– efficiency increase is the fastest track to cut down CO2

– existing and new plants need the CO2 capture

• Reliable and shorter permit procedures are crucial

• A stable legal framework requires matching implementation at national level

•Public acceptance of new energy infrastructure is needed

“The role of public policy is to generate the enabling environment for private sector financing to leverage investments into low carbon investments that

often will increase long term productivity and to create new markets”*

* Brussels, 8.3.2011, SEC(2011) 288 final. IMPACT ASSESSMENT. Accompanying document to the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EURPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS, A Roadmap for moving to a competitive low carbon economy in 2050.


Conclusions


THANK YOUFOR YOUR ATTENTION!

Secretary General: Patrick [email protected]

Policy Officer: Maria João [email protected]

EPPSA – European power Plant Suppliers AssociationAvenue Adolphe Lacomblé 59 | B - 1030 BrusselsTel: +32 2 743 2986 | Fax: +32 2 743 [email protected] www.eppsa.eu

Power Market, Technologies & Acceptance: Status & Perspectives VGB Congress “Power Plants 2011”

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