International Gas Union

Natural Gas Facts & Figures

March 2012

Navigation-tool for the Natural Gas Facts & Figures slide-pack

1.

Markets for Gas Power Generation Industry Chemical Feedstock

Commercial Sector Residential Sector Transportation Sector

2.

Natural Gas Resources, Supply & Transport Reserves: Conventional & Unconventional Gas Transport LNG Environmental Impact Power generation from gas with / without Carbon Capture & Storage (CCS) Efficient Partner for Wind (and other intermittent energy sources) Prospects for Developments of Further Technological Options
2

3.

4.

Goals and Objectives

Highlight the value of natural gas to ensure its fullest economic and environmental contribution in low carbon energy systems

Cost estimates

Note: The cost estimates in this package have been based on reliable, verifiable data. However they may not concur with cost estimates in other publications. This may be due to a variety of factors and assumptions, e.g.: Prices of fossil fuels CO2 prices Location factors Size of plants Costs of steel EPC costs Discount factors Lifetime of plants All cost comparisons in this package should therefore be considered as indicative. While capital costs of different options may vary considerably in absolute terms, in relative terms there is very little variance
(For reasons of consistency all cost data used in this package have been taken from the June 2010, Mott MacDonald (MMD) report for the UK DECC)
4

Markets for Gas Cost effective, Convenient and Efficient

Growing Global Demand for Gas

Source: IEA, The Golden Age of Gas, 2011 (GAS scenario)

6

Power Generation

Meeting Electricity Demand

EXPLANATORY NOTES
PEAK-LOAD, MID-LOAD and BASE-LOAD SUPPLY Same demand ranked in descending order illustrated by a load duration curve and corresponding supply

Electricity demand fluctuates from hour to hour over a year

Wind Solar
PEAK-LOAD SUPPLY

Hydro
Nuclear
Embryonic Expansion Maturity
MID-LOAD SUPPLY

BASE-LOAD SUPPLY Decline

Jan

Dec

Source: IGU/ Clingendael International Energy Programme (CIEP)

8

Gas-fired Power Generation CCGT (Combined Cycle Gas Turbine)

Very efficient generation technology

Modern combined cycle 1000 MW power

plant (CCGT)

Diagram CCGT, a combination of a gas

turbine and a steam turbine. Efficiency ~ 59 %.

Gas-fired Power Generation CCGT (Combined Cycle Gas Turbine)

Very efficient generation technology

High efficiency (relative to other options)

Less thermal waste & less cooling needed Compact equipment

Lower investment and operating costs than oil or coal plant

Shorter construction time and easier permitting process Few environmental problems (relatively clean)

Less CO2 emission rights needed than for oil or coal Suitable for meeting base-load and mid-load demand
Source: based on MMD, June 2010
10

Gas-fired power generation Lowest capital costs per MW installed

Capital costs of options may vary considerably in absolute terms, but very little in relative terms
Indicative, cost levels
million $/MW

5 4 3 2 1

Source: MMD, June 2010

11

Gas: A competitive option for new generation

Low All-in Unit Costs per kwh produced
Competitive for meeting Base-load Demand
$/MWh

Prices (at plant inlet) Gas : 8 $/MMBtu Coal: 80 $/t

Based on: 7000 hrs operation for gas and coal per year 2500 hrs for onshore wind per year 3600 hrs for offshore wind per year 7800 hrs for nuclear per year

Source: MMD, June 2010

Capital costs of options may vary considerably in absolute terms, but very little in relative terms
12

Gas: A competitive option for new generation

Low All-in Unit Costs per kwh produced
Flexible and Competitive for meeting Mid-load Demand
$/MWh

Prices (at plant inlet) Gas : 8 $/MMBtu Coal: 80 $/t

Based on: 4300 hrs operation for gas and coal per year

* Costs do not take account of effect of interruptibility on the plant efficiency Capital costs of options may vary considerably in absolute terms, but very little in relative terms Source: MMD, June 2010
13

Gas-fired Power: Efficient

Smaller plant size reduces risk of overcapacity
Minimum size to capture economies of scale (in MW)
1000 -1600

600 -1000 450

Gas CCGT

Coal supercritical

Nuclear

Source: MMD, June 2010

14

Gas-fired power: Efficient

Short construction time reduces risks of demand uncertainty.
years 8
7 6 5 4 3 2 1 0

