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Thermal Power Generation in 2030

Added Value for EU Energy Policy

Prof. Emmanouil Kakaras

EPPSA President

17th November 2014

European Energy Forum

Brussels, Belgium

Thermal Power Generation in 2030 - Added value for EU Energy Policy

I. EPPSA

II. EU 2030 Targets

III. EPPSA Study: Thermal Power In 2030

Different scenarios, similar conclusions

New-build database

IV. Conclusions

I. EPPSA

The European Power Plant Suppliers Association

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.

EPPSA actively promotes awareness of the importance of flexible and efficient, state-of-the-art thermal power generation and its crucial contribution to ensuring a clean, secure, and affordable energy supply.

EPPSA believes increased investment in Research, Development and Demonstration is a key factor in driving EU competitiveness as well as ensuring an affordable low emission power supply.

Virtually all thermal power plants in the EU are built by members of EPPSA or equipped with their components, and around 50% of Europe’s electricity.

EPPSA members provide the most advanced thermal power technologies in the world.


I. EPPSA

Our Members


I. EPPSA

II. EU 2030 Targets



New-build database

Conclusions

Future Added Value Of Thermal Power Plants

IV. Conclusions


III. 2030 Targets

On the 23rd October 2014 the European Council concluded on its 2030 energy and climate targets:

- At least 40% emissions reduction from 1990 levels by 2030 (nationally binding)

- At least 27% energy efficiency increase by 2030 (binding only at EU level)

- At least 27% renewable energy share by 2030 (binding only at EU level)

- A revised EU ETS

- Energy Security

So what is the place for Thermal Power as we move towards 2030?


I. EPPSA

II. EU 2030 Targets



Generation Mix in 2030

Capacity Mix in 2030

Thermal Capacity in 2030

Capacity Investments Required, 2010-2030

New-build database

Conclusions

Future Added Value Of Thermal Power Plants

IV. Conclusions


IV. EPPSA Study: Thermal Power In 2030


24 scenarios from 7 studies were examined with regard to their results for the EU energy system in 2030.

They were specifically examined and compared with regard to the generation mix, the installed capacity and the additional capacity of thermal power needed by 2030 to account for decommissioning of existing plants.

JRC (2009) Future Fossil Fuel Electricity Generation in Europe: Options

and Consequences (JRC)

Eurelectric (2009) Power Choices: Pathways to Carbon-Neutral Electricity in

Europe by 2050 (Eurelectric)

Greenpeace (2010) Energy (R)Evolution: Towards a Fully Renewable Energy Supply

in the EU-27 (Revolution and Adv. Revolution)

European Climate

Foundation (2011)

Power Perspectives 2030: On the Road to a Decarbonised

Power Sector (ECF)

DG ENER (2011) Energy Roadmap 2050 (RM2050)

DG ENER (2013) EU Energy Trends to 2050 (DG ENER)

ENTSO-E (2013) 2030 Visions (ENTSO-E)




Share of thermal power generation in the 2030 generation mix

never falls below 1/3rd.


55.8 53.3

43.2 44.540.3

48.441 38.7 37.5 34.1 36.8

43

27.5

18.5

24.5 20.721.8 4.8

3.3

18.6 21.2

15.8

21.513.4

16.6

28.232.3 34.8 37.9

46.955.7

42.8 41.350.1

41.8 43.7

0%

25%

50%

75%

100%

2010

Ref

eren

ce (D

G E

NER)

Ref

eren

ce (Gre

enpe

ace)

Ref

eren

ce (RM

205

0)

CPI (

RM

205

0)

Ref

eren

ce (DG

ENER)

E(R

) (Gre

enpe

ace)

Adv

. E(R

) (G

reen

peac

e)

EE (R

M 2

050)

DST

(RM

205

0)

RES (R

M 2

050)

Del. C

CS (R

M 2

050)

L. N

uc (R

M 2

050)

Scenario

% o

f to

tal

Thermal (inc. biomass) Nuclear RES




In only 2 scenarios share of thermal power below 1/3rd .

In these scenarios this capacity still produces 41 - 48.4% of total electricity;


57.5

44 42.3 43.2 39.344

32.727.4

38.1 37.2 33.4 36.9 38.6

15.7

9.7 11 99.4

12

2

1.4

7.3 8.86.8

8.9 5.2

27

46.4 46.7 47.8 5143.9

65.371.3

54.5 5459.9

54.2 56.2

0%

25%

50%

75%

100%

2010

Ref

eren

ce (D

G E

NER)

Ref

eren

ce (Gre

enpe

ace)

Ref

eren

ce (RM

205

0)

CPI (

RM

205

0)

Ref

eren

ce (DG

ENER)

Pow

er C

hoices

(Eur

elec

tric)

E(R

) Gre

enpe

ace

Adv

. E(R

) (G

reen

peac

e)

EE (R

M 2

050)

DST

(RM

205

0)

RES (R

M 2

050)

d. C

CS (R

M 2

050)

l. NUC (RM

205

0)

Scenario

% o

f to

tal

Thermal (inc. biomass) Nuclear RES




All scenarios show a substantial installed capacity in 2030.

