Forecast in Power Production and Impact on CCPs in Europe

1. Forecast in Power Production and Impact on CCPs in Europe Joachim Feuerborn European Coal Combustion Products Association

2. Content • Introduction – Role of Coal in Energy mix • Role of Coal in Europe • Production and Utilisation of CCPs • Legislative, Technological and Economic impacts • 5. Conclusions

3. 1 Introduction – Role of Coal in Energy Mix World – EnergyConsumption 2012 Total: 12.4 bntoe (= 17.7 bntce) (cp: 14.6 bntce in 2004) Graph based on BP Statistical Review of World Energy 06.2013

4. 1 Introduction – Role of Coal in Energy Mix Expectedgrowth in worldwideelectricitygeneration(in billion kWh) Source: IEA, VGB; in: VGB facts & figures 2012/2013

5. 1 Introduction – Role of Coal in Energy Mix Expectedgrowth in electricitygeneration (in billion kWh) worldwide EU Source: IEA, VGB; in: VGB facts & figures 2012/2013

6. 2 Role of Coal in Europe Source: EURACOAL

7. 2 Role of Coal in Europe Coal is a major fuel for energy and steam production in European coal-fired power plants, especially in single EU member states .

8. 2 Role of Coal in Europe Hard coal + Lignite Hard coal

9. 3 Production and utilisation of CCPs Development of CCP production in Europe (EU 15) from 1993 to 2010

10. 3 Production and utilisation of CCPs Utilisation and dispoal fo CCPs in Europe (EU 15) in 2010

11. 3 Production and utilisation of CCPs MS for EU statistics * Estimate based on coal comsumption ** Information on uses only partly available

12. IPPC Directive - Integrated Pollution Prevention and Control(main principles for permitting and control of installations, integrated approach, application of Best Available Technique (BAT)) LCPD - Large Combustion Plant Directive(aims to reduce acidifciation, ground level ozone and particulates by controlling emissions of SO3, NOx and dust from large combustion power plants) IED - Industrial Emission Directive(successor of IPPCD - aims in minimising pollution from various industrial sources, based on several principals: integrated approach, BAT, flexibitlity, inspections, public participation) 4 Legislative, Technological and Economic impacts The most important Directives are: European Pollutant Release and Transfer Register (E-PRTR)(replaces and improves the previous European Pollutant Emissions Register)

13. 4 Legislative, Technological and Economic impacts Basic protocol and convention • KYOTO ProtocolOn 1.12.1997 37 industrial countries agreed to reduce green-house gases (GHG) over the five year period 2008 – 2012,know as KYOTO Protocol which entered force in 2005 • CONVENTION on Climate ChangeThe KYOTO Protocol islinked to the United Nations Framework Convention on ClimateChange. • The Convention encourageindustrialisedcountries to stabilize GHG emissions, the Protocolonlycommitsthem to do so.

14. 4 Legislative, Technological and Economic impacts Mechanisms of the KYOTO Protocol • Emission (CO2) Trading Industry has to deal with CO2 emissions with CO2 certificates. In the first two phases of CO2 trading the certificates were given for free, the third phase will start 1. January 2013 were certificates will be traded. • Joint Implementation (JI) JI enables industrialized countries to carry out joint implementation projects with other developed countries • Clean Development Mechanism (CDM)CDM allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, which can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets.

15. 4 Legislative, Technological and Economic impacts • Climate and Energy Package • In December 2008, the EuropeanParliament and the Councilagreedupon the so-called “Climate and Energy Package”, whichentered force in 2009. • The legislative package put in placewhatiscollectivelyknownasthe “EU-20-20-20” targets to be met by 2020: • Reduction of greenhouse gas emissions of at least 20 % below 1990 level, • Increasing the share of renewable energy to 20%, and • Improving the EU’s energy efficiency by 20%.

16. 4 Legislative, Technological and Economic impacts The 20-20-20 package is part of the Roadmap for moving to a low-carbon economy in 2050 • The European Union (EU) is to become a competitive low carbon economy. • The EU should prepare for reductions in its domestic GHG emissions by 40 % by 2030, and by 80 % by 2050. Aim: Reduction in global GHG emissions of 50 % by 2050 may avoid a temperature increase of 2°C

17. 4 Legislative, Technological and Economic impacts Mitigation of climate change in the EU: two stages – two speeds Reduction of GHG emissions from 5.8 Gt/y in 1990, to some 4.6 Gt/y in 2020, and to some 1 Gt/y in 2050 Source: European Commissionand OECD Environmental Outlook, 2008

18. 4 Legislative, Technological and Economic impacts Evolution of installed capacity in EU-27 – 2009 to 2020 53 % 44 %

19. 4 Legislative, Technological and Economic impacts Evolution of Electricity Generation in EU-27 – 2009 -2020 52 % 44 %

20. 4 Legislative, Technological and Economic impacts Generation equipment – capacity by primary energy in MW DEPENDING ON POLITICAL DECISIONS! Source: EURELECTRIC Power Statistics

21. 4 Legislative, TechnologicalandEconomicimpacts Power Plant efficiency and CO2 reduction potential of the European Power Industry Source: VGB

22. CCS 4 Legislative, TechnologicalandEconomicimpacts Power Plant efficiency and CO2 reduction potential of the European Power Industry with CCS Source: VGB

23. 4 Legislative, TechnologicalandEconomicimpacts New power plant projects in European member states Source: VGB

24. 4 Legislative, TechnologicalandEconomicimpacts New power plant projects in single EU member states Source: VGB

25. 4 Legislative, TechnologicalandEconomicimpacts New hardandlignitefiring power plantsunderconstruction (excerpt of VGB database on new power plant projects) UCON: under construction

26. 4 Legislative, TechnologicalandEconomicimpacts New hardandlignitefiring power plants in authorisationprocess (excerpt of VGB database on new power plant projects) WA: waiting for authorisation

27. 4 Legislative, TechnologicalandEconomicimpacts Basics for future energy production: • „Renewables first“ • Cost effective production by other sources(nuclear, coal, biomass, gas – according spec. merit order) Cost factors to be considered at any time: • Fuel cost • Cost of CO2 certificates • Energy cost (energy trade) • ……….

28. 4 Legislative, TechnologicalandEconomicimpacts Impacts on energy prices: • „feed in tariffs“ forrenewable power (wind, photovoltaic,..) • (different in memberstates) Factors for energy trade: • Duration of contracts (long term/short term) • Calculation: average cost // limit costs • Trading by exchange markets (sport market/prognosis) • ………. Risks for power production: • Demand dependent production by renewables not possible • Production by e.g. coal as „back up“ in times with low demand and therefore low prices not profitable

29. ► Primary energy demand will increase, worldwide and in Europe ► Coal is a major fuel for energy and steam production ► Operation of coal-fired power plants are influenced by European Directives (IPPC, LCPD, IED) and Decisions which aim in reduced emission into the environment. ► The CO2-reduction aims 20 % by 2020, 40 % by 2030 and by 80 % by 2050 will result in reduced use óf coal and increase the use of renewables and co-combustion in coal-fired power plants. In addition, the operation conditions of coal-fired power pants will be different. 5 Conclusions

30. ► New coal-fired power plant projects are designed for co-combustion and flexible operation. Most of the power plants under construction are already under fire ► Due to energy trading additional factors for operation of coal-fired power plants to be considered. ► The amount of CCPs in EU15 countries is decreasing. However, the amount of ash produced in EU 28 countries sums up to more than 145 million tonnes. ► Coal will remain a major fuel for energy production. ► Quality aspects and marketing activities have to be considered for the use of CCPs . 5 Conclusions