CCGT

Coal

Nuclear

Plus shortest time for permitting etc

Source: Energy Technology Perspectives, IEA 2010
15

CHP: A very energy-efficient option

CHP: Combined Heat & Power. Also: "cogeneration Proven technology To reduce thermal waste from power production and use the heat. Higher efficiency than separate generation Saves energy and emissions Total efficiency ~80 %. Can take biogas
Source: Energy Delta Institute
16

Industry

17

Gas: Convenient & Efficient Source of Energy

Economic and Clean

Easy handling, lower installation and maintenance cost Good controllability of processes and high efficiency Direct heating or drying of products or materials Clean and environment-friendly Less CO2 emission rights needed (where applicable)

18

Gas: Convenient and Efficient Source of Energy

(examples)

Steam drums for paper manufacturing Ceramic foam infrared heater (1150 oC)

19

Gas: The Efficient Source of Energy

(examples)

Batch grain dryer

Infrared (IR) paint drying

20

Chemical Feedstock

21

Industry chemical feedstock

More than 165 bcm/year

Gas conversion industry uses gas as an efficient and valuable source for chemical conversion into other products which are sold worldwide
Ammonia converts: some 135 bcm/year for production of fertilizer, fibers, etc Methanol converts: 30 bcm/year

Source: IGU/ Clingendael Institute (CIEP)

22

Chemical feedstock
Many high quality and high value applications

From Natural Gas

Source: Dutch State Mines (DSM)

23

Commercial Sector

24

Gas: The Efficient Source of Energy Commercials

Offices, schools, hospitals, leisure centers and hotels Shops, restaurants, caf's, Small businesses, workshops, garages Easy handling once infrastructure is present Lower investment cost compared to other fuels High efficiency heating equipment available (incl. condensation)

25

Gas: The Efficient Source of Energy

(examples)

Green houses use

Boiler house in green house.

Gas use temperature dependent.

Assimilation illumination + Use of CO2 from exhaust gases as fertiliser

26

Residential Sector

27

Residential
Efficient and environmentally friendly fuel for heating, hot water and cooking
Clean and easy handling once infrastructure is present Low installation cost vs. other fuels High efficiency heating equipment available High comfort factor Individual heating systems in apartment blocks

High efficiency heating

system (hot water boiler) with storage vessel

High efficiency heating system

28

Micro CHP:
Commercial applications in various countries

Micro CHP:
Heat and power from one apparatus High efficiency system with generator Your own home power plant

29

Residential Cogeneration System

Grid Power

Heating

Air Conditioning

Heat Recovery Unit

Lighting

Shower

City Gas

GE Power PEFC Unit

TV

Bath

Buckup

Hot Water

Floor Heating

Source: Courtesy Osaka Gas

30

Transportation Sector

31

Automotive Fuels: CNG and LNG

CNG : Compressed Natural Gas Gas stored in vehicle at high pressure (200 bar)
LNG : Liquefied Natural Gas Gas stored in liquefied form at atmospheric pressure (requires cryogenic tank and regasification equipment ) Best in heavy vehicles and ships Alternatives : Gasoline, diesel, LPG Position gas : Clean, low on emissions Feasibility depends on fiscal regime Best in vehicles with limited travel radius and many stop-starts

Reduces dependence on/import of oil

32

LNG as automotive fuel for heavy vehicles

LNG is used in increasingly many places for road transport fleets: Buses, Dust Carts, Chilled Container Transporters it gives good engine performance and a vehicle range comparable with other fuels
LNG is suitable to fuel high-consumption transport where space for the LNG storage is readily available: e.g. trains and sea ferries LNG is less-suitable for small privately-owned vehicles because of more complex procedures and more expensive fuelling stations with special requirements regarding their location. Heavy vehicles do not lend themselves to be run on electric power.

33

CNG and LNG as automotive fuel for heavy vehicles (example)

US builds Interstate Clean Transportation Corridor

North Americas fuelling infrastructure has been built over the past 100 years, giving oil-based fuels an advantage over newer alternatives, like natural gas or hydrogen. Now, there is project to develop a new network of alternative fuel filling stations for long-haul trucking fleets in western United States.
The Interstate Clean Transportation Corridor (ICTC) proposes a network of LNG and CNG facilities connecting heavily trafficked interstate trucking routes between Utah, California, and Nevada. The aim is to promote the conversion of heavyduty fleets from diesel to natural gas in order to cut down emissions, reduce oil dependence and save fuel costs.

