Siemens Power Generation Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung

Siemens Power Generation 2006. All Rights Reserved Siemens Power Generation Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Nicolas Vortmeyer CTO, Siemens Power Generation

Key Drivers for Siemens Power Generation Innovation Balanced global & regional Energy Mix Power Generation & Conversion Technology Mix Coal, Oil & Gas, Nuclear, Renewable, Industrial heat recovery, Power Generation & Conversion Solutions Clean, competitive & reliable Power Society requirements Competitiveness & affordability Environmental protection Safety & security of supply Customer requirements Low life cycle cost Compliance to environmental standards Fuel flexibility & operational flexibility Key product features High efficiency, high quality, availability, reliability, low O&M and service costs, delivery time, investment costs NO x, SO x, CO and other pollutants emissions reduction, CO 2 reduction, CO 2 capture and renewables Good load following & cycling capability, high quality, dispatchability, fuel flexibility & availability, low start up times Our innovations improve the global energy infrastructure: competitiveness, environmental protection, security of supply 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 2

Energy prices determine the market mix for power plant types (2010-) Oil price development 120 Goldman Sachs: 100 Potential for Super spike of 105 $/bbl by 2007 US$/bbl 80 60 November 2005: 58 US$/bbl Credit Suisse 50 US$/bbl 40 Merrill Lynch: 20 30 $/bbl in 2007 0 1986 1990 2000 2010 Low fuel price Reference scenario 2010- High fuel price Oil price falls back to 30 $/bbl Stronger electricity demand Natural gas is favorite energy carrier Goverment aid for renewable energies Nuclear: few new installations in America and Western Europe 3% 9% 47% 23% 6% 12% 4% 11% 37% 29% 7% 13% Others *) Wind power Combined cycle power plants Steam power plants Nuclear power plants Hydro power plants 4% 15% 24% 33% 10% 14% Oil price rises to 100 $/bbl Damped electricity demand Strong extension of renewables Advanced coal technologies with reduced emissions (IGCC) Reassessment of nuclear (new installations) *) Solar, Geothermal, Biomass, Diesel 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 3

Siemens PG Business Systems & Solutions, Components, Technology Platform...Systems & Solutions using own components Fossil Power Plants IGCC Power Plants Steam and Gas Turbosets Biomass Power Plants Compression Solutions Solutions Service PP Environmental Management IT Solutions Solutions Wind Farms Fuel Cell Power Plants Compressors Gas Turbines Generators Steam Turbines Gasifiers Wind Turbines I&C Components FGD Diagnostic Systems Fuel Cell Generators Siemens PG Technology Platform...based on a world class technology platform 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 4

Our customers want: High efficiency Long-lasting products and solutions High reliability and availability Innovative products and solutions High operating flexibility Environmentallyfriendly products and solutions Custom-tailored output User-friendly applications All-inclusive solutions Fast implementation Low prices Maximum warranty Quality Fast response Flexibility Adherence to commitments, reliability Loyalty Competent and experienced partner Strong partner for the future Consultant and solution provider 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 5

Drivers for innovation in coal-fired power plants The requirements for the evolutionary power plant development are well-known. Low electricity generation costs Availability O&M costs Investment costs Thermal efficiency Costs/yields of CO 2 emission certificates Environmental protection Reduction of CO 2 emissions Reduction of other emissions Fuel flexibility Operational flexibility Start-up times, load-shifts etc. Efficiency bonus through value of the product CO 2 Compensation of energy demand of CO 2 - separation by efficiency increases Efficiency gains and CO 2 separation are the major technical drivers for the long-term economical use of coal. 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 6

Environmental compliance is one of the major drivers in the power generation industry Siemens PG Customer Survey (with more than 100 major customers, approx. 80% of customers from EU) Which of these environmental issues has the greatest impact on your investment decisions? #1 CO 2 #2 NOx #3 SO 2 What value do you place on CO 2 reductions for your investment calculations? 0 /t 2,5 % 10 /t 35,0 % 20 /t 37,5 % #4 Particulate matter #5 Hg 30 /t 3,8 % Not relevant for my region 21,2 % CO 2 trading scheme In force In progress Under consideration Hosting offset projects Kyoto protocol not ratified 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 7

