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1 Wartsila

  2. 2. Content Wartsila Market trends and challenges Smart power system Smart Power Generation Scenario for EU 2050 roadmap2 © Wärtsilä 03 July 2012 Smart Power Generation
  3. 3. Market trends and challenges Smart Grid, Super Grid, Demand Response ..... but power generation? • Green house gas emission targets and challenges • Typical present capacity mix • Cyclic operation impact on the power system • How to manage the increasing variability • Cyclic operation impacts on steam power plants3 © Wärtsilä 03 July 2012 Smart Power Generation
  4. 4. 20-20-20 system challenges• Typical target for year 2020, e.g. EU and USA: – 20% energy share from renewable sources – 20% less greenhouse gas emissions – 20% increase in energy efficiency• 20 % renewable energy in 2020 means 5-7 times more wind power capacity in the EU! – Wind power capacity will greatly exceed average load – System operation and operation profiles of thermal plants need to change – Variable wind power and larger day/night load variations increase demand for dynamic flexibility of generation assets – It is generally agreed that security of supply is at risk, but there has not been any perceived solution• Present electricity markets are generally based on selling energy (kWh’s) and do not reward dynamic flexible capacity adequately to encourage investments• New parallel capacity markets must be developed to enable private investments in fast, flexible system balancing capacity (kW’s)4 © Wärtsilä 03 July 2012 Smart Power Generation
  5. 5. System impact of wind power Source: Vestas • Reaching 20% renewable power requires approximately 285 GW of installed wind capacity in the EU • A wind speed change from 9 -> 7 m/s could change wind power output with ~100 GW. Such wind speed changes are barely notable and happen all the time.5 © Wärtsilä 03 July 2012 Smart Power Generation
  6. 6. Balancing renewables? European wind power generation in January 2010 at various regions.6 © Wärtsilä 03 July 2012 Smart Power Generation
  7. 7. Zero carbon system? • As in EU, Zero carbon targets for 2050 are discussed in some countries • Present situation globally – Fossil fuel (coal, gas & oil) based electricity production decreased from 75% in 1973 to 68% in 2008 – Renewables share of electricity production in 2010 • Denmark 19.3 %, Spain 33.7 %, Norway 64 %, UK 3.3 % • Carbon capture and storage (CCS) technologies still require substantial innovation and investment, both the capturing process and storaging – The confidence in CCS becoming a technically and economically viable option is not strengthening and several CCS development projects have been put on hold At present there is no perceived solution for reaching a reliable zero carbon system7 © Wärtsilä 03 July 2012 Smart Power Generation
  8. 8. Present situation Germany Capacity mix 2010 Power generation mix 2010 1% 3% 7% 3% 3% 16% 4% 1% <1 % 6% 4% 14% 3% 11% 22% 14% 11% 3% 43% 31% Total installed capacity: 168 GW Total generated power: 607 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Source: Power eTrack8 © Wärtsilä 03 July 2012 Smart Power Generation
  9. 9. Present situation Oman Capacity mix 2010 Power generation mix 2010 7% 4% 93% 96% Total installed capacity: 6 GW Total generated power: 19 TWh Gas Oil Source: Power eTrack9 © Wärtsilä 03 July 2012 Smart Power Generation
  10. 10. Present situation Sweden Capacity mix 2010 Power generation mix 2010 <1 % 1% 2% 5% <1 % 2% 6% 11% 12% <1 % 3% <1 % <1 % 40% 49% 25% 44% Total installed capacity: 37 GW Total generated power: 138 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Source: Power eTrack10 © Wärtsilä 03 July 2012 Smart Power Generation
  11. 11. Present situation India Capacity mix 2010 Power generation mix 2010 2% 1% <1 % 1% 0% 3% <1 % 1% 14% 8% 8% 10% 23% 3% <1 % 2% 0% 53% 69% Total installed capacity: 172 GW Total generated power: 829 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Source: Power eTrack11 © Wärtsilä 03 July 2012 Smart Power Generation
  12. 12. Present situation China Capacity mix 2010 Power generation mix 2010 <1 % <1 % 1% <1 % 1% 2% <1 % 1% 1% 15% 5% 22% 2% <1 % 1% <1 % 69% 78% Total installed capacity: 978 GW Total generated power: 4373 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Source: Power eTrack12 © Wärtsilä 03 July 2012 Smart Power Generation
  13. 13. Present situation Japan Capacity mix 2010 Power generation mix 2010 1% <1 % 1% 1% <1 % <1 % <1 % <1 % 20% 17% 8% 7% 25% 31% 15% 27% 1% 0% 18% 26% Total installed capacity: 283 GW Total generated power: 1139 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Source: Power eTrack13 © Wärtsilä 03 July 2012 Smart Power Generation