Source: Interstate Clean Transportation Corridor

34

LNG as fuel for ships

Application of LNG as bunker fuel is rising rapidly

LNG propelled ferry, Norway

35

CNG based road transport a growing business (examples)

Examples New VW Passat Estate TSI EcoFuel model powered with turbocharged CNG engine 1.4-liter TSI 110 kW (148 hp) emitting 119 124 g CO2 / 100 km With average consumption of 4.4 5.2 kg / 100 km and 21 kg reservoir possible range with one filling is around 450 km

Turbocharged CNG engines

36

CNG based road transport a growing business (examples)

Source : NGV Journal 07/2011

37

CNG based road transport

38

Natural gas for road transport

Source: Gasunie Natural gas, part of an efficient sutainable energy future, The Dutch case, Feb 2010
39

2 Natural Gas Resources, Supply & Transport

40

Natural Gas reserves: plenty & more to come

Proven conventional reserves are growing
In addition: Unconventional gas has come within technological & economic reach Conventional Unconventional
Coal bed methane Tight gas Shale gas

Volume
The total long-term recoverable conventional gas resource base is more than 400 tcm, another 400 tcm is estimated for unconventionals: only 66 tcm has already been produced. - IEA-Golden Age of Gas 201141

Conventional Reserves: plenty and more to come

Growing proven reserves
tcm 200 160 120 80 40 0 1980 1990 2000 2010 Europe Latin America North America Africa Asia-Pacific E. Europe/Eurasia

Middle East

Global proven gas reserves have more than doubled since 1980, reaching 190 trillion cubic metres at the beginning of 2010
Source: IEA World Energy Outlook 2011
42

Types of Unconventional Gas

Tight Gas Shale Gas Coalbed Methane

Occurs in tight sandstone Low porosity = Little pore space between the rock grains Low permeability = gas does not move easily through the rock
Source: Shell

Natural gas trapped between layers of shale Low porosity & ultra-low permeability Production via triggered fractures

Natural gas in coal (organic material converted to methane) Permeability low Production via natural fractures (cleats) in coal Recovery rates low

43

Growth of unconventional gas production Impact on US supply

Developments of shale production in the United States have a major effect on the US market and will impact rest of the world

US shale production grows to about 45 % of total production by 2030

Source: James Baker Institute, Rice, 2010
44

World gas resources by major region (tcm) significant unconventional prospects world-wide
Inventorization of unconventional gas is still at an early stage

Source: IEA Golden Age of Gas, 2011

45

The prospects of unconventionals

Unconventional gas offers potential for more domestic production in many countries Particularly for countries like China and Poland this could help to reduce dependence on coal

First exports of unconventional gas under development

Australia: First LNG export project based on Coalbed Methane (8.5 mt/a committed with potential to expand) US: Various LNG export projects in planning stage due to successful development of shale gas

46

The prospects of shale gas

Shale gas is so far only produced in North America. Its true potential is still a matter of uncertainty.

Environmental concerns revolve around ground water contamination resulting from hydraulic fracturing. Governments, together with industry, are addressing new regulation for shale extraction to protect public health and environment. Energy used for production and its CO2 emission is higher than for conventional gas (see next slides).

47

Well-to-burner greenhouse emissions shale gas vs conventional gas

Mt CO2-eq per bcm

Incremental for shale gas: Flaring & venting Production All types of gas: Production, flaring, venting & transport

Combustion

Source: IEA Golden Age of Gas, 2011

48

Gas Transport

49

Energy Transportation
daily equivalents

Basis: equivalent of 50 million m3/day of natural gas

(1 large pipeline 48 or 56)

(diesel)

Source: Energy Delta Institute

50

Natural Gas and Electricity Transmission

Gas pipelines offer:

Lower losses and lower costs of large volume and/or long distance energy transmission

More energy transportation capacity for different customers in different

segments of the energy consumption

Lower visual impact

Better and more economic storage options

Source: Clingendael International Energy Programme (CIEP), 2012
51

Natural Gas and Electricity Transmission

Gas pipelines offer more energy transportation capacity

Lower visual impact from transport of gas vs overhead electricity lines

For high volume energy transportation: 8 power transmission masts of 3 GW each are equal to 1 gas pipeline (48 inch)
Source: Gasunie
52

Natural Gas and Electricity Transmission

Lower costs of energy transmission
A specific advantage of gas transmission compared to electricity transmission is that for gas in growth markets much larger economies of scale can be realised than for power transmission and thus much lower costs per kwh. For electricity, a maximum scale of 2-3 GW is technically achievable, after which multiple (parallel) lines are required*. However, gas pipelines have a capacity between 10 and 25 GW.

