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EU Climate Policy Roadshow. Energy Efficiency in the EU Policies and implementation Mr. Andrzej Werkowski Energy Max Power, Poland. Energy Efficiency in the EU Policies and implementation. Agenda. Energy Efficiency in the EU – strategic approach and actions
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EU Climate Policy Roadshow Energy Efficiency in the EUPolicies and implementation Mr. Andrzej Werkowski Energy Max Power, Poland Moscow, 8-9 April 2014
Energy Efficiency in the EU Policies and implementation Agenda • Energy Efficiency in the EU – strategic approach and actions • Implementation of the EU Energy EfficiencyDirective 2012 • Cogeneration – one of the most effectivetools to improveenergyefficiency • CaseStudy – Cogeneration in Poland • Conclusions EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Instead of Introduction „Thereisonly one thing one can be sure of Energy prices WILL grow” (ConnieHedegaard – EuropeanCommissioner for Climate Action) „#1 Priority – Achieving an energyefficient Europe” (EU Strategy – Energy 2020, November 10, 2010) THE CHEAPEST ENERGY IS ENERGY WE DON’T USE (Essence of energyefficiency) EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Mainpillars of the EU Climate and Energy Policy • Competitiveness • Security of supply • Sustainability EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation At the same time … EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Business as UsualScenarioGrowingdependence on fossilfuelimports % % EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation EU Climate and Energy Policy • The 2020 Climate and Energy Package 3 x 20 (adopted in 2009, under implementation) • 2030 Framework for Climate and EnergyPolicies(to be adopted by October 2014) • Reducing greenhouse gas emissions in 2030 by 40%compared to 1990 • Increasing the share of renewable energy to at least 27% in 2030 • Continued improvements in energy efficiency • Roadmap 2050(under consultation) • Furtheremissionsreductionto 80% below 1990 levels • Milestones: 40% by 2030 and 60% by 2040 • Guidance for mainsectorsresonsible for Europe’s emissions on howtheycan make the transition to a low-carbon economy most cost-effectively EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation EU Climate and Energy Policy Keyimprovementdirections EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation EU Energy Efficiency • Energy efficiency is at the heart of the EU’s Europe 2020 Strategy for smart, sustainable andinclusive growth and of the transition to a resource efficient economy • Energy efficiency isone of the most cost effective ways to enhance security of energy supply, and to reduceemissions of greenhouse gases and other pollutants • In many ways, energy efficiency can beseen as Europe's biggest energy resource • This is why the EU has set itself a target for2020 of saving 20% of its primary energy consumption compared to business as usualprojections, and whythis objective was identified as a keystep towards achieving the EU long-term energy and climate goals EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Climate and Energy Package 3 x 20 • The climate and energy package is a set of binding legislation which aims to ensure the European Union meets its ambitious climate and energy targets for2020 • These targets, known as the "20-20-20" targets, set three key objectives for 2020: • 20% reduction in EU greenhouse gas emissions from 1990 levels • Raising the share of EU energy consumption produced from renewable resources to 20% • 20% improvement in the EU's energy efficiency EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy efficiency 2020 Is the EU on the righttrack to meetthe EE objective? Primaryenergy consumption, [Mtoe] Additionaleffortsneeded to fill the gap EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation EU Climate and Energy Policy Improvementpotentialuntil 2020 Economicpotential [Mtoe] EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Plan 2011 – KeyEffects Meeting the EU energyefficiency 20% reduction target shouldlead to: • Potential to generate financial savings of up to€ 1.000 perhousehold every year • Improvement of Europe’s industrial competitiveness • Creation up to 2 millionjobs • Reduction of annual greenhouse gas emissions by740 million tons EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Directive 2012/27/EU • AmendsDirectives 2009/125/EC and 2010/30/EU and repealsDirectives 2004/8/EC and 2006/32/EC • Enteredintoforce on 4 December 2012 • Most of itsprovisionshave to be implemented by the Member States by 5 June 2014 • All EU-28 countries are required touse energy more efficiently at all stages of the energy chain– from the transformation of energy and its distribution to its final consumption • All EU-28 countriesarerequired to establish indicative national energy efficiency targets for 2020 EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Directive 2012/27/EU – National targets EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Directive – Actions Public sector to lead as example • Purchase of products, services & buildingswith high energyefficiency performance • Annual renovation target of 3%for public buildings above 250 m² • Localenergyefficiencyplans and introduction of energy management systems • More systematic use of Energy Performance Contracting Share of Public sector Consumption of EU’s GDP Share of public buildings in the EU buildingstock EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Directive – Actions Creatingbenefits forconsumersthrough the provision of tailoredenergy services and information • National energyefficiencyobligationscheme for utilities • Obligation for individualenergymeters, reflectingactualenergy consumption & information on actual time of use • Ensureaccuracy & frequency of billing based on actual consumption • Appropriateinformationwith the bill providingcomprehensiveaccount of current energy costs SmartMetering EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Directive – Actions Improvingenergyefficiency in transformation and distribution of energy • 10-year national heat & cooling plans:transparency, predictability & alignment of policies for investments • Waste heatrecovery (CHP) obligation for new and existingpower & industrial plants • Network tariffs design to