turning challenges into opportunities
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A carbon neutral vision for electricity and district heat 2050 in FinlandTRANSCRIPT
Turning challenges into opportunities
A carbon-neutral vision for electricity and district heat
2050
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The future is decided now
• Capital-intensive, long-term operations
• Interaction with the rest of society • Need for new capacity • Costs of climate change mitigation
will grow, if actions are postponed • A concrete model for the industry
and decision-makers 2
Capital-intensive industry
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Source: Confederation of Finnish Industries EK
Investments and plans of various industries in Finland 2004-2010 (MEUR)
Source: EK Investment Surveys 2006, 2007, 2008, 2009 and 2010 4
Phases of vision work
• Four research institutes co-operate – Lappeenranta University of Technology – Tampere University of Technology – Finland Futures Research Centre of
Turku School of Economics – Government Institute for Economic
Research • Three future workshops • Two internet surveys
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Targets
• To support the well-being of citizens and national competitiveness
• To reduce greenhouse gas emissions • To increase energy efficiency • To promote the utilisation of
domestic energy • To find cost-efficient solutions
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Angles of observation
• Climate challenge • Citizens’ purchasing power and
prosperity, competitiveness of the business sector
• Availability of energy and security of supply
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ET’s vision work
• The energy industry’s vision 2050: – Turning challenges into opportunities – a carbon-neutral vision for
electricity and district heat for 2050
• Four future scenarios – Finland as a piece of driftwood in the world in crises – Ecological values dominate – Ending oil dependency while securing prosperity – Industrial growth
• Three background reports from – Finland Futures Research Centre of Turku School of Economics – Lappeenranta University of Technology – Tampere University of Technology
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Operating environment
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World 2050 • Population 9–10 (6.7) billion • Mean temperature will have risen by 2
degrees • Energy supply and climate issues on
government agendas, binding international agreements
• Rapidly growing global need for energy • Oil and natural gas will be concentrated in
the hands of a few, global consumption will decline
• Coal will be commonly used
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Finland 2050 • Population over 6 (5.3) million • National economy grows, purchasing
power improves • Service sector grows • Traffic increases • Average size of households decreases
and their number increases • Technology plays a key role in energy
production and climate solutions • The efficiency of energy use improves
Technological devopment will create new
opportunities • The efficiency of energy use will improve • Smart grid • Production technologies will evolve
– combined heat and power production – renewables – micro-generation – 4th generation nuclear power
• Electrification of transport • Heat pumps • District cooling, utilisation of thermal energy from
cooling • Carbon capture and storage (CCS)
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Energy efficiency according to the vision
• The building stock will grow, while the total need for heating energy will decrease by 30 %
• The number of household appliances will increase, but the potential for increasing efficiency (23% 2020) will make up for the increase in energy consumption
• In services, the potential for increasing efficiency is almost 20%
• In industry, the potential for increasing efficiency is about 20%
• In regular passenger services, the present performance level can be reached by one third of the present energy consumption.
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Energy efficiency will improve also in sectors outside the energy vision
• Heavy traffic, ship and air traffic – engine technology – features of vehicles
• Production machinery – hybrid solutions – electrification
• Industry – optimisation of pumps, blowers and compressed-air
equipment – frequency converters and high-efficiency engines – increased recycling of materials – optimisation and development of processes
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Technology may open up completely new possibilities
• DC electricity transmission • Sharp increase in property and
building-specific energy production • Solar energy breakthrough also in
the Nordic countries • Room-temperature superconductivity • Fusion power generation
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National economic trends
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Source: VATT
Increase in transport
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Source: Finnish Transport Agency
Transport will go electric
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Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
Smart grid
• Two-way electricity transmission and communication
• Distributed micro-generation included – Solar, wind power, biofuels
• Flexibility for the system – Demand yields according to production – Enables storage of energy
Growing efficiency and functioning of markets
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Consumption of heating energy 2050
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Demand for district heat 25–33 TWh in 2050 (2007: 31 TWh).
Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
Demand for electricity
Sector Electricity consumption (TWh/a)
2007 2030 2050
Housing 23 24-26 24-27
Household electricity 11 13 13-14
Heating of buildings 12 11 9-11
Cooling of buildings 0,2 1 2
Industry 48 49-56 48-58
Services & Public sector 15,5 22 30-40
Transport 0,5 3 8-10
Losses 3 3 4
Total 90 100-111 113-138
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Impacts of the vision
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Energy production in Finland 2050
• Share of emission-free generation increases – Use of wood increases significantly – More regulating power from hydropower – Nuclear power is probably used for district heating as
well – Sharp increase in wind power generation
• Distributed micro-generation increases – Production integrated into buildings, small-scale co-
generation will soon be a reality (solar, wind, bio) • Fossils less important
– Carbon capture in operation – some multi-fuel power plants are carbon sinks
– Natural gas is used in cities and industry • Peat is still used
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Electricity generation 2050
Carbon capture will cover a good third of all fuels in 2050.
