Natural Gas: Low Emission. OSPE Energy Seminar. OSPE presentations can be downloaded at:

Transcription

1 The Marriage of Nuclear with Natural Gas: Low Emission Affordable Electricity OSPE Energy Seminar OSPE presentations can be downloaded at: OSPE Energy Task Force May 2016

2 2 Outline of Presentation Data Sources Natural Gas Is Key to a Low Emission Affordable Future Carbon Dioxide Emissions from Ontario s Power System Creating a Low Emission Affordable Future The Electrical Demand Profile The Optimum Roles for NG, Nuclear and Renewables Generation Costs Energy Policy Implications Q&A period.

3 3 Data Sources for Today s Presentation Electrical supply and demand data was obtained from the Independent Electricity System Operator (IESO) website at: Cost data for Ontario s electricity sector was obtained from the IESO website above and from the Ontario Energy Board (OEB) website at: The Ontario Society of Professional Engineers (OSPE) reports and seminars on Ontario s electricity system and energy policy are available at:

4 4 Natural Gas Is Key to a Low Emission Affordable Future In Dec 2015 Ontario was the first mixed generation power system in the world to achieve an 80% reduction in greenhouse gases compared to 1990! That s 35 years earlier than the 2050 date in the international goal. Ontario accomplished this goal in only 12 years from 2003 to One key decision was to phase out coal generation by The world thinks this was accomplished by replacing coal with wind and solar generation. It is true that wind and solar generation contributed to this achievement. However What is not well understood by the global community is that the lion share (~90%) of the reductions in greenhouse gas emissions occurred because of the partnership between natural gas and nuclear generation! Ontario now produces electricity at less than 40 kg CO 2 per MWh.

5 5 Carbon Dioxide Emissions from Ontario s Power System

6 6 Creating a Low Emission Affordable Future That s right low emission affordable electricity that meets the global 2050 greenhouse gas reduction goal can and should include natural gas in the supply mix! Many global electricity systems operate at 500 to 700 kg CO 2 per MWh. Natural gas generation on its own operates at ~400 kg CO 2 per MWh or higher. A low greenhouse gas emission power system (below 100 kg CO 2 per MWh) requires: A dependable zero emitting base-load energy source. A dependable moderately emitting peak load energy source. Natural gas provides dependability at reasonable cost and moderate emissions and provides operational reserve at very low cost and very low emissions. Natural gas is a key supply option for affordable low emission electricity.

7 Jan 31-Jan 02-Mar 01-Apr 01-May 31-May 30-Jun 30-Jul 29-Aug 28-Sep 28-Oct 27-Nov 27-Dec The Marriage of Nuclear with Natural Gas: 7 The Electrical Demand Profile 30, Transmission System Total Electrical Demand 30,000 25,000 20,000 MW 15,000 10,000 5,000 Total Electrical Demand - January 7, 2015 Shown 0 MAX DAILY LOAD HOURLY LOAD MIN DAILY LOAD Hours of the Day (EST) 25,000 20,000 MW 15,000 10,000 5, % OF PEAK 90 % OF PEAK 80 % OF PEAK 70 % OF PEAK 60 % OF PEAK 47 % OF PEAK MAX DAILY LOAD MIN DAILY LOAD Peak load region natural gas, solar and wind can supply low emission affordable electricity. Base load region hydroelectric and nuclear can supply zero emission affordable electricity.

8 8 The Optimum Roles for Natural Gas, Nuclear and Renewables Let s look at each low emission supply technology briefly. Variable renewables (wind and solar) most favored by the public but they need a dependable, flexible, low cost backup. In North America, natural gas is the lowest cost dependable backup for variable renewables. Good news? Yes - for peak load but not necessarily for base load! A power system with only wind and solar with natural gas backup can reduce greenhouse gas emissions down to about 150 to 200 kg CO 2 per MWh. That s a 40 to 60% reduction for high emission power systems but that combination won t deliver an 80% reduction and can actually increase emissions on clean power systems that currently operate below 150 to 200 kg CO 2 per MWh. Wind and solar generation need storage as a partner to achieve emission reductions of 80% or greater. Storage is currently very expensive and is not 100% efficient.

9 9 The Optimum Roles for Natural Gas, Nuclear and Renewables Hydroelectric a great partner if you can find enough capacity. Most jurisdictions don t have enough to achieve 80% reduction if natural gas provides the rest. Bio-energy another great partner if you can find enough capacity. Most jurisdictions have more energy demand than available bio-energy sources. So we can t achieve 80% reduction if natural gas provides the rest. Nuclear in Ontario each installed kw of capacity is capable of lowering greenhouse gas emissions 6x more than solar, 2.6x more than wind and 1.7x more than hydroelectric due to the high capacity factor of nuclear units of 85 to 90%. Nuclear needs a dependable, flexible, low cost partner to supply peak demand and operating reserve. Nuclear can supply low cost, low emission thermal energy (steam) to reduce emissions in other sectors. Natural gas & nuclear make ideal partners.

10 10 Generation Costs While electricity commodity rates rose rapidly from 2003 to 2015 from under 5 cents/kwh, they are still affordable at 10.1 cents/kwh in 2015 for residential and small businesses and 6.3 cents/kwh for large industrials (2)(3). Plant Type 2015 Existing Plants CAN cents/kwh (2) 2015 Electricity Output (3) 2020 New Plants CAN cents/kwh (4) Hydroelectric % n/a Nuclear % 11.0 Wind % 8.9 Natural Gas 12.7 (1) 9.8 % 12.3 (1) Bio-energy % n/a Solar PV % 10.5/16.2 (5) (1) NG plant costs reflect curtailment to 17% capacity factor. Costs are for gas at $2 US/M.BTU. Price rises 0.8 cents/kwh per $1 US for NG and 1.2 cents/kwh for each $30 CAN/tonne CO 2 emissions. (2) OEB data. (3) IESO data adjusted by distribution supply. (4) OSPE study Ontario s Energy Dilemma. (5) Large solar farms/small rooftop solar.

11 11 Energy Policy Implications Ontario has invested up to ~$250 CAN per tonne of carbon dioxide reduction to achieve the 80% reduction in the electrical sector (1). Greenhouse gas emission reductions in other sectors will be more expensive to achieve because natural gas can currently supply thermal energy at 2 to 5x less cost than electricity. To achieve lower greenhouse gas emissions, energy policies can: Raise the penalties (price) for greenhouse gas emissions, or Subsidize use of clean electricity instead of fossil fuels, or Mandate energy supply choices through regulation where those choices are not sufficiently incented by emission penalties or fuel conversion subsidies, or Combine these approaches to optimize costs and emissions without creating insurmountable competitive hurdles for our trade exposed businesses. (1) Data from the 2015 Ontario Auditor General s report.

12 12 Questions? OSPE seminars are available at: Are you an engineering graduate and would like to become a member of OSPE? Visit: Engineering students can now join OSPE for free.

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