IEA-IEF-OPEC Workshop, 30 October 2014
by
Coal and Gas Substitution
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Answers for Energy.
Influence Of Renewables on Fossil Power Plant
Business in Europe
Solar
Wind
Nuclear
Coal
Source: EDF, Öko Institut
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
EU28: … but CO2 emission reduction is too slow to
fullfil long-term decarbonization targets
Shift form gas to coal again in recent past (TWh, gross)
1,582
1,627
49%
50%
47%
41%
51%
50%
53%
2009
2010
2011
1,584
1,514
1,426
39%
Gas
59%
61%
Coal
2012
2013
Relative high gas prices and low
CO2 certificate prices favored the
use of coal instead of CCPPs
in power generation in the last
two years
CO2 Emissions and reduction targets (Mt CO2e)
4,050
3,560 3,670 3,540 3,490 3,430
-20%
3,240
-80…-95%
CO2
200…800
1990
2009 2010 2011 2012 2013e
2020
As a consequence the CO2
emissions especially in power
generation increased again.
The long-term CO2 emission
reduction target is at risk
2050
Source: BMWi, UBA
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Higher growth for Gas than for Coal expected in
global power generation up to 2030
Power generation by Fuel Types
Power plant retirements and new capacity additions 2014-30
TWh
GW
2.7%
36,655
3%
2%
7%
15%
23,465
1%
2%
2%
11%
Other RES
Solar
25%
23%
2%
Hydro
6,330
327
92
303 9
113
2
Gas
4%
35%
Coal
1,161
Absolute
growth
2013-2030
Gas
3900 TWh
41%
Coal
3200 TWh
2030
2013
863
656
217
Engines
920
Wind Onshore
18 170
657
Wind Offshore
496
274
Nuclear
Oil
10,175
152
718
163 16
557
Wind
16%
11%
5,928
2,083
1,122
237
Biomass/Waste, Geoth.
Solar CSP
Solar PV
1,632
Hydro
555
NPP
2,793
SPP
509
SCPP
2,046
CCPP (incl. IGCC)
1,331
401
2,535
489
899
2013
Retirements New Capacity
14-30
Additions
14-30
2030
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Replacement of Coal plants by CCPP would be an
effective lever for reduction of CO2 emissions
low efficiency
Specific CO2 Emissions by Plant Type (kg/kWh)
typical efficiency
Lignite SPP
0.89
Coal Plants
0.13
0.79
0.72
Hard Coal SPP
0.13
Efficiency up to 45%
(w/o pre-drying)
0.89
0.09
Gas
0.04
State-of-the-art
technology
-65%
Gas SPP
GAS CCPP
CCS
Efficiency up to 47%
Assumptions on CO2
emissions by fuel
types:
Lignite
0,400 kg/kWh(th)
0.54
0.49
Gas SCPP
high efficiency
0.73
0.67
Hard Coal IGCC
Gas Plants
0.98
1.11
0.59
0.53
SPP
0.49
0.37
0.34
0.33
Hard Coal
0,330 kg/kWh(th)
Natural Gas
0,200 kg/kWh(th)
Efficiency up to 61%
for CCS (Carbon Capture
and Storage):
88% capture rate
Source: Siemens, status April 2014
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Dispatch decision based on marginal cost comparison, coal-to-gas switch influenced by many factors
Marginal cost comparison
Comments
€ct/kWh
• 1 ~€15 €/t coal-to-gas switch
at current coal prices and
lower gas prices; with 39%
efficiency of coal-fired power
plants
11
Power plants with negative
operational margin
10
9
HC SPP, eta 39%, coal 3.0 €/GJ
HC SPP, eta 39%; coal 2.8€/GJ
HC SPP, eta 45.6%, coal 2.8€/GJ
8
CCPP, eta 60%, gas 8.5 €/GJ
7
CCPP, eta 60%, gas 7.7 €/GJ
3
6
CCPP, eta 60%, gas 6.0 €/GJ
2
5
peakload price 2012
baseload price 2012
1
4
3
2
1
0
0
10
20
2012
CO2
price
30
40
50
60
70
80
€/t CO2
• 2 ~€35 €/t coal-to-gas switch at
low gas prices and current
coal prices
(39% coal efficiency)
• 3 ~55 €/t coal-to-to gas switch
at current gas and coal
price levels
• Although gas with lower
LCoE than coal, still
negative operational
margin due to low
wholesale price (based on
2013 wholesale price)
2012 status: Only coal economic,
gas CCPP with negative clean spark
spread
Note: 2012 German fuel price. Coal 2.8 €/GJ; Gas 7.7 €/GJ; Source: E ST MC
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
New-build decision based on full cost comparison
Negative business case!
Full cost comparison
Comments
€ct/kWh
•
Based on current wholesale
price, both gas and coal have
negative business cases
•
For new-build decision, gas
CCPP has favorable conditions
(lower LCoE than coal SPP)
20
Power plants with negative
business case
HC SPP 2,000 hrs
15
HC SPP 4,000 hrs
HC SPP 6,000 hrs
CCPP 2,000 hrs
10
CCPP 4,000 hrs
CCPP 6,000 hrs
1
peakload price 2012
5
• 1 In normal operation conditions,
coal SPP running longer hours
than gas, ~€10-20 €/t coal-togas switch when CCPP
running 4000flh and SPP
running base load (6000flh)
baseloadprice 2012
0
0
10
20
30
40
50
60
70
80
€/t CO2
Note: 2012 German fuel price. Coal 2.8 €/GJ; Gas 7.7 €/G, WACC: 5.6%, HC=hard coal; Source: E ST MC
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Strong trend towards Decentral Energy will affect
Coal power generation adversely
Power generation (PG) market, Ø 2013-30, GW/a
Distributed energy (DE) market1) – Base case
Ø GW/a
GW
356
Recip.
engines
52
Geothermal
Biomass/
waste
Solar
Wind
Offshore
Wind
Onshore
Hydro
(inc. Ocean)
NPP
SPP
SCPP
CCPP
(incl. IGCC)
186
2
8
35
10
43
24
Share of DG in entire PG market
10 1
19
x%
Annual growth in entire PG market
20
x%
Annual growth in DG market
47%
58
6
72
Ø DE
market1)
2013-30
35%
29%
2.6%
3.4%
5.6%
52
70
2
8
6.6%
34
12
12
8
Central
169
5
Biomass/
waste
Small hydro
Small SPP
31
1990
Geothermal
Wind onshore
Small
SCPP/CCPP
7
Decentral
Recip.
215engines
Solar
111
54
43
81
Entire
42%
170
20
49%
2000
2010
2020e
2030e
1) Incl. SCPP/CCPPs with GT <60 MW and SPPs with ST <250 MW
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Market Trends disfavor large central Coal SPP,
while flexible CCPP are required as secured capacity
Market Trends
Fuel Diversification
Efficiency
Flexibility
Decentralization
• Gas trade is getting
more global
• Tighter emissions
standards drive
efficiency
requirements
• High share of
fluctuating Renewbles need
flexible backup
power
• High installations
Renewbles
worldwide
• LNG supply
levelized regional
price levels
• Expected higher
CO2 prices in midterm support lowcarbon fossils
• Cross-border trading
of electricity forces
flexible plant
operation
• Trend towards
decentral autoproduction in
systems with high
levies
• Overall efficiency
improvement
through de-central
CHP applications
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution
Thank you
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2014-10-30
IEA- IEF-OPEC Workshop – Coal by Gas Substitution