Building a New Future with European Carbon Targets

17 May 2009 (Last Updated May 17th, 2009 18:30)

Industry experts are preparing to meet at next month's ViB New Build Europe 2009 conference. Natalie Coomber finds out how the EU's leading players plan to fulfil the ambitious 20/20/20 target.

Building a New Future with European Carbon Targets

The EU's 20/20/20 scheme at once aims to achieve a low-carbon economy and secure Europe's power future. With the duel target of reducing carbon dioxide emissions by 20% and increasing Europe's reliance on renewables by equal measure – and all by 2020 – it has set the hearts of technologists throughout Europe fluttering at the wealth of state-of-the-art technologies that will be needed to achieve these aims.

For those dominant in the traditional fossil fuels space, the need to make their existing power plants more efficient is now coupled with a speedy requirement to ramp up footprints in renewable energies. With December's big meet in Copenhagen looming ever closer, major players are meeting at the end of June during ViB's New Build Europe 2009 conference to explore how fossil fuel generation will fit into the future power mix.

As European Power Plant Suppliers Association secretary general Patrick Clerens puts it: "We will need to burn fossil fuel for the next few decades otherwise we will not meet our demand – that is a fact." But equally certain is the fact that Europe – and the world's other major emitters – cannot continue to release so many greenhouse gases.

In 2006, six major Danish energy companies merged to form one mass conglomerate, Dong Energy. Three years later and the company is thriving but it accounts for roughly a third of Danish CO2 emissions. A fact that chief executive Anders Eldrup told power-technology.com he hopes to change.

"The integration is a challenge, as is guaranteeing the same reliability that is at existing power plants."

"We are working on a plan that over some years will reduce our production based on fossil fuels. Out of our total power production 85% comes from fossils. Our target is that within one generation we can turn this round so 85% is generated by renewables."

The future in wind

With a commonly acknowledged truth that fossil fuels are essential to the power mix, alongside an acceptance by traditional players that renewables need to be given a much greater focus, it seems Europe is achieving a balanced approach to its future power supply. But making sure this is mirrored around the world is not only essential to guaranteeing the future well-being of the planet, it is also vital in securing Europe's business edge.

"Europe as a unit is very committed to reducing CO2 emissions. But one thing is sure, we cannot do this on our own and if others do not follow our example, it will enormously harm the competitiveness of Europe," says Clerens.

One way to guide global institutions towards this end would be a single mandatory CO2 trading arena.

"The dream would be to have a global system with global rules for carbon but realistically we want to have as broad and long-term market as possible," adds Eldrup.

"We cannot do this on our own and if others do not follow our example, it will enormously harm the competitiveness of Europe."

To cement its long-term future, Dong is planning about €1bn this year in acquisitions. This spend has already begun with its buy-out of the Severn 850MW gas-fired plant under construction in Wales during March, alongside a number of windfarm acquisitions in Poland.

Its mark is also keenly felt in the offshore wind space with about half of all farms around the world under its stable and with a recent mega-contract with Siemens, Dong confirmed its view that wind is one of the most promising renewables yet.

By agreeing to purchase 500 windfarms from the technology firm, Dong has committed to one of the biggest turbine orders in history.

"Our intention with the Siemens contract is to have continuous production to industrialise the process and shorten the building time instead of doing it on a case-by-case basis," says Eldrup.

But despite PricewaterhouseCoopers confirming Dong Energy as the most efficient coal-fired plant power producer in a 2008 benchmark survey, making fossil fuel stations more efficient must be just as an important competency as increasing its renewable plays going forward.

Feeling the heat

A further element of the European 20/20/20 strategy set out in 2007 was a promise to build 10 to 12 demonstration plants to test up-scaled carbon capture and storage (CCS) technologies at thermal generation plants that have been proved successful in a laboratory environment. The three technologies pushing through in this space are pre-combustion, post-combustion and oxyfuel combustion capture.

Clerens says that a wealth of private money has produced cutting-edge technology and it is now a case of up-scaling and ensuring cost efficiency.

"We will need to burn fossil fuel for the next few decades otherwise we will not meet our demand."

"I don't think the technology presents a challenge, it is known to work. The integration is a challenge, as is guaranteeing the same reliability that is at existing power plants," Clerens said.

While all three methods look to provide advantages, post-combustion and oxyfuel combustion capture have the additional attraction of being able to be retrofitted into existing plants. But while all offer promise, each has a long way to go if it is to be proved manageable at the average power plant output of 1,000MW.

The credit downturn is yet to deviate power producers from future plans as the average lead time stands at around seven years. But Eldrup says that his company has witnessed a drop in demand and as these technologies are principally privately funded, making sure your company can present a sound business case for its bet is going to become essential in the coming months.

What is certain is that to meet future power needs fossil fuels form an essential part of the power mix but to be a sustainable element, CCS technologies need to become much more prevalent and their use needs to be more heavily complemented with renewables. In Europe, these plans are fully underway but if they are being complemented enough in other jurisdictions is a matter for debate. Although being first on the bandwagon may help some firms sell their wares abroad, this opportunity needs to be carefully balanced with making sure stringent legislation doesn't hold EU firms back.