energy efficiency & renewable energy – opportunity or...

© Vattenfall AB

Energy Efficiency & Renewable Energy –

Opportunity or Threat?Brussels, 27 May 2008

Lars G JosefssonPresident & CEO, Vattenfall AB

STO-STV080-20070108-A1-

© Vattenfall AB 1

Agenda

• Growth in World Energy Demand

• Vattenfall’s Global Climate Map

• The Power Sector’s Contribution

• Energy Efficiency can mean Increased Electricity Consumption

STO-STV080-20070108-A1-

© Vattenfall AB 2© OECD/IEA - 2007

Reference Scenario:

World Primary Energy Demand

Global demand grows by more than half over the next quarter of acentury, with coal use rising most in absolute terms

02468

1012141618

1980 1990 2000 2010 2020 2030

billio

nton

neso

f oil e

quiva

lent

02468

1012141618

1980 1990 2000 2010 2020 2030

billio

nton

neso

f oil e

quiva

lent

Other renewablesBiomassHydroNuclearGasOilCoal

STO-STV080-20070108-A1-


Reference Scenario:

Primary Coal Demand by Region

China & India account for 78% of the growth of coal use in power generation and 91% of the growth in other sectors

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2005 2030 2005 2030

Mtoe

TEOther OECDEU27JapanUSOther DCIndiaChina

Power generation Other

STO-STV080-20070108-A1-


This is not sustainable!

Investment not on trackReduced number of suppliersCO² emissions from 2005 to 2030:

+56%

STO-STV080-20070108-A1-

© Vattenfall AB 5

Vattenfall’s Global Climate Map for 2030

43 2726252423222120

100

98

203040

-10

-100-110-120-130-140-150-160

-207

-40-50-60-70-80-90

0 1 10 11 12 13 14 15 16 17 18 192 65

-30

Cost of abatementEUR/tCO2e

Insulation improvements

Fuel efficient commercial vehicles

Lighting systemsAir Conditioning

Water heatingFuel efficient vehicles

Sugarcanebiofuel

Nuclear

Livestock/soils

Forestation

Industrialnon-CO2

CCS EOR;New coal

Industrial feedstock substitution

Wind;lowpen.

Forestation

Celluloseethanol CCS;

new coal

Soil

Avoided deforestation

America

Industrial motorsystems

Coal-to-gas shiftCCS;

coal retrofit

Waste

Industrial CCS

AbatementGtCO2e/year

AvoiddeforestationAsia

Stand-by losses

Co-firingbiomass

• ~27 Gton CO2e below 40 EUR/ton (-46% vs. BAU)• ~7 Gton of negative and zero cost opportunities• Fragmentation of opportunities

Smart transitSmall hydro

Industrial non-CO2Airplane efficiency

Solar

www.vattenfall.com/climatemap

STO-STV080-20070108-A1-

© Vattenfall AB 6

All sectors and regions will have to contributeGtCO2e, 2030

US + Canada

OECD Europe China

Rest of world**

Regions

Other Industrial*

Eastern Europe (incl. Russia) TotalSector

1.3 0.8 0.70.3 1.7 1.0 5.9Power

0.8 0.6 0.80.7 1.5 1.5 6.0Industrial

1.2 0.5 0.40.1 0.3 0.4 2.8Transportation

0.8 0.5 0.50.4 0.7 0.8 3.7Buildings

0.2 0 00 0 6.5 6.7Forestry

0.2 0.1 0.10.1 0.3 0.8 1.5Agriculture

4.4 2.5 2.51.6 4.6 11.1 26.7Total

* Australia, New Zealand, Japan, Singapore, South Korea, Taiwan, UAE, Saudi Arabia, Qatar, Oman, Kuwait, Israel, Bahrain, Mexico** Africa, South and Central America excl. Mexico, Asia excl. China and countries included in “Other industrialized” (see previous note)

STO-STV080-20070108-A1-

© Vattenfall AB 7

What can the Power Sector do until 2030?

1 Carbon Capture and Storage

2 CO2-efficient fossil fuel

3 Renewable Energy Sources

4 Nuclear Power

5 Reduce Demand: further 3-4 Gt reduced CO2e

Approx. 6 Gt reduced CO2e

STO-STV080-20070108-A1-

© Vattenfall AB 8

Carbon Capture & Storage, approx 3 Gt CO2e

• Three capture technologies seem capable to be commercial by 2020: Post-combustion, Pre-combustion and Oxy-fuel

• All three largely contain known technology but require optimisation, scale up and process integration

• Policies needed: ETS, Demo plant financing, Legal framework for storage and transportation

STO-STV080-20070108-A1-

© Vattenfall AB 9

Vattenfall’s CCS projects

Plant Schwarze Pumpe,Germany

Mongstad,Norway

Demonstration plants,Germany, Denmark, Poland

Type Large scale pilot plant Large scale pilot plant Demonstration plant

Capacity 30 MW 100 000 ton CO2/a (~35 MW) 250 - 350 MW

Fuel Lignite and hard coal Gas from refinery Hard coal, Lignite

CO2technology

Oxyfuel Post-combustion Post-combustion and oxyfuel

Operation 2008 2010 Ca 2015

10 years of continuous R&D is now resulting in severallarge scale development projects.

STO-STV080-20070108-A1-

© Vattenfall AB 10

More efficient fossil fuel technology, approx 0,4 Gt CO2e

Pressurised Fluidised Bed Dryer Pilot PlantReducing moisture of lignite from ~60% to ~15%

• Global dependence on fossil fuels is a fact for the foreseeable future

• In addition to CCS, we must use the most efficient conventional technology available

• Competitive markets offer the best incentives for this

• R&D needed to further advance technology

STO-STV080-20070108-A1-

© Vattenfall AB 11

Renewable energy sources, approx. 1,5 Gt CO2e

Nuclear power, approx. 1,1 Gt CO2e

• Wind, biomass, wave and solar power will experience cost reductions due to learning curve improvements and vendor competition

• At 40 €/tCO2, renewables could become competitive around 2020. Could potentially supply 20% of global power generation by 2030

• Policies needed: ETS, market-based support systems with possibility to trade between member states, stable regulation that gives incentives to invest in power grids

Construction of Lillgrund offshore wind farm, Sweden 2007

• Important contribution to the reduction of greenhouse gases andsecurity of supply

• Volume dependent on political decisions

STO-STV080-20070108-A1-

© Vattenfall AB 12

Energy Efficiency can mean more electricity

Examples:- Heat Pumps - Rail Transport- Electric Vehicles

energy efficiency & renewable energy – opportunity or...

Documents