International comparison of fossil power efficiency and CO 2 intensity - Update 2013 FINAL REPORT

International comparison of fossil power efficiency and CO 2 intensity - Update 2013 FINAL REPORT

International comparison of fossil power efficiency and CO 2 intensity Update 2013 FINAL REPORT By: Paul Noothout, Joris Koornneef, David de Jager and Erik Klaassen Date: August 2013 Project number: CESNL14003 Ecofys 2013 by order of: Mitsubishi Research Institute, Japan ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 2 Chamber of Commerce 30161191

Summary The purpose of this study is to compare the energy efficiency and CO 2 -intensity of fossil-fired power generation for Australia, China, France, Germany, India, Japan, Nordic countries (Denmark, Finland, Sweden and Norway aggregated), South Korea, United Kingdom and Ireland (aggregated), and the United States. This is done by calculating separate benchmark indicators for the energy efficiency of gas-, oil- and coal-fired power generation. Additionally, an overall benchmark for fossil-fired power generation is determined. The benchmark indicators are based on deviations from average energy efficiencies. For the comparison of CO 2 intensity, Canada and Italy are added as additional countries. The countries included in the study (excluding Italy and Canada) generated 69% of public fossil-fired power generation worldwide in 2010. In the period 1990-2010 the share of fossil power used in the public power production mix has increased from 64% to 69%. Total power generation is largest in the United States with roughly 4,190 TWh, closely followed by China with 4,147 TWh and Japan with 968 TWh. From the fossil fuels, coal is most frequently used in most countries. Figure 1 shows the breakdown of public power generation per country. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other renewables Oil Natural gas Coal Nuclear Hydro Figure 1 Fuel mix for public power generation by source in 2010. Note that gas use in the Nordic countries is underestimated as Norwegian power production from natural gas is confidential. ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 3 Chamber of Commerce 30161191

Efficiency [%] Total coal-fired power generation in all countries combined increased from 3,036 to 6,835 (+125%) by the period 1990 2010, with China being the strongest grower, increasing from 442 to 3,232 TWh, fuelled by fast-growing domestic energy. Gas-fired power generation in all countries combined increased by 226% from 551 to 1,795 in 1990-2010. The United States, driven by inexpensive shale gas prices from 2009 onwards, shows the strongest absolute growth from 319 to 929 TWh. Oil-fired power generation had played a marginal role by 2010 with only 144 TWh. Power production from oil has been declining (-70%) over 1990-2010. In 2010, Japan and the United States were the largest oil-fired power producers. Figure 2 shows the energy efficiency per country and fuel source. Because the uncertainty in the efficiency for a single year can be high we show the average efficiencies for the last three years available, 2008 2010: Coal-fired power efficiencies range from 27% (India) to 41% (Japan). Gas-fired power efficiencies range from 37% (France) to 52% (United Kingdom and Ireland). Oil-fired power generation efficiencies range from 18% (India) to 42% for (Japan). Fossil-fired power efficiencies range from 28% (India) to 45% (United Kingdom and Ireland). The weighted average generating efficiency for all countries together in 2010 is 35% for coal, 47% for natural gas, 35% for oil-fired power generation and 38% for fossil power in general. 60% 50% 40% 30% 20% 10% 0% Coal Gas Oil Fossil Figure 2 Energy efficiency per fuel source (average 2008-2010). The weighted average efficiency for gas-fired power generation shows a strong increase from 39% to 47% for the considered countries (see Figure 3), caused by a strong increase in new gas-based capacity: gas-based production more than tripled. ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 4 Chamber of Commerce 30161191

Efficiency [%] Coal-fired power generation however, doubled in the period 1990-2009, while the weighted average efficiency remained constant at about 35%. The reason for this is that a large part of the growth in coal-fired power generation takes place in China and India, for which generating efficiency by coal remains the same. This is due to a large part of the growth in coal-fired power generation taking place in China, United States and India, where efficiencies of coal plants remained relatively low (despite a significant increase of +7%pts in 1990 2010 in the case of China). Based on Platts (2006), the majority of new coal-fired power plants in China are based on sub-critical steam systems. The efficiency that can be achieved by sub-critical units is around 39%. The efficiency that can be achieved by applying best available technology (super-critical units) is as high as 47%. This means that coal-fired power efficiency in China could have been much higher if best practice technology had been used. For India the situation is the same; 40% of coal-fired capacity is built after 1990, of which all plants are based on sub-critical steam systems (Platts, 2006). 50% 45% 40% 35% Coal Gas Oil Fossil 30% 25% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Figure 3 Weighted average energy efficiency for included countries. Figure 4 shows the benchmark for the weighted energy efficiency of fossil-fired power generation. Countries with benchmark indicators above 100% perform better than average and countries below 100% perform worse than the average. As can be seen, in order of performance, the Nordic countries, Japan, Germany, United Kingdom and Ireland, South Korea and the United States all perform better than the benchmark fossil-fired generating efficiency. ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 5 Chamber of Commerce 30161191

