Energy Sources Decarburization · Gulf of Mexico, are still under scrutiny by EPA and the Obama administration. In spite of that, gas undoubtedly looks as the main energy source for

www.ravenna2013.it

Energy Sources Decarburization

Energy and EnvironmentNew Trends and Issues

Marco SuminiDept. of Industrial Engineering

University of Bologna

www.ravenna2013.it

2

In the last years some relevant events have profoundlychanged the energy market:

The first: the new standby of the nuclear energydevelopment (“Nuclear Renaissance”) after the Fukushimacrisis that undermined any perspective for the comingdecades. Even if we can count 434 reactors in operation andsome new grid connections (in 2013, February, HongYanhe-1, China, 1 GW, PWR) and 69 NPP in construction, publicacceptance and economic compliance with the energymarket are still a big issue.

In US, the constraints on the Federal budget withthe related cuts to subsidies to Nuclear (and renewables too)and the costs of the upgrades required after Fukushima areforcing many utilities to an anticipated outage for many agingor not easy to refit NPP.

Moreover, the economic disaster of the first EPRNPP of Olkiluoto in Finland (that is now looking at Russianstyle PWR, the VVVRs) created some additional panic.

www.ravenna2013.it

3

The second: the strong development of the shalegas search and extraction in the Central and North-Westpart of US, that is rapidly changing also many politicalstrategies, allowing f.i. the US to look differently withrespect to the past to Arab oil-based power and putthemselves on the market as energy exporters.

However, fracking will probably face in the nextfuture some consensus issues due to the still lackinginformation about the medium-long term environmentalconsequences of the extraction procedures (water tabpollution, extensive use of chemicals, etc.).

and, as far as today, the planned Keystone XLpipeline linking Alberta oil sands fields and US shale gasresources to the big refineries and ship terminals in theGulf of Mexico, are still under scrutiny by EPA and theObama administration.

In spite of that, gas undoubtedly looks as themain energy source for the coming decades (see the fastdevelopment of the various pipelines, liquefied gasterminals, etc. all around the world). In EU too, potentialshale gas fields have been identified and tested.

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4

All costs are rising in a fast pace, mainly forenvironmental reasons, for new oil/gas sources (even foroil sands, the Canada Environmental Authorities areestablishing stronger carbon content limits for the extractedoil)

The very long term exploitable resources like theArctic ones, are really investment demanding (and thestudies on the potential interest for the methane hydrate iceare still under way).

So, we are again facing the perspective of at leastone or two decades with energy production still basedmainly on fossil fuels (more coal, perhaps less oil, andmore and more gas…): the nuclear phase-out of Germanyand delay in the nuclear restart in Japan up to now aresimply increasing fossil fuels burning.

In this context, Carbon Capture technology hasfound his own path to develop, even if all the proposedideas looks expensive and focused on big plants withpotential relevant and dramatic environmental impact incase of failure.

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5

An other main point is the worldwide economicalstandby that touch also the so called BRICS, thatdiscovered in the last couple of years that economicalgrowth cannot be decoupled from the social one…

www.ravenna2013.it

6

Finally, and mainly in OECD Countries, an alwaysmore deep consciousness of the environmental issues risenby the exploitation of the energy sources (every kind,renewable or not: even wind farms or PV fields have theirissues), and the need of a new attitude with respect to thecarbon emissions & global heating and anthropogenic drivenclimate changes that threatens the Planet…

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7

What is stepping out is an idea (and the search)of a “smart” solution for global networks forproduction/distribution of the (electric) energy when andwhere you need it, becoming able to overcome the well-known paradigm of “you can produce it, but you cannotstore it”.

This philosophy, that is actually receiving quite astrong support by economical analysts, remove fromconsideration some facts that are also relevant and worthto mention in a correct picture of the energy problem, i.e.

the return to the strategic idea of an autonomoussustainable energy policy at Country level, that goes inopposite direction with respect to the more appealing“smart” concepts.

the need of plants f.i. for electric energy baseload production (hydro or nuclear or coal…) that cannotrely (only) on renewable potential…

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Ref: http://www.q-cumber.org 8

www. q- cum ber. org Q- regist razione

Su0Facebook0

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9

COSA PUOI FARE CON QCUMBER

“Post Rosso ”!