Efficiency development of fossil-fueld power plants Lignite-fired steam power plant > 43% Target 2020 >50% Hard coal-fired steam power plant 47% Target 2020 >53% Combined-cycle power plant > 58% Target 2020 >63% Niederaußem, Leistungsklasse 1000 MW Reference STPP NRW, Leistungsklasse 600 MW Mainz-Wiesbaden, Leistungsklasse 400 MW Development of efficiency 1992: 36 % *) 2002: 43 % Target 2020: >50 % 1992: 43 % 2002: 46 % Target 2020: >53 % 1992: 52 % 2002: 58 % Target 2020: >63 % *) Technology of 1972 (RWE, Niederaußem 300 MW unit) 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 8

Decisive role of turbo-machines for modern power generation Natural gas CC CC with Coal Gasification CC with bio mass gasification G G CO 2 -free CC Bio mass/ waste incinerators Conventional steam power plant CO 2 -free steam power plant Solar thermal power plant Nuclear power plant Geothermal power plant G Combined cycle (CC) as well as the Clausius Rankine Process are the platforms for all relevant thermal power generation technologies 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 9

New gas turbine technology: worldwide highest efficiency and output Gas turbine Combined cycle power plant SGT5-8000H SCC5-8000H Power output 340 MW* CCPP power outputnet 530 MW* Efficiency 39%* CCPP efficiencynet 60%* 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung *GT-values without inlet/outlet pressure losses, intro rating Power Generation 10

Coal based CCS technology pathways Conventional market CCPP Gasifier scale up, cost reduction, syngas turbines Cost and manufacturing of Ni-alloy thick wall parts IGCC SPP SPP 700 Scrubber under non- oxidating environment Scrubber under oxidating environment Corrosion in boiler, aggregation of waste gases in flue gas recycling CCS market ZEIGCC = IGCC + pre combustion scrubbers SPP 700 + post combustion scrubbers SPP + oxyfuel boiler Zero Emission IGCC is the currently most promising option for CCS 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 11

IGCC technology for highly efficient and clean power generation Process 1 Coal Gasification process H 2 O CO + H 2 + pollutants Gas cleanup NO x SO 2 Hg Ash CO + H 2 (Syngas) Combined-cycle power plant Today Midterm Investment costs: 1.300 /kw Efficiency: ~ 49% Investment costs: 1.100 /kw Efficiency ~ 53% Coal Gasification process CO + H2 + pollutants Gas cleanup CO + H 2 (Syngas) Shift reaction CO 2 + H 2 CO 2 separation H 2 Combined-cycle power plant Process 2 H 2 O NO x SO 2 Hg Ash H 2 O CO 2 CO 2 -Deponierung Longterm Investment costs: 2.000 /kw Efficiency: ~ 45% 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 12 All values for Integrated Gasification Combined-Cycle (IGCC) based on hard coal

Wind power: portfolio and projects Installed fleet worldwide: 4,500 MW 1991 kw-class (< 1 MW) Stall-Technology 0.6 MW 1996 World s first offshore wind farm (Vindeby/DAN) 5 MW 1.0 MW MW-Class current market ( 1.3 2.3 MW) CombiStall-Technology 1998 1.3 MW 1999 2.0 MW 2000 World s largest offshore wind farm (Middelgrunden/DAN) 40 MW 2001 Multi-MW-Class future market ( 2.3 VS 5.X MW) Pitch-Technology with variable speed (VS) 2.3 MW 2003 World s largest onshore wind farm (King Mountain/USA) 278 MW 3.6 MW 2005 World s largest offshore wind farm (Nysted/DAN) 166 MW 5 MW Onshore wind farm (Smøla/NOR) 150.4 MW Current product portfolio Planned 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 13

Vision: The future energy supply will be environmentally sound and integrated Gas liquefaction (LNG) Flue gas cleaning (scrubbers, mercury) Deep sea exploration Gas to liquids (GTL) Hydrogen economy Off-shore wind farm Unconventional oils (tar sands, oil shales) Nuclear power plants Integrated gasification combined cycle (IGCC) Synfuels from gasification Power plant dispatch optimization CO 2 separation and deposition System load management Fuel cells 31.05.2006 Innovationstrends bei Anlagen und Komponenten in der Energieerzeugung Power Generation 14