CO 2 intensity [g/kwh] Performance relative to benchmark 120% 110% 100% 90% 80% 70% Coal Gas Oil Fossil Weighted benchmark Figure 4 Benchmark for weighted energy efficiency of fossil-fired power production (100% is average). Figure 5 shows the CO 2 -intensity for fossil-fired power generation for the years 2008-2010 per country. The CO 2 intensity for fossil-fired power generation ranges from 545/kWh for Italy to 1,170 g/kwh for India on average. This is a difference in emissions of more than 100% per unit of fossilfired power generated. The CO 2 intensity for fossil-fired power generation depends largely on the share of coal in fossil power generation and on the energy efficiency of power production. 1,400 1,200 1,000 800 600 400 200 0 Figure 5 CO 2-intensity for fossil-fired power generation. 2008 2009 2010 Average ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 6 Chamber of Commerce 30161191

CO 2 reduction potential [%] Fossil-fired power generation is a major source of greenhouse gas emissions worldwide and is responsible for approximately 30% of global greenhouse gas emissions. If the best available technologies 1 would have been applied for all fossil power generation in the countries of this study (including Canada and Italy) in 2010, absolute emissions would have been, on average, 23% lower. Figure 6 shows how much lower CO 2 emissions would be for all individual countries as a share of emissions from fossil-fired power generation. The CO 2 emission reduction potential per country, as a percentage of emissions from public power generation, ranges from 16% for Japan to 43% for India. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Figure 6 Relative CO 2 emission reduction potential for fossil power generation by energy efficiency improvement by replacing all fossil public power production by BAT for the corresponding fuel type. Figure 7 shows the emission reduction potential in absolute sense. China, United States and India show very high absolute emission reduction potentials of 760, 517 and 324 Mtonne, respectively. This is due to large amounts of coal-fired power generation at relatively low efficiency. 1 I.e. Installations operating according to the present highest existing conversion efficiencies. ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 7 Chamber of Commerce 30161191

CO 2 reduction potential [Mt CO 2 ] 800 700 600 500 400 300 200 100 0 Figure 7 Absolute CO 2 emission reduction potential for fossil power generation by energy efficiency improvement by replacing all fossil public power production by BAT for the corresponding fuel type. ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 8 Chamber of Commerce 30161191

Table of contents 1 Introduction 1 1.1 Power generation by fossil-fuel sources 1 2 Methodology 7 2.1 Energy efficiency of power generation 7 2.2 Benchmark for fossil generation efficiency 8 2.3 CO 2 intensity power generation 11 2.4 Share of renewable and nuclear power generation 12 3 Results 13 3.1 Efficiency of coal-, gas- and oil-fired power generation 13 3.2 Benchmark based on non-weighted average efficiency 21 3.3 Benchmark based on weighted average efficiency 23 3.4 CO 2 -intensities 26 3.5 Emission reduction potential 29 4 Renewable and nuclear power production 33 4 Conclusions 52 5 Discussion of uncertainties & recommendations for follow-up work 54 References 56 Appendix I: Comparison national statistics 58 Appendix II: Input data 67 Appendix III: IEA Definitions 74 ECOFYS Netherlands B.V. Kanaalweg 15G 3526 KL Utrecht T +31 (0)30 662-3300 F +31 (0)30 662-3301 E info@ecofys.com I www.ecofys.com CESNL14003 9 Chamber of Commerce 30161191

1 Introduction This study is an update of the analysis International comparison of fossil power generation and CO 2 intensity (Ecofys, 2012). This analysis aims to compare fossil-fired power generation efficiency and CO 2 -intensity (coal, oil and gas) for Australia, China (excluding Hong Kong), France, Germany, India, Japan, Nordic countries (Denmark, Finland, Sweden and Norway aggregated), South Korea, United Kingdom and Ireland, and the United States. This selection of countries and regions is based on discussions with the client. United Kingdom and Ireland, and the Nordic countries are aggregated, because of the interconnection between their electricity grids. Although all electricity grids in Europe are interconnected, there are a number of markets that operate fairly independently. These are the Nordic market (Denmark, Finland, Sweden and Norway), the Iberian market (Spain and Portugal), Central (Eastern European countries) and United Kingdom and Ireland. The analysis is based on the methodologies described in Phylipsen et al. (1998) and applied in Phylipsen et al. (2003). Only public power plants are taken into account, including public CHP plants. For the latter a correction for the (district) heat supply has been applied. This chapter gives an overview of the fuel mix for power generation for the included countries and of the amount of fossil-fired power generation. The methodology for this study is described in Chapter 2. Chapter 3 gives an overview of the efficiency of fossil-fired power generation by fuel source and addresses the development of the share of renewables in public power generation over time. Chapter 4 gives the conclusions. 1.1 Power generation by fossil-fuel sources Fossil-fired power generation is a major source of greenhouse gas emissions. Worldwide, greenhouse gas emissions from fossil-fired power generation accounted for roughly 30% of total greenhouse gas emissions in 2005 (UNFCCC, 2008). The countries included in the study generate 69% of public fossilfired power generation worldwide in 2010 (IEA, 2012). CESNL14003 1

Electricitry production (TWh) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Other renewables Hydro Nuclear Oil Natural gas Coal 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other renewables Oil Natural gas Coal Nuclear Hydro Figure 8 Absolute (top) and relative (bottom) public power generation by source in 2010. Note that for the Nordic countries there is a small underestimation of power production from natural gas as power produced from natural gas in Norway is confidential. CESNL14003 2

