Research and Development in the Energy Sector. The energy system of the future

Transcription

1 Research and Development in the Energy Sector The energy system of the future

2 Vattenfall AB (publ) Solna, Sweden Visiting address: Evenemangsgatan 13 T For additional information, please visit A book from Vattenfall AB Cover: Mikael Olsson Photographers: Mikael Svensson, Hans Blomberg, Philip Karlberg, Greg Willis, Anders Modig, Felix Gerlach, Bernd Schnabel, Marco Cevat, Kathrin Rößler, Marcus Nyberg, Ben Barden, Gretar Ívarsson, Bernd Sieker, Jorrit Lousberg, Daniel Blom and Hans-Peter van Velthoven. Some images are used under the Creative Commons-license (Attribution-ShareAlike) Edited images are available at

3

4 About Vattenfall Vattenfall is one of Europe s largest electricity generators and its largest heat producer. Vattenfall s main products are electricity, gas and heat. In the areas of electricity and heat, Vattenfall works in all parts of the value chain: generation, distribution and sales. In the gas area, Vattenfall is primarily active in sales. Vattenfall is also engaged in energy trading and lignite mining. The parent company, Vattenfall AB, is wholly owned by the Swedish state. Core markets are the Nordics, Germany and the Netherlands. During 2011 operations were also conducted in Belgium, France, Poland and the UK. Key facts and figures 2011 Net sales: billion EUR i Operating profit: 3.2 billion EUR ii Total assets: billion EUR Electricity generation: TWh Heat sales: 41.6 TWh Gas sales: 53.8 TWh Total number of employees: 34,685 iii Customers as of 31 December 2011: 7.7 million electricity customers, 2.2 million natural gas customers and 5.7 million electricity grid customers i) Exchange rate used is 1 EUR = SEK ii) Excluding items affecting comparability iii) FTE (Full Time Equivalents) 4 Research and Development in the Energy Sector

5 Foreword Foreword There has historically been a great need for change within the energy industry. Sustainability challenges such as the energy system s climate impact and rising energy consumption call for advanced technologies, behavioural changes and innovative solutions. Vattenfall has a key role to play but must broaden its perspective. We hope that this book offers you some insight into how these processes work and how this contributes to the continued development of the energy system. My hope is that it will answer some questions and offer new perspectives. If you are interested in learning more about the energy system, I recommend a visit to our homepage: An energy system conversion requires co-operation and efforts from a great variety of operators all with different roles, circumstances and driving forces. Time perspectives are also often staggering. Much of today s energy system is the result of decisions taken in the 1960s and 70s. There is no shortage of challenges, but neither is there any doubt that these must be overcome and research and development (R&D) will be a significant part of the solution. This book, the third in our series on the European energy system, is therefore highly topical. But describing energy sector R&D is not an easy task. An enormous breadth of efforts and projects are involved in the process of developing the energy technology of the future. It is seldom easy to draw a line between public and private investments or between the development of new and existing technologies. Many projects are interdisciplinary collaborations between researchers, companies, trade associations and countries, which complicates the task of explaining the major aspects of the research. Øystein Løseth CEO and President, Vattenfall For Vattenfall s part, R&D is a central element of our business operations. Our overall goal is to contribute to the development of tomorrow s energy system. We do this by making continuous improvements to our existing power plants and by collaborating with research teams at universities and research institutes as well as within other companies and organisations. Research and Development in the Energy Sector 5

6 Table of Contents Table of Contents Part 1: Introduction Sustainability challenges call for R&D Focus on the energy system s climate impact Security of supply is a growing challenge...10 Only profitable technology attracts investment Conversion of energy system a long-term process R&D investments often jointly financed...16 Part 2: Electricity production of the future Conventional low-emitting energy sources Hydro power Nuclear power Thermal energy sources Biomass Coal power Natural gas Unconventional low-emitting energy sources...76 Geothermal energy Ocean energy Solar energy Wind energy Part 3: Electricity grids of the future Electricity grids today An interconnected European energy system More options for users Storage technologies can improve grid balance Development of grid monitoring and control Smarter transmission needed Glossary Research and Development in the Energy Sector

7 Topic Subtopic Research and Development in the Energy Sector 7

8 Topic Subtopic PART 1 Introduction Research and development will be the foundation for the conversion to a sustainable energy system. R&D is a complex process that can be conducted in many different ways, with different time horizons and involve multiple actors. 8 Research and Development in the Energy Sector

