Addressing challenges of building new fossil-fuelled power plants

21st February 2013

The IEA’s most recent World Energy Outlook prognosticates a 15–36percent increase in Europe’s electricity needs by 2030. New thermal power plant capacity in the order of some 400gigawatts will be required across the EU.

We need to understand that gas and coal are here to stay. The IEA forecasts that by 2030, approximately 60percent of the power generated in the EU will come from – mostly imported – fossil fuels. Today’s import share of about 50percent will climb to roughly 70percent by 2030. These facts raise questions about how to secure energy supplies and use domestic sources more efficiently.

Plant costs and fuel prices

The current hike in electricity prices that began in 2005 has sparked new power plant projects all over Europe. Many of these projects focus on coal as an energy source, but will they eventually be realised? Under the impact of the climate debate, using coal for electricity generation meets with popular resistance more frequently these days, particularly in Germany. In late 2007, RWE Power was forced to cancel a projected
ultra-modern hard coal plant in the Saar region after local residents voted it down.

Even though such projects may be unpopular sometimes, Germany needs state-of-the-art coal-based power plants in order to bolster its power supply, stabilise electricity prices, improve competitiveness, and protect the climate.

As for fuel costs, world market prices for natural gas and hard coal have grown more volatile in the last decade. In addition, natural gas resources in the North Sea dry up, so Europe’s dependence on imports from politically unstable countries will increase. Therefore, current investment decisions ought to favour coal, yet a great many new gas-fuelled power plant projects pop up across Europe today. The reason is the EU’s Emissions Trading Scheme (ETS).

Climate protection

The ETS gives gas-fired power plants an advantage over older, less efficient coal-fired plants with their comparatively high emissions certificate costs. Emissions trading requirements lead to fewer full load hours for new plants, too, thus lengthening the amortisation period. This brings about greater relative disadvantages for coal-based power plants with their higher investment costs than gas-fired plants.

The most recent proposals on emissions trading presented by the European Commission earlier this year go even further: Beginning in 2013, comprehensive auctioning of all energy sector emissions certificates would be introduced, with no distinction made between existing and newly-built plants. This would put the future of generating power with coal in jeopardy.

Today, coal-fired plants account for some 90 per cent of Poland’s electricity production; for Greece or the Czech Republic, the figure stands at about two thirds. In Bulgaria and Rumania, coal’s market share is a respectable 40 per cent. Here, the fuel supply stems entirely from domestic resources, making coal-based electricity generation the most secure and economical power source in Central and Eastern Europe. These countries will find comprehensive auctioning of emissions certificates and a switch to gas-based power plants unacceptable, because wholesale prices would increase substantially and have adverse effects on domestic industries. The European Commission's concept would effectively stop construction of new coal-fired power plants, therefore Eastern European countries will lobby for exemptions from the plan so that investment in modern, more efficient plants may continue across the EU.

Relying exclusively on gas as the mainstay of our future electricity production flies in the face of any sensible risk diversification strategy. Nuclear energy and renewables can and will make an important contribution, too, but are just one module of a comprehensive energy strategy.

At any rate, discriminating against coal in the name of global climate protection will fail to bring the desired results. Global coal consumption increased 30percent between 2000 and 2006. In China alone, one new 500-megawatt coal-fired power plant goes online every week. Any reduction in CO2 emissions in Germany or even in all of Europe, however ambitious, pales by comparison.

In light of these facts, it is essential to invest in new, efficient coal-fired power plants, like RWE Power does. We are spending billions of euros on the modernisation of our power plant line-up, which is good for the climate and good business, too.

We are also developing technologies for operating tomorrow's power plants in an even more environmentally friendly manner, the impact of which will be felt far beyond Germany’s national boundaries. This includes the development of coal-based power plants with integrated carbon capture and storage technology, a key part of future electricity-generation strategy.

From challenges to solutions

The first and foremost goal of our Clean Coal strategy is to increase power generation efficiency, for maximum CO2 reduction and cost-effectiveness. For this purpose, RWE Power pursues technological innovation in three stages:

Stage One encompasses renewing our power plant line-up with the best technology currently available eg the use of BoA technology in our new lignite-fired plants with 43percent efficiency at Grevenbroich-Neurath.

Stage Two focuses on power plant engineering for tomorrow and involves using pre-dried lignite and further increases in the steam parameters in the water/steam process. For example, a lignite predrying demonstration module on an industrial scale at Niederaußem is under construction, if successful this technique will yield for new build lignite fired powerstations a 47–48percent degree of efficiency.

Stage Three is aimed at coal-based plants without CO2 emissions. RWE Power is currently launching a 450-megawatt power plant project with integrated coal-gasification technology, CO2 capture and safe underground storage, scheduled for 2014.

We are also pursuing Post-Combustion Capture, a cleansing process with CO2 capture from flue gases as a retrofit option for all new RWE units.m

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Dr Ing Manfred Kehr is with RWE Power AG, Essen, Cologne, Germany.

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