going all electric? finding the best way to bring energy ... · • how is the power generation...
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© Siemens AG 2013. All rights reserved
Going all electric? Finding the best way to bring energy to the end user
Venice, May 24, 2013
Gas Infrastructure Europe (gie)Annual Conference, May 23-24, 2013
Dr. Volkmar Pflug, Vice President Market and Competitive Intelligence
Siemens AG, Sector Energy
Page 2 © Siemens AG 2013. All rights reserved
What can drive gas consumption in power generation?
• How is the power generation sector going to dispatch gas-fired power plants?
• Are all-electric applications a significant driver for power and gas demand?
• What are the main challenges and opportunities of gas power plants in Europe today?
• What role might the gas grid play for energy transport and storage in the future?
Core Questions to be addressed
Page 3 © Siemens AG 2013. All rights reserved
European Power Sector delivers ~1/3 of the final energy –thereof ~1/4 of the gas consumption comes from power generation
Source: IEA Statistics, Siemens Scenario calculations
Industry
Building/Others
2010
1,816
8%(153)
32%
18%
5%6%
10%
20%
Electr./CHP
Transport
in Europe, Mtoe
Natural Gas
Oil
Coal &peat
Nuclear
Other (biofuels)
Hydro
2010
1,816
26%(465)
33%
17%
13%
9%3%
Supply Demand
Primary Energy / Gas
Page 4 © Siemens AG 2013. All rights reserved
European Power Sector can only deliver a moderate growth to gas demand – even considering all-electric development
Source: IEA Statistics, Siemens Scenario calculations
Industry
Building/Others
2010
1,816
8%(153)
32%
18%
5%6%
10%
20%
Electr./CHP
Transport
Power Generation Europe, TWh
100
31%
10%
RE w/o Hydro
+13%
+12%
Gas
Other fuels/ energy resources
2030
3,748
895(24%)
45%
All electricapplications
Efficiency Gains
--1,261
Economic Growth
1,605
2010
3,303
798(24%)
66%
~100TWh potential from all-electric
(e-cars, heat pumps ...)
in Europe, Mtoe
Natural Gas
Oil
Coal &peat
Nuclear
Other (biofuels)
Hydro
2010
1,816
26%(465)
33%
17%
13%
9%3%
Supply Demand
Power Generation (TWh)Primary Energy / Gas
Page 5 © Siemens AG 2013. All rights reserved
European Power Sector can only deliver a moderate growth to gas demand – even considering all-electric development
Source: IEA Statistics, Siemens Scenario calculations
Electr./CHP
Transport
Industry
Building/Others
2010
1,816
8%(153)
32%
18%
5%6%
10%
20%
Power Generation Europe, TWh
100 3,748
+12%
+13%
Gas
RE w/o Hydro
Other fuels/ energy resources
2030
895(24%)
31%
45%
All electricapplications
Efficiency Gains
--1,261
Economic Growth
1,605
2010
3,303
798(24%)
10%
66%
~100TWh potential from all-electric
(e-cars, heat pumps ...)
in Europe, Mtoe
Oil
Coal &peat
Natural Gas
33%
Nuclear
Other (biofuels)
Hydro
2010
1,816
26%(465)
17%
13%
9%3%
in Europe, Mtoe
2030
1,829
175
330
+11%
Electr./CHP
Supply Demand Demand
Gas in othersectors
Power Generation (TWh)Primary Energy / Gas PE / Gas
Page 6 © Siemens AG 2013. All rights reserved
Primary Energy / Gas
While in regions with a low gas price a coal-to-gas switch provides an economic path for CO2 emission reduction
3,748
895(24%)
2,852(76%)
2010
3,303
798(24%)
2,505(76%)
Gas
Other fuels/ energy resources
2030
Europe
Gas
Other fuels/ energy resources
2030
4,805
1,946(40%)
2,859(60%)
2010
4,354
1,030(24%)
3,324(76%)
USA USA:• Low gas price < 3 €/GJ (<$ 4 per
mmbtu) due to very economic shale gas exploration
• Stimulates investment in gas power plants replacing old coal plants
• Significant lever to reduce CO2emissions at low cost
Europe:• High gas price >7 €/GJ due to oil price
indexation• Only moderate investment in gas power
plants in spite of need for highly flexible capacity
• Significant lever to reduce CO2emissions at low cost
Source: IEA Statistics, Siemens
Power Generation (TWh)
Page 7 © Siemens AG 2013. All rights reserved
Although gas power plants perfectly fit to a low-carbon power generation, there are threats for an adequate investment
Economic path for reductionof CO2 emissions
Perfect complement tofluctuating Renewables
1
2
Compatibility to power-to-gasstorage option
3
Low load factors
Low spark spread
Low CO2 price
1
2
3
Threats (regional / temporarily):Drivers for Gas in Power Generation:
Page 8 © Siemens AG 2013. All rights reserved
CO2 Emissions (Mt CO2)Power Generation, gross (EU-27, TWh)
Scenario: A complete Coal-to-Gas shift could reduce CO2 emissions by ~30%1
809
412 1173 1173
484
2030
3748
0 31
1380
783
382
2030
3748
31
895
783
382
2012
3269
70754
880
346
CoalOilGas
Nuclear
Hydro
OtherRenewables
Regular Planning Coal-to-Gas Shift
Source: Siemens calculations
CO2 emissons (Mt)1230 860 495
495
860
1.230
-30%
20302012
-60%
2030
Regular Planning Coal-to-GasShift
Page 9 © Siemens AG 2013. All rights reserved
CCPP requires lowest specific investment per 1 ton of CO2 emission reduction
740650
1200
195
Solar PVGas CCPP Wind Onshore
Wind Offshore
*vs. an existing coal SPP (efficiency 38%);(assumed load factors: CCPP 60%, Solar PV 11%, Onshore 24%, Offshore 48%);always for the same amount of power generation
1
Specific investment per 1 t CO2 emission reduction (€/t CO2)*
Page 10 © Siemens AG 2013. All rights reserved
Among three scenarios for low carbon energy mix the “Focus Gas” scenario is the most economic one
1,421
1,368
1,540
1,399
Import/ExportFeed-In-TariffT&D OPEX
CO2 CostsFuel CostsO&M Costs
Storage CostsT&D CAPEXPower Generation
Cumulated Cost by Type of Cost 2011-2030 [bn €]
CAPEX OPEX
FocusRenewables
Focus Gas
Scenarios
BalancedMixof RE & CCPP
Planning Case0
50
100
150
200
250
300
350
400
1990 1995 2000 2005 2010 2015 2020 2025 2030
Mt/a
Focus GasFocus Renewables
Balanced Mix Renewables& highly efficient Gas
- 50% CO2 reduction target by 2030 (basis 1990)
- 40% CO2 reduction target by 2020
Source: Siemens calculations
Planning Case
3 scenarios to reach CO2 target in 2030 Cumulated Costs
1Example
Page 11 © Siemens AG 2013. All rights reserved
Renewable force conventional power plants to lower loads and more frequent operation breaks
0
100
200
300
400
500
0 10 20 30 40 50 60 70 80 90 100Residual Load (GW)
Residual Load Ranges
20122030
No.