9 Introduction Research and Development in the Energy Sector New discoveries and innovations have driven the development of the energy system since the 18th century. Research and development (R&D) remains the focus of advancements in the energy sector, which is currently facing significant sustainability challenges. Global energy consumption produces a large share of the carbon dioxide emitted to the atmosphere emissions that affect our climate and contribute to global warming. Meanwhile, global energy demand continues to rise. Reducing the energy sector s climate and environmental impact is an important goal for governments, companies and trade associations. Many are turning to R&D for the answer. Greek philosopher Thales of Miletus noted 2,500 years ago that amber rubbed against fur could attract light objects. Thales had discovered what we now call static electricity. The word electricity comes from the Greek word for amber (electron). But the discoveries underlying modern use of electricity were not made until the turn of the 18th-19th century. These included discoveries by scientists Alessandro Volta, André-Marie Ampère and Georg Ohm. Research and development are still of paramount importance within the energy sector, particularly in terms of managing some of the major challenges facing humankind today such as greenhouse gas emissions and global warming. New problems lead to new approaches, new discoveries to new opportunities, and hard work to continued improvements. The purpose of this book is to provide an overview of research and development within the European energy sector and describe how it works and how it contributes to the development of the energy system. Sustainability challenges call for R&D European and global energy requirements are on the rise and expected to continue growing through the foreseeable future, a trend that presents the energy system with major sustainability challenges. These challenges are the focus of energy sector R&D throughout the world. The challenges can be summarised through three dimensions that are central to the energy system: the climate and environment, security of supply and competitiveness. Meeting society s long-term energy needs requires balancing these three dimensions, which are usually illustrated as an energy triangle. Today, no energy source is optimal in all aspects. Each energy source has advantages and disadvantages within each dimension, and achieving a balance requires a mix of complementary energy sources within electricity production. Research and Development in the Energy Sector 9

10 Introduction The Energy Triangle In supplying society with its needs, a balance must be struck between three key dimensions: the climate and environment, security of supply and competitiveness. Climate and environment All energy sources have an environmental impact during their life cycles. The combustion of energy sources, particularly fossil fuels, generates CO 2 emissions and contributes to global warming. In the long run, emissions from power production will need to be virtually eliminated in order to stabilise atmospheric greenhouse gas levels. The future energy mix will also need to include a much greater share of renewable energy sources. Security of supply Fuel shortages and unreliable electricity systems cause societal and economic problems. Security of supply entails the guarantee of fuel availability and reliable energy delivery from some source, 100 per cent of the time. This is a political and a technical challenge. Competitiveness Energy is a fundamental input to economic activity, and thus to human welfare and progress. The costs of producing energy vary between different nergy sources and technologies. A competitive energy mix will keep overall costs as low as possible given the available resources. Security of supply Climate and environment Competitiveness Focus on the energy system s climate impact All energy sources have some type of climate or environmental impact during their life cycle. Climate change linked to the emission of carbon dioxide and other greenhouse gases into the atmosphere is now seen as humankind s greatest environmental challenge, and the energy system accounts for a large part of this. Emissions from the energy system must therefore be drastically reduced in order to stabilise atmospheric carbon dioxide levels. Fossil energy sources like coal, natural gas and oil account for the largest percentage of CO 2 emissions. A significant amount of current long-range energy sector R&D is therefore focused on reducing CO 2 emissions from these energy sources and developing new competitive, large-scale energy sources to replace fossil sources. In the short term, emissions from existing power plants must be minimised, while grids must be adapted to handle and distribute electricity from renewable energy sources. Today s grid is built to distribute electricity from a smaller number of power plants that produce large, even quantities of electricity over time. In order to increase the share of renewable energy sources in the mix, the grid must be adapted to a greater number of geographically dispersed power plants that produce less, more intermittent electricity. Energy system security of supply is a growing challenge Challenges within the security of supply dimension are associated with the availability of fuel and the reliability of electricity production. Security of electricity supply is dependent on a functioning electricity distribution infrastructure and on an energy mix that includes both baseload power and balancing power. Baseload power is comprised of energy sources that can produce large, even quantities of electricity over time. Balancing power comes from energy sources that can be quickly converted to produce more or less electricity to manage fluctuations in electricity demand. Options for storing electricity are limited 10 Research and Development in the Energy Sector