In scenarios with lowest capacity, total installed thermal capacity is 335 GW.

In most non-reference/baseline scenarios, the total installed thermal power capacity is between 423 – 485 GW, not very different from the 2010

Reference case of 479 GW.


175.8 159133.6 123.2 104

174

40 17

106.1 107.9 107.5 107.1 115 116.5 116.5 111.9 103.8

225 242

238.8 256.1

258

230228

219 230 227.2 230.4236.7 234 220

276.7270.6

5429

47.6 32.8 24

13

13

24.129.3 29.3 28.1

3011.2

11.2

16.216.2

2539 72 73.5

39

53

7677

74.676.7 77.7 76.9

81.3

50.150.1

50.749

281

0

100

200

300

400

500

600

2010

Ref

eren

ce (D

G E

NER)

Ref

eren

ce (Gre

enpe

ace)

Ref

eren

ce (RM

205

0)

CPI (

RM

205

0)

Ref

eren

ce (DG

ENER)

Pow

er C

hoices

(Eur

elec

tric)

E(R

) Gre

enpe

ace

Adv

. E(R

) (G

reen

peac

e)

EE (R

M 2

050)

DST

(RM

205

0)

RES (R

M 2

050)

d. C

CS (R

M 2

050)

l. NUC (RM

205

0)

Slow P

rogr

ess

(ENT

SO-E

)

Mon

ey R

ules

(ENTS

O-E

)

Gre

en T

rans

ition

(ENT

SO-E

)

Gre

en R

evolut

ion

(ENTS

O-E

)

Scenario

Cap

acit

y In

sta

lled

(G

W)

Solids Gas Oil Biomass/Waste/CHP




2010-2030 period: investment in dispatchable capacity needed for generation adequacy

Between 166 and 234.3 GW of new thermal power capacity needed.


435

265.5290

232 228

310

234.3

166187 183 184

204

11 3

62.9

3 4 3 3 8

275.9 277.2

359

0

100

200

300

400

500

Busin

ess

As Usu

al (J

RC)

Basel

ine

(Eur

elec

tric)

Ref

eren

ce (D

G E

NERa)

Ref

eren

ce (R

M 2

050)

CPI (

RM

2050

)

Low C

arbo

n Policy

(JRC)

Power C

hoices

(Eur

elect

ric)

EE (R

M 2

050)

DST (R

M 2

050)

RES

(RM

205

0)

d. C

CS (R

M 2

050)

l. NUC

(RM

2050

)

Ref

eren

ce (D

G E

NERb)

Hig

her R

ES (D

G E

NER

b)

Low X

B Tra

de (D

G E

NERb)

Scenario

Ca

pa

cit

y I

nv

es

tme

nt

(GW

)

Thermal CCS Total Dispatchible Plants




Although grid stability demands a back-up system provided by thermal PPs,

and old fleet reaches end of the lifetime many new projects have been

cancelled or postponed


IV. EPPSA Study: Thermal Power In 2030 summary

Different scenarios, same conclusions

Thermal Power share in generation mix 2030 decreases in all scenarios, however, it never falls below a third.

Thermal Power percentage of the total installed capacity will decrease by 2030 to between 27.4% and 44% (versus 55.8% in the 2010 reference case)

Share of Thermal Capacity decreases (in all but one scenario), but the absolute thermal capacity will range from 423-485 GW (similar to 479 GW in the 2010 reference case)

Significant investment in dispatchable capacity – thermal power in particular – is required to maintain generation adequacy. Between 166 and 234.3 GW additions will be required, which translates to 39.4 and 48.3% of installed thermal power capacity to be built before 2030.


I. EPPSA

II. EU 2030 Targets



New-build database

IV. Conclusions



A. New-build Database

EPPSA and its members have been assembling a database, covering the efficiency and emissions of thermal power plants before and after retrofitting/refurbishing



A. New-build Database


Total Net capacity replaced 22,0 GW

495 GW installed

Investments from 2000 to 2015 27,4 billion €

Saved fuel cost until 2030 29,1 billion €

Saved CO2 emissions per year 57,37 million t/a

Saved CO2 emissions until 2030 1,25 billion t

Average saved fuel (meaning saved CO2 emissions)

32 %

CO2 avoidance cost over 20 years 23,92 €/t

Real Cost / saved ton of CO2 (Capex, Opex, saved fuel, saved allowances)