  14. 14. Present situation USA Capacity mix 2010 <1 % Power generation mix 2010 1% 1% 1% <1 % <1 % 2% <1 % <1 % 1% 4% 6% 6% 9% 9% 24% <1 % 20% <1 % 40% 29% 44% Total installed capacity: 1143 GW Total generated power: 4017 TWh Biogas Biomass Geothermal Hydro Nuclear Solar PV Coal Gas Oil Wind Solar Thermal Source: Power eTrack14 © Wärtsilä 03 July 2012 Smart Power Generation
  15. 15. Existing capacity situation • The situation varies greatly between different countries • There is substantial excess installed capacity in many countries, but the capacity is not suitable for future system balancing needs • Coal is a dominant base load fuel15 © Wärtsilä 03 July 2012 Smart Power Generation
  16. 16. Transfer to low carbon generation • The dominant role of coal is difficult to change • Replacing it with some other dispatchable low/no carbon generation capacity is a major challenge. The options are: • Hydro – local solution on rivers where more hydro power can be built • Nuclear – politically sensitive and limited uranium reserves • CCS – not feasible today and requires major global R&D • Biomass – global reserves not adequate for replacing coal • Natural gas – fastest and simplest solution to dramatically reduce carbon emissions • Replacing all coal based power generation with natural gas would reduce CO2: – globally by 4080 million tons per annum – in the EU by 532 million tons per annum, which represents almost half of the EU 2020 climate package target of 1160 million tons per annum. • Substantial reduction of CO2 requires both wide wind and solar integration and transfer to natural gas generation16 © Wärtsilä 03 July 2012 Smart Power Generation
  17. 17. Typical present 100 GW power system Annual system load duration curve and System peak load 100 GW dispatchable capacity 140 Average capacity factor 0.5 120 Annual system energy 500 TWh Grid reserve 100 System Load (GW) Hydro+nuclear+coal 70 % 80 CCGT Base load 22 % 60 CCGT Peaking 8% 40 20 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Annual Hours • The system consists mainly of inelastic base load capacity Average daily load curve CCGT peak-load mode CCGT baseload mode Coal Hydro+Nuclear • Good dispatching forecastability 60.000 – Statistical load data available 50.000 – No wind variability Load (MW) 40.000 • Increasing daily load variations 30.000 • At low load periods (night) 20.000 – Some CCGT’s are stopped 10.000 – Other CCGT’s ramp down to minimum load 0 – Coal regulates 1 3 5 7 9 11 13 15 17 19 21 23 Hour17 © Wärtsilä 03 July 2012 Smart Power Generation
  18. 18. Cyclic operation – System operator’s view• System balancing becomes more and more challenging due to cyclic demand and increasing share of variable renewable capacity• The current system capacity mix does not enable optimum and reliable system operation – Existing generation capacity is mainly based on inelastic steam power plants which are not capable of required dynamic flexibility and have poor part load efficiency – The capacity mix has to change so that there is proportionally less inelastic base load capacity, and the following needs to be added: • Dynamic and flexible capacity for system balancing, which can be either hydro (reservoir) or natural gas based generation • Two way demand response to reduce or increase the momentary load • Strengthening (changing?) the grid where applicable18 © Wärtsilä 03 July 2012 Smart Power Generation
  19. 19. Cyclic operation – Damage cost • Cyclic operation has a significant impact on the O&M cost of thermal (steam) power plants – Increased damage to equipment due to thermal stresses with related higher maintenance and capital costs, and forced outage rates – Lower efficiencies below those explained by the "heat rate curves" – Potentially shortened unit life Source: Intertek19 © Wärtsilä 03 July 2012 Smart Power Generation
  20. 20. Pöyry report - Challenges of intermittency Direct quotes from Pöyry’s report: • “Wind 2030 and solar output will be highly variable and will not ‘average out’ • By wholesale market prices in some countries will have become highly volatile and driven by short term weather patterns • Thermal generation becomes ‘intermittent’ in its operation – Inevitably the large amount of thermal capacity that essentially operates as a backup to the wind becomes more valuable for its capacity than its energy output. • Unless market designs change, the investment case for thermal plant is challenging – and this holds even for a significant shortfall against targets of renewables deployment • ‘Flexible demand’ may be an important dynamic, but its role is complex • Equally, the challenge for policy makers and regulators is to create suitable market structures without relying on the ‘golden bullets’ of more interconnection and demand side response while definitely making efforts to promote and develop both of these. In particular the European Target Model will need to encompass the value of capacity and ‘flexibility’.” Source: The challenges of intermittency in North West European power markets, Pöyry, March 201120 © Wärtsilä 03 July 2012 Smart Power Generation