Gas transportation for electricity generation can be combined with gas for other consumers in other market segments, leading to substantial economic advantages.
* for very long distances (over 800 km) UHVDC lines can offer scale advantages up to 6-7 GW

Source: Clingendael International Energy Programme (CIEP), 2012

53

Natural Gas and Electricity Transmission

Lower costs of energy transmission with economies of scale
Overhead power transmission
Capital costs: at least 2-3 x more expensive per unit of energy than gas pipelines sized for high volume transmission only in the case a gas pipeline is laid only to transmit gas for power generation, as may be the case in an emerging market, the capital costs are of the same order of magnitude

Underground power transmission

Capital costs: at least 10-15 x more expensive per unit of energy than gas pipeline sized for high volume transmission
Source: Clingendael International Energy Programme (CIEP), 2012
54

Natural Gas and Electricity Transmission

Lower losses from energy transmission

Losses pipelines: Losses (AC): Losses (DC):

0.2-0.4% per 100 km 2-4% per 100 km 0.2-0.4% per 100 km plus 1% one-off conversion loss

Source: Clingendael International Energy Programme (CIEP), 2012

55

Natural Gas and Electricity Transmission

Example of large scale, long distance transmission
Indicative transmission costs of gas and electricity (ct/kWh for 200 km) (24 GW or 48 pipeline over 200 km) Load Factor = 5500 hrs
Overhead electricity transmission
(and underground gas pipeline)

Underground electricity transmission

(and underground gas pipeline)

Source: Clingendael International Energy Programme (CIEP), 2012

56

Natural Gas and Electricity Transmission

EXPLANATORY NOTES
Input parameters for calculation of indicative costs of gas vs electricity transmission
Discount factor: 10% Load factor of electricity/gas transport: 5500 Lifetime: 25 years Energy losses AC transmission: 3% per 100 km Energy losses DC transmission: 0,3% per 100 km + 1% loss during AC-DC-AC conversion Energy losses gastransport: 0,3% per 100 km. Capex gas pipeline 24 GW: 0,2 mln /MW per 100 km Investment costs of AC overhead transmission, AC underground cable and DC underground cable are based on Parsons Brinckerhoff "Electricity Transmission Costing Study (Jan 2012) for the case Lo (3 GW) for 75 km. Investment costs of DC overhead line based on ABB "The ABCs of HVDC Transmission Technology", Case 500kv Investment costs of large scale gas pipeline (24 GW) is based on the average of building costs of existing pipelines (BBL, Blue stream, Green stream, Europiple II, Franpipe, Langeled, North stream)
Source: Clingendael International Energy Programme (CIEP), 2012
57

The LNG market: Connecting regions

58

LNG Production Growing in all Global Regions

Source: IGU World LNG Report, June 2011 (PFC)

59

Growing Liquidity in the LNG Market Flexible LNG

The LNG industry has a total of around 1 660 bcm of LNG available for sale from existing production over the period 2009-2025
IEA WEO 2009

Flexible LNG makes the LNG industry very responsive to changing demands of the global market

LNG adds to the diversification of the supply sources

60

The LNG market: Very accessible

Considerable growth of LNG import capacity in all regions matches the flexibility of the LNG industry to supply
(production vs capacity of receiving terminals)

Source: IEA Golden Age of Gas, 2011

61

LNG: More flexibility through new technology

On-board regasification offers low cost and convenient option to supply gas to new and existing markets

62

LNG: More flexibility through new technology

Small scale LNG offers opportunities to produce otherwise stranded gas and reduce gas flaring

Gas source

Source: Skaugen
63

Overland transport of LNG: By road trucks and railcars

LNG is transported by road truck in many countries Trucked LNG has many small-scale uses: Domestic and commercial piped gas supply from satellite re-gasification terminals located in places remote from pipelines Small industrial users (electric power, engine tests, glass, paper) Commercial users (trains, buses, ferries, institutions) Supply to peak-shaving plants Supply to pipeline network during repairs or maintenance