-19,58 €/t


B. Flexible Technologies


Balancing necessities today (Germany, as an example):

Ideal: high renewable

generation, wind and

sun; minimum thermal

Often reality: very low

renewable generation,

wind and sun; thermal

fills the gap


B. Flexible Technologies


System needs flexible plants with improved efficiency at part-load. Therefore capacity markets need to support only plants meeting

flexible requirements

Increasingly variable supply and demand => even faster ramping in the future:

Current average fleet performance for ramp rate: (Germany) Hard coal: 1,5 %MCR/min

Lignite: 1 %MCR/min

CCGT: 2 %MCR/min

State-of-the-art for EPPSA members: Hard coal: 4-5 %MCR/min

Lignite: 3-4 %MCR/min

CCGT (average): 5-6 %MCR/min


C. …and what about Carbon Lock-in?


What is the carbon lock-in effect

Different definitions exist.

Very often used to indicate that when we build plants today, they

will still be in operation in 2050, making a decarbonisation of

the Electricity System impossible by 2050.




The merit order (traditional)




The merit order (with wind or solar)

IV. EPPSA Study: Thermal Power In 2030 C. What about Carbon Lock-in?


We have seen that the needed thermal power capacity plays a “servicing” role:

Question: Is there really a lock-in or a necessary contributor?

IV. EPPSA Study: Thermal Power In 2030 C. What about Carbon Lock-in?


It is indeed a clear choice:

Necessity to balance the system

Response from modern thermal power is necessary as they are the only able to render the full fledge services of :

Variable energy resources balancing;

System security; and

Grid services

even if no dispatchable RES are available

Political choice to achieve this with older, more costly or with modern, cleaner, more flexible and cost effective plants

Question: Is there really a lock-in or a necessary contributor?

I. EPPSA

II. EU 2030 Targets



New-build database

IV. Conclusions


V. Conclusions –policies to encourage investment


Since 2000 reserve margin of EU as a whole sufficient; 2010 – 33% However MSs below the reserve margin threshold of 15% in the short term. In Belgium and Germany the short-fall due to nuclear phase out In Finland due to delays in nuclear commissioning “Taking import capacities into account the EU market is likely to exhibit robust reserve margins in 2015.”

But will it really do so?


- Thermal Power Plants must remain the back bone of the European Electricity System (never fall below 1/3rd of generation mix)

- Security of supplies is seriously threatened by insufficient investment in new Thermal Power plants whilst old plants are being closed eg …

In June 2014, the de-rated margin in the UK was predicted by OFGEM to fall to 2% in 2015 and this will only improve due to the introduction of a “Capacity Market”. Since the summer the risks this winter have worsened due to extended unplanned outages at coal, gas and nuclear power plants

In Sept 2014, ELIA the Belgian TSO published its strategy for rolling power-cuts in view of “the very real risk of power shortages as winter approaches”

It is clear that doing nothing will not be enough and will lead to power shortages.



EPPSA recommends that EU and Member State policy makers take more careful account of the essential contribution that will be required by Thermal Power plants (baseload and flexible) through to 2030

Assess accordingly the impact of new policies on electricity markets, affordability, investment, business opportunities and R, D & D (research, development and demonstration).


V. Conclusions – R+D

- However, due to the ever increasing number of intermittent RES, and the corresponding increase in load variation, more and more steep ramping rates for back-up power will be necessary.

- Current challenges can already be met today by newly built plants:

- Many newly built power plants can operate down to 30% of their normal load.

- The ramping rates of new plants can be up to 6% (and even up to 8% with added fuels) of installed capacity per minute

- Services for grid stability, balancing needs, etc.


Continuous efforts on implementing innovation into new thermal plants will guarantee that future requests regarding the flexible performance and back up role of thermal power can be met!

V. Conclusions R+D


Flexible and efficient power plants research and innovation is supported in H2020 under the LCE 17:

Highly flexible and efficient fossil fuel power plants

There is a clear need for further R,D&D

Which is oversubscribed for the WP2014-2015

We therefore call for flexible and efficient fossil fuel power generation to be replicated in the Energy WP 2016-2017 with adequate funding

V. Conclusions

Added Value of Thermal Power Plants

Suitable policies to encourage investment and R+D will guarantee the added value of Thermal Power Plants in the European Energy System:

Affordability

Security of supply

Sustainability

Technological leadership, business and quality jobs


Thermal Power Generation in 2030

Added Value for EU Energy Policy


Thank you for your attention!

EPPSA – European Power Plant Suppliers Association

Avenue Adolphe Lacomblé 59 | B - 1030 Brussels Tel: +32 2 743 2986 | Fax: +32 2 743 2990 [email protected] www.eppsa.eu

Secretary General: Patrick Clerens [email protected]

Policy Officer: Nicolas Kraus [email protected]

Members

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