“Post Verde ”!

“Qalert Odori ”!

Qalert odori Qcumber offre la possibilità di segnalare problematiche di molestie olfattive, direttamente su mappa, indicando l’ora della segnalazione, il livello di odore percepito ed eventualmente inserendo fotografie

Post Verde Qcumber offre la possibilità di segnalare direttamente su mappa luoghi e/o situazioni di pregio e da tutelare.

Post Rosso Qcumber offre la possibilità di segnalare direttamente su mappa eventuali problemi e disagi ambientali (es. rifiuti abbandonati sul territorio, ecc..)

Accedere al Geodatabase Qcumber offre la possibilità di conoscere il territorio consultando: elementi di stressor (es. cave, discariche, impianti di trattamento rifiuti, ecc.), elementi di vulnerabilità (Comunità umane, ecosistemi e risorse ambientale), e dispositivi di ARPA (centraline meteo, piezometri, ecc..)

Analizzare il t erritorio Qcumber offre la possibilità di analizzare il territorio entro un raggio di 3 km intorno al luogo in cui vive un utente (Analizza area nella tua geolocazione) o intorno ad un punto di interesse definito dall’utente (Analizza area qui).

Le segnalazioni possono essere notificate agli Enti competenti e i cittadini verranno informati sulle attività intraprese e sul livello di risoluzione del problema.!

www. q- cumber . org

www.ravenna2013.it

Appendix

data and references

10

www.ravenna2013.itRef: IAEA PRIS (Power Reactors Information System), Sept. 2013

11

Current Status:

434 NUCLEAR POWER REACTORSIN OPERATION

370 543 MWe TOTAL NET INSTALLEDCAPACITY

1 NUCLEAR POWER REACTORSIN LONG-TERM SHUTDOWN

69 NUCLEAR POWER REACTORSUNDER CONSTRUCTION

(Click on the chart for more statistics)Regional Distribution of Nuclear Power Plants

www.ravenna2013.it

Ref: IEA, 2013 12

www.ravenna2013.it

13

www.ravenna2013.it

14

www.ravenna2013.itRef: RENAISSANCE IN REVERSE: COMPETITION PUSHES AGING U.S. NUCLEAR REACTORS TO THE BRINK OF ECONOMIC ABANDONMENT MARK COOPER, July 2013.

15

The Shift in the Natural Gas Supply Curve

Sources: EIA, Natural Gas Data; Nymex H enry H ub.

y = -0.5634x2 + 11.528x - 51.851

R² = 0.7397 y = 2.6548x - 17.06

R² = 0.7641

y = -1.333x + 20.575

R² = 0.7867

0

1

2

3

4

5

6

7

8

9

6 7 8 9 10 11 12 13 14

Wellhead Price

$2010/MCF

Reserve toConsumption Ratio

Pre-Shale Gas

Post-Shale Gas

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16

Reserves Drive Prices on a Forward Looking Basis

0

2

4

6

8

10

12

14

Wellhead Price ($2010/MCF) Reserve-to-Consumption Ratio (Years)

Nymex Henry Hub ($2101/MCF)

www.ravenna2013.it

17

EXH IBIT I I I -10: DEMAND FOR FOSSIL FUEL GENERATING CAPACITY:

1985 = 1

Source: Energy Information Administration, Monthly energy Review data tables.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

GDP $2005

Total kwh

kwh/$ GDP (Real)

Fossil Fuel/KWH

www.ravenna2013.it

18

EXH IBIT IV-7: TRENDS & PROJECTIONS FOR ONSH ORE OVERNIGH T WIND COSTS

Sources: Ryan Wiser, et al., Recent Developents in the Levelized cost of Energy From U.S. Wind Power

Projects, NREL, February 2012; Eric Lantz, Maureen H and and R yan Wiser, The Past and Future cost of