11 Introduction Baseload power and balancing power To meet society s basic electricity demands, we need power plants that can produce large, even quantities of electricity over time ( baseload power ). This is essentially comprised of fossil-based, nuclear and hydroelectric power. Most renewable energy sources, such as wind and solar energy, are intermittent meaning that they have variable electric production capacity that is impossible to control. They can only produce electricity under the right conditions and thus cannot function as baseload power. Solar cells and wind turbines, for example, produce electricity only when the sun shines or the wind blows. To handle ups and downs in electricity demand, we need access to energy sources that can be quickly converted to produce more or less electricity ( balancing power ). Hydro power works well as balancing power, since dam flows can be increased or reduced very quickly to regulate electricity production and adjust it to demand at a particular point in time. Gas-fired plants can also adjust production relatively quickly to meet fluctuations in demand. this means that, at any given time, the same amount of electricity must be produced that is consumed. This presents a growing challenge as the share of renewable energy sources with intermittent production, such as wind and solar energy, increases. To meet these challenges, R&D projects are studying how to make intermittent energy sources less intermittent; in other words, how to reduce fluctuations in the amount of electricity produced at all hours of the day and night. This may include, for example, developing technology that enables the placement of wind turbines in high wind locations such as far out to sea. Research is also being conducted on ways various types of power plants (e.g., coal- and gas-fired plants) can be converted more quickly and used as balancing power, without decreasing the plant s overall efficiency. Countries that consume more energy than they have access to need to import energy from other countries. This can present challenges to the energy system security of supply, and the importing country s relationship with the exporting country is often vital in maintaining a stable energy supply. In order to avoid this type of dependency, substantial resources are being invested to develop domestic energy sources, make them more efficient and reduce total domestic energy requirements. Only profitable energy technology attracts investment In order for an energy source to be used commercially on a large scale, it must be competitive in other words, the total cost per produced kilowatt hour must be low enough that the electricity produced can be sold at a profit. Many renewable energy sources have significantly higher total production costs than, for instance, hydro and coal, making them less profitable investments. R&D is therefore underway to produce more efficient and less expensive technologies to extract renewable energy. Many governments have introduced subsidies and other financial control measures to increase the competitiveness of renewable energy sources and stimulate expansion in the area. One example of this is the EU s emissions trading scheme, which sets a price for atmospheric carbon dioxide emissions (see fact box on following page). The system increases the costs of producing electricity with fossil energy sources, which in turn makes renewable energy sources more competitive. The EU emissions trading scheme is an important tool for stimulating investments in renewable, as opposed to fossil, energy technologies. Research and Development in the Energy Sector 11

12 Introduction EU emissions trading a way to reduce CO 2 emissions The EU s Emissions Trading Scheme (ETS) was introduced in 2005 as the world s first large-scale trading system for atmospheric greenhouse gas emissions. Under the scheme, each member state sets a cap on the total allowable amount of carbon dioxide emissions and allocates this total amount among emitting industries and energy companies through emissions rights. The system rewards companies that reduce their emissions by allowing them to sell their remaining emissions rights, while companies that need to emit more CO 2 are penalised by having to purchase more emissions rights. The share of allocated emissions rights is being gradually cut back, and energy companies will be obliged to purchase all emissions rights via auction as of Conversion of the energy system - a long-term process Investment decisions regarding new energy infrastructure and new power plants span decadeslong time horizons and involve a multitude of various actors from politicians to the business sector and trade associations. Conversion of the European energy system to one that is more competitive, has less of an impact on the environment and climate and improves security of supply is a complicated, long-term process. Energy research - an interplay between multiple actors The development of innovations, new technologies and groundbreaking energy solutions in today s world is a result of collaboration. A multitude of various actors from academia, industry and politics work together, and the combined strength of their expertise, skills and perspectives is essential to achieving R&D results. These actors all have different roles, objectives and driving forces. Energy sector R&D plays an important role in both the short and long term. In the short term, work is being done to streamline and develop existing technologies; in the long term, focus is on hastening the development of an energy system adapted to the energy challenges of today and tomorrow. This may involve new types of energy sources, new methods to extract energy from existing energy sources, and new ways to reduce total energy consumption within the system. The energy system is being continuously improved but will nevertheless be quite similar in coming decades. With today s knowledge, conversion to a sustainable longterm energy system probably lies 50 years in the future. The government plays an important role in energy sector R&D as both financier and regulator. To a certain extent, the government determines the scope of the type of research conducted in the country through various types of government subsidies, grants and tax systems. An example of this is the carbon tax, a financial instrument aimed at reducing fossil fuel consumption by taxing CO 2 emissions from fossil energy sources such as coal and oil. In addition to national governments, the EU plays an important role as a regulator and through its framework programmes for financing EU-led R&D. A greatly improved innovative environment is high on the EU s political agenda. Energy companies are purchasers and users of energy technology and therefore focus their R&D on testing 12 Research and Development in the Energy Sector

