A Global View of Sustainable Energy and Deregulation

Transcription

1 GE Energy A Global View of Sustainable Energy and Deregulation Eric Gebhardt April 2008

2 Global trends Population Consumption Energy security Environment Create big challenges 2

3 2008

4 2030

5 And the challenges drive the technology High fuel prices require higher efficiency Energy security requires more diverse solutions More stringent environmental standards require lower emissions, increased use of renewables and nuclear 5

6 Global energy drivers diversity is key South East Asia High economic growth driving power additions Fuel supply security and environmental challenges driving diversity and renewables China 2X increase in installed capacity by %+ of world s additions India Government committed power to all by 2009 Middle East Massive oil & gas infrastructure investments National companies will exercise more influence Europe Gas and oil prices up 2X over two years Import dependency forecast to rise to 70% by 2030 Overall Environmental/security concerns everywhere Forward fuel costs high and volatile Core industry investments following low fuel costs 6

7 Electricity demand 2X by 2030 Billions of kw hours 35,000 30,000 25,000 20,000 Asia Africa Middle East Europe & EurAsia Central and S America North America emerging markets exploding 15,000 10,000 5, Sources: EIA-DOE International Energy Annual 2004 & International Energy Outlook

8 Power Gen industry forecast W. Europe E. Europe North America 8 GW/yr China Asia 29 GW/yr 36 GW/yr Africa MidEast 39 GW/yr 26 GW/yr Latin America 14 GW/yr 3 GW/yr 12 GW/yr 10 yr avg annual cap adds (GW) Coal 52 Gas/Oil 68 Hydro 25 Wind 22 Nuclear 10 TOTAL 184 India 16 GW/yr Forecasting 184 GW/yr globally 29 GW in North America Capacity and supply chain management critical 8

9 How do we grow, and still care for the planet?

10 Fuel prices High and unpredictable Oil prices Gas prices Coal prices $/BBL $/MMBTU $/ton $ '99 '01 '04 '07 '09 ' '99 '01 '04 '07 '09 '12 $100 $80 $60 $40 $20 Apr 05 Apr 06 Apr 07 Apr 08 WTI Spot WTI NYMEX Futures Henry Hub Henry Hub NYMEX Futures Average weekly commodity spot prices Source:EIA WTI Spot Prices; NYMEX Future Prices April 18, 2008 Source:PowerDat from Platts, a unit of the McGraw-Hill Companies; NYMEX Future Prices April 18, 2008 Sources: EIA Coal News and Markets Week of Apr 11, 08; Coal data from Platts, a unit of the McGraw-Hill Companies, Inc. 10

11 Growing demand for renewables Renewable technology only 5% of electrical capacity today Solid double digit growth expanding global footprint World renewable installed capacity (GW) '06 Renewable installed capacity sources (est) 22% 5% 2% 36% Wind Small Hydro Biomass Geothermal Solar PV (grid) % Source: REN21, Renewables 2006 Global Status Report, Renewables 2007 Global Status Report, Excludes large hydro 11

12 Coal is still a primary energy source Recoverable coal reserves (million short tons) China India Middle East S & Central America Africa North America Europe & Eurasia Asia Pacific Source: EIA 12

13 Sustainable? Billion of tons of carbon emitted per year 14 7 Historical emissions Projected path Source: S. Pacala and R. Socolow (13 August 2004)

14 Sustainable? Billion of tons of carbon emitted per year Historical emissions Projected path Flat How do we get there Efficiency and installed base upgrades Renewable electricity & fuels Nuclear CO 2 capture & storage 14 Source: S. Pacala and R. Socolow (13 August 2004)

15 Global environmental concerns driving global policy Kyoto enters into force Germany sets targets for wind and leads in new solar Europe adopts first climate emissions trading law and develops first ever pollution register China quest to double nuclear by 2020 US Energy Policy Act passes States are making progress 15

16 No single policy No single fuel No single technology

17 Meeting big challenges with big solutions Diverse Nuclear Coal Gas Wind Oil Geothermal Biomass Hydro Solar + Efficient Efficiency Reliability Emissions Driving Cost of Electricity Down Affordable, reliable & environmentally responsible 17

18 Technology diversity is critical Gas Steam Cleaner Coal Nuclear Wind T&D Biomass Environmental Services Solar Asset Optimization 18

19 Technology diversity is critical Gas technology focus Gas Steam Cleaner Coal Nuclear Wind Biomass Efficiency Emissions Operating and fuel flexibility Reliability and availability T&D Environmental Services Solar Asset Optimization 19

20 Technology diversity is critical Coal technology focus Gas Cleaner Coal Steam Nuclear CAPEX Cycle time Emissions Competitive Ultra-super Wind Biomass criticalsolar and IGCC T&D Environmental Services Asset Optimization 20

21 Technology diversity is critical Gas Steam Wind Biomass Solar Steam technology focus Cleaner Coal Nuclear Efficiency Emissions T&D Reliability and availability Environmental Asset Services Optimization 21

22 Technology diversity is critical Nuclear technology focus Gas Steam Cleaner Coal Nuclear Safety Reliability Capital cost Wind T&D Biomass Environmental Services Solar Asset Optimization 22

23 Technology diversity is critical Gas Steam Wind Biomass Solar Renewable technology focus Cleaner Coal Capacity factors Reliability Scale T&D Nuclear Environmental Logistics Services Asset Optimization 23

24 Technology diversity is critical Existing asset focus Environmental performance Plant optimization Upgrades O&M costs Gas Steam Cleaner Coal Nuclear Wind T&D Biomass Environmental Services Solar Asset Optimization 24

25 Recent Renewable Integration Studies

26 Client: (North East United States) Study Objectives Reliability implications of increased wind generation, up to MW Screening for project viability Operation feasibility, forecasting, and regulation Study Findings Feasibility of 3300 MW of new Wind capacity, without major infrastructure changes Requirements for wind farm performance needs & interconnection requirements 26

27 Client: (Western United States) Study Objectives Comprehensive assessment of high penetration of Renewables in the State Multi-scenario analysis over period, (5% to 25% wind, based on peak load) Study Findings Feasibility of 33% (energy) renewable integration, by 2020 Feasibility of new capacity additions: 10GW of wind, 5GW solar, 3GW geothermal, and 2GW of biomass Changes to operating practices for compatibility with Wind & Solar additions 27

28 Deregulation

29 Defining Deregulation Market Market Restructuring: Introducing Competition & Separating Industry Functions Deregulation/ Liberalization: Increases reliance on market forces Market Privatization: Transferring Ownership Market 29

30 Deregulation Implications Developed Countries Capture value of system inefficiencies Power Prices Deregulation Drivers Developing Countries Attract foreign investment Power Prices 30

31 Status of Deregulation World Wide No Data Open Markets 31

32 Status of Privatization World Wide No Data Assets in Private Sector 32

33 The road ahead Accelerate diverse technology investment Actively participate in energy policy process Develop the next generation of Energy Engineers Educate key stakeholders about energy issues, cost and tradeoffs Anticipate and lead change, rather than just survive it 33