Wind Energy, NREL, August 2012; California Energy Commission, Cost of Central Station Generation, January 2012.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

$2010/KW Actual

Projcted CEC

80% Predicted

20% Predicted

www.ravenna2013.it

19

www.ravenna2013.it

20

EXH IBIT IV-9: TRENDS & PROJECTIONS FOR SOLAR

Source: Lazard, Levelized Cost of Energy Analysis – Version 5.0, June 2011; Galen Barbose, et al., Photovoltaic

(PV) Pricing Trends: Historical, Recent, and Near-Term Projections, LBL and NREL, November 2012,

0

2

4

6

8

10

12

1998 2002 2006 2010 2014 2018 2022 2026 2030

$/W

LE 10 MW

10- LE 100 MW

GT 100 MW

www.ravenna2013.it

21

Unsubsidized Levelized Cost of Energy Comparison Certain Alternative Energy generation technologies are cost-competitive with conventional generation t echnologies under some scenarios, before factoring in environmental and ot her externalities (e.g., RECs, transmission and bac k-up generation/ system reliability costs) as well as construction and fuel cost dynamics affecting conventional generation te chnologies

Source: Lazard estimates. Note: Assumes 60% debt at 8% interest rate and 40% equity at 12% cost for conventional and Alternative Energy generation technologies. Assumes Powder River Basin coal price of $1.99 per MMBtu and natural gas price of $4.50 per MMBtu.

As many have argued, current solar pricing trends may be masking material differences between the inherent economics of certain types of thin-film technologies and crystalline silicon.

‡ Denotes distributed generation technology.

(a) Analysis excludes integration costs for intermittent technologies. A variety of studies suggest integration costs ranging from $2.00 to $10.00 per MWh.

(b) Low end represents single-axis tracking. High end represents fixed-tilt installation. Assumes 10 MW system in high insolation jurisdiction (e.g., Southwest U.S.). Not directly comparable for baseload.

(c) Diamonds represent estimated implied levelized cost of energy in 2015, assuming $1.50 per watt for a crystalline single-axis tracking system and $1.50 per watt for a thin-film single-axis tracking system.

(d) Low end represents single-axis tracking. High end represents fixed-tilt installation. Assumes 10 MW fixed-tilt installation in high insolation jurisdiction (e.g., Southwest U.S.).

(e) Low end represents solar tower without storage. High end represents solar tower with storage capability.

(f) Represents estimated midpoint of levelized cost of energy for offshore wind, assuming a range of $3.10 – $5.00 per watt.

(g) Estimates per National Action Plan for Energy Efficiency; actual cost for various initiatives varies widely. Estimates involving demand response may fail to account for opportunity cost of foregone consumption.

(h) Indicative range based on current and future stationary storage technologies; assumes capital costs of $400 – $750/KWh for 6 hours of storage capacity, $60/MWh cost to charge, one full cycle per day (full charge and discharge), efficiency

of 66% – 75% and fixed O&M costs of $5 to $20 per KWh installed per year.

(i) Low end represents continuous operation. High end represents intermittent operation. Assumes diesel price of $4.00 per gallon.

(j) High end incorporates 90% carbon capture and compression. Does not include cost of transportation and storage.

(k) Represents estimate of current U.S. new IGCC construction with carbon capture and compression. Does not include cost of transportation and storage.

(l) Does not reflect decommissioning costs or potential economic impact of federal loan guarantees or other subsidies.

(m) Represents estimate of current U.S. new nuclear construction.

(n) Based on advanced supercritical pulverized coal. High end incorporates 90% carbon capture and compression. Does not include cost of transportation and storage.

(o) Incorporates 90% carbon capture and compression. Does not include cost of transportation and storage.

