RWE Trading: The interface to the world s wholesale energy markets

Transcription

1 RWE Trading: The interface to the world s wholesale energy markets > Some 35 analysts, including five meteorologists, ensure that our traders have a broad and fundamental understanding of the markets > We translate our market perspective into our trading strategies, our investment portfolio and our asset optimisation business > 2013 trading volumes included: Power: 1,145 terawatt hours (TWh) Gas: 304 billion cubic metres (bcm) Coal: 735 million metric tonnes Oil: 2,019 million barrels CO 2 certificates: 626 million Biomass: 9 million tonnes of which 2.8 million tonnes physically delivered GGL2 and ENplus RWE Supply & Trading 14/10/2015 PAGE 1

2 RWE: Producer, trader and end-user of wood pellets Upstream 750,000 tonnes capacity > 170 mil. $ investment into a pellet mill in Waycross, GA > 750,000 tonnes of pellets annually from 2012 > Industrial and domestic quality Midstream Covers the full interface for trading > Wood pellet trading physical and financial > Integrated freight and logistics team > Risk and credit management > Optimization of Freight / logistics Storage / working capital Quality Downstream Almost 3 mil. tonnes portfolio > Co-firing in the Netherlands > Conversion in the UK > Supply to traders and utilities Europe and Asia RWE is the only party in the world with multi years of experience in all three parts of the supply chain RWE Supply & Trading 14/10/2015 PAGE 2

3 RWE Supply & Trading 14/10/2015 PAGE 3

4 RWE s Georgia Biomass, the world s largest wood pellet plant RWE Supply & Trading 14/10/2015 PAGE 4

5 Ship Amer RWE Supply & Trading 14/10/2015 PAGE 5

6 Amercentrale in the Netherlands Amer 8 (645 MWe, 250MW warmte) Biomassa loskade en tijdelijke opslag. 300kT biomassameestook/jaar 525 GWh Houtvergasser ( 33 MWe) Amer 9 (600 MWe, 350 MW warmte) 600kT biomassameestook/jaar GWh 90kT biomassa/jaar 130 GWh RWE Supply & Trading 14/10/2015 PAGE 6

7 RWE trades biomass all over the world Expected 2015 wood pellet trade flows*: 1.25 Canada West 4.6 US 0.6 Canada East 8.1 Total European demand served 1.0 Baltics 0.65 Portugal 0.6 Total Asian demand served 400 K Canada West 250 K Australia *RWEST estimates for total I2 seaborne wood pellet flows, not just RWE s Excludes SE Asian wood pellets. Note Vietnam, China and Malaysia all delivering to Korea in 2014 RWE Supply & Trading 14/10/2015 PAGE 10

8 Large scale biomass co-firing RWE Status 2013MAY17 Mark Bouwmeester 2013MAY17

9 Agenda >Introduction RWE Generation >Strategy: low carbon electricity generation >Biomass Reasoning Experience Co-firing >Ambition RWE Generation 2013MAY17 PAGE 2 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition

10 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition WELCOME TO THE NEW RWE GENERATION! RWE Generation is here > A newly formed pan- European energy company > One of the largest power portfolios in the world, with approx. 40 GW of generating capacity > More than 15,000 staffers > More than 70 locations WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 3

11 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 4

12 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition RWE is active in the total energy value chain Raw material production Natural gas Oil Lignite Woodpellets Biogas Power generation Hard coal Natural gas Oil Lignite Biomass Biogas Wind Solar Hydro Nuclear Trading Hard coal Natural gas Oil Electricity Woodpellets CO2 Power and gas grids Natural gas Electricity Customers Natural gas Services Electricity emobility SmartHome WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 5

13 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition Climate protection (2v4) > Realism Idealism > Sustainable mix Wind Biogas Hydro electric Biomass Solar Affordable Sustainable Lower CO2/kWh Available 0,79 now => 0,62 in % Metric t MWh WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 12

14 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition Climate protection (3v4) > Realism Idealism > Sustainable mix Wind Biogas Hydro electric Biomass Solar Affordable Sustainable Available sites/production-data-live/rwe-renewable-energy-live/ WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 13