13 Introduction and improving existing solutions, rather than developing new technologies. It is often an energy company that runs across problems and requirements through its use of energy technology. Energy companies play a crucial role in identifying potential for development. Business sector R&D is often concentrated on a few major industrial groups, which often spur development through their own R&D work. Many research projects at universities and colleges examine and develop the potential of various energy technologies. Discoveries and inventions developed within academia that are deemed to have commercial potential may be taken over and further developed on a large scale by technology and energy companies. Academia is thus a natural partner for industry, which often finances major research projects. Various actors perform various types of work in various ways collaboration takes place through joint projects and through discoveries in one area that can be further developed in another area. Hiring researchers and supplying materials and facilities is often very expensive. The work that is conducted is therefore dependent on willingness to invest and financing possibilities. Financing comes mainly from the business sector and other private sources. researchers are studying the functioning of the smallest particles in the universe. Basic research is often conducted by a university or research institute. Applied research uses new understanding and new discoveries to create new technologies that can be used in practice. An example of this is the use of research conducted by Curie (and many others) to investigate how radioactivity can be used to extract energy from atomic nuclei which ultimately led to the development of nuclear power. Development refers to efforts to exploit and commercialise the knowledge or understanding obtained in earlier stages of research. Commercialising a technology entails making it profitable for large-scale use so that it will be of use to consumers. This type of research covers the development of prototypes, processes and pilot or demonstration facilities. During this final stage in an energy company s development process commercialisation a full-scale power plant is built and connected to the grid, for instance. Development work may also consist of minor improvements to existing technology. Collaborative research is also conducted on the local, national and international levels. Collaboration is required, for instance, to adapt and connect the European electricity grids across national borders to a common European energy market. This is particularly complicated by differing technological standards and capacity restraints in electricity grids. Today, successful innovations in the energy sector are nearly always the result of collaboration between many actors, often between several industries and different countries. Research with differing objectives The distinction is often made between three types of R&D work: basic research, applied research and development. Basic research is aimed at increasing knowledge or understanding of a technology or substance. Marie Curie s research on radioactivity is an example of this. Another, contemporary example is the particle accelerator at the CERN Institute, where Research and Development in the Energy Sector 13

14 Introduction Vattenfall s view of research and development Vattenfall s R&D is part of its business operations. The overall aim is to contribute to the development of current and future energy systems. Efforts are focused on new or existing technology to meet our customers needs and expectations, to reduce our operations environmental impact, to improve our operations efficiency and to develop environmentally sustainable energy solutions. A fundamental element of Vattenfall s R&D work is that it is expected to contribute to business operations, which by extension entails fulfilling the owner s profitability requirements. Historically, energy companies have had extensive R&D organisations. Today, this work is conducted through a network of various actors, in which people possessing the requisite skills offer their expertise. Vattenfall collaborates with universities, suppliers, authorities, customers and sometimes also with competitors to develop new innovations and technological solutions. This approach requires transparency and trust, as well as clear agreements and solid understanding of what each actor is expected to deliver. Today, energy companies serve a more co-ordinating function within these R&D networks. Vattenfall s primary role is to develop existing technologies and incorporate new technological solutions into its operations. In the technological area, Vattenfall needs to develop skills and proficiency in a variety of technologies. Some fast-growing areas (such as wind power) are characterised by high demand and a lack of skills and resources. Because Vattenfall is competing for a limited number of people with the right skills and experience, it is focusing on building expertise in these areas. Vattenfall invested a total of EUR 114 million in Group-wide R&D expenses totalled approximately 0.6 per cent of group earnings in 2011, an above-average figure for R&D efforts among comparable energy companies. The R&D process varies widely depending on a series of factors, including, who it is that initiates the process and how advanced the technology is. Research conducted at universities and industrial research institutes may involve the development of existing technologies, as well as research on entirely new energy sources and power plant technologies. Technological development within an energy company often occurs through improvements to existing technology, but may also involve processes for commercialising new technologies developed by others. A technology deemed to have commercial potential may be developed in various ways: within a newly-started company, through licensing, through collaboration, etc. Development within an energy company is strongly influenced by the major investments made in new electricity production facilities or in new types of energy. This process is extremely resource- and timeconsuming. To minimise the risk associated with these major investments, development often follows a multistep process, from test rigs to final commercialisation (see fact box: Example of an energy company development project Ultimately, all R&D work must be profitable although the earlier the stage in the research process, the more difficult it is to know what the end result will be. Basic research is therefore often financed by governments, international organisations and universities, while development work is often financed by companies. 14 Research and Development in the Energy Sector

