ASEAN cogeneration experiences

Transcription

1 ASEAN cogeneration experiences 2004 Cogeneration Week in Thailand March 2004 Miracle Grand Convention Hotel, Bangkok Niels Beck-Larsen COGEN 3 Biomass expert 1

2 Outline 1. ASEAN primary energy and EU Cogeneration achievements 2. Why cogeneration 3. Cogeneration Applications 4. Singapore, Malaysia and Thailand cogeneration development 5. WADE model 6. EU cogeneration directive 7. National Energy Policy Review 8. Criteria for electricity market General principles 9. Conclusion 10.COGEN 3 - Policy activities

3 ASEAN Population: 481 million * Installed Capacity: 82 GW ** * en.html ** ea/elec.html (1/1 2001) 3

4 Brunei Indonesia Malaysia Myanmar Philippines Singapore Thailand Vietnam 4

5 EUROPE (EC) Population: 377 million * Installed Capacity: 541 GW ** * html ** lications/factbook/ 5

6 70 Cogeneration in EU % of electricity production in 1995, 97, 99 and EU average (10%) Ireland Greece France Belgium UK Sweden Germany Portugal Spain Italy Austria Finland Netherlands Denmark 2000 figures based on new methodology see 6

7 Proven, Clean & Efficient Biomass, Coal, Gas Cogeneration ASEAN Electricity Installed (GW) Capacity by Type, January 1, 2001 Region/Country Thermal Hydro Nuclear Geotherm/ Other Total COGEN share Nordic/Europe Denmark % Finland % Norway % Sweden % ASEAN Burma Indonesia Malaysia Philippines Singapore Thailand Vietnam ASEAN countries rely on fossil fuels => Cogeneration potential 7 Source:

8 Electricity Generation in European OECD countries: What a Waste of Energy! (in TWh) Conversion losses from thermal production: Coal: Own use Power plant: Transmission and distribution losses : Oil: Total primary energy input for electricity production: Gas: Renewable fuels & waste: Gross Electricity Production: Nuclear: Net Electricity Production: 2963 Electricity delivered to customers: Not acceptable! Industry: Residential: Commerce, Public Services: Hydro: Other: Net imports: % total efficiency of the electricity supply system 8Source: OECD 1999

9 In the world 69% (+) of energy input to global electricity system is lost* Energy input to global electricity system (fossil fuels and nuclear) T&D losses. 3.5% of fuel input (and 9% of electricity generated) 9 Conversion losses at power station. Over 65% of fuel input * 90% in India and some other developing countries Electricity consumed. 31% of fuel input

10 Central Electricity Generation (in TWh) worldwide ~65% of fuel energy wasted directly 10

11 Traditional industrial or commercial unit ELECTRICITY COMPRESSOR CHILLER P TRANSFORMER Condenser Expansion valve Evaporator Compressor COOLING R O C STEAM E S AIR S FUEL BOILER HEATERS DRYER E S 11

12 Cogen industrial or commercial unit ELECTRICITY FUEL Air Fuel TRANSFORMER Flue gases (~ 550 C) Fuel Generator GAS TURBINE WITH HRSG HRSG COMPRESSOR CHILLER Condenser Exhaust heat (~150 C) Electricity Expansion valve Evaporator Compressor COOLING STEAM P R O C E S S E S 12

13 Typical Cogeneration Applications Industrial cogeneration wood and agro-industries, food processing, pharmaceutical, pulp and paper, oil refinery, textile industry, steel industry, cement industry, glass industry, ceramic industry Residential/commercial/ institutional cogeneration hospitals, schools & universities, hotels, houses & apartments, stores & supermarkets, office buildings District cooling /district heating cogeneration airports, office and commercial buildings, dwellings and houses 13

14 Applications of Cogeneration in Singapore SembCorp Cogen 900MW to serve petrochemical cluster on Jurong Island ExxonMobil 180MW for own use Singapore Syngas 20MW for own use Island Power 800MW Keppel Merlimau Cogen 470MW 2 COGEN 3 supported FSDPs total 1.5MW using wood waste 14

15 Installed Capacity & Maximum Demand 15

16 Future Cogen share of capacity in Singapore Company Power Seraya Senoko Power Tuas Power SembCorp Cogen Island Power Company Singapore Syngas Pte. Ltd.* Exxon Mobil Asia Pacific Pte. Ltd.* Keppel Merlimau Cogen Elba Eastern (Pte) Ltd.* National Environment Agency TOTAL Capacity (MW) 3,100 3,300 2, ,740 Cogen (%) 7.7% 6.8% 0.2% 1.5% 4.0% 20.2% 16 * exempt from New Energy Market rules