$149 $91 $89

$125 $109

$102 $89

$87 $45

$0 $216

$297 $179

$95 $86

$65 $61

$204 $104

$99 $164

$206 $135

$142 $116

$95 $50

$329 $332

$230 $154

$122 $145

$87

$0 $50 $100 $150 $200 $250 $300 $350

Solar PV—Crystalline Rooftop

Solar PV—Crystalline Utility Scale

Solar PV—Thin-film Utility Scale

Solar Thermal

Fuel Cell

Microturbine

Geothermal

Biomass Direct

Wind

Energy Efficiency

Battery Storage

Diesel Generator

Gas Peaking

IGCC

Nuclear

Coal

Gas Combined Cycle

Levelized Cost ($/ MWh)

(g)

(i)

(j)

ALTERNATIVE ENERGY(a)

CONVENTIONAL (l)

$68 (c) (b)

$64 (c) (d)

(e)

(n)

Copyright 2013 Lazard.

$155 (f)

$115 (m)

2

L A Z A R D ' S L E V E L I Z E D C O ST O F E N E R G Y A N A L Y SI S — V E R SI O N 7 . 0

$141 (k)

$127 (o)

(h)

‡

‡

‡

‡

Ref: Lazard’s Levelized Cost of Energy Analysis—Version 7.0, Sept. 2103

www.ravenna2013.itRef: Lazard’s Levelized Cost of Energy Analysis—Version 7.0, Sept. 2103

22

Levelized Cost of Energy Comparison—Sensitivity to Fuel Prices Variations in fuel prices can materially affect the levelized cost of energy for conventional generati on technologies, but direct comparisons against “competing” Alternative Energy generation technologies must take into account issu es such as dispatch characteristics (e.g., baseload and/ or dispatchable intermediate load vs. peaking or intermittent tech nologies)

Source: Lazard estimates. Note: Darkened areas in horizontal bars represent low end and high end levelized cost of energy corresponding with ±25% fuel price fluctuations. (a) Low end represents continuous operation. High end represents intermittent operation.

$149

$91

$89

$125

$100

$87

$89

$83

$45

$0

$216

$225

$165

$90

$84

$59

$52

$204

$104

$99

$164

$212

$141

$142

$125

$95

$50

$329

$404

$242

$160

$124

$152

$96

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450




Solar Thermal

Fuel Cell

Microturbine

Geothermal

Biomass Direct

Wind

Energy Efficiency

Battery Storage

Diesel Generator

Gas Peaking

IGCC

Nuclear

Coal

Gas Combined Cycle


ALTERNATIVE ENERGY

CONVENTIONAL

$68

$155

$64


(a)

4


www.ravenna2013.it

23

$99 $179

$74 $209

$109 $340

$112 $345

$91 $339

$122 $343

$139 $245

$99 $297

$74 $344

$109 $322

$112 $228

$91 $321

$122 $441

$139 $513

$161 $230

$142 $257

$212 $389

$219 $391

$177 $384

$247 $373

$285 $288

$161 $332

$142 $379

$212 $372

$219 $276

$177 $368

$247 $476

$285 $548

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600

Solar Gas Peaker/Diesel Generator

U.S.

Australia

Brazil

India

South Africa

Japan

Northern Europe

U.S.

Australia

Brazil

India

South Africa

Japan

Northern Europe

Solar versus Peaking Capacity—Global Markets


GAS PEAKER VERSUS

SOLAR (a)(b)

DIESEL GENERATORS

VERSUS SOLAR (a)(c)


Diesel Fuel Cost

$288

$309

$216

$309


Source: Word Bank, Waterborne Energy, Department of Energy of South Africa, Sydney and Brisbane Hub Trading Prices and Lazard estimates. (a) Low end assumes a solar fixed-tilt thin-film utility scale system with per watt capital costs of $1.75. High end assumes a solar crystalline rooftop utility scale system with per watt

capital costs of $3.25. Solar projects assume capacity factors of 26% – 28% for Australia, 25% – 27% for Brazil, 23% – 25% for India, 27% – 29% for South Africa, 15% – 17% for

Japan and 13% – 15% for Northern Europe. Equity IRRs of 12% are assumed for Australia, Japan and Northern Europe and 18% for Brazil, India and South Africa; assumes cost of debt of 8% for Australia, Japan and Northern Europe, 14.5% for Brazil, 13% for India and 11.5% for South Africa.