15 Options to decrease CO2 emissions > Increase generation efficiency > Replace fossil fuels by biomass > CCS (Carbon Capture and Storage): Post combustion capture Pre-combustion capture Oxy-fuel process WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 15

16 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition RWE is working intensively on CO2 reduction Based on company wide experience > Modernisation of power plant portfolio Hard coal, gas, lignite (G, NL, UK) > On/Off shore Wind - where possible > Solar (CSP, PV) > Hydro (G, UK, F, ES, P) > Coal to biomass conversion (UK) > Biogas > Increase biomass co-firing % > Bio based economy (BBE) WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 17

17 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition Bio Based Economy > Cascading > Integration Heat delivery To increase efficiency Bio based products To replace depleting raw materials Fuels from waste To reduce dependence on fossil fuels test_met_nieuwe_biomassa_en_2_nieuwe_biogasprojecten_van_start.html WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 18 [Source] Natural power - the bio based economy of ESSENT

18 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition Global availability sustainability Worldwide, there is a great potential of sustainable biomass. To release this potential > Improve productivity of current production forests, > Use non-developed areas, world wide, > Grow third generation biomass, > Cascade, close cycles, etc, Optimise biomass use World biomass demand World energy demand Sust. biomass WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 22 [Source] Natural power - the bio based economy of ESSENT Technical biomass

19 Introduction Strategy Biomass Reasoning Experience Co-firing Ambition Essent has invested heavily in biomass co-firing the last 15 years Developed Bio-oil Claus A (test 2002) Capacity: 92 MW, bio-oil Developed Hammer mills Amer 8 Capacity: 96 MW, wood pellets Developed Logistical system Amer 8/9 Type: silo s, conveyors Developed 1 st biomass mill Amer 9 and unloading facilities Capacity: 83 MW, wood pellets Developed Hammer mills BS-12 Capacity: 100 MW Developed Wood gasifier Amer 9 Capacity: 33 MW Fuel type: waste wood Developed Stand alone plant Cuijk Capacity: 25 MW Fuel type: forest residues Start design: 1995 Electricity production Essent, 2012, TWh Developed 2 nd biomass mill Amer 9 Capacity: 83 MW, wood pellets 5,7 6,5 Coal 1,6 Biomass Gas 13,8 Total production Investment in biomass capacity Amercentrale > 130 M of investments ( ), of which 60 M in gasification > Use: 1 Mton/a biomass (755 kton wood pellets) > Co-firing capacity Amer 9 of 35% on mass basis > Saving more than 1 Mton/a CO2 at Amer WBPM RWE GCN Mark Bouwmeester Process Technology 2013MAY17 PAGE 23 23

20 Experiences of Innogy with Wood pellets - and Biocoal production Essent/RWE Biomass Conference 2011 Paul Coffey Chief Operating Officer, RWE Innogy

21 RWE Innogy is a key growth driver for RWE Group - biomass is a key element of the renewable strategy RWE Innogy Overview Business Area > Established in February 2008 > Bundling renewables activities and competencies across RWE Group Focus on capacity growth in commercially mature renewable technologies, i.e. wind, biomass and hydro Research & Development and Venture Capital to drive the development of emerging technologies, e.g. solar, geothermal, marine > European focus > Asset portfolio of 2.4 GW in operation and 1.1 GW under construction mainly located in United Kingdom, Germany, Spain, Netherlands, Italy France and Poland (Accounting view + PPA as at Q1 2011) > Project pipeline of 17.6 GW capacity of wind, hydro and biomass (Accounting view + PPA as at Q1 2011) Wind Onshore Wind Offshore Hydro Biomass New Applications Focus and Strategy Key technology for capacity growth Focus on organic growth Focus markets include Germany, UK, Spain, Italy, The Netherlands, France and Central- and South-Eastern Europe Key technology for capacity growth Organic growth strategy leveraging strong position in UK Focus markets include UK, Germany and The Netherlands Run-of-river projects and storage plants Development of hydro power projects Focus areas are South- Eastern Europe and Turkey Development of biomass plants Regional focus on RWE core markets and Central- and South- Eastern Europe Driving innovative renewable technologies towards commercial stage through Venture Capital and R&D and proving large scale commercial feasibility by operating demonstration plants RWE Innogy Page 1

