The Combined Heat & Power (CHP) story - Baltics
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Transcript of The Combined Heat & Power (CHP) story - Baltics
The Combined Heat & Power (CHP) story - Baltics
2
Content
CHP – energy for the future
Sustainability
Global potential
Pricing
Fortum – Next Generation Energy Company
Fortum’s vision for the future
A
C
D
E
F
CHP – energy for the future
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CHP – a simple and safe technique with great benefits
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Economically viable in
small scale: Electricity
One plant – multiple products
Renewables competitive to
fossil fuels
Fuel flexibility Efficient use of resources
Large global potential
Main advantages of CHP
Overview
66
Main advantages of CHP
Efficient use of resources
Losses 25Losses 25 Losses 48Losses 48
CHP production75% efficiencyCHP production75% efficiency
Separate production52% efficiencySeparate production52% efficiency
Fuel100Fuel100
Fuel100Fuel100
Electricity 25Electricity 25
Heat 50Heat 50
Electricity 17Electricity 17
Heat 35Heat 35
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Main advantages of CHP
Economically viable in small scalewith potential for economy of scale
CHPCHP
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Non-renewable
Forestry biomass
Agro biomass
Bio oilsWaste
Main advantages of CHP
Fuel flexibility
99
Main advantages of CHP
Renewables competitive to fossil fuels
• Reduced environmental impact
• Avoids cost of CO2 emissions
• Reduces transportation and shortage risks
• Offers a more stable and competitive price
Chapter 2
Sustainability
10
March 2009
0
10
20
30
40
50
60
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
TWh
2006 Afterinvestmentprogramme
2007
Consistently towards CO2-free energy production
Fortum’s electricity production in the Nordic countries
2008
Hållbar utveckling 201011
Other production(Peat, gas, coal, other)
CO2 -free production(nuclear, hydro power, and bio mass)
Researching new fuels
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• Bio-fuels, residual products, waste
• Low cost, abundant, sustainable
• Meeting plant specifications
• Bio-fuels needs to fulfil EU-criteria
• Fuels for electricity needs to qualify for
• green certificates
• chemical legislation
Research and progress bio-fuels
13
Residual products from biodiesel
Lignin
Animal oilsPellets
Pine tar oilPyrolitic oils
Olive stones
Salix
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Secure Security of supply
Sustainable
Simple Competitive
Meets the demands of customers and society
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The sustainable waste
• Enables a more sustainable society
• Local fuel from recycled materials
• Turns cost into commodity
• No need for landfill
• Reduces methane by reducing landfills
European Commission climate targets
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20-20-20 until 2020
Reduce green house
gas emissions with
20 %
Increase usage of renewable energy to
Increase energy
efficiency and energy savings with
20 % 20 %
Chapter 3
Global potential
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China
Russia
India
Europe
North America
Global demand for 4,800 GW new capacity until 2030
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Source: IEA WEO 2009, reference scenario
Primary energy demand 2007-2030
Electricity consumption growth 2007-2030Electricity capacity additions 2008-2030 (GW)
China
Russia
India
Europe
North America
1919
CHP meets the global challenges
Organic growth potential in emerging markets
Organic growth potential in emerging markets
Significant growthpotential globallySignificant growthpotential globally
Enables the use of local fuels (bio, waste)Enables the use of local fuels (bio, waste)
Synergy opportunities in the growing bio energy and bio fuel markets
Synergy opportunities in the growing bio energy and bio fuel markets
EU’s LCP Directive to drive new CHP investment potential further
EU’s LCP Directive to drive new CHP investment potential further
CO2 issue will increase CHP’s Competitiveness
CO2 issue will increase CHP’s Competitiveness
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Estimated distribution of potential increase
Small scale CHP >100Desalination >250Industrial CHP >500District heating >500
>1,350
An average CHP plant equals 2 TWhe
Main advantages of CHP
Large global potential for CHP
Heat
Elec-tricity
2,000 TWhe1,000 large plants
Today
>3,350 TWhe1,675 large plants
Tomorrow
CHP output(approx. distribution)
21
Supply – demand balance of solid biomass Current Potential
Wood
Agro
Estimated bio fuel potentialby 2020
(TWh fuel)
869
193
Source: Pöyry analysis 2010
22
Current EU target
Estimated waste to energy potential by 2020
Waste incinerated today and potential
26 311
1000 tn/a
73 035
Chapter 5
Pricing
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2424
Heat pricing
Regulatory approval of heat
prices from ex ante to ex post
Protection towards
excessive heat prices
Different regulators approach
Most common approach - cost based pricing
District heating pricing approaches vary in different European countries
2525
Heat pricing
Incentivizing productivity
improvements and investments
Simple, straight forward and high
quality
DH competitive with alternatives
over time
DH competitive with alternatives
over time
Promotion of alternative based pricing based on several advantages
2626
Heat pricing
• Provides incentives for energy efficiency actions
• Secures reasonable returns on invested capital
• Market prices for both heat and electricity
• fair for customers and companies,
• allows to cover costs of necessary investments
• sustainable in a long term
• predictable and do not create additional costs
The most important aim of DH industry is to create a pricing approach that is:
2727
Energy efficient buildings and district heating
• Important with understanding of global system perspective.