15 Introduction Example of an energy company development project Project start and test rigs The development project is based on an identified need or opportunity. The first phase therefore includes analyses and inquiries to examine project conditions. During this early phase several different ideas and tracks are tested, collaboration with universities and technology suppliers is initiated and small-scale test facilities are built. Pilot plants After the test period a smaller-scale pilot project can be initiated to test whether the facility can deliver and is efficient. Pilot plants often include a series of specialised solutions to problems as well as measuring equipment to facilitate evaluation. A wellfunctioning pilot project provides crucial insights and knowledge that can be used in larger demonstration projects. Demonstration plants A demonstration plant is a large-scale project for final testing of a technology prior to commercialisation. The idea during this phase is that the plant should be built as identically as possible to the commercially completed plant, and that it should comply with all applicable laws and regulations. Commercialisation Following evaluation of the demonstration plant, complete facilities are built that can be connected to the existing electricity grid. Research and Development in the Energy Sector 15

16 Introduction R&D investments often jointly financed Due to climate challenges and a growing demand for energy, there has never been a greater need to change the energy system. It is impossible to predict the R&D investment that will be needed to convert the energy system but the amounts will be large. The EU Commission estimates that global spending on energy research must be multiplied several times over if the UN s climate goals are to be achieved. Due to these major costs, coupled with energy system investments with decades-long time horizons, governments play a crucial role in financing energy research. Only in very rare cases can public companies and private investors bear the cost of such long-term, risky and costly development work. But there are many examples of projects in which governments, companies, researchers and investors join forces to share development project costs and risks. The EU Commission has also pointed out that countries whose governments invest heavily in research on renewable energy sources are often also home to many companies that make energy sector R&D investments. The International Energy Agency (IEA) is one of the organisations following the trend of energy R&D investments. In a 2012 report, the IEA found that The IEA has also tried to estimate total government Pelamis wave power project outside the Shetland Islands, a joint project between Vattenfall and Pelamis Wave Power. OECD countries government investment in R&D 20% 15% 10% 5% 0% n Health and environment n Space programmes n Non-oriented research n General university funds n Energy 16 Research and Development in the Energy Sector

17 Introduction investments in energy R&D among its member states. Although member states are limited in number and primarily concentrated in the OECD area, IEA estimates give an indication of the trend over time since OECD countries account for a very large share of total R&D investments. During the oil crisis of the mid-1970s many countries intensified the search for alternative energy sources to reduce their dependency on oil. Government investments in energy R&D rose sharply for five years, ending in 1980 when the trend turned downward again. Investments continued to fall until the early 2000s. Since then, government investment in energy R&D has risen slowly, especially in the fields of renewable energy sources, energy efficiency, fuel cells and nuclear power. But R&D investments fluctuate greatly based on factors such as oil prices, economic situation and stability, and it is too early to determine whether or not the upward trend will be long-term. Political instruments impact R&D the types of energy that a country will invest in for its energy mix. The establishment of political goals requires effective incentives and regulations, defined by a policy. An energy system policy is established on the national and EU levels. The aim is to influence the decisionmaking and actions of companies and consumers. Reducing energy consumption is one example of a behavioural change that a policy can help to influence. The conversion to an increased share of renewable energy is also accelerated through subsidies and financial support for specific energy sources. A policy must be stable and not change too much over time. Too much uncertainty in terms of a future policy s formulation restrains investment and continued technological development. Governments try to minimise this risk through measures such as forming long-term agreements across party lines. There are many examples in Europe of cross-party agreements, including within nuclear policy. Political instruments such as policies and roadmaps play an important role in determining the type of R&D that is prioritised by a society for example, by defining Investments in R&D among IEA member states, Total R&D in million Euro (2010 prices and exchange rates) n Energy efficiency n Fossil fuel n Renewable energy n Nuclear n Hydrogen and fuel cells n Other power and storage n Other technology or research Research and Development in the Energy Sector 17

18 Introduction A roadmap is a tool aimed at establishing common visions and action plans to achieve set goals and interim targets (for, e.g., a particular type of energy). One example is the EU s Roadmap 2050, described below. EU s visions, plans and goals The EU has adopted common climate targets the targets. The goal is to reduce CO 2 emissions by 20 per cent over 1990 levels by the year 2020, increase the share of renewable energy sources in the energy mix to 20 per cent and increase energy efficiency 20 per cent. These goals form the basis for EU roadmaps, action plans and strategies in the energy area. Another important element of the EU s work in the energy and climate field is the roadmap Power Perspectives 2030 On the road to a decarbonised power sector, which focuses on ways in which the energy sector and member states can reduce their CO 2 emissions. The plan takes over where Roadmap 2050 leaves off, analysing how and at which stages the energy sector can reduce its CO 2 emissions by 2030 and It also maintains that significant investments are needed in energy sources that have less environmental impact. EU member states are urged to ensure that existing climate measures are fulfilled by adopting legal frameworks and applicable policies for orienting the energy sector towards lower CO 2 emissions. The EU has produced a SET (Strategic Energy Technology) Plan based on shared visions such as Roadmap 2050 and Power Perspectives The plan, adopted by the EU in 2008, is a first step towards establishing a common energy research policy for Europe. It includes a framework for accelerating the development of technologies that are cost-efficient and emit less CO 2, aimed at achieving the targets. The plan also includes a long-term component designed to minimise climate change and prevent global temperatures from rising more than two degrees Celsius. The goal is also to further reduce the cost of climate-neutral technologies and thereby steer research programme prioritisation. 18 Research and Development in the Energy Sector