Electricity generation (TWh) In 2010, the total power generation (incl. renewables and nuclear power) was largest in the United States with roughly 4,190 TWh, closely followed by China with 4,147 TWh and Japan with 968 TWh. The share of fossil fuels in the overall fuel mix for electricity generation was almost 70% on average. France, which has a large share of nuclear power (78%), and the Nordic countries with a large share of hydropower (53%) in 2010 are exceptions. From the fossil fuels, coal is most frequently used in most countries, except for Japan and the United Kingdom and Ireland, in which natural gas is more abundantly used than coal. Australia and China show a very high share of coal in their overall fuel mix for power generation of 78%, followed by India with a share of 67% in 2010. The share of oil-fired power generation is typically limited; only Japan and the United States have larger amounts, in absolute sense. Figure 9 - Figure 12 show the amount of coal-, gas-, oil- and total fossil-fired power generation respectively in the period 1990-2010, from public power plants and public CHP plants together. 3500 3000 Australia China 2500 France 2000 1500 Germany India Japan 1000 Korea 500 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nordic countries UK + Ireland United States Figure 9 Coal-fired power generation. Total coal-fired power generation in all countries increased from 3,036 to 6,835 (+125%) during the period 1990-2010. China shows the strongest absolute growth from 442 to 3,232 TWh. The US saw its share of coal-fired power production shrink to the lowest relative level since 1978, mainly driven by national or regional legislation and regulations promoting gas and renewable technologies at the expense of coal-fired generation. The drop in 2009 is caused by a significant drop in natural gas prices due to the availability of cheap natural gas. CESNL14003 3

Electricity generation (TWh) 1000 900 800 700 600 Australia China France Germany 500 India 400 Japan 300 Korea 200 100 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nordic countries UK + Ireland United States Figure 10 Gas-fired power generation. Gas-fired power generation in all countries combined increased by 226% from 551 to 1,795 in 1990-2010. The United States shows the strongest absolute growth from 319 to 929 TWh. In 2009 and 2010, the growth was fuelled by shale gas. CESNL14003 4

Electricity generation (TWh) 250 Australia 200 China France 150 Germany India 100 Japan Korea 50 Nordic countries 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 UK + Ireland United States Figure 11 Oil-fired power production. Oil-fired power generation plays a limited role and its importance has further diminished in the past, especially in the case of the three leading oil-fired power producing countries (USA, Japan and China). CESNL14003 5

Electricity generation (TWh) 3500 3000 Australia China 2500 France 2000 1500 Germany India Japan 1000 Korea 500 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nordic countries UK + Ireland United States Figure 12 Fossil-fired power production. Total fossil-fired power generation increased from 4,027 to 8,777 TWh (+118%) in 1990-2010. Korea, China and India show the strongest relative growth in this period. CESNL14003 6

2 Methodology This chapter discusses the methodology used to derive the energy efficiency indicators as well as the input data used to determine the indicators. This study is based on data from IEA Energy Balances edition 2012 (IEA, 2012). The advantage of using IEA Energy Balances is its consistency on a number of points: Energy inputs for power plants are based on net calorific value (NCV) 2 ; The output of the electricity plants is measured as gross production of electricity and heat. This is defined as the electricity production including the auxiliary electricity consumption and losses in transformers at the power station ; A distinction is made between electricity production from industrial power plants and public power plants and public combined heat and power (CHP) plants. In this study we take into account public power plants and public CHP plants. We distinguish three types of fossil fuel sources: (1) coal and coal products, (2) crude oil and petroleum products and (3) natural gas. In the remainder of this report, we will refer to these fuel sources as coal, oil and gas, respectively. For a more extensive definition of public power production and these fuel types, refer to Appendix IV. As a check, IEA statistics on the United States and India are compared to available national statistics (see Appendix I). In some cases energy efficiencies based on IEA are replaced by energy efficiencies calculated from national statistics. This is done when the efficiencies based on national statistics appeared to be more reliable in earlier versions (prior to 2012) of this report. 2.1 Energy efficiency of power generation The formula for calculating the energy efficiency of power generation is: E = (P + H*s) / I. Where: E P H s I Energy efficiency of power generation Power production from public power plants and public CHP plants Heat output from public CHP plants Correction factor between heat and electricity, defined as the reduction in electricity production per unit of heat extracted Fuel input for public power plants and public CHP plants 2 The Net Calorific Value (NCV) or Lower Heating Value (LHV) refers to the quantity of heat liberated by the complete combustion of a unit of fuel when the water produced is assumed to remain as a vapour and the heat is not recovered. CESNL14003 7

