Modeling by tech group Wrtsilhas revealed that the main system-wide benefits are within reach of European power producers who are rapidly replacing coal with renewable generation and flexibility: from fuel cost avoidance and carbon – to new clean energy export opportunities.
Modeling the energy system of Germany and Ukraine – two key European countries with very different power systems and coal phase-out policies – shows that the capacity gap in coal can be optimally bridged with renewable electricity coupled with flexible resources, that is to say flexible thermal power stations and energy storage.
Our analysis of both sides of the coal output spectrum is clear: The value of coal has been eroded by the low cost renewable base load. The phasing out of coal presents a myriad of opportunities for European countries to reduce production costs, achieve energy independence and generate income through sector coupling at the company level. Flexibility is the key to upgrading variable renewables to fulfill a baseload role to achieve these benefits, said Jan Andersson, Market Development Manager for Europe, Wrtsil Energy.
Wrtsil modeled a rapid phase-out scenario by 2030 in which Germany would phase out coal-fired electricity by 2030 (eight years ahead of the target), stressing that the value of coal-fired electricity would be eroded by building 13 GW of new renewable capacity per year. Key information for Germany includes:
- An additional renewable base load makes Germany less dependent on imports from neighboring countries during the coal phase-out years, from a net rateimporterfilletexporterin the 2030s.
- Germany could save up to 600 million tonnes of CO2by 2045, or 81% of its national carbon footprint today (compared to phasing out coal by 2038).
- To meet the demand for heating as coal is phased out, and to balance the influx of new renewables, up to 12 GW of flexible gas-fired combined heat and power (CHP) is needed.
In Germany, decisions made in the coming months will determine whether they will increase imports of electricity (increasing costs and carbon) from neighboring countries to fill the capacity gap, or pave the way for becoming a net exporter of clean energy. to the rest of Europe, added Jan Andersson.
Wrtsil presented the result of a key decision Ukraine must take in the coming months: whether tomodernizeorwithdrawits coal to meet its national emission reduction targets. Key information for Ukraine includes:
- The modernized coal-based power system costs € 5.2 billion (10%) more to consumers over 10 years, mainly due to the cost of domestically produced and imported coal to power its fleet of power plants .
- Modernization of Ukraine’s coal-fired power plants will emit 53 million tonnes (32%) of more CO2than removing and replacing coal with a mix of low-carbon technologies between 2022 and 2031.
- A new system at optimal cost, based on 32 GW of new renewable energies and flexibility, would save 500 million euros per year on the cost of the electricity produced by 2031.
Unlike Germany, Ukraine is currently unable to encourage its exit from coal, so it is essential that it finds the cheapest route to properly meet the demand for electricity. Our modeling gives a clear result: modernizing coal is much more expensive than retirement and leaves the system more exposed to climate risk, while investments in renewables, as well as battery energy storage and balancing gas, results in system-level cost savings, added Igor Petryk, Market Development Director, Wrtsil Energy.
The models from Germany and Ukraine were supplemented by entering power system data and scenario definitions into the PLEXOS System Optimize platform. The platform focuses on finding the optimal energy mix by finding the cheapest solutions for defined scenarios. In the optimization process, all the real constraints defined are taken into account, as well as the hourly distribution and the capacity additions.
Webinar recording:The value of flexibility is recognized in Germany
White paper:Flexibility to perpetuate the Ukrainian electricity system
Wrtsil Energy in brief
Wrtsil Energy is leading the transition to a 100% renewable energy future. We help our customers in decarbonization by developing advanced technologies. These cover balancing power plants, hybrid solutions, energy storage and optimization technology, including the GEMS energy management platform. Wrtsil Energys lifecycle services are designed to increase efficiency, promote reliability and ensure operational performance. Our track record includes 74 GW of power plant capacity and over 80 energy storage systems delivered to 180 countries around the world.
Wrtsil in brief
Wrtsil is a global leader in intelligent technologies and complete lifecycle solutions for the marine and energy markets. By focusing on sustainable innovation, total efficiency and data analytics, Wrtsil maximizes the environmental and economic performance of its customers’ ships and power plants. In 2020, Wrtsils’ net sales totaled 4.6 billion euros with around 18,000 employees. The company is present in more than 200 sites in more than 70 countries around the world. Wrtsil is listed on Nasdaq Helsinki
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