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District heating 2050
Carbon capture is commonly used in power plants fired by coal and natural gas, as well as in the biggest power plants fired by peat and wood in 2050. The oil used by heating plants is bio-oil.
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Electricity generation capacity 2050
Generation capacity 24,000–32,000 MW in 2050 – we will need a total of19,000—27,000 MW of new capacity.
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• There will be a 50% increase in combined heat and power generation • Emissions from electricity generation
280 g/kWh 30–40 g/kWh • Emissions from district heat generation
220 g/kWh 25 g/kWh
• Overall emsissions from electricity and heat generation 5–7 Mt of CO2, today 30 Mt – Emission reduction 25 Mt
Low-carbon generation
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Electricity and district heat will replace fossil fuels
• Electricity and district heat will replace fossil fuels and reduce emissions – Transport: -8 million tonnes – Heating: -3 million tonnes – Industry: -1 million tonne
– Electricity imports will be counterbalanced by some small-scale exports – Emissions impact -6 million tonnes
• A total emission reduction of 12-18 Mt of CO2
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Estimated reduction in CO2 emissions
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With electricity and district heat, - the CO2 emissions covered by the vision will decrease by 85-90 per cent - GHG emissions from Finland will decrease by a good 50 per cent In operations excluded from the vision, enegy efficiency can be increased, biofuels can be introduced and other corresponding measures can be taken, and thanks to these measures, the goal of reducing emissions by a total of 80% can be reached
Impacts on CO2 emissions
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Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
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Energy consumption 2050
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• Energy consumption will decrease • The share of electricity in end-use of energy will increase from the present 28% to approx. 46% • The share of district heat will incease sligthly (11%), even though the heat requirement of buildings will decrease • The CO2 emissions from electricity and district heat generation will decrease by approx. 80%, while the consumption of electricity and district heat will increase by about a half • As a result of the increase in energy efficiency, the end-use of energy will be 30% lower than on the baseline (in which case energy efficiency and the generation of electricity and district heat, as well as the fuels, would be the same as today, and no additional nuclear or hydro power could be constructed). 31
Implementation of the vision will bolster the balance of
trade
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Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
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Completely possible • Carbon-neutral energy production • Self-sufficiency will improve • Energy efficiency will increase • Use of renewable and domestic energy
sources will increase • The national economy will strengthen;
prosperity and the volume of gross domestic product will increase
• Purchasing power will increase more quickly than the prices of electricity and district heat
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Preconditions
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International preconditions for the implementation of
the vision
• A global price for carbon dioxide • Directing carbon dioxide costs to
emission-producing operations • Open and integrated European
electricity market
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Preconditions for the implementation of the vision in
Finland (1/2)
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• A stable and predictable operating environment must be ensured for energy investments
• Far-sighted and and consistent energy policy • All operators commit to the climate target in the
long run • Functioning fuel market • A wide selection of technologies and fuels available
for operators – Social steering is directed to the climate targets
instead of the means
Preconditions for the implementation of the vision in
Finland (2/2) • Emission prices are determined by the market • No steering methods that overlap or contradict
with those of emissions trading • Regional planning, EIA and permit systems will be
accelerated • All operators commit to the European electricity
market • Energy technology should be developed into a
cornerstone of exports – Sufficient investments in technological
develpment • Solutions supporting the electrification of
transport 37
Thank you!
• Further information and research reports are available here: www.energia.fi
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Further illustration
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Energy-saving applications for electricity and district heat
• The relative shares of various measures in increasing energy efficiency
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Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
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Electricity and district heat as solutions:
• Carbon-neutral energy production • Self-sufficiency will improve • Energy efficiency will increase • Use of renewable and domestic energy
sources will increase • Purchasing power will increase more
quickly than the prices of electricity and district heat
• The national economy will be strengthened
Contents of the presentation
• Objectives and angle • Vision work • Megatrends • The starting points and main themes • Impacts of the vision
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Target world
• Fair global distribution of economic growth
• Implementation of sustainable development
Common targets for solving climate change and energy poverty problems
• Strong co-operation at the international and regional levels
• WEC’s Lion scenario as a background
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Structural change in the national economy
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Source: VATT
Macroeconomic development
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Issues to be investigated
• Alternative prospects for energy and the economy
• Development of energy production and operating technologies, along with energy efficiency – impact on energy production and consumption
• The goal state of energy consumption and production – in view of climate change and energy security
• Preconditions and measures for achieving the goal state
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Angles of observation
• Climate challenge • Citizens’ purchasing power and
prosperity, competitiveness of the business sector
• Availability of energy and security of supply
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International trends:
• Climate change • Population growth • Fossil energy resources are in short
supply and concentrated in the hands of a few – Availability? – Price? – Conflicts?