Heat extraction causes the energy efficiency of electricity generation to decrease although the overall efficiency for heat and electricity production is higher than when the two are generated separately. Therefore, a correction for heat extraction is applied. This correction reflects the amount of electricity production lost per unit of heat extracted from the electricity plant(s). For district heating systems, the substitution factors vary between 0.15 and 0.2. In our analysis we have used a value of 0.175. It must be noted that when heat is delivered at higher temperatures (e.g. to industrial processes), the substitution factor can be higher. However, at the moment, the amount of high-temperature heat delivered to industry by public utilities is small in most countries. We estimate that the effect on the average efficiency is not more than an increase of 0.5 percent point 3. No corrections are applied for air temperature and cooling method. The efficiency of power plants is influenced by the temperature of the air or cooling water. In general surface water-cooling leads to higher plant efficiency than the use of cooling towers. The cooling methods that can be applied depend on local circumstances, like the availability of abundant surface water and existing regulations. The effect of cooling method on efficiency may be up to 1-2 percent point. Furthermore the efficiency of the power plant is affected by the temperature of the cooling medium. The sensitivity to temperature can be in the order of 0.1-0.2 percent point per degree. [Phylipsen et al, 1998] In order to determine the efficiency for power production for a region, we calculate the weighted average efficiency of the countries included in the region. 2.2 Benchmark for fossil generation efficiency In this analysis we compare the efficiency of fossil-fired power generation across countries and regions. Instead of simply aggregating the efficiencies for different fuel types to a single efficiency indicator, we determine separate benchmark indicators per fuel source. This is because the energy efficiency for natural gas-fired power generation is generally higher than the energy efficiency for coal-fired power generation. In general, choices for fuel types are often outside the realm of the industry and therefore a structural factor. Choices for fuel diversification have in the past often been made at the government level for strategic purposes, e.g. fuel diversification and fuel costs. The most widely used power plants for coal-fired power generation are conventional boiler plants based on the Rankine cycle. Fuel is combusted in a boiler and with the generated heat, pressurized water is heated to steam. The steam drives a turbine and generates electricity. In principle any fuel can be used in this kind of plant. 3 A change of 1 percent point in efficiency here means a change of e.g. 40% to 41%. CESNL14003 8

An alternative for the steam cycle is the gas turbine, where combusted gas expands through a turbine and drives a generator. The hot exit gas from the turbine still has significant amounts of energy which can be used to raise steam to drive a steam-turbine and another generator. This combination of gas and steam cycle is called combined cycle gas turbine (CCGT) plant. A CCGT plant is generally fired with natural gas. Also coal firing and biomass firing however is possible by gasification; e.g. in integrated coal gasification combined cycle plants (IGCC). These technologies are not widely used yet. The energy efficiency of a single steam cycle is at most 47%, while the energy efficiency of a combined cycle can be up to 61% (Siemens. 2012). Several possible indicators exist for benchmarking energy efficiency of power generation. One possible indicator is the comparison of individual countries efficiencies to predefined best practice efficiency. The difficulty in this method is the definition of best practice efficiency. Best practice efficiency could e.g. be based on: The best performing country in the world or in a region; The best performing plant in the world or in a region; The best practical efficiency possible, by best available technology (BAT). The best practice efficiency differs yearly, which means that back-casting is required to determine best practice efficiencies for historic years. A different method for benchmarking energy efficiency is the comparison of countries efficiencies against average efficiencies. An advantage of this method is the visibility of a countries performance against average efficiency. In this study we choose to use this indicator. We compare the efficiency of countries and regions to the average efficiency of the selected countries. The average efficiency is calculated per fuel source and per year and can be either weighted or non-weighted. In the first case the weighted-average efficiency represents the overall energy efficiency of the included countries. A disadvantage of this method is that countries with a large installed generating capacity heavily influence the average efficiency while small countries have hardly any influence at all on the average efficiency. On the other hand, when applying nonweighted benchmark indicators, one efficient power plant in a country could influence the average efficiency if absolute power generation in the country is small. In this research we included both methods, to see if this leads to different results. The formula for the non-weighted average efficiency for coal (BC 1 ) is given below as an example. The formulas for oil and gas are similar. CESNL14003 9

BC 1 = EC i / n Where: BC 1 EC i n Benchmark efficiency coal (1). This is the average efficiency of coal-fired power generation for the selected countries. Efficiency coal for country or region i (i = 1, n) The number of countries and regions The formula for the weighted average efficiency for coal (BC 2 ) is given below as an example: BC 2 = (PC i + HC i *s)/ IC i Where: BC 2 PC i HC i s IC i Benchmark efficiency coal (2). This is the weighted average efficiency of coal-fired power generation for the selected countries. Coal-fired power production for country or region i (i = 1, n) Heat output for country or region i (i = 1, n) Correction factor between heat and electricity, defined as the reduction in electricity production per unit of heat extracted Fuel input for coal-fired power plants for country or region i (i = 1, n) To determine the performance of a country relative to the benchmark efficiency we divide the efficiency of a country for a certain year by the benchmark efficiency in the same year. The formula of the indicator for the efficiency of coal-fired power is given below as an example: BC i = EC i / BC 1 or BC i = EC i / BC 2 Where: BC i Benchmark indicator of the energy efficiency of coal-fired power generation for country or region i Countries that perform better than average for a certain year show numbers above 100% and vice versa. To come to an overall comparison for fossil-fired power efficiency we calculate the outputweighted average of the three indicators, as is shown in the formula below: BF i = (BC i * PC i + BG i * PG i + BO i * PO i ) / (PC i + PG i + PO i ) Where: BF i, BC i, BG i and BO i Benchmark indicator for the energy efficiency of fossil-fired, coalfired, gas-fired and oil-fired power generation for country or region i CESNL14003 10