(b) Assumes natural gas prices of $7 for Australia, $14 for Brazil, $15 for India, $15 for South Africa, $18 for Japan and $10 for Northern Europe (all in U.S.$ per MMBtu). Assumes a capacity factor of 10%.

(c) Diesel assumes high end capacity factor of 30% representing intermittent utilization and low end capacity factor of 95% representing baseload utilization, O&M cost of $15 per

KW/year, heat rate of 10,000 Btu/KWh and total capital costs of $500 to $800 per KW of capacity. Assumes diesel prices of $4.65 for Australia, $4.30 for Brazil, $3.00 for India, $4.30 for South Africa, $6.00 for Japan and $7.00 for Northern Europe (all in U.S.$ per gallon).

Solar PV can be an attractive resource relative to gas and diesel-fired peaking in many parts of the w orld due to high fuel costs; without storage, however, solar lacks the dispatch characteristics of conventional peaking technologie s

$334

$431

$503

6


www.ravenna2013.it

24

Levelized Cost of Energy Components—Low End

Source: Lazard estimates. Note: Assumes 60% debt at 8% interest rate and 40% equity at 12% cost for conventional and Alternative Energy generation technologies. Assumes Powder River Basin coal price of $1.99 per MMBtu and

natural gas price of $4.50 per MMBtu.

(a) Low end represents single-axis tracking. (b) Low end represents single-axis tracking. (c) Low end represents solar tower without storage capability.

(d) Low end represents flow battery. (e) Low end represents continuous operation. (f) Does not incorporate carbon capture and compression. (g) Does not reflect decommissioning costs or potential economic impact of federal loan guarantees or other subsidies.

(h) Based on advanced supercritical pulverized coal. Does not incorporate carbon capture and compression.

$143

$82

$81

$108

$50

$39

$59

$45

$33

$121

$8

$122

$67

$72

$42

$26

$6

$8

$8

$13

$20

$13

$7

$5

$2

$6

$4

$8

$3

$1

$3

$11

$18

$30

$15

$6

$5

$7

$3

$4

$28

$45

$15

$90

$288

$46

$18

$7

$17

$30

$149

$91

$89

$125

$109

$102

$89

$87

$45

$216

$297

$179

$95

$86

$65

$61

$0 $50 $100 $150 $200 $250 $300 $350




Solar Thermal

Fuel Cell

Microturbine

Geothermal

Biomass Direct

Wind

Battery Storage

Diesel Generator

Gas Peaking

IGCC

Nuclear

Coal

Gas Combined Cycle

Capital Cost Fixed O&M Variable O&M Fuel Cost


ALTERNATIVE ENERGY

CONVENTIONAL


Certain Alternative Energy generation technologies are already cost-competitive with conventional gene ration technologies; a key factor regarding the long-term competitiveness of currently more expensive Alternative Energy tech nologies is the ability of technological development and increased producti on volumes to materially lower the capital costs of certain Alternative Energy technologies, and their levelized cost of en ergy, over time (e.g., as has been the case with so lar PV and wind technologies)

(a)

(b)

(c)

(e)

(f)

(g)

(h)

10


(d)


www.ravenna2013.it

25

Levelized Cost of Energy Components—H igh End


Source: Lazard estimates. Note: Assumes 60% debt at 8% interest rate and 40% equity at 12% cost for conventional and Alternative Energy generation technologies. Assumes Powder River Basin coal price of $1.99 per MMBtu and

natural gas price of $4.50 per MMBtu. (a) High end represents fixed-tilt installation. (b) High end represents fixed-tilt installation.

(c) High end represents solar tower with storage capability. (d) High end represents NaS technology. (e) High end represents intermittent operation.

(f) High end incorporates 90% carbon capture and compression. Does not include cost of transportation and storage. (g) Does not reflect decommissioning costs or potential economic impact of federal loan guarantees or other subsidies. (h) Based on advanced supercritical pulverized coal. High end incorporates 90% carbon capture and compression. Does not include cost of transportation and storage.