• Promotion of alternative space heating solutions will decrease the potential for energy efficient CHP production.
• Decreasing heat demand will reduce heat sales specially during spring and autumn time. Peak hours will decrease and respectively share of fixed costs will increase.
• Any measures leading to increased condensing electricity production or heat-only production should be carefully considered.
• Obligatory connection to district heating is not recommended
Chapter 6
Fortum – Next Generation
Energy Company
28
29
Fortum’s emissions among the lowest in Europe
Source: PWC & Enerpresse, Novembre 2010Changement climatique et Électricité
g CO2/kWh electricity, 2009
Average 346 g/kWh
0
200
400
600
800
1000
1200D
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E
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urop
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41155
CO2-free electricity production 2010•66% of total electricity production•86% of electricity production in the EU• The majority of the capacity of the ongoing investment programme in the EU is CO2-free.
Source: PWC & Enerpresse, Novembre 2010Changement climatique et Électricité, Fortum
Note:Fortum’s specific emission of the power generation in 2010 in the EU were 84 g/kWh and in total 189 g/kWh, 86 % (91 %) emission free in EU and 66 % (69 %) emission free overall.Figures for all other companies include only European generation.
Mission
3030
Our mission and strategy
Strategy
Create solid earnings growth in Russia
Leverage the strong Nordic core
Build platform for future growth
Competence in CO2 free nuclear, hydro and energy efficient CHP production, and operating in competitive energy markets
Fortum’s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions that fulfill the needs for low emissions, resource efficiency and energy supply security, and deliver excellent value to our shareholders.
31
CHP cornerstone of Fortum’s strategy
31
• Corner stone in Fortum’s strategy
• Competitive
• Resource efficient
• Has potential for further growth
• Will enable the sustainable society
32
CHP is part of Fortum’s past, present and future strategy
Kuusamo
UimaharjuJoensuu
Nokia
SuomenojaKirkniemi
Naantali
Kauttua
Tartu
Jelgava Ganibu
Pärnu
Klajpeda (under construction)
CzęstochowaŚwiebodzice
BristaCity KVV6/Stockholm/ CHP
Hässelby
HögdalenCity KVV1/Stockholm
BytomZabrze
33
Cases (3/4)
Pärnu, Estonia
• Fueled by local bio fuels such as chips, wood residues from local industries, and peat
• Provides the City of Pärnu with district heating
• Constructed without accidents
• Benifits local industry
Fortum Klaipėda
CHP – a simple and safe technique with great benefits
Overview
• At the moment ”Fortum Heat Lietuva” owns 95% of ”Fortum Klaipeda” shares, other 5 % - AB Klaipėdos energija
• Total planned investment - EUR 130 million
• Power plant capacity for heat power will consist of 50 MW from fuels incineration plus 14 MW during Winter time from flue gas condenser. It planned to produce 140 GWh of electricity and about 380 GWh of heat power
Overview
• Capacity – 50 MW of heat and 20 MW of electricity
• Klaipėda CHP plant will use biofuels as well as municipal and industrial waste as fuel, producing both heat energy that will be supplied to Klaipeda city, covering 40% of Klaipeda’s heat demand, and electricity that will be sold in the national grid Klaipeda CHP plant will use the latest available technologies that will secure maximum efficiency of fuel consumption as well as from flue gas cleaning
• Planned commissioning – 2013
Annual reduction of CO2
emissions - by
96000 tons
Steam boiler of a grate type 85MW • Steam pressure - 47 bars, temperature - 400º C, • Steam generation capacity - 105 t/h• Steam turbine and generator 20MW
Annual output will be generated: • about 400 GWh thermal energy• about 140 GWh electrical power
Fuel types which are being used at CHP
• Biomass fuel (wooden chips) - 75’000 tons• Public utilities waste - 115 -130’000 tons• Industrial waste - 50’000 tons
Public utilities waste from Klaipėda region after the primary screening on the locations of their collection or after the secondary screening
Fuel types
Benefits for Klaipėda region
• Reduces dependence on imported fuels (natural gas) when supplying heat to Klaipeda city, whereas 40% of heat from total needed for the city will be produced in this CHP plant.