PC i, PG i and PO i Coal-fired, gas-fired and oil-fired power production for country or region i 2.3 CO 2 intensity power generation In this study we calculate CO 2 emissions intensities per country for the year 2008: Per fossil fuel source (coal, oil, gas); For total fossil power generation and For total power generation. There are several ways of calculating CO 2 -intensities (g CO 2 /kwh) for power generation, depending on the way combined heat and power generation is taken into account. In this study we use the same method as for calculating energy efficiency and correct for heat generation by the correction factor of 0.175 (see Section 2.1). The formula for calculating CO 2 intensity is: CO 2 -intensity = (1/E i * C i * P i ) / P i Where: i Fuel source 1... n E i Energy efficiency power generation per fuel source (see Section 2.1) C i P i CO 2 emission factor per fuel source (see table below) (tonne CO 2 /TJ) Power production from public power and CHP plants per fuel source (MWh) In the comparison of CO 2 -intensities, Canada and Italy are included as additional countries. The data input for calculating the energy-efficiencies for Canada and Italy are taken from IEA (2011). The table below gives the CO 2 emission factors per fuel source. Table 1 Fossil CO 2 emission factor (IEA, 2005) Fuel type Tonne CO 2/TJ ncv Hard coal 94.6 Lignite 101.2 Natural gas 56.1 Oil 74.1 Other fuels (biomass, nuclear, etc.) 0 CESNL14003 11

2.4 Share of renewable and nuclear power generation This report also gives an insight into the development of the share of renewable and nuclear power production in total public power production. For the period 2000-2009, annual developments for all geographical regions as stated above (excluding Canada and Italy) are included. The IEA classifies a number of different energy sources that are used for power production as renewable (see Table 2). Ecofys has mapped (i.e. aggregated) these into various different categories: Bio; Geothermal; Hydro; Solar; Ocean; Waste; Wind. Table 2 Mapping of different renewable energy categories of IEA Renewable energy sources as defined by IEA Industrial waste Municipal waste (renewable) Primary solid biofuels Biogases Bio-gasoline Biodiesels Other liquid biofuels Non-specified primary biofuels and waste Charcoal Hydro Geothermal Solar photovoltaics Solar thermal Tide, wave and ocean Wind Ecofys mapping Waste Waste Bio Bio Bio Bio Bio Bio Bio Hydro Geothermal Solar Solar Ocean Wind Data input for calculating the shares originates from IEA (2012). To be consistent with the rest of this study, only the share in public power production is considered. CESNL14003 12

3 Results The data presented in this chapter are based on the methodology as specified in Chapter 2. Chapter 3 is structured as follows: Section 3.1 gives energy efficiencies for coal,- gas- and oil-fired power production, including a simple aggregation of fossil-fired power efficiency; Section 3.2 and 3.3 provide results of the benchmark analysis. In these sections two benchmark indicators for fossil-fired power efficiency are given, one based on non-weighted and one based on weighted average efficiencies, respectively; Section 3.4 and 3.5 show the resulting CO 2 intensities per fuel source and for total power generation per country and indicate CO 2 abatement potentials. Chapter 4 gives the development of the share of renewable and nuclear power production over the last decade. The underlying data for the figures in this chapter can be found in in Appendix II. This section provides energy efficiency and input data for the analysis in terms of power generation, fuel input, heat output and the resulting benchmark efficiencies. 3.1 Efficiency of coal-, gas- and oil-fired power generation Figure 13 - Figure 15 show the efficiency trend for coal-, gas- and oil-fired power production, respectively, for the period 1990-2010. Figure 16 shows the energy efficiency of fossil-fired power generation by the weighted-average efficiency of gas, oil- and coal-fired power generation. CESNL14003 13

Efficiency [%] 45% Australia 40% China France 35% Germany India 30% Japan 25% Korea Nordic countries 20% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 UK + Ireland United States Figure 13 Average efficiency of coal-fired power production. The energy efficiencies for coal-fired power generation range from 27% for India to 43% in the case of Denmark (part of the Nordic countries) in 2010. Note that over the past two decades, especially China and Korea, and to a lesser extent Germany, have gradually improved the efficiency of their domestic coal-fired power generation, whereas other regions have experienced limited up to zero improvement. CESNL14003 14

Efficiency [%] 65% Australia 60% 55% 50% 45% 40% 35% People's Republic of China France Germany India Japan 30% Korea 25% 20% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nordic countries UK + Ireland Figure 14 Average Efficiency of gas-fired power production. In contrast to other fuels, the efficiency gas-fired power generation has typically improved over the last two decades. Efficiencies range from 32% for France to 52% for the UK and Ireland in 2010. Indian efficiencies appear to have a statistical flaw as average efficiencies of around 60% represent BAT and are thus are unrealistic for a country as a whole. The largest efficiency improvements in 1990-2010 are observed for USA, India 4, Korea and Germany. Surprisingly, the Chinese efficiency has remained constant over time at an invariable 38.9%. This gives the impression that power production have been calculated rather than based on actual data collection. French efficiencies are fluctuating heavily over time. Four-fifths of the French public power originates from nuclear plants, with natural gas only responsible for a marginal 4% in 2010. As a consequence, it is likely that natural gas is only deployed as a marginal back-up fuel used mainly for grid balancing purposes. This could possibly explain the heavily fluctuating efficiencies over time. Indian efficiencies are deemed to have limited reliability. 4 Although the figures for India are deemed unreliable with efficiencies approaching the current BAT efficiency of 61% in 2008 already. CESNL14003 15