$192

$97

$92

$143

$60

$59

$102

$59

$74

$229

$39

$154

$122

$108

$111

$52

$11

$7

$7

$18

$102

$13

$11

$10

$6

$29

$4

$8

$4

$2

$3

$11

$22

$40

$15

$10

$8

$7

$6

$2

$33

$54

$29

$90

$288

$41

$21

$7

$24

$31

$204

$104

$99

$164

$206

$135

$142

$116

$95

$329

$332

$230

$154

$122

$145

$87

$0 $50 $100 $150 $200 $250 $300 $350




Solar Thermal

Fuel Cell

Microturbine

Geothermal

Biomass Direct

Wind

Battery Storage

Diesel Generator

Gas Peaking

IGCC

Nuclear

Coal

Gas Combined Cycle

Capital Cost Fixed O&M Variable O&M Fuel Cost

ALTERNATIVE ENERGY

CONVENTIONAL

(a)

(b)

(c)

(e)

(f)

(g)

(h)

Certain Alternative Energy generation technologies are already cost-competitive with conventional gene ration technologies; a key factor regarding the long-term competitiveness of currently more expensive Alternative Energy tech nologies is the ability of technological development and increased producti on volumes to materially lower the capital costs of certain Alternative Energy technologies, and their levelized cost of en ergy, over time (e.g., as has been the case with so lar PV and wind technologies)

11



(d)


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26

Energy Resources: Matrix of Applications

Source: Lazard estimates. (a) Qualification for RPS requirements varies by location. (b) LCOE study capacity factor assumes Southwest location. (c) Could be considered carbon neutral technology, assuming carbon capture and compression.

(d) Carbon capture and compression technologies are in emerging stage.

LEVELIZED COST OF ENERGY

CARBON NEUTRAL/

REC POTENTIAL

STATE OF

TECH NOLOGY

LOCATION DISPATCH

CUSTOMER LOCATED

CENTRAL STATION GEOGRAPHY INTERMITTENT PEAKING

LOAD-FOLLOWING

BASE- LOAD

ALTERNATIVE ENERGY

SOLAR PV $89 – 204 � Commercial � � Universal(a) � �

SOLAR TH ERMAL

$125 – 164 � Commercial � Southwest � � �

FUEL CELL $109 – 206 ?(b) Emerging/ Commercial

� Universal �

MICROTURBI NE $102 – 135 ?(b) Emerging/

Commercial � Universal �

GEOTH ERMAL $89 – 142 � Mature � Varies �

BIOMASS DIRECT

$87 – 116 � Mature � Universal � �

ONSH ORE WIN D

$45 – 95 � Mature � Varies �

BATTERY STORAGE

$216 – 329 � Emerging � � Varies � �

CONVENTIONAL

DIESEL GENERATOR $297 – 332 � Mature � Universal � � � �

GAS PEAKING $179 – 230 � Mature � � Universal � �

I GCC $95 – 154 �(c) Emerging(d) � Co-located or

rural �

NUCLEAR $86 – 122 � Mature/

Emerging �

Co-located or rural

�

COAL $65 – 145 �(c) Mature(d) � Co-located or

rural �

GAS COMBI NED

CYCLE $61 – 87 � Mature � � Universal � �


While the levelized cost of energy for Alternative Energy generation technologies is becoming increasi ngly competitive with conventional generation technologies, direct compar isons must take into account issues such as locatio n (e.g., central station vs. customer-located) and dispatch characteristics (e.g., baseload and/ or dispatchable intermediate lo ad vs. peaking or intermittent technologies). This analysis also does not address the potential stranded cost aspects of distributed generation solutions in respect of existing electric utility s ystems, nor does it account for the social costs or other externalities of the rate consequences for those who cannot afford distribute d generation solutions

12



Documents

Energy Sources Decarburization · Gulf of Mexico, are still under scrutiny by EPA and the Obama administration. In spite of that, gas undoubtedly looks as the main energy source for