of o
pera
tion
brea
ks >
1h p
er y
ear
Total number of breaks >1h: 2012: 2200 per year 2030: 4000 per year
Solution ideas:
Strategic Reserve (lowest impact in market)
Capacity Payments
New renewables regulatory regime (i.e. no more preferred feed-in)
Stabilize CO2 price (i.e. reduce certificate volume, introduce carbon floor price)
1/2
Spark Spread for Combined Cycle Plants
Residual load/operation breaks for conventional plants
Page 12 © Siemens AG 2013. All rights reserved
Integration of Renewables will become essential -Gas power plants can provide flexible backup power
Source: Siemens
Imbalance of Demand and Supply (2020)
2
The increasing high share of fluctuating Renewables (Solar, Wind) in Europe will challenge the conventional power plants in terms of:• Fast positive/negative load ramps
• Frequent operation breaks and start-
ups from the rest mode
• Low annual load factors
Combined cycle gas power plants provide the highest operation flexibility and the lowest investment
Operation flexibility by plant types
Flexible capacity needs to be rewarded!
Page 13 © Siemens AG 2013. All rights reserved
Power generation in Germany shifting from gas to coal againin 2012 due to low carbon price causing higher CO2 emissions
Source: IHS CERA, AGWE, UBA, eia (net generation, rounded values)
-5.7 €/t
2012
7.6
2011
13.3 931917
+14 Mio. t
20122011
276263
+14 TWh
2012
70
Gas
2011
83
Gas
3
-13 TWhCoal Coal
Carbon Price (€/t CO2)Power GenerationCoal & Gas (TWh)
GHG Emissions(Mio. t CO2e)
Carbon Price: ~0 €/tCO2Coal: 1’730 (42%) 1’520 (37%)Gas: 1’100 (25%) 1’230 (30%)
Mio. t CO2e: 5’500 5’300Lowest emissions
since 20 years
Low gas price in USA drives power generation and reduction of CO2 emissions
Page 14 © Siemens AG 2013. All rights reservedPage 14 Oct 2012
Storage required for a long-term full decarbonization of thepower sector – Gas grid is the most promising large-scale storage
Power Generation Conversion In / Out Utilization
Photovoltaic
Wind Power
Inter-mittent
generation PEM-Electrolyzer
+ -
O2 H2
H2O
Conventional(e.g. fossil)
Grid
Steadygeneration
CO2
CH4
H2
Direct utilization (no storage step)
Industry
Industry(usage ofH2)
CC-Turbine
Energy (Re-Electrification)
Fuel Cell Car
Mobility(H2-refueling)
H2
CH4
H2 storage
(injection)
Methanation / CO2 utilization
(Sabatier-Process)
Gas pipeline
(in-jec-tion)
For long-term storage of temporarily excess power from renewables hydrogen/methane production and feed-in of the synthetic gas into the pipeline system is feasible
Power Sector
Gas Sector
H2
3
Page 15 © Siemens AG 2013. All rights reserved
• Modest growth in electric power consumption in Europe +13% (2030 vs. 2010)• Economic growth + demand from further electrification mainly compensated by efficiency gains• Gas-fired power plants expected maintain its 25% share to total power generation until 2030
• Low CO2 price Shift towards coal-fired power generation at present
• Dispatch of gas-fired power plants only, if gas price becomes significantly lower: Gas providers need to push hard for additional supply sources to remove the current oil price-indexation
• Gas-fired power generation replacing coal most economic way to reduce CO2 emissions Regulatory framework needs to make power plant investment feasible Review of Renewable Energy Policies. Consider EPS for new (and old?) plants?
• Gas-fired power generation optimal complement to intermittent renewables Flexibility of capacity must be rewarded in a future regulatory system
• Long run: Complete decarbonization of power generation requires energy storage Gas grid seems to be the most promising way for storing energy from “power-to-gas”.
Conclusions
Gas price is the most critical factor to increase consumption in power generation
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