64

Costs of Production and Supply

65

Indicative Cost Curve

Long-term gas production cost curve
Indicative supply cost

*
per

1$

* Delivered

Note: 5 $/MMBtu compares to less than 30 $/bbl

Source: IEA WEO 2009
66

Environmental Impact
(examples are focussed on power generation)

67

Natural Gas with or w/o CCS:

Cleanest fossil fuel for power generation

Metric Tons CO2 per MWH 1 Oil (0.80) 0,75 Coal (0.85)

0,5 Natural Gas (0.35) 0,25

Solar Nuclear Wind (0)

Clean Natural Gas* (0.04)

Clean Coal* (0.09)

* With CCS
Source: IGU based on CERA

GHG Emissions
68

Natural Gas fired generation:

Smallest ecological footprint for power generation
Land use in acres to have 1,000 MW of capacity
Acres

40,000

Solar

10,000

Wind

10

Natural Gas

Source: based on data from Union Gas Ltd.

69

Gas: Cleanest Fossil Fuel

Lowest emission of CO2

Emission of CO2
(in kg CO2/MWh) 1,200 (340%) 850 (230%) 350 (100%)

Lignite-fired power

Hard coal-fired power

Gas-fired CCGT

Source: US Department of Energy (DOE), US Energy Information Administration (EIA)

70

Gas: The Cleanest Fossil Fuel

Also lower on SOX and NOX
Kg/MWh
0,35 0,3 0,25 0,2 0,15 0,1 0,05 0 0

Gas CCGT SOx NOx

Coal Supercritical
-6

Mercury emission from coal: 4.3 10

kg/MWh

Global warming effect of NOX is considerably higher than that of CO2

(up to 300 times for 100 years (source ICBE))
Source: US Department of Energy (DOE): National Energy Technology Laboratory (NETL) 2010
71

Particulate emissions from heating systems

mg/kWh
Natural gas

0,11

Heating oil

6,1

Lignite*

306

Hard coal**

554

* Emissions based on use of briquettes and lignite from the Rhineland-area in Germany
** Emissions based on use of briquettes LUWB Landesanstalt fr Umwelt, Messungen und Naturschutz Baden-Wrttemberg; Average emission factors for small and medium combustion installations without exhaust gas after treatment. Status: 2006, BGW; Source: www.asue.de
72

Replacing coal with gas for electricity generation

Cheapest & fastest way to meet CO2 reduction targets

The next decade is critical. If emissions do not peak by around 2020 and decline steadily thereafter, achieving the needed 50% reduction by 2050 will become much more costly. In fact, the opportunity may be lost completely. Attempting to regain a 50% reduction path at a later point in time would require much greater CO2 reductions, entailing much more drastic action on a shorter time scale and significantly higher costs than may be politically acceptable.
IEA, ETP 2010

Over 40% of global CO2 emissions comes from Power Generation Over 70% comes from coal-fired Generation
Karstad IGU

A near-term initiative to displace coal generation with additional generation from existing natural gas combined cycle capacity could result in reductions in power sector CO2 emissions on the order of 10%.
MIT, 2010, on the US market
73

Power generation: CCS for gas and coal

74

CCS
EXPANATORY NOTES

CCS = Carbon Capture and Storage Process of carbon sequestration from fossil fuels, based on existing technology. CCS currently regarded as economic at CO2-emission tax levels well above 50 $/tonne. This section discusses only so-called post combustion carbonsequestration. For the analysis a distinction is made between the CO2 capture and transportation / storage of CO2. To date no commercial application of CCS exists, neither for coalnor for gas-fired generation

75

Lower CO2 emission after CCS

Residual CO2 emission in kg CO2/MWh

Hard coal-fired power

85

Gas-fired CCGT

35

Estimate: 90 % capture of CO2 emission

Source: MMD, June 2010

76

Gas: CCS Efficient

Low Cost of Carbon Capture

Low Incremental Capital Costs ($/kw)

and Low Incremental Unit Costs per kwh ($/MWh)

Source: MMD, June 2010
77

CCS for Gas vs Coal

Less CO2 to be captured, transported and stored

CO2 captured in kg per Mwh of electricity produced

(based on 90% CO2 removal)