19 Introduction Based on the targets, the EU has produced a roadmap, Roadmap 2050, which is an instructive plan for work aimed at achieving an energy sector with lower CO 2 emissions and a smaller climate impact. The plan takes into account the EU s targets for reducing atmospheric emissions of greenhouse gases, the EU s long-term goals for security of supply and prerequisites for economic growth. Based on estimates of the EU s 2050 energy needs, the roadmap then details several scenarios, all of which include share of renewable energy, costs and implications for the electricity grid. EU member states are urged to ensure that existing climate measures are fulfilled by adopting legal frameworks and applicable policies for orienting the energy sector towards lower CO 2 emissions. Guidelines for influencing consumer behaviour To properly design guidelines and control instruments, governments and other decision-makers must take into account factors including the way various types of energy relate to each other and whether or not sufficient support and commitment for the initiative can be created among companies and citizens. On method of influencing consumer preferences and behaviour is encouraging consumers to consume electricity at times of the day when electricity production is high. Influencing consumer preferences and behaviour is extremely important in creating a more energyefficient society. Better understanding of how lifestyle, culture and values impact companies and households energy consumption can inspire politicians to create new incentives aimed at improving a society s energy efficiency. One way to do this is to design research programmes focused on consumer behaviour linked to energy consumption for example, studying ways to encourage consumers to consume electricity at times of the day when electricity production is high. Another method is to give companies and households simpler tools and information for monitoring and managing their electricity consumption. An example of this is the development of smart grids and smart electric meters that make it easier for consumers to steer their consumption to times of the day when electricity prices are lower. You can read more about this in the Grids of the Future section. Research and Development in the Energy Sector 19

20 PART 2 Electricity production of the future Electricity production is the core of the energy system. With the conversion to a sustainable energy system, technologies for electricity production will be improved and entirely new technologies and energy sources will be developed and put into service.

21 Electricity production of the future Electricity production of the future The transition to a sustainable energy system imposes new demands on the way electricity is produced. Power plants will need to be more efficient and emit less, while keeping costs down and maintaining a high level of security of supply. For this to be possible, today s power plants need to be improved and new technologies need to be developed and commercialised. The chapter describes the research and development work being conducted on the energy sources that have the greatest potential to play a significant role in the future energy system. Some energy sources are already being used on a large scale today while others will require significant R&D efforts before they can be used on a commercial basis. Some technologies may never be developed in accordance with present day hopes and expectations. The chapter is divided into three sections: conventional low-emitting energy sources, thermal energy sources and unconventional low-emitting energy sources. Each group includes several energy sources which, in various ways, are facing similar R&D challenges. The section on conventional low-emitting energy sources covers hydro power and nuclear power. Read more on page 22. Thermal energy sources includes biomass, coal and natural gas. Read more on page 42. Finally, unconventional low-emitting energy sources discusses geothermal energy, ocean energy, solar power and wind power. Read more on page 76. Total EU electricity production by energy source (2009) Renewable energy sources in the European electricity mix (2009) 0.9% 3.0% 0.9 % 2.2% 0.1% 22.6% 26.5% Coal 26.5% Wind 4.1% 19.6% Hydro 56.4% Wind 20.8% 3.9% Total: 3,210 TWh 4.1% Hydro 11.2% Nuclear 27.8% Biomass and waste 3.9% Natural gas 22.6% Total: 580 TWh 56.4% Biomass and waste 19.6% Geothermal 0.9% Solar 2.2% Ocean energy 0.1% 11.2% Oil 3.0% Other 0.9% 20.8% 27.8% Source: IEA, World Energy Outlook, 2011 Source: IEA, World Energy Outlook, 2011 Research and Development in the Energy Sector 21

