Electrical Energy Generation in Europe: The Current and Future Role of Conventional Energy Sources in the Regional Generation of Electricity

468 Pages·2015·13.964 MB·English

by  Jorge Morales Pedraza (auth.)

Jorge Morales Pedraza
Electrical
Energy
Generation
in Europe
The Current and Future Role of
Conventional Energy Sources in the
Regional Generation of Electricity
Electrical Energy Generation in Europe
Jorge Morales Pedraza
Electrical Energy Generation
in Europe
The Current and Future Role
of Conventional Energy Sources
in the Regional Generation of Electricity
123
JorgeMorales Pedraza
Vienna
Austria
ISBN 978-3-319-08400-8 ISBN 978-3-319-08401-5 (eBook)
DOI 10.1007/978-3-319-08401-5
LibraryofCongressControlNumber:2014950679
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Preface
Thepreparationofabookhasalwaysbeenacomplexandchallengingtask.Thisis
thethirdbookonenergymattersthatIhavehadtheopportunitytoprepare.Thefirst
two books were dedicated to the use of different energy sources for generation of
electricity in Latin America and the Caribbean region. One of the books was
dedicatedtotheuseofoil,naturalgas,andcoalforgenerationofelectricity,andthe
second to the use of different renewable and nuclear energy sources for the same
purpose.Thisbookisthefirstoftwobooksdedicatedtotheuseofconventionaland
nonconventional energy sources for the generation of electricity in the European
region. In this particular book, the role of oil, natural gas, and coal in the regional
generation of electricity is presented.
Providing a stable and secure supply of energy is a great challenge for gov-
ernments seekingto achieve sustainabledevelopment goals, since the main energy
sourcesprovidingeconomicgrowthandsocialdevelopmentarepresentintheEarth
only in specific locations and in limited quantities. Energy is, undoubtedly, an
important element in the struggle of any country to alleviate poverty, promote
economicgrowth,andfoster social development.Butastheworldconsumesmore
and more energy, stress is placed on current level of energy reserves and the
environment at national, regional, and international levels.
The world should work together to safeguard the environment without slowing
socioeconomic development. Third World countries should look for adequate
technological solutions in order to change present unsustainable patterns of con-
sumption and production in developed countries and to seek the low-hanging fruit
and the win–win solutions that provide the least costly ways of achieving sus-
tainable development goals.
Thebookhasfivechapters.Chapter1givesthereadersageneraloverviewofthe
currentsituationandthefuturerolethatcouldbeplayedbyoil,naturalgas,andcoal
in generation of electricity in the European region. According to different expert’s
opinions, the use of energy at world level will continue to increase gradually until
2030.AccordingtostudiesmadebytheFrenchAssociationofOilProfessionals,it
is expected that for 2030, the world energy demand will be double and it is
probably that could be triple for 2050. Until 2030, the primary energy demand at
v
vi Preface
world level is expected to increase annually at 1.7 %, which is somehow smaller
than the world growth of 2.1 % registered during the past three decades. It is also
expected that 90 % of the increase in the world energy demand in the coming
decades will be satisfied with fossil fuels. If this forecast is true, then around 15,
300 million tons of oil equivalent (112,500 million of barrels of oil) will be con-
sumedatworldlevelin2030.Electricity production willaccount for 32%oftotal
global fossil fuel use.
InthespecificcaseofEurope,fossilfuelssuchasoil,naturalgas,andcoalareby
farthelargestsourcesofenergyandarewidelyprojectedtodominatetheEuropean
energymixthroughtoatleast2030.TheEuropeanCommission’sEnergyRoadmap
2050 identifies natural gas as a critical fuel for the transformation of the energy
system.Thesubstitutionofcoalandoiltonaturalgasintheshorttomediumterms
couldhelptoreduceemissionswithexistingtechnologiesuntilatleast2030–2035.
In Europe, the net growth in the past 11 years of natural gas power (118.2 GW),
wind power (75.2 GW), and solar photovoltaic (26.4 GW) was at the expense of
fueloil(down13.2GW),coal(down9.5GW)andnuclearenergy(down7.6GW).