Efficiency [%] 50% Australia 45% 40% 35% 30% People's Republic of China France Germany India Japan 25% Korea 20% 15% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nordic countries UK + Ireland United States Figure 15 Average efficiency of oil-fired power production. For oil-fired power generation the efficiencies range from 19% for India UK and Ireland to 42% for Japan in 2010. The graph shows large fluctuations in efficiency for oil-fired power generation. This seems to be a result of data uncertainty. Please note that oil-fired power generation is very small (below 6 TWh, or roughly 1 GW generating capacity) in all countries but Japan and the USA and to a lesser extent India and Korea. The data for these countries with low amount of oil-based power are therefore considered to be unreliable (e.g. France peaks above BAT efficiencies). CESNL14003 16

Efficiency [%] 50% Australia 45% China 40% France Germany 35% India 30% 25% Japan Korea Nordic countries 20% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 UK + Ireland United States Figure 16 Average efficiency of fossil-fired power production. For overall fossil-fired power generation, the efficiencies range from 28% for India to 45% for UK and Ireland in 2010. Below is a discussion of the results organised by country. Australia Total fossil-fired power generation in Australia is 213 TWh in 2010, of which 85% is generated from coal, of this 38% is lignite. Total coal-fired capacity is 27 GW in 2005 (Platts, 2006). The energy efficiency for coal-fired power generation decreased in the period 1990-2010, from 36% to 34%. The energy efficiency of gas-fired power generation in Australia was 38% in 2010. Gas-fired power generation in Australia was limited at 31 TWh in 2010. Around 2005 power from natural gas was generated in 4 plants with steam turbines (total capacity 2 GW), 3 plants with gas turbines (total capacity 1 GW) and 5 combined-cycle plants (total capacity 1 GW). The steam turbines are commissioned in the period 1968-1976, the gas turbines in the period 1991-2000 and the combined-cycles in the period 1998-2004 (Platts, 2006). Oil-fired power generation in Australia is very low, only 1 TWh in 2010. CESNL14003 17

China China is the largest fossil-fired power generator and generates 2950 TWh in 2009, which almost entirely is generated by coal. The average energy efficiency of coal-fired power generation is 35% in 2010. It has increased steadily in the period 1990-2010 coming from 29%. Coal-based electricity production increased heavily from 442 TWh in 1990 to 3,232 TWh in 2010, corresponding to an increase of more than 600%. Figure 14 shows that over the period of 1990-2010 the efficiency gas-fired power generation has remained constant. Gas-fired power generation increased from 3 TWh in 1995 to 69 TWh in 2010. In the three most recent years in particular, a strong increase was seen. Oil-fired power generation is only 5 TWh in 2010. France Fossil-fired power generation in France is small, only 51 TWh in 2010. This power is generated mostly by coal, closely followed by gas. The energy efficiency for coal-fired power plants in France was 40% in 2010. Coal-fired power generation in France shows strong fluctuations year by year ranging from 1 to 10 TWh in the past two decades, and may depend on power production by hydro and nuclear plants. In France electricity demand peaks in winter due to electric heating, and fossil power generation is used to absorb the peak in demand. This means that the capacity factor of coal-fired power plants can vary strongly which generally reduces energy efficiency. Based on Platts (2006) the operational capacity for coal-fired power plants is 8200 MW in 2005. This implies that, on average, full load hours range from 1,800 3,700 hours per year. Gas-fired power generation increased rapidly especially since 2000 (before practically no gas was used). In 2010, 21 TWh was generated. The energy efficiency was constant in 2000-2006 at 48-50% but plummeted very low to 32% in 2010. The strong suggestion here would be to deploy gas much more often as a peak load fuel due to the marginal character of gas-based power production. Based on Platts (2006), the operational capacity for public gas-fired power generation increased from practically zero in 1990 to roughly 2000 MW in 2005. The largest share of the capacity went into operation after 1998. Of the capacity approximately 55% is CHP. Germany Fossil-fired power generation in Germany is 322 TWh in 2010, of which 79% is produced by coal. After the reunification of West and East Germany several inefficient lignite power plants were closed. This led to a higher efficiency of coal-fired power generation. The efficiency of coal-fired power generation increased from 35% in 1990 to 39% in 2010. The share of lignite in coal-fired power generation in Germany is large at 60% in 2010. CESNL14003 18