  21. 21. Scenario 203021 © Wärtsilä 03 July 2012 Smart Power Generation
  22. 22. European Turbine Network - Position paper Direct quotes from ETN position paper: • “Highly flexible power production units need to be added to the grid – The variability of renewable energy sources will require highly flexible power production units as back-up to balance any short-falls in production • CCS incompatible with flexible generation – Flexible operation requires that power plants operate in cyclic mode, which hamper current Carbon Capture Storage (CCS) technologies, therefore new carbon capture technologies need to be developed for cyclic mode. • Efficiency, emissions and cost penalties – CO2 reduction by renewables is partly off-set by the lower efficiency and higher emissions of power stations maintaining a spinning reserve to provide back-up in case of reduced renewables production. This may also result in higher price for CO2 reduction” Source: European Turbine Network A.I.S.B.L. – Enabling the Increasing Share of Renewable Energy in the Grid – Technological Challenges for Power Generation, Grid Stability and the role of Gas Turbines – Position Paper22 © Wärtsilä 03 July 2012 Smart Power Generation
  23. 23. Smart power system • Low carbon system capacity mix and operation • Competitive technology comparison • The role of gas23 © Wärtsilä 03 July 2012 Smart Power Generation
  24. 24. Daily load curves, 20 % at 2020 system Daily system load curve and capacity dispatch Load curve, future - high wind Load curve, future - low wind Load curve, future - average wind Solar Wind Solar Wind Solar Wind Wind curtailment Flexible capacity Wind curtailment Flexible capacity Low-carbon baseload Flexible capacity Low-carbon baseload Low-carbon baseload 90.000 90.000 90.000 80.000 80.000 80.000 70.000 70.000 70.000 Load (MW) Load (MW) Load (MW) 60.000 60.000 60.000 50.000 50.000 50.000 40.000 40.000 40.000 30.000 30.000 30.000 20.000 20.000 Flexicycle! 20.000 10.000 10.000 10.000 0 0 0 1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23 Hour Hour Hour System dispatching challenges • 49 GW wind capacity > more than system night load! • Wind speed change 7  9 m/s leads to a wind power output change of 13,5 GW! Such wind speed changes happen all the time! • Dynamic thermal capacity will have to stretch tens of GWs up and down within less than 30 minutes • System balancing will be a major challenge24 © Wärtsilä 03 July 2012 Smart Power Generation
  25. 25. System capacities, 20 % at 2020 system 1(2) • System peak load 100 GW Capacity, future system • Needs 110 GW installed dispatchable Variable capacity (10% margin for contingency Capacity 58 GW situations) Solar • 20% of power produced with renewables 9 GW requires e.g.: Low-carbon – 49 GW wind capacity (capacity factor 25%) baseload – 9 GW solar capacity (capacity factor 20%) 32 GW Wind • The >8000h base load capacity need is 49 GW about 32 GW • The gap between installed base load capacity and the system peak load must Flexible be covered with 78 GW of flexible, capacity 78 GW dispatchable capacity Dispatchable Capacity 110 GW25 © Wärtsilä 03 July 2012 Smart Power Generation
  26. 26. System capacities, 20 % at 2020 system 2(2) Base load capacity • Zero - or lowest possible - CO2 • Lowest possible marginal costs • Quantity 32 GW  Over 8000 h of full power operation • No need for agility of dispatch, load range 60…100 Flexible capacity • High agility of dispatch • Lowest possible CO2 (high efficiency in a wide load range) • Lowest possible marginal costs • Decentralized locations in load pockets • Quantity  Dispatchable capacity above base load26 © Wärtsilä 03 July 2012 Smart Power Generation
  27. 27. Competitive technology comparison Electrical Normal starting efficiency Typical plant time to full load, Dynamic CO2, full load, % size, MW minutes capabilities g/kWh Nuclear 31-33 1000 - 2000 >2000 Poor - Coal 33-45 300 - 4000 >180 Poor 820 - 1050 CCGT gas 50-57 200 - 1500 60-90 Not good 370 Gas engines 46 1 - 500 5-10 Excellent 430 Aero GT 33-41 1-300 10-13 Good 500 HDGT 30-35 100-1000 13-30 Decent 560 Flexicycle 46/50 100-500 10/60 * Very good 400 *) Simple cycle / combined cycle27 © Wärtsilä 03 July 2012 Smart Power Generation