22 Electricity production of the future The Energy Triangle Conventional low-emitting energy sources With the growth of intermittent energy sources, improved flexibility is crucial to the energy system s security of supply This section on conventional low-emitting energy sources covers hydro power and nuclear power. These are competitive energy sources that provide security of supply and play a major role in today s energy system, as both baseload power and balancing power. Much R&D is focused on developing and upgrading existing power plants and technologies. With the growing share of intermittent energy sources in the energy mix, the roles of hydro and nuclear as balancing power will increase presenting new challenges. Despite their many similarities, these two energy sources face different technological, environmental and political challenges. Climate and environment All energy sources have an environmental impact during their life cycles. The combustion of energy sources, particularly fossil fuels, generates CO 2 emissions and contributes to global warming. In the long run, emissions from power production will need to be virtually eliminated in order to stabilise atmospheric greenhouse gas levels. The future energy mix will also need to include a much greater share of renewable energy sources. Climate and environment Security of supply Competitiveness Security of supply Fuel shortages and unreliable electricity systems cause societal and economic problems. Security of supply entails the guarantee of fuel availability and reliable energy delivery from some source, 100 per cent of the time. This is a political and a technical challenge. Competitiveness Energy is a fundamental input to economic activity, and thus to human welfare and progress. The costs of producing energy vary between different nergy sources and technologies. A competitive energy mix will keep overall costs as low as possible given the available resources. 22 Research and Development in the Energy Sector

23 Electricity production of the future The Energy Triangle The following section presents the challenges facing hydro power and nuclear power as well as the R&D being conducted on these types of power to create a long-term sustainable energy system. Climate and environment Hydro power and nuclear power generate very low emissions of carbon dioxide and other greenhouse gases. However, hydro power plants and reservoirs are a significant encroachment on the landscape and impact river ecosystems. Nuclear power also impacts its environment and produces radioactive waste, requiring high levels of operational and waste management security to minimise risks of impact on the environment and nature. An important focus of hydro and nuclear power R&D is on minimising impact on local environments as well as operational risks. Security of supply Both hydro power and nuclear power serve as baseload power today that is, they can produce a stable flow of great amounts of electricity. There will be more need for balancing power to enable the energy system to integrate a greater share of renewable energy sources with intermittent electricity production. Hydro power in particular (but also nuclear power) is well-suited as balancing power. Because production can be turned on and off quickly, they can compensate for increased demand or reduced production from renewable energy sources. Much R&D focuses on adapting power plants to function even better as balancing power as renewable energy sources gain significance. Competitiveness Both hydro power and nuclear power produce large amounts of electricity at a low, competitive price. Opportunities to expand large-scale hydro power and nuclear power in Europe are limited. Meanwhile, major investments are needed in existing power plants. Nuclear power entails additional costs for managing radioactive waste. Some R&D work is focused on continuing to lower costs and streamline operations in existing power plants. Research on nuclear power also studies the development of technologies to improve efficiency in the long term and thus minimise radioactive waste and reduce operational and waste management costs. Research and Development in the Energy Sector 23

24 Electricity production of the future Hydro power Hydro power a renewable energy source of continued importance Hydro power has low operating costs, high security of supply and is currently the most important renewable energy source in the European energy mix. Hydroelectric reservoirs can store great amounts of energy in the form of water, representing the most important form of energy storage in the energy system. Hydro power will continue to play a vital role in the European energy system, particularly as balancing power. R&D focuses mainly on upgrading ageing power plants to meet the need for improved flexibility and to increase the capacity of existing power plants. Hydro power has long been an important part of the European energy system and will continue to play a crucial role. Hydro power is a stable and reliable energy source, and its role as balancing power will grow as the share of intermittent sources, such as solar and wind power, increases in the energy system. Current research is also studying the development of small-scale hydro power and pumped storage power, which is used to store energy when there is a surplus of electricity in the system. There are limited opportunities to construct new, large-scale hydroelectric plants in Europe, although updates and modernisation measures can increase the electricity production of existing power plants. Hydro power today Hydro power currently functions as both baseload power and balancing power, and is by far the most important renewable energy source in Europe. In 2009 hydro power accounted for approximately 11 per cent of the EU s electricity production and roughly 60 per cent of total renewable electricity production. 1 Hydro power is advantageous in that it generates very few greenhouse gas emissions, provides security of supply and has low operating costs. Hydroelectric plants do, however, have an impact on their local environments. They also involve high investment expenditures - building a new large-scale hydroelectric plant is a major project. 24 Research and Development in the Energy Sector