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18 Prospects for further cogen applications Economic Review Commission s Sub-Committee on Manufacturing highlighted utilities cost as consistently expensive in Singapore and recommended that regulations around cogeneration and transmission and distribution charges be reviewed Concerning the Electronics Industry Cluster it identified 7 Key Initiatives, among which: Centralised co-generation facilities for waferfab parks that could generate cost savings Review regulations to encourage co-generation. The chemical industry are large consumers of electricity, while many petrochemical processes utilize large amount of steam, making the industry ideal for the use of highly efficient methods of power generation such as cogeneration Similarly, for the Chemicals Cluster it listed 2 of 11 Key Initiatives as: - Review regulations to encourage more efficient methods of power generation including cogeneration -Ensure cost competitiveness of power, including reviewing transmission and distribution charges 18

19 Prospects for further cogen applications ERC s Sub-committee on manufacturing in its Recommendations/Action Plan: The New Energy Market rule requiring co-generators to put their generators to the EMA for dispatch would put them at risk of disrupting steam production. 19

20 Prospects for further cogen applications In 2002, the Ministry of the Environment & the National Environment Agency put up the Singapore Green Plan 2012 It cited the 2 existing cogeneration plants by SembCorp Cogen and ExxonMobil as examples of clean and efficient use of energy Growth of refuse to be slowed and cost of disposal (by incineration) to be increased. Privatization of refuse disposal (the incinerators) will pose a threat/opportunity to waste collectors. May lead to more small wood waste burning cogen plants 20

21 Barriers to further Cogeneration Applications - EMA s New Energy Market Rules All generating units >10MW to be included in the NEM, i.e. all such generators will have to be made available for dispatch by EMA and generated power have to be put on the market All licensed 1MW 10MW generators are to be registered with the Energy Market Company as market participants either for dispatch or as a generation settlement facility (EMA has exempted some generators which had been operating before the new market rules, but other changes in policy has yet to be announced) EMA has issued an information paper on Policy on Direct Supply of Electricity by Generating Sets to On-site Loads, but this restricts the use of the power generated to users within the fences of the on-site generator 21

22 Barriers to further Cogeneration Applications - natural gas prices Cost of natural gas for smaller potential users of cogeneration may be pegged too high relative to the price of electricity to make cogeneration by natural gas economically feasible 22

23 Cogeneration in Malaysia Have existed in Malaysia for some time especially in 1990 ties IPP program 36 licenses issued 13 public, 23 private ~350 palm oil mills Licensing from Energy Commission - under purview of Ministry of Energy, Communication & Multimedia District cooling is in - due to tropical climate 23

24 Cogeneration in Malaysia Fifth Fuel Policy formulated in 2001 to promote use of Renewable Energy (RE) (in 8MP) together with energy efficiency (EE) Cogeneration is EE in supply and therefore encouraged today most focus on RE Cogeneration using RE is especially encouraged Will reduce dependence on fossil fuels Will help dispose agricultural and municipal waste SREP program supports biomass cogeneration tariff contract for 21 years, tax allowance No direct policy support for natural gas and coal cogeneration 24

25 Cogeneration in Malaysia Type Industrial Cogeneration Fully Integrated Cogeneration District Cooling Cogeneration Area Pulp & paper, Palm oil, Cement, Steel, Glass, etc Large industrial complexes requiring heating, cooling & electricity Large commercial complex or high rise office buildings Examples Perwaja Steel, Shell Refining, Titan Petrochem. 350 palm oil mills Petronas CUF, Proton City KLIA, KLCC, KL Sentral, Tractors Malaysia 25

26 Malaysia examples of District cooling District Cooling System with Thermal Energy Storage University Tenaga Nasional Bangsar Energy System Plaza Rakyat Energy System Bandar Utama Shopping Complex District Cooling System with Cogeneration Plant Kuala Lumpur City Center New Kuala Lumpur International Airport Putrajaya Government Administration Center KL Sentral Individual Building with Thermal Energy Storage TNB's Building at Bangi TNB's Building at Jitra TNRD Research Center 26

27 Cogeneration in Thailand: major programs 1. Power Purchase Programs from Small Power Producers (SPPs) and Subsidy for Renewable Energy SPPs 3. Very Small Renewable Energy Power Producers (VSREPP) 27 Page 27

28 SPPs by Type of Fuel (as of July 2002) 28 Page 28

29 3. Very Small Renewable Energy Power Producers the VSREPP Program On 14 May 2002 the regulations on power purchase from VSREPP was approved. A VSREPP is defined as a generator with own generating unit; utilizing RE sources, agricultural and industrial wastes and residues, or by-product steam; selling no more than 1 MW of electrical power to a distribution utility. 29

30 Cost EU and US Electricity Supply 2020 WADE model Cogeneration and distributed energy require less investments compared to traditional central electricity supply IF YOU REMEMBER TO INCLUDE TRANSMISSION AND DISTRIBUTION INVESTMENTS Source: WADE 30

