POWER GEN Europe - BET Aachen

Twenty years of
evolution
in the European power industry
As POWER-GEN Europe celebrates its 20th anniversary, Nigel Blackaby, PennWell’s
International Conference Director, considers the major trends shaping the European power
industry’s past, present and future.
Signi�cant transformation has epitomized the power industry over the
past two decades. Looking back, industry commentators agree the
most signi�cant trend has been the industries shift from being largely
state-owned, centrally-controlled and dominated by large integrated
companies to that of a liberalized environment.
Some would suggest that this has led to lower prices for the consumer
and the introduction of e�ciencies into the marketplace. Others would
argue that energy costs for consumers have actually risen, that there
continues to be a lack of transparency and that wider market uncertainty
still hampers investment in plant and infrastructure.
Nevertheless, unbundling of generation, transmission, distribution
and supply (retail), as well as the creation of energy trading markets
has driven e�ciencies into the marketplace, primarily in respect of
technology e�ciencies and lower wholesale prices via energy trading.
Speci�cally, combined-cycle gas turbine generation has blossomed, with
major advances in e�ciency and size.
Meanwhile, the landmark Kyoto Agreement of 1997 and the EU 2020
targets established in 2007/8 have driven a major and long-lasting shift
in focus to addressing concerns around CO2 and greenhouse gas (GHG)
emissions. Renewable energy legislation has been enacted in a number of
European countries, prompting an increase in the number of wood- and
biomass-burning plants, as well as greater interest in carbon capture and
storage (CCS) technology. There has also been the rapid development of
solar and wind energy.
Facing fresh challenges
Major players are already moving to green energy and have accepted they
must now build power plants on the basis of clean power. The utilities
also recognize renewables, especially wind and solar, as being the way
forward. However, regulatory boundaries continue to change in respect
of GHG emission restrictions, rights and fees; the price and availability
of fuels; and the opposing positions being taken on development of
nuclear since Fukushima. There is also the challenge of integrating the
increasing amount of renewables into the electricity system and the
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operational issues these create – from frequency and voltage stability to
provision of reserve. Storage of energy and conversion from one type to
another – e.g. wind to water storage, wind to hydrogen and electricity to
heat – will therefore be hugely important.
There is also the issue of expanding the grid and deploying new
transmission lines to accommodate renewables, especially o�shore
renewables that are located quite some distance from the grid load site.
Obtaining the necessary permits and public acceptance is currently
proving di�cult. Similarly, doubts persist as to whether CCS is a realistic
option, given public opposition to transporting CO2 via pipeline and storing
it underground. Using excess energy from solar or wind to transform CO2
into methane provides a viable alternative. Meanwhile, �ue gas cleaning
will remain an important aspect of the clean energy mix.
A secure, sustainable and least-cost electricity system
Certainly, deregulation, the green agenda and integration of renewables
such as wind and solar into the electricity system bring fresh challenges,
but they also create exciting new opportunities, as do increasingly rapid
advances in plant, storage and smart grid technologies. Moving forward,
the industry must look much more closely at the energy mix and other
technologies to emerge. E�ectively, what’s needed is system �exibility in
terms of both fuels and outputs.
Moreover, both government and industry must work together to better
communicate the need for technology development in general –
including nuclear, shale gas, CCS and coal – to gain public acceptance
of the necessity of these technologies to sustaining our way of life and
preserving the planet.
Against a backdrop of greater demand for energy from emerging markets
and a gradual rise in economic activity globally, it is more important than
ever that all stakeholders pull together to �nd a solution to delivering
a secure, sustainable and least-cost electricity system. Ultimately, all
investments in the power sector are long-term and will feed through to the
consumer. Therefore clarity regarding long-term strategies of regulators
together with improved transparency for consumers must be achieved.