In the specific case of the EU power sector, countries continue to replace ageing
fueloil,coal,andnuclearpowerplantswithmoderntechnology,whileatthesame
time increasingitstotal installed capacitytomeettheincreasing energy demandin
the coming years.
Chapter 2 provides readers with the latest information about the current and
future role to be played by oil for generation of electricity in the European region.
Worlduseofpetroleumandotherliquidfuelsisexpectedtogrowfrom85.7million
barrels per day in 2008 to 97.6 million barrels per day in 2020 and 112.2 million
barrelsperdayin2035;thisrepresentsanincreaseof14.9%withrespectto2008.
It is important to highlight that most of the growth in liquid fuel use is in the
transportation sector, where, in the absence of significant technological advances,
liquid fuels will continue to provide much of the energy consumed at least during
the coming decades. For the time being, liquid fuels remain an important energy
source for transportation and industrial sector processes. Despite rising fuel prices,
the use of liquid fuels for transportation purposes is expected to increase by an
averageof1.4%peryearor46%duringtheperiod2008–2035.Thetransportation
sector will account for 82 % of the total increase in liquid fuel use from 2008 to
2035,withtheremainingportionofthegrowthattributabletotheindustrialsector.
Theuseofliquidfuelisexpectedtodeclineintheotherend-usesectors,particularly
for electric power generation during the coming years.
To meet the increase in world demand, liquid fuels production (including both
conventionalandnonconventionalliquidfuelsupplies)shouldincreasebyatotalof
26.6 million barrels per day from 2008 to 2035. With the aim to meet this fore-
seeableincrease,OPEC countries will investin incrementalproductioncapacityin
order to maintain a share of approximately 40 % of total world liquid fuels pro-
ductionthrough2035,consistentwiththeirshareoverthepast15years.Increasing
volumes of conventional liquids (crude oil and lease condensate, natural gas plant
liquids, and refinery gain) from OPEC producers are expected to contribute 10.3
million barrelsperdaytothetotal increase inworld liquid fuelsproductionduring
Preface vii
the coming years, while conventional supplies from non-OPEC countries is
expected to add another 7.1 million barrels per day during the same period.
The ten top crude oil exporters in 2012 exported 32,618,000 barrels per day.
Within this group, there are only two Europeancountries (Russiawith 22.1% and
Norway with 5.2 % of the world total). The ten top importers of crude oil in 2012
imported 30,462,000 barrelsper day of crude oil. Within this group, there arefour
European countries (Germany, Italy, France, and Spain).
Chapter 3 provides readers the latest information on the world total natural gas
production,consumption,importandexport.Naturalgascontinuestobethefuelof
choiceinmanyregionsoftheworld,particularlyintheelectricpowerandindustrial
sectors. The reason is in part because of its lower carbon intensity compared with
coal and oil, which makes it an attractive fuel source in countries where govern-
ments are implementing policies to reduce greenhouse gas emissions, and also
becauseofitssignificantpricediscountrelativetooilinmanyregions.Inaddition,
it is an attractive alternative fuel for new power generation plants because of low
capital costs and favorable thermal efficiencies. In the IEO (2011), total world
naturalgasconsumptionforindustrialusesisexpectedtoincreasebyanaverageof
1.7 % per year through 2035, and consumption in the electric power sector is
expected to grow by 2 % per year during the same period. The industrial and
electric power sectors together account for 87 % of the total projected increase in
natural gas consumption.
There are enough reserves of natural gas to satisfy the foreseeable demand
duringthecomingdecades.AccordingtoEIAsources,theworld’stotalnaturalgas
reserves in 2012 were estimated at 1,317,482 trillion m3 (6,844.595 trillion cubic
feet). The world’s total natural gas consumption is expected to increase by 1.6 %
per year on average, from 111 trillion cubic feet (3,919.965 billion m3) in 2008 to
169trillioncubicfeet(5,968.235billionm3)in2035;thisrepresentsanincreaseof
52.2 % with respect to 2008. Increasing supplies of nonconventional natural gas,
particularly in North America, but elsewhere as well, will help to keep global
markets well supplied.