  28. 28. Competitive technology comparison28 © Wärtsilä 03 July 2012 Smart Power Generation
  29. 29. Operational flexibility vs. electrical efficiency CCGT’s 50% Electrical Wärtsilä efficiency, Flexicycle™ net Wärtsilä SC Aero- 40% GT’s Coal Industrial GT’s Starting time Ramp rate Part load operation Nuclear Flexibility 30% Low Medium High Steam Power Plants Simple Cycle Combustion Engines29 © Wärtsilä 03 July 2012 Smart Power Generation
  30. 30. The role of gas• Recent technical breakthroughs and commercialisation of shale gas have lead to: – Substantial increase in perceived lifetime/availability of gas reserves globally – Reduction of gas price in the US from 10 $/MMBtu (2008) to less than half – Rapid decline in demand for LNG in US and consequential surplus of supply. US will become an exporter of LNG instead of the major importer. – The new competitive situation is leading to • Deindexation of gas prices from oil (LFO) • Small scale LNG becoming commercially interesting • Huge interest in LNG in locations with no gas infrastructure• The use of gas in power generation will increase as it is competitively priced and is a low carbon fuel• The role of gas in power generation is covering multiple segments – Base load to intermittent, in systems with low share of installed wind capacity – Peaking to system balancing, as the share of wind capacity increases and the net load to thermal plants decreases – This is because gas power plants: • Can be constructed rapidly with a reasonable cost • Produce less CO2 emissions than other thermal dispatchable plants • Can offer favourable dynamic characteristics30 © Wärtsilä 03 July 2012 Smart Power Generation
  31. 31. The role of gas Quotes: • Jeff Immelt, CEO, GE: “The world is starting a natural gas power generation cycle” • John Krenicki, Vice Chairman, GE : “We are looking at a 25-year very bullish gas market” • Linda Cook, Executive Director Gas & Power, Royal Dutch Shell: “The decreasing cost of LNG is making it more competitive in more markets.” • Maxime Verhagen, Deputy Prime Minister of the Netherlands: “For many decades to come, gas will remain critically important to the energy mix worldwide. In our effort to move to an efficient and low carbon economy, natural gas as the cleanest of fossil fuels is indispensable. The Netherlands aims to contribute to this transition by serving as a gas hub to North-West Europe.”31 © Wärtsilä 03 July 2012 Smart Power Generation
  32. 32. Smart Power Generation • Definition • Features • Benefits • Operating modes32 © Wärtsilä 03 July 2012 Smart Power Generation
  33. 33. Smart Power Generation 1) All in One! A unique combination of valuable features! Energy Efficiency Smart Power Generation Fuel Operational Flexibility Flexibility 2) The missing piece of the low carbon power system puzzle! Affordable Smart Power System Reliable Sustainable33 © Wärtsilä 03 July 2012 Smart Power Generation
  34. 34. Why is this technology Smart? All in One! A unique combination of valuable features! • Extreme flexibility in operation modes, best available dynamic features, highest available simple cycle energy efficiency and wide fuel portfolio form a unique combination, not available with any other technology. • The unique combination of valuable features brings benefits both to power systems and power producers. • With its true flexibility, Smart Power Generation is the most valuable asset also in the coming low carbon power markets.34 © Wärtsilä 03 July 2012 Smart Power Generation
  35. 35. What is Smart Power Generation The missing piece of the low carbon power system puzzle! Smart power generation enables the global transition to a sustainable, reliable and affordable energy infrastructure. It is a new, unique solution for flexible power generation and an essential part of tomorrow´s optimized and secure low carbon power systems. Smart power generation can operate in multiple modes, from efficient base load power production to ultra fast dynamic system balancing. Smart Power Generation improves the system total efficiency, and solves the variability challenges of maximized wind integration. Energy Affordable Efficiency Enable! Smart Smart Power Power Generation System Fuel Operational Flexibility Flexibility Reliable Sustainable35 © Wärtsilä 03 July 2012 Smart Power Generation