Compared with CCS for Coal: Per kwh of electricity produced

45% less CO2 to be transported 45% less CO2 to be stored

Source: MMD, June 2010

Resulting in

Lower costs of CO2 transportation

Lower call on (scarce) CO2 storage capacity

78

Gas with CCS: Low all-in unit costs

Baseload: 7000 hrs of operation CO2 tax: 80$/t
$/MWh

Prices (at plant inlet) Gas : 8 $/MMBtu Coal: 80$/t

Note: CCS reduces plant efficiency

Capital costs may vary considerably in absolute terms, but very little in relative terms
Source: MMD, June 2010
79

Gas with CCS: Low all-in unit costs

Midload: 4300 hrs of operation CO2 tax: 80$/t
$/MWh

Prices (at plant inlet) Gas : 8$/MMBtu Coal: 80$/t

Note: CCS reduces plant efficiency

* Costs do not take account of effect of interruptibility on plant efficiency

Capital costs may vary considerably in absolute terms, but very little in relative terms
Source: MMD, June 2010
80

Power generation: Gas and Wind

81

Meeting Electricity Demand Merit order based

EXPLANATORY NOTES

DEMAND FOR ELECTRICITY CAN BE MET FROM A VARIETY OF SOURCES WHICH WILL CONTRIBUTE BASED ON A SO-CALLED MERIT ORDER: For installed power plants the order in which these sources called upon to meet the demand is based on variable cost of production, leading generally to the following ranking preferences. 1. Renewable energy Hydro

Wind Solar Biomass* 2. Nuclear power plants 3. Coal-fired power 4. Gas-fired power
* Not necessarily the lowest variable cost option but often favoured for its low CO2 contribution
82

When You Need Electricity You Cant Flick a Switch and Turn on the Sun and Wind

Variability creates complex grid balancing and supply security issues Gas-fired generation can play a key role in maintaining grid stability and supply security

83

Meeting Electricity Demand Wind Power

EXPLANATORY NOTES

Wind power is a growing part of the generation mix. It is attractive because it is renewable and does not emit CO2. However, the contribution of wind power can vary significantly.
solar onshore offshore

Example: Poyry 2011 estimates over a 4 months period

This overview deals with the consequences of extended absences of wind power (more than 4 hours) for which combined cycle gas-fired power generation is a suitable partner
Source: CIEP/ Poyry 2011 estimates
84

The Impact of Variability can be Significant

EXAMPLE OF CONTRIBUTION OF VARIABLE WIND POWER TO ACTUAL DEMAND (LOAD) DURING HIGH PRESSURE WEATHER IN TEXAS
Demand (=Load) vs actual Wind Output

DEMAND

WIND SUPPLY

conventional sources (gas) are needed to supply (with extra flexibility)

Source: National Review Online: Bryce, August 2011
85

Meeting Electricity Demand Wind Power

EXPLANATORY NOTES

Installed wind power displaces fossil sources of power supply, but will it be gas or coal?
The main purpose of wind power is to reduce power supply from fossil fuel and thus reduce CO2 emission An effective CO2 reduction will be achieved if coal-based electricity is displaced by wind power However, in energy systems with both gas- and coal-based generation, more gasbased electricity is generally displaced than coal, as long as the variable costs of gasfired generation are higher than those of coal (see also example Spanish Market).

This significantly reduces the effectiveness of CO2 reduction from wind:

1 MWh of wind power replacing gas-fired power leads to a reduction of 350 kg CO2 1 MWh of wind power replacing coal-fired power leads to a reduction of 850 kg CO2

Once CO2 emissions are priced/taxed or other performance measures are introduced this order could be reversed
Source: Clingendael International Energy Programme (CIEP), 2012
86

Natural Gas complementing electricity supply from Wind

EXAMPLE OF IMPACT OF VARIABLE WIND POWER ON SUPPLY FROM GAS- AND COAL-FIRED GENERATION (Spanish electricity market)

In MWh

Source: REE, Heren, 2010

87

Meeting Electricity Demand The Wind and Gas-fired Power Partnership

Wind power capacity always needs backup from other sources
Installed wind power capacity needs backup from other power supply sources to maintain the required level of security of supply at times of reduced wind supply
High and low pressure zones can extend over vast geographical areas so that generally there can be little compensation from wind power elsewhere in a region. Dependent on regions, interconnections and availability of renewable alternatives , in most areas between 80 and 95% back-up from conventional sources will be required.