Chapter4providesreadersthelatestinformationontheworldcoalconsumption,
which is expected to increase by 50.3 %, from 139 quadrillion Btu in 2008 to
2009 quadrillion Btu in 2035; this represents an increase of 50.3 %. In the case of
world coal consumption, it is expected to increase at an average rate of 1.5 % per
year from 2008 to 2035, but the growth rates by region will be uneven, with total
coal consumption in OECD countries remaining near 2008 levels and coal con-
sumptioninnon-OECDcountriesincreasingatapaceof2.1%peryear.Asaresult,
increased use of coal in non-OECD countries accounts for nearly all the growth in
world coal consumption over the period.
In2008,coalaccountedfor28%ofworldenergyconsumption.Ofthetotalcoal
produced worldwide in 2008, 60 % was shipped to electricity producers and 36 %
of industrial consumers, with most of the remainder going to consumers in the
residential and commercial sectors. According to the IEO (2011), coal’s share of
totalworldenergyconsumptionisexpectedtoremainrelativelybigthroughoutthe
viii Preface
period2010–2035,decliningslightlyfromapeakof29%in2010to27%in2015,
where it is expected to remain through 2035.
Coal was the main energy source not only in Europe, but also worldwide until
the 1960s. Owing to advances in oil extraction, conversion, and application tech-
nologies, coal then began to lose market share to oil. The entry of natural gas and
nuclear power into the energy market at the beginning of the 1970s put further
pressure on the use of coal for generation of electricity. As a result, despite the
rising energy demand, gross coal consumption in the EU-15 has been declining
since 1970, while the share of coal in gross inland energy consumption has more
thanhalved,frommorethan30%toapproximately15%.Incontrast,coalretained
a 25 % share in gross inland energy consumption globally over the period
1970–2000.
However,inrecentyearsthereisrenewedinterestintheuseofcoalintheEU,as
well as in other countries within and outside the European region for different
purposes, based on a wide perception that coal is an abundant, widely available,
cheap, affordable, and reliable energy source.
Chapter 5includesasummaryofthemain issues includesinprevious chapters.
Jorge Morales Pedraza
Acknowledgments
Duringthepreparationofthepresentbookdifferentprofessionalsassistedmeinthe
compilation of relevant information regarding the current and future role offossil
fuelsingenerationofelectricityintheEuropeanregion.MylovelydaughterLisette
Morales Meoqui, M.Sc. has been an extremely helpful assistant in collecting the
necessary information and reference materials used in the preparation of the book,
in addition of her current job as Head of Finance in the Austrian firm Zeno Track
GmbH.MydearsonJorgeMoralesMeoqui,nowaDoctorinEconomics,hasbeen
also extremely helpful in the revision of some of the initial materials used during
the preparation of the book.
Withoutanydoubt,thepresentbookisarealitythankstothevaluablesupportof
my lovely wife, Aurora Tamara Meoqui Puig, who had assumed other family
responsibilities in order to give me the indispensable time and the adequate envi-
ronment to write the book.
ix
Contents
1 General Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Liquid Fuels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2.1 Crude Oil. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.5 Energy Dependency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.6 Electricity Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.6.1 Impact of the Economic and Financial Crisis
in Generation of Electricity . . . . . . . . . . . . . . . . . . 26
1.6.2 The Use of Oil for Electricity Generation. . . . . . . . . 30
1.6.3 The Use of Natural Gas for Electricity Generation. . . 31
1.6.4 The Use of Coal for Electricity Generation. . . . . . . . 32
1.6.5 Market Concentration in the Liberalized Power
Generation Markets in Europe . . . . . . . . . . . . . . . . 35
1.6.6 Electricity Generation Cost. . . . . . . . . . . . . . . . . . . 36
1.6.7 The Situation of the Energy Sector in the European
Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.7 Security of Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
1.8 Investment in Energy Infrastructure. . . . . . . . . . . . . . . . . . . 43
1.9 Environmental Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
1.10 Energy Efficiency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
1.11 Energy Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
1.12 Access to Modern Energy Technology. . . . . . . . . . . . . . . . . 49
1.13 European Internal Energy Market . . . . . . . . . . . . . . . . . . . . 49
1.13.1 Integrating National Markets . . . . . . . . . . . . . . . . . 51
1.14 New Initiatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
xi