31 US Electricity costs in 2020 Capital Cost to Supply 2020 Electric Load Growth 1, $ Billions for New Capacity % 8.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 39.39% % DG of Total US Generation Inv. In New Cent. Gen. Inv. In new Dist. Gen. Source: WADE 31

32 US Electricity costs in 2020 Capital Cost to Supply 2020 Electric Load Growth 1, $ Billions for New Capacity % 8.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 39.39% % DG of Total US Generation Inv. In New Cent. Gen. Inv. In new Dist. Gen. Inv. In T&D Source: WADE 32

33 Retail Costs per KWh for Incremental 2020 Load In 2000 dollars US Electricity costs in Average Retail Price in cents / KWh Cents / KWh % 8.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 39.39% % DG of Total US Generation O&M of New Capacity Fuel Capital Amorization + Profit On New Capacity Source: WADE 33

34 US Electricity costs in 2020 Retail Costs per KWh for Incremental 2020 Load In 2000 dollars Average Retail Price in cents / KWh Cents / KWh % 8.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 39.39% % DG of Total US Generation O&M of New Capacity Fuel Capital Amorization + Profit On New Capacity T&D Amorization on New T&D Source: WADE 34

35 Heat Rates / Fuel Consumption - (btu/kwh) existing mix Central Plants Central Plant Central Plants btu / kwh Coal - Steam $1,300 Coal - Steam 11,000 Oil - steam $1,300 Oil - steam 11,000 Gas - Comb Turb $500 Gas - Comb Turb 13,000 Gas Comb Cycle $650 Gas Comb Cycle 7,000 Nuclear (Plant Re-rate) $2,000 Nuclear 0 Hydro/ pump Stor. $2,000 Hydro/ pump Stor. 0 Geothermal $2,013 Geothermal 0 Biomass $1,200 Biomass (NON FOSSIL) 12,000 Solar $6,040 Solar 0 Wind $1,119 Wind 0 DG DG DG Coal $1,600 Coal 5,250 Oil $1,200 Oil 7,000 Gas ( CHP) $1,000 Gas ( CHP) 5,250 Biomass $1,500 Biomass (NON FOSSIL) 8,000 Hydro $2,000 Hydro 0 Solar $6,040 Solar 0 Wind $1,678 Wind 0 Recycle $1,000 Recycle 0 35 $ / KW T&D $1,260 Existing Capacity Yearly Retirement Determination

36 250 EU Electricity costs in Euro Billions for New Capacity % 11.50% 15.00% 20.00% 25.00% 29.37% % DE of Total EU Generation Inv. In New Cent. Gen. Inv. In new Dist. Gen. Inv. In T&D Source: Cogen Europe and WADE 36

37 8.00 EU Electricity costs in Euro Cents / KWh % 11.50% 15.00% 20.00% 25.00% 29.37% % DE of Total EU Generation O&M of New Capacity Fuel Capital Amorization + Profit On New Capacity T&D Amorization on New T&D Source: Cogen Europe and WADE 37

38 European Commission Programmes on Cogeneration EU s CHP goal to promote highly efficient cogeneration In 1997 CHP Strategy - EU target to double the share of cogen from 10% to 18% of total electricity generation by 2010 The European Union is extremely dependent on its external energy supplies, increase of import from 50% today to 70% by 2030 if current trends persist. EU CHP/cogeneration directive approved February 2004 in EU Parliament 38

39 EU - Reasons for political support A Community priority given the potential benefits of cogeneration with regard to saving primary energy, avoiding network losses and reducing emissions in particular of greenhouse gases (and contribute to meet the Kyoto targets). Efficient use of energy by cogeneration can also contribute positively to the security of energy supply and to the competitive situation of the European Union. Increased competition on electricity market because cogeneration allows new actors to enter the market. 39

40 EU-Member state obligations 1. Member States shall establish an analysis of the national potential for cogeneration, including micro-cogeneration. 2. The analysis shall: identify all potential for useful heating and cooling demands, suitable for cogeneration, as well as the availability of fuels and other energy resources include a separate analysis of barriers, which may prevent the realisation of the national potential for cogeneration in particular barriers relating to the prices and costs of and access to fuels, grid system issues, administrative procedures, and costs in energy prices 3. Member States shall every four years, evaluate progress towards increasing the share of cogeneration. 40

41 EU timetable for CHP directive 41

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43 National Energy Policy Review 43