25 Electricity production of the future Hydro power Countries with the resources and opportunity to utilise hydro power have considered it obvious to do so. The share of hydro power in the total energy mix varies widely between countries based primarily on geographic, geological and economic factors rather than on political decisions. The construction of large-scale hydro power requires the presence of suitable rivers with large differences in altitude and the opportunity to construct large dams. The energy mix in countries like Sweden, France and Austria, with high mountains and many rivers, therefore include large amounts of hydro power. How hydro power works Hydro power utilises water s natural cycle to produce electricity. The sun evaporates water, which falls as precipitation in upland areas. The water flows back to the sea via rivers and streams. A hydro power plant harnesses the energy of flowing water and converts it to electricity. The technology used in a hydroelectric plant is not advanced flowing water powers a turbine which powers a generator which produces electricity. Water is collected in reservoirs in order to control electricity production. To produce electricity, the sluices are opened and water gushes down and powers a turbine. Hydro power plants can thus raise and lower production on extremely short notice mere minutes as compared to coal-fired and nuclear plants. A hydroelectric reservoir is a natural form of energy storage. Water stored in the reservoir contains huge amounts of potential energy that can be converted to electricity at any time. Hydroelectric plants can also be used to store energy from other energy sources. Pumped storage power uses surplus energy generated by, for instance, wind turbines to pump water up to a reservoir, where it is stored as potential energy. When more electricity production is needed, the reservoir sluices are opened and the water powers a turbine just as in an ordinary hydroelectric plant. In this way, potential energy is converted to electricity again and can be used in the electricity system. A hydro power plant Large dams trap the water in reservoirs to create the necessary fall height and to store water for later use. The water falls to a lower level, passing through the turbine. The turbine axle rotates and powers the generator. The generator converts the rotating movement of the turbine into electrical energy. The transformer regulates the voltage so it is appropriate for the power grid. Reservoir Dam Power grid Reservoir sluice Transformer Generator Turbine Research and Development in the Energy Sector 25

26 Electricity production of the future Hydro power Although the technology for generating electricity at a hydroelectric plant is relatively simple, controlling the enormous force of the water is a major challenge. A hydro storage reservoir may contain several billion cubic metres of water and must be able to withstand storms, extreme temperatures and major variations in water flows. Reservoirs must also be able to handle logs and other water-borne objects while allowing fish and other animals to pass through. Hydroelectric plant appearance and design may vary widely based on local environment and the characteristics of the river near which it is built. Constructing a hydroelectric plant is a huge project that requires expertise in such diverse areas as hydrology, meteorology, biology and engineering. The role of hydro power in the future energy system Hydro power will play a crucial role in the European energy system in the future, albeit increasingly as balancing power. More balancing power will be needed as the share of intermittent energy sources increases. Unlike other types of balancing power, hydro power can nearly instantly convert its electricity production. There are limited possibilities to expand Europe s large-scale hydroelectric plants. Most rivers that are suitable for large-scale hydro plants are either already developed or are protected for environmental reasons. Accordingly, hydro power s share in the European energy mix will probably shrink as Europe steps up its electricity production. But by upgrading and modernising existing hydro plants, the amount of hydrogenerated electricity in the mix may well increase. Pumped storage power uses surplus electricity to pump water up to a reservoir, where the energy is stored as potential energy. Increasing the use of hydro power as balancing power will put more pressure on reservoirs, sluices and turbines and increase the need for new technologies and upgraded components. 26 Research and Development in the Energy Sector

27 Electricity production of the future Hydro power Hydroelectric plants impact their local environments in several ways. The reservoirs create artificial lakes, preventing the natural flow of water and impacting the entire river s animal and plant life. Some of today s R&D on hydro power is therefore focused on minimising impact on the local environment and identifying methods of offsetting the impact on animal and plant life that does occur. Great development possibilities at existing power plants Hydroelectric power plants have long useful lives they can function for up to 60 years after construction but technology is constantly evolving. Many of Europe s hydro plants are old and could be significantly more efficient if modernised and upgraded with modern technology. One way to improve power plant efficiency is to replace old turbines with newer models. A modern turbine can increase the amount of electricity produced by a specific amount of water. Reservoir security It is not only actual power plants that are being modernised. To minimise risk of damage to dams, power plants and local environments during extreme water flows and weather conditions, reservoirs themselves are being improved. Much R&D is focused on how dams are affected by water pressure and various weather conditions, ways in which various material characteristics and strength are affected and methods to counteract wear and tear. Reservoirs are being upgraded to withstand water flows that occur only once every 10,000 years. Older power plants are being equipped, for example, with larger sluices and canals (also called spillways ) to enable management of water levels by diverting water around the power plant and releasing it downstream. This makes it easier and quicker to manage excessively high reservoir water levels. Vattenfall s Stornorrfors hydroelectric plant, the second-largest in Sweden, has an installed capacity of 590 MW. It generates the most electricity of all hydro plants in Sweden, and is situated by the Ume River in the north of Sweden. Research and Development in the Energy Sector 27