So Nordic Perspective on the Global Energy Transition Per Langer 1
In less than 2 hours the earth receives the amount of energy we consume annually Fortum's solar plant in India 2
Future energy system features: Security of Supply a limited resource Energy a non limited resource Wind most competitive Clear Seasonality Intermittent power EQUATOR PV most competitive Low seasonality Intermittent power 3
Future energy system features: Security of Supply a limited resource Energy a non limited resource 47 /MWh 34 /MWh 80 /MWh 47 /MWh 50 /MWh 36 /MWh 92 /MWh 52 /MWh 70 /MWh 50 /MWh 80 /MWh 47 /MWh Clear Seasonality Wind most competitive Intermittent power 44 /MWh 32 /MWh 44 /MWh 26 /MWh 63 /MWh 45 /MWh 51 /MWh 30 /MWh 66 /MWh 47 /MWh 51 /MWh 30 /MWh Low seasonality PV most competitive Intermittent power 54 /MWh 39 /MWh 38 /MWh 22 /MWh 62 /MWh 44 /MWh 43 /MWh 25 /MWh 66 /MWh 47 /MWh 45 /MWh 26 /MWh 4 NOTE: Solar and wind resources and CAPEX may largely vary by individual projects, even on same region, thus impacting LCOE. Hence, figures are indicative and do not aim to present our geographical preferences for given technologies but rather illustrate progress of wind and solar globally, long-term. PV LCOE assumptions based on EU PV Technology Platform report and EU PVSEC 2015 paper (lead author Fortum solar technology manager Dr. Eero Vartiainen) LCOE assumptions: 7% real WACC CAPEX, OPEX globally uniform; lifetime solar 30y, wind 25y Wind and solar: internal assumptions that solar utilisation to increase by 7,5% and wind by 15% from 2016 to 2030 Uniform 20% corporate tax assumed
Onshore wind and solar PV breaking records with PPA contracts while offshore dropping into the game with first under 100 /MWh auction result Solar PV Onshore Offshore Lowest recently announced long-term PPA contract prices and auction results, without subsidies 1 Netherlands 73 /MWh Germany 69,4 /MWh United States 58,0 /MWh Mexico 31,7 /MWh United States 42,0 /MWh Marocco 26,8 /MWh Peru 33,1 /MWh Jordan 54,5 /MWh UAE 26,7 /MWh India 57,7 /MWh Peru 42,9 /MWh Brazil 43,8 /MWh New world-record Chile 26,0 /MWh South Africa 45,5 /MWh South Africa 58,0 /MWh Australia 61,6 /MWh 5 1. Sources: announcements by the investing companies and IEA report Renewable Energy Medium-Term Market Report 2015 for US, Brazil, South Africa, Australia and Jordan. Values reported in nominal EUR, 1 EUR = 1,12 USD, 1 EUR = 75,3 INR, 1 EUR = 9.48 SEK. United States values calculated excluding tax credits. Typical contract lengths are 15-25 years. The prices indicate levels with which investors have been willing to invest, however, they may not describe the actual comparable costs as the bid prices may be reduced by preferential land prices, site exploration cost, targeted low-cost loans etc. 2. The price level at which investors can hedge their renewable production for the next 4 years: average of 2017-2020 electricity (LUL) + elcertificate futures with 29.8.2016 closing prices. This low price levels still result in continuation of investments in onshore wind in Sweden.
Energy and capacity balance in Germany 2015 Power generation and imports, consumption and exports in Germany in 2015 TWh 700 Generation capacity, peak load and export capacity in Germany in 2015 MW 200 000 600 180 000 160 000 Export Consumption 500 400 300 140 000 120 000 100 000 80 000 Import Other fossil fuels Gas Hard coal Lignite Nuclear 200 100 60 000 40 000 20 000 Hydro Other renewables Biomass Solar 0 Generation and imports Consumption and exports 0 Generation capacity Peak load and export capacity Wind Source: ENTSO-E Statistical Factsheet 2015, ENTSO-E Summer Outlook 2016 6 25.05. 2015 at 03:00 (time) 36 146 MW
Average power prices in Nordics and Germany were very close in December 2014 7
but hourly prices were very different! Price pattern is getting more important than average price 8
Managing seasonality creates challenges in Nordics Example of a single-family house Challenge: Need to transfer 15 000 kwh energy from summer to winter This would mean: 2343 Tesla Powerwalls (6.4 kwh capacity, 3000$) Investment of 7 million USD Space needed for batteries 468 m3 9
How can the Nordic countries continue to be successful? To be successful in the future, we need more: Hydro power Can solve seasonality and intermittence Combined Heat and Power Can solve with seasonality Wind/ Sun power Provides energy Demand flexibility Can solve intermittence on a daily level Batteries Can solve intermittence on a daily level Nordic cooperation Can solve intermittence on a daily level and seasonality How well we handle the seasonality problem in the Nordic will in large scale define how competitive energy market we will have 10
Transition towards Solar Economy is ongoing 11