  36. 36. Features of Smart Power Generation • Agility of dispatch • High plant reliability and availability – Megawatts to grid in 1 minute from start – Multiple units enable firm (n-2) power (n=number – 5 minutes to full load from start of installed units) – Fast shut down in 1 minute – Typical unit availability > 96% – Fast ramp rates up & down – Typical unit reliability ~ 99% – Unrestricted up/down times – Typical unit starting reliability > 99 % – High starting reliability • Optimum plant location and size – Remote operator access including start & stop – Location inside load pockets i.e. cities – Black start capability – Flexible, expandable plant size enables step by • Low generation costs step investments – High efficiency (46% in simple cycle and >50% in – Low pipeline gas pressure requirement (5 bar) combined cycle) • Fuel flexibility • High dispatch with low CO2 – Natural gas and biogases with back-up fuel – Wide economic load range – Liquid fuels (LBF, LFO, HFO) • Multiple units – Fuel conversions • Any plant output with high efficiency • Low environmental impact – No derating enabling higher dispatch in hot climate – Low CO2 and local emissions even when ramping and at high altitude and on part load – Low maintenance costs, not influenced of frequent starts and stops, and cyclic operation • Easy maintenance – Low/no water consumption36 © Wärtsilä 03 July 2012 Smart Power Generation
  37. 37. Benefits to power producers • Operate on multiple markets – Energy markets Energy Efficiency – Capacity markets – Ancillary services markets • High dispatch enabled by high efficiency • Dependable and committable – Multiple generating units Smart – High unit reliability and availability Power • Optimum plant location close to Generation consumers Fuel Operational • Fuel flexibility – hedge for the future Flexibility Flexibility • Fast access to income through fast-track project delivery • Competitive O&M costs37 © Wärtsilä 03 July 2012 Smart Power Generation
  38. 38. Benefits to power systems Affordable • Secures the supply of affordable and sustainable power – Enable highest penetration of wind and Smart solar power capacity Power – Maximizing the use of wind power capacity Reliable System Sustainable by minimizing wind curtailment Load curve, future - high wind – Ensure system stability in wind variability 90 000 Solar Wind Wind curtailment Flexible capacity Low-carbon baseload and contingency situations 80 000 – Avoid negative prices 70 000 • Ensures true optimization of the total power 60 000 system operation Load (MW) – Remove the abusive starts and stops, and 50 000 40 000 cyclic load from base load plants that are Smart Power Generation 30 000 not designed for it – Improves the total system efficiency 20 000 • Enables reaching the 20 % 2020 renewable 10 000 energy share targets set by many countries 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour38 © Wärtsilä 03 July 2012 Smart Power Generation
  39. 39. True flexibility through multiple operation modes All in one! • Base load generation – The technology is proven in base load applications with 47,000 MW of references worldwide • Rapid load following in the morning and in the evening – Starting, loading and stopping units one by one along with changing load • Peaking during high consumption periods • Balancing wind power i.e. “Wind chasing” – Starting, loading and stopping rapidly when wind conditions change • System balancing – Fast frequency regulation and efficient spinning reserve • Ultra fast zero-emission NSR grid reserve for any contingency situation – Starting and producing power in just 1 minute, and full power in 5 minutes • Fast grid black start in case of a power system black out39 © Wärtsilä 03 July 2012 Smart Power Generation
  40. 40. Smart Power Generation in the 2050 roadmap scenarios The role of Smart Power Technology in Energy 2050 Roadmap scenarios has been assessed and simulated through dynamic calculations with Plexos dispatch modeling software. Modelling is based on the Spanish power system. The Spanish system is fairly isolated, with limited interconnectivity, and can therefore show impacts of large scale renewable integration as an “example of how such a system behaves” without modelling major grid constraints and the whole power system cost structure to get the price signals over the interconnections correct. .40 © Wärtsilä 03 July 2012 Smart Power Generation
  41. 41. The Model Modelling is based on true Spanish load data (10 minute intervals) from 2010 and on true 10 minute wind generation data from the same year. The system capacity mix is specific for each scenario and the scenario data is based on EU information of Spain. Modelling covers one full year (2030), in 1 hour intervals, and takes into consideration dynamic characteristics (for example starting and stopping times, costs and emissions) of various power plants. Such modelling reveals optimum operation model from cost and CO2 emission point of view, and situations with major overproduction and lack of energy, which would lead to obvious system reliability problems.41 © Wärtsilä 03 July 2012 Smart Power Generation