encourageoffering services for consumersallowing them to save energy &control consumption • National annualinventories of generationinstallations to monitor efficiencylevels • Remaining • potential Achieved savings EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Efficiency Directive – Actions Increaseawareness for benefitsstemmingfromenergyefficiencyimprovements in industry • Member States to createincentives for SMEs to undergoenergy audits • Dissemination of best practices onbenefits of energy management systems for SME businesses • Mandatory audits for largecompanies & incentives for the implementation of recommendedmeasures and the introduction of Energy Management Systems EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation EU Energy Efficiency Policy Implementation EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration – Benefits • Increased efficiency as the plant istailored to meet the needs of localcustomers • Large cost savings, providing additional competitiveness for industrial and commercial users, and offering affordable heat for domestic users • Lower emissions to the environment, in particular of CO2 • Reduction of transmissionlossesdue to decentralisation • Increase in flexibility in system use - particularly ifnatural gas isthe energy carrier • Improved local and general security of supply • Important vehicle for stimulatingcompetition in generation and for promoting liberalisation in energy markets • Increased employment –development of CHP systems is a generator of jobs EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration • Cogeneration is the most effective and efficient form of power generation, offering savings ranging between 15-40% when compared against the supply of electricity and heat from conventional power stations and boilers • Cogeneration optimises the energy supply to all types of consumers • Through the utilisation of the heat, the efficiency of cogeneration plant can reach 90% or more EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation CogenerationPrinciple EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration in the EU • Today11% of electricity isgenerated using cogeneration • Today cogeneration saves Europe around 200 million tonnes of CO2 per year – itis the single biggestsolution to the Kyototargets • In the next 20 years, at least 25% of electricity production could come from cogeneration • Highest CHPapplicationpotential: industry, district heating, buildings, agriculture • Emergingareas: • Micro-CHP • Biomass CHP • New technologies: cooling, polygeneration and fuel cells EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration in the EU EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration in the EU EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Policy of Poland until 2030 Primarydirections „Lowenergyefficiencyis one of the most importingfactorsthreateningPoland’senergy security” (Prof. Jerzy Buzek, Former EP Chaiman and Prime Minister of Poland, EUROPOWER 2008) • Improve energy efficiency - #1 Priority • Enhance security of fuel and energy supplies • Diversify the electricity generation structure by introducing nuclear energy • Develop the use of renewable energy sources, including bio-fuels • Develop competitive fuel and energy markets • Reduce the environmental impact of the power industry EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy policy of Poland until 2030 Energy efficiencyimprovement – Keyobjectives • Achieve zero-energy economic growth, i.e. economic growth with no extra demand for primary energy • Reduce the energy intensity of Polish economy to the EU-15 level The key objectives are to be met mainly through: • Building highly efficient generation units • Twofold increase in power generation with the use of highly efficient cogeneration technology by 2020 • Limit grid loss • Increase efficiency of final use of energy EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy policy of Poland until 2030 Polish economy will grow in the next decades to decrease the distance to the EU-15 economies, therefore final energy usage will increase dynamically – 31% by 2030.Same applies for primary energy usage – 27% increase. EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy policy of Poland until 2030 Aiming at achieving “zero emission” economic growth Polish economy will steadily lower energy-intensity GDP ratio. Over 45% improvement is forecasted by 2030 EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy policy of Poland until 2030 Renewableenergy and natural gas are to steadilyreplacecoal in energygenerationprocesses EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy policy of Poland until 2030 Growing role of district heating, electric energy, oil products and gas, EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Energy Policy of Poland until 2030 – Cogeneration • Increasing efficiency of electricity generation, through construction of high efficiencyunits, reducing network losses and development of distributed generation • Doubling electric energy production in high efficiency cogeneration technologies until 2020,compared to production in 2006 • Stimulating developments of cogeneration, including cogeneration from sources below 1MW, through support mechanisms, and adequate regional policies • Aiming at replacing the heat only plants supplying district heating systems with cogeneration by 2030. • Preferential treatment of cogeneration as the technology recommended for building newgenerationcapacity • Implementation measures to achieve the target in the national action plan for energyefficiency • Maximising the utilization of local renewable energy potential in cogeneration of heat, cold and electricity • Developing district heating systems EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration in Poland EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – District Heating Potential • District heating playsthe most important role inthePolish heating system (> 42%) • > 70% of heatsuppliersfallinto SME category EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – Industrial Energy Potential 2010 [GW] 2030 [GW] • Industrial energyissupposed to make thebiggestcontribution to thePolishoverallenergycapacity • Cogenerationshould be considered as preferablesolution EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration in Poland EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – Policy development • The current support scheme for electricity production in cogeneration has been in force since 2007 and will be validuntil 2018 • The support scheme for electricity generation in cogeneration is based on a quota system and on the instruments so-called “certificates of origin from cogeneration” (1) Established on yearlybasis by Energy Regulatory Office (URE) (2) Market price variesfromtheSubstitutefeelevel (3)Averageenergy price referencein 2012 on thewholesale market ≈ EUR 45/MWh EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – Whysupportisneeded? • Mainreasons: • Lowelectricitywholesale market price • Lowratiobetweenelectricity and natural gas price (< 2, whilethenecessarylevel > 2,5) Additionalsupportthroughcertificateschemeiskey instrument, essential for securingnecessaryreturns of newcogenerationplants EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – Awarenessamongkey market actors Customers Market Manu-facturers Installers Gridoperators Industry Commercial Households Consultants Architects Banks Utilities ESCOs Engineering companies Influencers Policy Federal Regional Local Sectororganisation General public Specialist media Energy agencies Regionalplanners Academia NGOs Research Poor Low Earlyawareness Interest Active market EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Germany – Awarenessamongkey market actors Customers Market Manu-facturers Installers Gridoperators Industry Commercial Households Consultants Architects Banks Utilities ESCOs Engineering companies Influencers Policy Federal Regional Local Sectororganisation General public Specialist media Energy agencies Regionalplanners Academia NGOs Research Poor Low Earlyawareness Interest Active market EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogenerationin Poland – Economicclimate for growth „Normal” Interest for new investments exists, no significanteconomicbarriers „Modest” Modest/limited economicbenefits, limited interest for new investments „Poor” No interest/possibilities for new investments Not applicable for thesector EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Strategy for development of cogenerationtill 2030 – Keygoals Double CHP electricitygeneration • CHP electricityproductionshould double from 24 TWh intheyear 2006 to 48 TWh tilltheyear 2030 (22 % shareindomesticgrosselectricitydemand) 20 % share of RES CHP • RES CHP shouldhaveatleast 20 % shareintotalinstalled CHP capacityintheyear 2030 (1 % intheyear 2006) Enforcesustainablelocalheatplanning and implementation • Further development of district heating and othersustainableheatsupplyoptions EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration Road Map for Poland until 2030 Contribution to growth • Theexpected increase of cogeneration in the future will be based on: • Extended capacities of existingcogeneration plants • Introduction of cogeneration in electrical plants and industry • Large increaseof cogeneration plants using bioenergy fuels • Growth of natural gascogeneration will be rather moderate with only 10% share of total new expected cogenerationcapacities • Dominating share with more than 60% will have solid biomass and biogas EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Cogeneration Road Map for Poland until 2030 – Deliverables Exploitation of the estimated more than4.000 MWe economic potential of high efficiency cogeneration in Poland,by removing the barriers and facilitating faster and more balanced growth of high efficient cogeneration utilisation inall applicable sectors till the year 2030, couldresultin: • Contribution of 57 TWh to primaryenergysavings • Supply of 48 TWh or more than 22% of gross final electricity demand • Heatgenerationfromcogeneration > 120 TWh (more than 55 TWh additional heat) • Increase of RES useup to 20% of total installed cogeneration capacity • Reduce CO2 emissions by at least 23 milliontons/annum EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Casestudyfactsheet • CHP Częstochowa, Poland • Electricalcapacity – 64,5 MWe • Heatcapacity – 120 MWt • Fuel – Coal, Biomass • Technology – CFB • Electricitygeneration – 385 GWh/annum • Heatproduction – 540 GWh/annum • Year of commissioning – 2010 • The first cogeneration plant built on greenfield site in Poland • Electricity supplied to the national grid • Heat suppliedto the district heating of Częstochowa city, coveringmore than 80% district heat demand • CHP's gross efficiency in first operational year was 70,7%, share of biomass– 21,2% • Environment friendly • Successfactors • Green and Red Certificates • CFB technology – efficient in different loads, flexible for different fuel mixes EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Innovative technology Gas Max Power CHP Plant • Designedwith the innovative combined gas-steam cycle with residual heat recovery • Maximizingthe heat power from burning gas in a three-stage gas turbines system applicationdriven by: • natural gas combustion • superheatedsteam • vapour of lowboilingorganicliquid • The whole heat of combustion of the gas may be converted into electricity while maintaining theminimum energy loss • No need to use heat produced from the combustion of gas at the outside of cogeneration plant, if not demanded EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Innovative technology Gas Max Power CHP Plant 1100 °C 500 °C GT HRSG 450 °C 200 °C ST HEx 200 °C 40 °C HEx ORC 11-15kV EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation • Steam • Hot water • Chill Module 3 Module 2 Electric energy Gas Gas Gas 40, 80, 120...200 MWe Steam Steam Steam Modules ORC ORC ORC Module 1 Module 2 Typeof fuel: Natural gas, syngas, diesel-oil … EU Climate Policy Roadshow
Energy Efficiency in the EU Policies and implementation Distinguishingfeatures of Gas Max Power CHP Plant • Self start – no need for external electric power supply • Standby – to achieve the rated power in 10 min. • Power control range – a large dynamic range of the turbine set • Methodof regulating flows of energy: • Largegas turbine dynamics - maintaining continuity at low load • Sectionalsteam boiler (shifting power from steam turbines) • Sectionalheat exchanger of the organic liquid (power shifting between turbines and ORC) • Modular design – availability for step-by-stepimplementation • Environment friendly EU Climate Policy Roadshow