In the mid '90s the natural gas market was liberalized in Germany, leading to more competition and lower gas prices. This resulted in more gas use and a large increase of CHP capacity. This led to a strong increase of efficiency of gas-based power generation from 33% in 1990 to efficiencies up to 50% (e.g. 2008), as shown in Figure 14. Gas-fired power generation increased from 25 TWh in 1990 to 65 TWh in 2010. India Fossil-fired power generation in India was 684 TWh in 2010, of which 83% is produced from coal. Total coal-fired capacity in India, excluding auto-producers, was 62 GW in 2002 (TERI, 2004). The energy efficiency for coal-fired power generation is constantly very low with 26-28% over the whole period of 1990-2010. Some reasons for this may be (IEA, 2003b): The coal is unwashed; Indian coal has a high ash content of 30% to 55%; Coal-fired capacity is used for peak load power generation as well as base load power generation. The energy efficiency for gas-fired power generation increased from 23% in 1990 to 38% in 2010. Efficiency is highly fluctuating with on average 60% in 2008 and 38% in 2010 again. Although efficiencies in India have significantly improved, statistics are not deemed reliable due to such unrealistically high efficiencies. Gas-fired power plants in India are fairly new and most are built in the last 15 years. Gas-fired power generation increased from 8 TWh to 100 TWh in the period 1990-2010. Many gas-fired power plants in India use efficient combined-cycle technology (IEA, 2003b). Oil-fired power generation is 15 TWh in 2010 at a very low efficiency of around 20%. Japan Japan is the fourth largest fossil-fired power producer with 606 TWh in 2010. Of this amount, 42% is generated by coal and 48% by gas. Figure 9 shows an increase of coal-fired power generation in Japan from 94 TWh in 1990 to 255 TWh in 2010. The energy efficiency in this period remained fairly constant in the range of 40-41%. Figure 14 shows an increase of gas-fired generating efficiency in Japan from 43% in 1990 to 48% in 2010. Gas-based electricity generation increased in this period from 165 TWh to 272 TWh, as shown in Figure 10. The Japanese Central Research Institute of the Electric Power Industry (CRIEPI) mentions the followings reason for the large share of conventional steam turbines in gas-fired power plants in Japan: CESNL14003 19

Japanese general electric utilities started to implement gas-fired power plants ahead of time in response to the oil crises of the 1970s. In those times gas turbines were not yet implemented on a large scale. As a result, utilities implemented conventional steam turbines based on active electricity demand, as they remain now. In the 1990s however, utilities implemented combined cycle power plants. Furthermore, utilities will implement More Advanced Combined Cycle (MACC) with 59% (LHV) thermal efficiency, among the world s highest. The first MACC began its commercial operation in June 2007. Oil-fired power generation in Japan decreased from 206 TWh in 1990 to 60 TWh in 2010. Nordic countries Total fossil-fired power generation in the Nordic countries is 60 TWh in 2010. Sweden and Norway both have a very limited fossil power capacity; Finland and Denmark have a comparable production. Coal-fired power generation in the Nordic countries was 40 TWh in 2010. The energy efficiency for coal-fired power generation in the Nordic countries has been between 37 and 42 in 1990-2010, with an outlier of 34% in 2008. Gas-fired power generation (with a large share consisting of CHP plants) in the Nordic countries was 19 TWh in 2010, generated with an efficiency of 48%. South Korea Total fossil-fired power generation in South Korea is 314 TWh in 2010, of which 200 TWh is generated by coal and 101 TWh by gas. The energy efficiency for coal-fired power generation increased strongly from 26% in 1990 to 37% in 2010. Coal-fired power generation increased in this period from 12 TWh to current levels. The energy efficiency of gas-fired power generation increased from 40% to 51% in the period 1990-2010, whereas gas-fired power generation increased from 10 to 101 TWh. United Kingdom and Ireland Total fossil-fired power generation in the United Kingdom and Ireland is 283 TWh in 2010, of which 110 TWh is generated from coal and 170 TWh from gas. Due to the liberalization of the electricity market in the early '90s several less efficient coalfired power plants were closed in the UK, leading to a higher average efficiency of coal-fired power plants. In the following years (1996-1997), lower production of coal-based electricity was seen by reducing the load factor of coal-fired power plants, resulting in a decrease of the average efficiency of coal-fired power plants. The energy efficiency for coal-fired power plants has not changed over the past 20 years and was 38% in 2010 due to no new renewal of the coal-based stock. As gas prices decreased, gas-fired power generation capacity increased significantly from 1992 onwards. The large addition of new capacity has resulted in a strong increase of the average efficiency of gas-fired power plants, from 40% in 1990 to 52% in 2010. Gas-fired power generation increased from a minor 4 TWh in 1990 to 170 TWh in 2010. CESNL14003 20

Efficiency [%] United States The United States is the second largest fossil-fired power generator (China overtook the US in 2006) and generated 2,902 TWh in 2010, of which 67% is generated by coal. The energy efficiency of coal-fired power generation remained almost constant in the period 1990-2010, at 36%. The energy efficiency of gas-fired power generation increased from 38% in 1990 to 49% in 2010. Electricity generation by gas-fired power plants increased strongly in this period from 319 TWh to 928 TWh driven by the availability of inexpensive natural gas. Oil-fired power generation was 36 TWh in 2010 and is generated at an efficiency of 36%, making the US the second largest producer behind South Korea. 3.2 Benchmark based on non-weighted average efficiency In this section, a benchmark indicator for fossil-fired power generation efficiency is calculated. This is done by comparing the efficiency of countries and regions to the average efficiency of the selected countries. Separate benchmark indicators for coal, oil, gas and fossil-fired power generation are calculated to compare the efficiencies. The formula for calculating the benchmark indicators can be found in Chapter 2. The benchmark indicator is based on the country efficiency per fuel source divided by the average efficiency per fuel source. The separate benchmark indicators are weighted by power generation to get to an overall indicator for fossil-fired power generation. Figure 17 shows the average efficiencies for all countries and regions considered in this study. Because these efficiencies are not weighted, they do not represent the total overall energy efficiency of power production in the included countries. 50% 45% 40% 35% Coal Gas Oil Fossil 30% 25% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Figure 17 Average non-weighted efficiencies CESNL14003 21