  42. 42. The Model The power systems contains about 30 GW of combined cycle gas turbine plants. The same amount of Smart Power Generation plants were “installed” in the system to operate in parallel with the CCGT’s. The software freely dispatches all the plants, allowing them to operate when their overall cost (including starting and stopping etc.) is the best for the national power system. The scenarios state that biomass fired power generation is running first i.e. probably has some kind of feed‐in tariff. However, from total system cost point of view this does not provide lowest cost and often not even the lowest total CO2 (as biomass is replacing wind and nuclear). One challenge: the software knows the coming wind conditions exactly for the full year ahead, and can plan the operation of inelastic older thermal plants without any forecasting errors in wind generation. In real life the system reserves need to be bigger as the wind error can be several % even over the next 10 minutes, and even more over an hour.42 © Wärtsilä 03 July 2012 Smart Power Generation
  43. 43. Reference scenario The Reference scenario includes current trends and long‐term projections on economic development (gross domestic product (GDP) growth 1.7% pa). The scenario includes policies adopted by March 2010, including the 2020 targets for RES share and GHG reductions as well as the Emissions Trading Scheme (ETS) Directive. For the analysis, several sensitivities with lower and higher GDP growth rates and lower and higher energy import prices were analysed. Findings: Smart Power Generation (orange) technology produces the fast peaks with lower costs and emissions than the Combined Cycle Gas Turbine plants. Combined cycle gas turbine plants are used as soon as they have adequate running time available (which the software knows “too well” as it knows the accurate wind production data of the days ahead). Coal plants are not running at all due to excessive costs. Nuclear produces on almost full power all through the period. Because of high costs, pump storage is very little utilised for balancing during high wind periods. No major overproduction or underproduction occurs in this scenario during this period i.e. system balance is maintained quite well.43 © Wärtsilä 03 July 2012 Smart Power Generation
  44. 44. Reference Scenario44 © Wärtsilä 03 July 2012 Smart Power Generation
  45. 45. EU 2050 Roadmap Scenarios High Energy Efficiency Political commitment to very high energy savings; it includes e.g. more stringent minimum requirements for appliances and new buildings; high renovation rates of existing buildings; establishment of energy savings obligations on energy utilities. This leads to a decrease in energy demand of 41% by 2050 as compared to the peaks in 2005‐2006. Findings: The load is lower in this scenario than in the others. Nuclear plants need to reduce their output to minimum during the high wind periods and still there is substantial overproduction of electricity (wind power must be curtailed or energy stored). Restarting nuclear plants takes several days and costs a lot so that is not an option. Pump storage does not provide a cost efficient method for balancing. Smart Power Generation technology takes away the abusive peaky generation pulses from Combined Cycle Gas Turbines (CCGT). CCGT plants do not run at all during high wind periods. Coal is not used either. This scenario offers quite a challenging environment for the system operator as over‐ and underproduction occurs frequently and in substantial quantities.45 © Wärtsilä 03 July 2012 Smart Power Generation
  46. 46. EU 2050 Roadmap Scenarios High Energy Efficiency46 © Wärtsilä 03 July 2012 Smart Power Generation
  47. 47. Diversified supply technologies No technology is preferred; all energy sources can compete on a market basis with no specific support measures. Decarbonisation is driven by carbon pricing assuming public acceptance of both nuclear and Carbon Capture & Storage (CCS). Findings: Again nuclear power plants need to reduce their output to minimum during the high wind period and still there is overproduction of electricity, and hereby nuclear plants lose a big part of their revenues. Pump storage again does not provide a cost effective means for system balancing. Smart Power Generation technology takes care of the fast peaks and balancing . CCGT plants do not run at all during high wind periods. Substantial over‐ and underproduction occurs again over longer periods of time.47 © Wärtsilä 03 July 2012 Smart Power Generation
  48. 48. Diversified supply technologies48 © Wärtsilä 03 July 2012 Smart Power Generation