• Reduced dependence on imported fuel (gas)
• More stable heat tariff
• Reduced expenses for construction of new waste dumps and management of the existing ones since the amount of waste reduces by 4 to 5 times as a result of waste burning process
• Reduced impact on the formation of the greenhouse gas effect since the gas originating from waste dumps (shale gas) has a much greater impact on the increase of the greenhouse effect than CO2 gas
Construction in Klaipėda
41
Great business opportunities for the CHP business
• CHP especially suitable in densely populated areas
• 40 % of EU’s energy is used for heating
• Demand for electricity will increase when replacing other types of energy
• Demand for heating is expected to decrease only very slow
• Even small CHP plants more and more profitable in the future
42
Continue to strive for resource efficient carbon
free production
What does Fortum want?
Push the development towards the sustainable society Continue the integration
towards a European market
R&D on sustainable energy sources
Chapter 7
Fortum’s vision for the future
43
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* CCS decreases plant output (energy efficiency), while at the same time reducing CO2 emissions dramatically.If applied to bio-CHP, “negative” emissions = removing CO2 from the atmosphere
** Extremely low utilization (<5%) of uranium energy content in LWR with final deposition of spent fuel.However, huge improvement potential both with CHP mode and Generation IV (breeder) technologies
* CCS decreases plant output (energy efficiency), while at the same time reducing CO2 emissions dramatically.If applied to bio-CHP, “negative” emissions = removing CO2 from the atmosphere
** Extremely low utilization (<5%) of uranium energy content in LWR with final deposition of spent fuel.However, huge improvement potential both with CHP mode and Generation IV (breeder) technologies
Towards a solar economy
HighHigh
LowLow
FiniteFinite InfiniteInfinite
EfficiencyEfficiency
ResourcesResources
Condensing
CHP
SolarSolar
Coal IGCC CHP
Coal CHPCoal CHP
CCGT CHP
CCS *
Bio fuelsCHP
Nuclear tomorrow**
Nuclear today **
Coal condensing
Gas condensing
CCS *
SolarCSP
Hydro
Photo-voltaic Osmosis
Wind Wave
Large CO2 emissionsLarge CO2 emissions Zero emissionsZero emissions
4545
Fuel flexibility enables transition towards solar economy and sustainability
• CHP a driving force away from fossil fuels
• Renewable local fuels are advantageous over fossil fuels
• Reduced environmental impact
• Fuel flexibility enables the use of local fuels and renewable fuels
• Reduces the need for fuel transportations
Smart Heat – a research project for the sustainable energy system of the future
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Electricity, heat, cooling, and gas in one integrated system where we always make use of surplus energy
The sustainable energy system of the future We use energy that would otherwise be
lost, and use it when it is needed
1. Enables more solar and wind power2.
Increased integration between the heating and electricity systems
1.Heat and cold storage
2.Increased share of local production in buildings
3.Smart grids
4.Electric vehicles and bio gas vehicles
We make use of all local energy
1.Recycling turns household waste into electricity, heat, and biogas
1
2
3
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2
1
5
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3
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Pyrolysis could be a fast track for fuel switching
47
• Oil is produced by low oxygen burning
• Pyrolysis can be obtained by utilising the heat from existing CHP-plants
• Fortum is part of a R&D consortium which has piloted a CHP-integrated production method
• Next step will be a construction of a demo-plant
• Pyrolysis oil can replace heating oil in existing heat boilers
• Pyrolysis oil can be upgraded into traffic fuels or value-added bio chemicals.