• Increase in global energy consumption • European electricity market integration
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Opportunities provided by technological development:
• Energy use will become more efficient
• Electricity and district heat will replace fossil fuels
• Energy efficiency to be enhanced in the construction sector
• Transport will increase and become electrified
• Cooling will be more common 49
Starting points and main themes
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Energy consumption today
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Source: Adato
Present greenhouse gas emissions
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Source: Statistics Finland
Carbon-neutral electricity and district
heat • Production structure will be reformed • Emissions from own production will
decrease • Will replace fossil fuels • From energy imports to small-scale
exports
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Energy requirements of buildings
• Building regulations will reduce the specific heat requirements of buildings
• Total heat requirement will decrease by 30 per cent
• Oil heating will be replaced by district heating in urban areas
• District cooling will become more common in urban areas
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Combined heat and power generation
• The amount of CHP electricity: 25–30 TWh, today: 27 TWh – Follows the consumption of district heat and industrial
steam • The share of CHP heat will rise to 85%, today 75% • Technological development and the markets will
promote cogeneration – The share of CHP electricity will grow – Will be profitable on a smaller scale
• Flexible in terms of fuels and generation – The share of biofuels will increase significantly – Will produce condensate electricity, and provide markets
with some regulation
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Reduction of emissions from the electricity and district heat
sector: 12-18 Mt of CO2
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Self-sufficiency will reduce emissions
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• Significant electricity imports (10–15 TWh) will turn into small-scale exports (0–10 TWh): – Mainly exported to EU countries – Emission reduction approx. 6.2 million
tonnes of CO2
• Emissions from current imports: 4.2 Mt of CO2
• Exports will make up for 2 Mt of CO2 emissions from production in other EU countries
Extra graphs
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Population forecast
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Source: Statistics Finland
Decrease in family size
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Source: VTT
Evolution of GDP
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Source: Statistics Finland 2006.
Share of electricity in industrial energy use
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Source: Honkapuro, Jauhiainen, Partanen and Valkealahti.
Household electricity by appliance group
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Source: Adato
Turnover index of service industries
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Source: Statistics Finland
Electricity consumption of the service and public
sectors
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Electricity consumption by branch in the service and public sectors
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Source: Statistics Finland
Estimate of net CO2emissions from power and heat generation 2050
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Direct emissions from energy production + 5—7 Mt CO2/year
Fossil fuels will be replaced by electricity and district heat
– transport - 8 MtCO2/year
– heating - 3 MtCO2/year
– industry - 1 MtCO2/year
Decrease in emissions from electricity generation in other countries
– electricity imports will be counterbalanced by electricity exports - 4 MtCO2/year
– the emission reducing impact of electricity exports - 2 MtCO2/year
= net emissions according to the energy vision - 11— - 13 MtCO2/year
Estimate of the average thermal energy requirement of the entire housing stock in 2009, 2020 and 2050
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Type of building
Estimate of the average thermal energy requirement of each building type (kWh/m2,a)
2009 2020 2050
Detached houses 148 134 88—110
Terraced and linked houses
145 136 93—116
Apartment buildings 151 142 99—124
Commercial buildings 286 272 195—244
Office buildings 227 205 136—170
Transport and communications buildings
207 187 131—164
Buildings for institutional care
272 241 152—190
Assembly buildings 193 186 138—172
Educational buildings 158 146 98—122
Industrial buildings 353 338 241—301
Warehouses 166 153 103—129
Estimate of the efficiency rates and coefficients of performance of various heating systems
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Heating method Average efficiency rate (%) or coefficient of performance
2009 2020 2050
Oil 85 87 90
Direct electric heating 95 97 98
Electric storage heating
90 93 95
Wood-burning stove 60 65 70
Pellet heating + water circulation
75 78 80
Ground source heat pump
3 3,5 4
Air source heat pump 2.7 3.0 3.3
Energy consumption by equipment group
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Energy consumption by equipment group 2020 (GWh/a)
Equipment group BAU BAT BAT/BAU
Cold storage equipment 1,227 767 63%
Cooking 693 577 83%
Dish washer 290 268 92%
Laundering and drying 423 347 82%
Entertainment electronics 1,076 860 80%
IT equipment 240 87 36%
Electric sauna heater 971 971 100%
HVAC equipment 809 566 70%
Floor heating 227 227 100%
Car heating 225 225 100%
Indoor lighting 2,002 845 42%
Outdoor lighting 99 22 22%
Other 2,650 2,650 100%
Total 10,931 8,412 77%
Estimate of electricity consumption in Finland in 2030 and 2050 (year of comparison 2007)
Sector Electricity
consumption in 2007 (TWh/a)
Electricity consumption in 2030
(TWh/a)
Electricity consumption in 2050
(TWh/a)
Households 11 13 13–14
Heating of buildings 12 11 9–11
Cooling of buildings 0,2 1 2
Industry 48 49–56 48–58
Services & Public sector 15,5 22 30–40
Transport 0,5 3 8–10
Losses 3 3 4
Total 90 100–111 113–138
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