  49. 49. High Renewable energy sources (RES) Strong support measures for RES leading to a very high share of RES in gross final energy consumption (75% in 2050) and a share of RES in electricity consumption reaching 97%. Findings: Major overproduction of electricity takes place during the study week almost every day for extended periods. Nuclear power plants need to reduce their output to minumum most of the time. Pump storage does not help as overproduction is almost constant. Smart Power Generation technology takes care of system balancing and fast load peaks. CCGT plants do not run at all during high wind periods, and operate only a few hours during the whole week 8. It is obvious that there is a lot of excess energy for producing hydrogen or for some other “storage” during this week.49 © Wärtsilä 03 July 2012 Smart Power Generation
  50. 50. High Renewable energy sources (RES)50 © Wärtsilä 03 July 2012 Smart Power Generation
  51. 51. Delayed CCS Similar to Diversified supply technologies scenario but assuming that CCS is delayed, leading to higher shares for nuclear energy with decarbonisation driven by carbon prices rather than technology push. In 2030 there is almost no CCS in the system so the actual performance and costs of CCS‐coal are not relevant. Findings: During the study week nuclear power plants reduce their output to minimum load over several lengthy periods. Smart Power Generation again runs the peaks and effectively works as the system balancer. CCGT plants do not run at all during high wind periods. The system is out of balance on Tuesday and Wednesday for longer periods of time. Again the biomass fired generation is pushing all the other generation types up on the graph.51 © Wärtsilä 03 July 2012 Smart Power Generation
  52. 52. Delayed CCS52 © Wärtsilä 03 July 2012 Smart Power Generation
  53. 53. Low nuclear Similar to Diversified Supply Technologies scenario but assuming that no new nuclear (besides reactors currently under construction) is built, resulting in a higher penetration of CCS (around 32% in power generation). Findings: Nuclear plants are used but again they operate long periods on minimum load. The amount of nuclear plants is not really affecting their operating profile in the scenarios, they always need to reduce their output to minimum when the wind blows strongly. Pump storage does not provide an economical solution for balancing even in this fifth scenario. Smart Power Generation again handles the peaks and system balancing. CCGT plants run only when they can run on extended periods (due to long and expensive starts and stops). If wind forecasting errors were included, starting and stopping them would be more risky and Smart Power Generation would operate even more hours.53 © Wärtsilä 03 July 2012 Smart Power Generation
  54. 54. Low nuclear54 © Wärtsilä 03 July 2012 Smart Power Generation
  55. 55. Conclusions This dynamic power system study looked at the 2030 situation, in Spain, as part of the EU system, with the EU targets and actions in place. All 5+1 scenarios were modelled and studied. The results indicate that the high portion of renewables dramatically change the way the system is operated. Wind power pushes coal totally and gas plants partially out of the system, and forces even the nuclear plants to run on minimum load during long hours, thereby making their economy and payback look worse for the nuclear plant investors. Biomass fired plants do not have a clear role in the system as they produce high cost power and force lower cost nuclear to reduce output, and also cause substantial overproduction over longer periods especially in the high renewable scenarios. The carbon emissions of the power system are in all scenarios between 20...45 % of the average level of 2007...2009, which was 337 kg/MWhe. A distinctive step forward in decarbonising.55 © Wärtsilä 03 July 2012 Smart Power Generation
  56. 56. Conclusions Gas fired power plants have a central role in balancing the system. This they can do with high efficiency and with low carbon emissions. The results clearly indicate that economically and environmentally Smart Power Generation is a better solution than CCGT’s in balancing. The optimum quantity (in GW) of Smart Power Generation varies depending on the capacity mix in question. To reach the optimum cost and system efficiency, CCGT plants are needed, in parallel with Smart Power Generation. Smart Power Generation reduces the average system level variable generation costs from 1 to 5,5 % depending on scenario. Also the CO2 emissions were reduced in all scenarios from 1 to 12 %. This is a remarkable result taking into account that in the Spanish energy system in question has a high penetration of highly efficient Combined Cycle Gas Turbine plants.56 © Wärtsilä 03 July 2012 Smart Power Generation
