How To Transform Vattenfall

Transcription

1 Vattenfall Transformation from a fossil fuel based energy supply to a renewable energy supply Challenges and opportunities May 2010 Henrik R. Hansen Vattenfall, Heat Nordic

2 About Vattenfall Vattenfall was founded in Sweden nearly 100 years ago and converted into a public limited company in 1992 The group employs around 39,000 people and the parent company, Vattenfall AB, is wholly owned by the Swedish State Vattenfall is Europe s fifth largest generator of electricity and the largest generator of heat Vattenfall is active at all stages of the electricity value chain: generation, transmission, distribution and sales. Vattenfall is also active in electricity trading and generates, distributes and sells heat The company currently has operations in Sweden, Finland, Denmark, Germany, Poland, the Netherlands, Belgium and the UK with a total of 7.4 million electricity customers and 5.6 million network customers

3 Vattenfall - Map BG Pan Europe (Wind, Nuclear, Engineering) BG Nordic (Sweden, Finland, Denmark) BG Benelux (Belgium, the Netherlands) BG Central Europe (Germany, Poland) 3

4 Production in Denmark Nordjyllandsværket 656 MW Annual production: 6 TWh of electricity and 6 TWh of heat corresponding to about 17.5% of Denmark's electricity consumption and about 17% of Denmark's total district heat consumption Horns Rev* 160 MW 285 MW Ensted coal terminal Fynsværket 439 MW Hillerød & Helsingør CHP plants 135 MW Amagerværket 331 MW *Vattenfall owns 60%

5 Strategic direction and climate vision Making electricity clean is our strategic direction over the coming decades. Vattenfall s climate vision is for our entire operations to be climate-neutral by 2050 (by 2030 for the Nordic operations) and achieve a 50 per cent reduction in emissions from our own operations by 2030 compared with The new electricity that is needed to achieve the 2030 goal will come from: - renewable sources (such as wind power, bio energy, ocean energy) - Gas and coal power using CCS (Carbon Capture and Storage) technology - nuclear power 5

6 CO2 [kton/år] One possible road to CO 2 neutrality i 2030 (Nordic) Activities: (1.000) AMV1 100% bio Bio co-combustion Uppsala KVV NJV2, Shutdown Maxbio AMV3 Phase 1 (20%), Maxbio NJV3 Phase 1 (20%) Bio Fynsværket Maxbio NJV Phase 2 (40%) Vanaja new bioboiler AMV3 100% biomass or CCS Uppsala without peat CCS NJV (Coal and Biomass) Myllykoski 100% bio FYV7 100% biomass or CCS År

7 With the right incentives and framework, it is possible to increase the volume of biomass ton biomass in ton biomass in % 6% 27% 29% 21% 32% Træflis Træpiller Halm Halmpiller 44% 41%

8 Power and district heating prices, as well as investments are are exposed to competition and risk All production of power and district heating using biomass has to be competitive to alternative production regionally and locally. The transformation from fossil fuels to biomass needs long-term political devotion. Legislation has to be transparent and predictive, decreasing risk - and not the opposite. Investments are competing on IRR and risk profile and investment funds are limited. Solutions have to rest on marked principals.

9 Investments wood chips and wood pellets Unloading Storage Abt. 2 weeks Coarse grinding Drying Pulverizing Firing System Boiler Waste Water treatment Woodchips 30% moisture Wood dust 10% moisture buffersilo Unloading Storage Pulverizing of Pellets Firing System Boiler

10 NPV 2010 [MDKK] Example Getting a positive NPV Expenses Heat income Green certificate Coal purchase CO2-quotas Biomass O&M Heat sales Reduced Coal Decreased power production Investment Green certificate Reduced CO2

11 Amagerværket Retro-fitting of Amagerværket blok 1 Unit 1 was build in 1971 as a coal fired unit and retro-fitted in as a multi-fuel unit for wood and straw pellets, coal and oil. The unit produces heat and steam for the City of Copenhagen (KE and CTR). The heat is transported through a tunnel to two delivery points.

12 Fjernvarme-vandledninger i alu-kappe (ø406/ø600) Fjernvarme-dampled i stål-kappe (ø508/ø1 Pumpekondensatledning i stålkappe (ø323/ø710) e

13 Amagerværket Amagerværket unit 1 70 MW power 250 MJ/s heat (steam) Fuel: Wood and straw pellets, coal and oil At least 40 % of the fuel to be biomass, but 100% is more likely. Amagerværkets unit MW power 330 MJ/s heat (steam) 40 % biomass pellets substitute ton coal 100% biomass pellets substitute ton coal

14 TJ Amagerværket Heat from Amagerværket ?

15 Sourcing, trading and logistics Worldwide and regional sourcing according to UN 10 principles of sustainability Participation i building up trading tools on biomass fuels Assisting projects to utilize un-used biomass resources Investments in logistical infra-structure

16 Investment decisions Participation by the City of Copenhagen (KE+CTR heat distributors) is important. Fair sharing of costs and benefits from substitution of fossil fuels with biomass between Vattenfall and the City of Copenhagen. Long-term security of cash-flow is important (positive NPV and acceptable risk profile) Sustainability is important Customer satisfaction is important