22 Securing biomass fuel supply is a key driver of renewable growth There is a strong rationale for use of biomass as energy supply General Significant greenhouse gas (GHG) abatement potential Contribution to energy security/diversification and prices Source of significant local revenues Heat and power 4 Favourable economics compared to solar and suitability for base load supply Transportation 5 Needs no additional grid investments as existing systems are used and this demand growth will make EU a net biomass importer European forest reserves are nearly fully exploited for sawn timber and other industrial usage. Large scale energy generation will require increased imports Europe Current pellet supply Additional pellet capacity Required imports 2020 demand estimate 8 Mio. metric t Source: RWE-callculations RWE Innogy Page 2

23 and RWE is moving decisively to address this requirement Production capacity: 750,000 tons per year Used feedstock: 1.5 million tons of virgin wood per year Employees: ~80 FTE Total investment: approx. 120 million Use of the biomass pellets: Combustion in dedicated biomass plants and coal-fired power plants (co-firing) * Full Time Equivalent Waycross pellet plant - In just one year from foundation stone to first pellet 2010 Jan. Feb March - April 2011 May 2011 Q3 / 2011 January 2010 January 2011 March 2011 May 2011 Summer/Autumn 2011 Project announced March 2010 Construction start First wood deliveries First pellets produced April 2011 Trial runs on all five production lines Official inauguration Full capacity trials including debottlenecking project to increase capacity RWE Innogy Page 3

24 But not all biomass is equal. We evaluated many international locations against very stringent criteria (illustration only) Georgia USA Key drivers of location selection Access to fibre supply Cost effectiveness of fibre supply driven by competing markets and growth rates Logistics connections to plant Logistics connections to port facility Sustainability credentials of fibre supply The sustainability point was one of the most important drivers of our decision RWE Innogy Page 4

25 Replacing coal with pellets reduce CO 2 emissions and reduce RWE carbon cost exposure significantly and effectively Significantly lower specific CO 2 emissions versus hard coal Power plant Full chain kg CO 2 equiv. per MWh Wood pellets 1) 130* 208 BAT Average Full chain CCGT (Germany) ~ BAT Full chain Hard coal (Germany) ~ % BAT = Best Available Technology 1) Based on carbon Life Cycle Analysis made for pellets from Georgia Biomass to ARA (Amsterdam, Rotterdam, Antwerp) RWE Innogy Page 5

26 The upstream value chain is carbon lean with potential for further improvement FOR ILLUSTRATION CO 2 balance of wood pellet production from round wood (kg CO2 equiv. per MWh*) Raw materials 36 17% Wood harvesting and processing require low energy input Pellet production **) % Heat for wood drying is produced by bark combustion Transportation to port 10 5 % Transport route to port: approx. 100 km Maritime transportation % Transport via sea route from the East of the USA to ARA; consideration return cargo Total (acc. to ARA***) % Total based on production with US electricity mix today * for illustration purposes only ** Based on USA s electricity mix *** ARA: Amsterdam, Rotterdam, Antwerpen original Source: DBFZ (2011) RWE Innogy Page 6

27 From Tree to Pellet how a pellet plant works Waycross Site Overview RWE Innogy Page 8 8

28 Georgia s Best Management Practices for Forestry Georgia Forestry Commission, May 2009 Georgia's Commercial Forest Ownership 16% Family forests National Forests 18% Other Public 58% Forest Industry 5% 3% Other corporate

29 Carbon balance of 1 ha low productive plantation, including emissions in supply chain and avoided coal emissions Sum of carbon flows [Mg Carbon / ha] Fossil carbon avoided Litter carbon Tree carbon Silviculture emission Final transport emission Pelletising emission First transport emission Carbon debt Balance

30 Sum of carbon flows [Mg Carbon / ha] Fossil carbon avoided Litter carbon Tree carbon Silviculture emission Final transport emission Pelletising emission First transport emission carbon debt Balance

31 No use of plantation for fossil fuel substitution Tree carbon Sum of carbon flows [Mg Carbon / 25 ha] Forest floor and litter Balance no use of forest Balance low productive plantation Balance medium productive plantation Balance high productive plantation -3000

32 Principles for Procurement and Use of Biomass in the RWE Group

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