44 National Energy Policy Review 44

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47 Cogeneration Policy in ASEAN Country Present Situation Installed Capacity (MW)* Forecasted Annual Growth of Power Demand Policy on Cogeneration Key Off Taker Cambodia No National Grid 160 ~10% Preparing Phase EDC Indonesia Govt.- 56% Captive Power 40% IPP 4% 23,425 IPP, Captive Power, Conservation PLN Malaysia Govt. 85% Private 15% 13, % SREP, Cogeneration TNB Philippines Govt. 55% Private 45% 14,700 ~9% Renewable Energy RECS& NPC Singapore Power Pool 8,140 - EMA Thailand Govt. 60% Private 40% 24,500 ~10% SPP, VSPP, Renewable EGAT Vietnam Govt. 90% Private 10% 3,296 ~13% Preparing Phase EVN 47

48 Market/regulatory barriers to Cogen Difficult to secure grid access on fair terms Inadequate competition in electricity markets Market rules which encourage inefficiency Opposition from powerful monopoly companies Inadequate price recognition of environmental and grid benefits Price and market uncertainty for investors Lack of awareness of benefits of Cogeneration No country has well-resourced cogeneration promotion organisations 48

49 ASEAN Energy Strategy Review Summary I None of the ASEAN countries have today a direct active policy, legislation or support programme for cogeneration. Thailand supported in the 90es cogeneration in the SPP programme and cogeneration plants were implemented (contracts ongoing) Electricity sectors in ASEAN show substantial variation in terms of fuel choice, power prices, market structure and ownership Most of the ASEAN countries have started to implement a Renewable Energy development, where biomass cogeneration is supported in the legislation Cogeneration Policy is part of National Energy Policy which is often scattered between different agencies 49

50 ASEAN Energy Strategy Review Summary II Thailand: SPP programme and VSPP (<1MW), Malaysia: SREP programme Indonesia: 1 MW RE power plants Philippines preparing new RE legislation RE programmes are under development in Vietnam and Cambodia Singapore is lacking a biomass/cogeneration policy 50

51 ASEAN Energy Strategy Review Summary III Most ASEAN countries have indirectly a biomass cogeneration policy through biomass power and energy efficiency policy, legislation and support programmes Presently, none of the ASEAN countries have today an active policy, legislation or support programme for coal and Natural gas cogeneration No ASEAN country has initiated a cogeneration roadmap or a cogeneration directive similar to US and EU (and other regions in the world) 51

52 Criteria for electricity market regulation Cogen Europe general principles 1. All generators of electricity should have fair and nondiscriminatory access to the electricity system 2. The electricity system should be fully cost reflective with no cross subsidies from one part of the system to another 3. Power generation companies should have no ownership or management interest in the transmission and distribution system 4. Regulatory planning should take into account time perspectives of up to 20 years to provide sufficient market stability developers and investors 52

53 Criteria for electricity market regulation Cogen Europe general principles 5. All proposed new investment in centralised power plants and T&D networks should be fully costed and compared with decentralised alternatives 6. Distribution utilities should be required to engage in localised least cost planning processes which can enable DE to be developed in areas where its local benefits outweigh the costs of constructing or upgrading new distribution facilities 7. Use of T&D networks should be priced according to the services they provide and not in such a way as to encourage volume electricity transport 53

54 Criteria for electricity market regulation Cogen Europe general principles 8. Any benefits which generators (including DE) provide to the system (for example, voltage and frequency support, grid reliability and stability, reduction in T&D losses, reduced requirements for spinning reserve ) should be fully and fairly reflected in charges made for system use 9. Equally, generators (including DE) should not be excessively charged for their system impacts (for example, shallow rather than deep connection charging). In particular, back-up charging for DE should fairly and transparently reflect system impact and no more 54

55 Criteria for electricity market regulation Cogen Europe general principles 10. The electricity system should be subject to market based instruments, for example emissions trading, energy taxation and output-based standards, which reflect energy conversion efficiencies and internalise environmental costs 11. There must be a fully independent and resourced regulator of the system. His objectives should include lowering capital investment costs and electricity prices, reducing emissions of pollutants (including greenhouse gases) and use of fossil fuels use, minimisation of risk to system disruption 55

56 Conclusions There is a need for a comprehensive Cogeneration Policy in the ASEAN countries otherwise ASEAN will continue with energy waste at 50-70% directly in conversion Huge potential for Cogeneration but market conditions differ from one country to another The driving force for industry to invest in Cogeneration is lower energy cost. This force is independent of overcapacity present in some countries Financing largest obstacle for cogeneration investment despite market liquidity Fix tariffs and transparent interconnection cost speedup the cogeneration development 56

57 COGEN 3 - Policy activities 2004 EU cogeneration policy study tour Cogen Europe annual conference February Update National Energy Policy Review guidance for cogeneration development and prepare EU cogeneration policy study tour in connection with Powergen Barcelona (25-27 May) Cogeneration weeks Individual policy meetings/seminars (incl. Brunei & Laos) ASEAN policy tour expected in September / October WADE model data collection and calculations for Thailand 57

58 For more information, please visit COGEN 3 Website at: Thank You! 58