RENEWABLES AND STORAGE IN THE ENERGY SYSTEM OF THE FUTURE Innovation - Jan Schelling 2013-03-09

UMB Energiseminar 2013

New installations in Europe: Mostly renewables

2

Source. EWEA 2013

WIND CAPACITY GROWTH

3

source: GWEC

PV CAPACITY GROWTH

4

source: EPIA

Scenarios for the future

5

Source: Reiner Lemoine Institute 2012

Levelised cost of Electricity Q1 2013 ($/MWh)

Source: Bloomberg New Energy Finance

0 100 200 300 400 500

CHP

Coal fired

Natural gas CCGT

Nuclear

Small hydro

Large hydro

Geothermal - flash plant

Wind - onshore

Municipal solid waste

Landfill gas

Biomass - incineration

Geothermal - binary plant

Biomass - gasification

PV - c-Si tracking

PV - thin film

Biomass - anaerobic digestion

PV - c-Si

STEG - tower & heliostat w/storage

STEG - parabolic trough

Wind - offshore

Fuel cells

STEG - parabolic trough + storage

STEG - tower & heliostat

STEG - LFR

Marine - tidal

Marine - wave

LCOE BNEF EU Carbon Forecast Q1 2013 Central Scenario Q4 2012 Central Scenario

-7%

-

-

-

-

-

-

-14%

-

-

-

$1,058/MWh, -

$861 /MWh, -

-

-

-

-

-

-

-17%

-

-

-2%

-

-

-

Cost of Electricity

CoE (NOK/kWh)

- Cost of Electricity

- Strømkostnad

Annualised CAPEX (NOK/år)

- Capital Expenditures

- Kapitalutgifter

Annual OPEX (NOK/år)

- Operating & Maintenance (O&M) Expenditure

- Årlige drift- og vedlikeholdskostnader

Annual production (kWh/år)

- Årsproduksjon

7

𝐶𝑜𝐸 =𝐴𝑛𝑛𝑢𝑎𝑙𝑖𝑠𝑒𝑑 𝐶𝐴𝑃𝐸𝑋 + 𝐴𝑛𝑛𝑢𝑎𝑙 𝑂𝑃𝐸𝑋

𝐴𝑛𝑛𝑢𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛

Innovation cycles

8

Old technology

embryonic

growing

mature

aging

Technology Readiness Level

Technology Diffusion

Perf

orm

ance

Solar PV learning curve

2005 – 2008

silicon purification

bottleneck

2011 – 2012

large overcapacity,

negative margins

2012 – 2015

bankruptcies, consolidation

slower price reductions

9

0.1

1

10

100

1 10 100 1,000 10,000 100,000 1,000,000

PV

mo

du

le p

rice

s, $

/W (

20

12

)

Cumulated installations, MW

2012

2016

1976

20081988

adapted from: Bloomberg, Nov 2012

experience curve: 21% cost reduction per doubling of installed capacity

2010 price forecast

Solar and Wind: Complementary annual profile

10

Germany 2012

Solar Wind

Solar and Wind: Small compared to conventional

11

Germany 2012

Solar Wind Conventional

Solar and wind power vs. conventional

12

Germany, August 2012

Solar Wind Conventional

Capacity Factor (CF)

13

6 % 8 % 10 % 12 % 14 % 16 % 18 % 20 %

Sweden

Finland

Estonia

Lithuania

Latvia

Ireland

UK

Belgium

Netherlands

Gemany

Poland

Luxembourg

Denmark

Czech Republic

Slovakia

Austria

Slovenia

Hungary

France

Romania

Bulgaria

Italy

Greece

Spain

Portugal

Malta

Cyprus

Capacity factor (CF) for Solar PV in Europe

Actual output

Theoretical maximum output

1 year = 8760 hours

Theoretical maximum output: = 8760 h * 1 MW = 8760 MWh

1 MW power plant

Actual output: = 4380 MWh

Capacity Factor: = 4380 MWh / 8760 MWh = 0.5 = 50%

CF =

Example

Wind innovation

14

Endring CAPEX OPEX Årsproduksjon

Større generator

Større rotor

Høyere tårn

Mer effektiv rotor

Direct drive (ingen gir)

Plassering til havs

Større vindparker

Turbiner fra lavkostland (kina)

CAPEX + OPEX

kWh CoE =

Onshore vs. offshore wind

15

Onshore Offshore

Kostnad

Utbyggings-potential

Offentlig aksept

Miljøpåvirkning

Eierstruktur

Strømnett

Kraftproduksjon

Teknologirisiko

Why not more onshore wind?

Space limitations

Visual impact

Noise emissions

Other…?

16

Why offshore wind?

Large resource potential

Easier permitting

Local content

- Manufacturing

- Assembly

- Installation

- Operation & Maintenance

- Infrastructure

Global technology leadership

- Higher margins

- Export potential

17

Innovation in wind turbine technology

18

All parameters improved and LCOE to continue to fall (20-30% by 2030)

19

0%

5%

10%

15%

20%

25%

30%

35%

40%

1985 1995 2005 2015

0

10

20

30

40

50

60

70

80

90

1985 1995 2005 2015

0.00

0.50

1.00

1.50

2.00

2.50

1985 1995 2005 2015

Capacity factor Manufacturing capacity Turbine prices GW M$/MW %

Better turbines Taller towers

Denmark, Germany

Global

Source: Bloomberg New Energy Finance 2011

Cost gap between on- and offshore widening

20

Wind - Onshore

Wind - Offshore

0

50

100

150

200

250

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2009 2010 2011 2012

LCOE, €/MWh

Learning curves

21

År 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sol, GW 100 150 200 250 300 350 400 500 600 700 800 900

Øre/kWh 70 60 51 43

Gass,GW 1500 1550 1650 1700 1750 1800 1850 1900 1950 2000 2050 2050

Øre/kWh 30 31 32 33 34 35 36 38 40 42 44 46

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

2012 2014 2016 2018 2020 2022 2024

NOK/kWh

solar

gas

Learning curve: Cost reductions

22

Larger factory

Less material

Cheaper materials

Manufacturing in low cost country

Better performance

Faster manufacturing process

Cheaper manufacturing equipment

Competition More experienced workers

Standardisation Shared experience with other products

Merit order effect

Higher demand = higher prices

Lower demand = lower prices

23

DEMAND

Price, €/MWh

SUPPLY

Merit order effect

RES = Renewable Energy Sources

Renewables have low marginal

costs (zero fuel cost)

Often renewables have priority in

the grid

More renewables = reduced

residual demand = lower prices

24

Technology diffusion

25

coal

nuclear

gas

solar

fusion

wind (onshore)

wind (offshore)

tidal

wave

CO2 capture

Electricity storage technologies

26

Power to gas for energy storage

27

Electrolyser

Renewables Transportation

Heat

Power

Catalyst

Hydrogen

A low-carbon future?

28

Power

Heat

Transport

Gas

Wind, solar, hydro, marine, nuclear(?), …

Biomass, waste

www.statkraft.com

THANK YOU

UK wind resources and projects

30

Solar and Wind: Variable but predictable

31

Thermal plants: Deviating from plan too

32