  57. 57. Cost reduction Average cost reduction with Smart Power Technology.57 © Wärtsilä 03 July 2012 Smart Power Generation
  58. 58. Conclusions CO2 emissions in different scenarios and CO2 emission reductions achieved with Smart Power technology.58 © Wärtsilä 03 July 2012 Smart Power Generation
  59. 59. Conclusion The EU 2050 Roadmap highlights: ‐ “ the need for flexible resources in the power system (e.g. flexible generation, storage, demand management) as the contribution of intermittent renewable generation increases” ‐ ” Access to markets needs to be assured for flexible supplies of all types, demand management and storage as well as generation, and that flexibility needs to be rewarded in the market. All types of capacity (variable, baseload, flexible) must expect a reasonable return on investment.” Decentralization of the power system will dramatically increase due to more renewable generation. Together with all the Smart technologies, Smart Power Generation technology has the potential to play a key role in new EU policy implementation and enable the targeted extremely low carbon levels because –the back up system has to be efficient, low carbon and located at the right places in the grid.59 © Wärtsilä 03 July 2012 Smart Power Generation
  60. 60. Reference: STEC, Pearsall, Texas USA, 202 MW Quotes: • John Packard, Manager of Generation, STEC: “These flexible units have allowed us to respond to changes in the grid when the wind stops blowing and some of those wind resources are no longer available. Units like this can be started to compensate for the loss of that capacity. Certainly the capital cost is always important, but the ability to dispatch these units in increments that fit our load, allows us to keep the units at peak efficiency rather than partially load a larger unit where the efficiency might not be as good. So, one of the biggest economic drivers is again that flexibility” • Lloyd Freasier, Plant Manager, Pearsall, STEC: “The water use will be almost zero opposed to the old steam plant. And we get rid of many chemicals, the acids and caustics, chlorine and the hydrogen in the generators”60 © Wärtsilä 03 July 2012 Smart Power Generation
  61. 61. Reference: Chambersburg, USA ,23 MW Quotes: • William F. McLaughlin, President of Town Council, Chambersburg: “Key factors were affordability and flexibility, it fitted within our financial ability and it was overall the best package for the product and services that we’re going to keep running the plant over the long haul. From a technical stand point, the fact that we are dual fuel, natural gas and oil, gave us a substantial advantage in dealing with the environmental situation, the controls and licensing aspects from both the Pennsylvania department of environmental protection and the EPA. We meet or exceed all their criteria. • Alexander Grier, Senior Vice President, Downs Associates: “We wanted engines that would be able to run hour and hours at a time, but be able to be started and stopped again. Because of market conditions it might be started and stopped two or three times per day. It’s kind of an unusual peaking plant. It’s more of a market following plant than it is a traditional peaking plant.”61 © Wärtsilä 03 July 2012 Smart Power Generation
  62. 62. Reference: GSEC Antelope, USA 170 MW Quote: • Mark W. Schwirtz, President, General Manager, GSEC: “One of the driving factors for our new generation at this point is that we need peaking capacity. We are looking at something that is relatively low capital cost. From a renewable stand point, there is a lot of wind generation going in at this area and in order to back that wind generation up, we needed something that started quickly, in less than 10 minutes. This was technology that we felt that could do that. There are other technologies out there, but what led us to the decision to pick the Wärtsiläs, was that they start very quickly and are efficient units. And they provide multiple shafts, which gives us that that shaft diversity so we can bring that generation on in small increments. This we feel will have value in the markets that we participate in. If we look at efficiency, it is very important to us to get the most out of our fuel dollar. The more efficient the unit, the better it is for us. We looked at this water use, it was another key factor. And the ease of the operation was important to us.”62 © Wärtsilä 03 July 2012 Smart Power Generation
  63. 63. THANK YOU! Smart Power Generation63 © Wärtsilä 03 July 2012 Smart Power Generation