Other CO2-free back-up options are not generally available on a sufficient scale to complement a growing share of variable wind energy

Gas-fired generation is a flexible and reliable partner for wind at the lowest incremental CO2 emission (and at the lowest incremental costs)

Source: Clingendael International Energy Programme (CIEP), 2012

88

Meeting Electricity Demand

EXPLANATORY NOTES

Power supply is often expressed in running hours, as a fraction of total design capacity. In following examples onshore wind supply accounts for 2,500 hrs in any year. In the same examples average market demand is approx. 5,500 hrs. Residual demand, to be supplied from gas-fired capacity thus becomes 3,000 hrs.

Source: Clingendael International Energy Programme (CIEP), 2012

89

Gas: A suitable option for complementing wind

Low emission per kwh produced from wind and gas combined
Based on 2,500 hrs of onshore wind and 3,000 hrs of complementary supply from gas or coal

CO2 Emissions in kg/Mwh

without CCS with CCS

The example illustrates that wind combined with gas reduces CO2 emission. Wind combined with coal back-up produces more CO2 than a gas plant on its own
Source: Clingendael International Energy Programme (CIEP) based on MMD
90

Gas: A suitable option for complementing wind

Also lower all-in Unit Costs per kwh produced
All costs are based on 5,500 hrs of power supply*
$/MWh

The combination of wind and gas or coal represents 2,500 hrs of onshore wind and 3,000 hrs of complementary supply from gas and coal

Prices (at plant inlet) Gas : 8 $/MMBtu Coal: 80 $/t

* Costs do not take account of effect of interruptibility on the plant efficiency Capital costs of options may vary considerably in absolute terms, but very little in relative terms Source: MMD, June 2010
91

Prospects for Developments of Further Technological Options

92

Potential for future developments

Innovative steps for more climate protection

More efficiency and climate protection

Green gas Micro-CHP Condensing boiler technology & Solar

Fuel cells

Gas heat pump

Market readiness
Source: based on E.ON Ruhrgas

Innovation

Future technology
93

Green Gas

Source: Senternovem
94

Fuel cells

1.

Produce H2 using electricity from solar cells or other renewables or from natural gas in a reformer Fuel cell : 2 H2 + O2 2 H2O + electricity + heat

2.

95

Fuel cells Some characteristics

Silent, low maintenance High electrical efficiency ; total efficiency 80 to 90 %

No CO2 emissions (with likely exception for production of H2 from natural gas)
Fuel cells have stationary applications (buildings, plants, telecommunications) and transportation uses (cars, buses, trucks and machinery) Today still high cost per installed kW

96

Terminology (1)

AC bbl bcm BTU CBM CCGT CCS CHP CNG Coal supercritical CO2 DC EPC GHG LF LNG Flexible LNG Load duration curve

Alternating Current Barrel Billion (109) cubic meter British Thermal Unit Coal Bed Methane Combined Cycle Gas Turbine, the current efficient type of gas-fired power generation Carbon Capture and Storage Combined Heat & Power Compressed Natural Gas Most efficient process of coal fired power generation Carbon dioxide Direct Current Engineering, Procurement and Construction Green House Gas Load Factor Liquefied Natural Gas LNG supply potential, not committed to a single market under a long term contract A demand load curve but the demand data is ordered in descending order of magnitude, rather than chronologically
97

Terminology (2)

LPG MWh NOX OHT Peak shaving Natural Gas Resources Reserves, proven

Reserves, proven & probable

SOX tcm TWh UHVDC

* IEA WEO 2010

Liquefied Petroleum Gas Mega Watt hour Nitrogen Oxide Overhead transmission Processes of dealing efficiently with peak demand of electricity or gas Generally a broad indication of the potential availability of gas reserves Volume of oil or gas that has been discovered and for which there is a 90% probability that it can be extracted profitably on the basis of prevailing assumptions about cost, geology, technology, marketability and future prices* Proven reserves plus volumes that are thought to exist in accumulations that have been discovered and have a 50% probability that they can be produced profitably* Sulphur Oxide Trillion (1012) cubic meter Tera Watt hour Ultra High Voltage Direct Current
98