Performance relative to benchmark With regard to average non-weighted efficiencies, the efficiency for gas-fired power generation shows a strong increase from 38% in 1990 to 44% in 2010 (average annual improvement of 0.8%pts). The reason for this improvement is mainly the large amount of new generating capacity; gas-fired power generation increased by +226% over the period 1990-2010. Coal-fired power generation increased by +124% over the period 1990-2010. However, remarkably, only a very limited increase in efficiency is seen from 34% to 37% (average annual improvement of 0.3%pts). Figure 18 shows the energy efficiencies of the countries divided by the non-weighted average of efficiency. The data is averaged over the period 2008 2010 as uncertainty in the data of an individual year can be high. A benchmark indicator of 110% for gas means that the efficiency for gas-fired power generation in a country is 10% higher than the average (non-weighted) efficiency of the considered countries. The fossil benchmark indicator is based on the average benchmark indicators for coal, gas and oil, and is weighted by power generation output. 120% 110% 100% 90% 80% 70% Coal Gas Oil Fossil Non-weighted benchmark Figure 18 Average 2008 2010 performance for coal, gas, oil and fossil for countries relative to respective nonweighted average benchmark efficiencies. Countries are sorted on the basis of performance relative to the nonweighted benchmark for fossil fuel-fired power generation. As can be seen, the UK & Ireland and Japan perform best in terms of fossil-fired power generating efficiency with 17% and 14% above average efficiency respectively closely followed by the Nordic countries, Korea and Germany with 9%, 5% and 5% respectively above average. India is the most prominent underperformer with fossil efficiency of 27% below the benchmark. Figure 19 shows the time development of the benchmark indicator for fossil-fired power generation. Note that a decrease of the benchmark indicator for a country might mean that the efficiency of the country has decreased or that the weighted average efficiency has increased. CESNL14003 22

Performance relative to fossil benchmark 120% Australia China 110% France Germany 100% India 90% Japan Korea 80% Nordic countries 70% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 UK + Ireland United States Figure 19 Benchmark for energy efficiency of fossil-fired power production (based on non-weighted average efficiencies). 3.3 Benchmark based on weighted average efficiency In this section, we calculate a second benchmark indicator for fossil-fired power generation efficiency. This is done by comparing the efficiency of countries and regions to the weighted average efficiencies of the selected countries. The formula for calculating the benchmark indicators can be found in Section 2.2. The benchmark indicator is based on the country efficiency per fuel source divided by the weighted average efficiency per fuel source. The separate benchmark indicators are weighted by power generation to get to an overall indicator for fossil-fired power generation. Figure 20 shows the weighted average efficiencies for all countries and regions considered in this study. This corresponds to the efficiency of all countries and regions together. CESNL14003 23

Efficiency [%] 50% 45% 40% 35% Coal Gas Oil Fossil 30% 25% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Figure 20 Average weighted efficiencies of all countries and regions at the scope of this study (%). For the weighted average efficiencies, the efficiency for gas-fired power generation shows a strong increase from 39% in 1990 to 47% in 2010 (average annual improvement of 1.1%pts). The reason for this improvement is mainly the large amount of (more efficient) new generating capacity; gas-fired power generation increased by +226% over the period 1990-2010. Coal-fired power generation increased by +124% over the period 1990-2010. However remarkably, only a very limited increase in efficiency is seen of 34% to 35% (average annual improvement of 0.1%pts). The reason for this is that a large part of the growth in coal-fired power generation takes place in China, United States and India, for which generating efficiency by coal increased only slightly (+7 % pts in China) or remained the same (India and the USA). For the United States this is not surprising as (by approximately 2005) only 4.5% of coal-fired capacity is commissioned after 1990 (Platts, 2006). For India the situation is the same; 40% of coal-fired capacity is built after 1990, of which all plants are based on sub-critical steam systems (Platts, 2006). The differences with the non-weighted average approach (Figure 17) are limited. In general they can be explained by the fact that the impact of countries with large power production output is diminished by the non-weighted approach whereas the impact of small countries is magnified. For instance, the largest producers from gas-fired power are Japan, South Korea and the United Kingdom and Ireland and they are also among the most efficient. Hence, in the non-weighted average approach their impact on the average is lower (than in the weighted average approach) resulting in a lower overall average efficiency for all countries combined. Figure 25 shows the energy efficiencies of the countries divided by the weighted average efficiency. The data is based on the average over the period 2008 2010 as uncertainty in the data for an individual year can be high. A benchmark indicator of 110% for gas means that the efficiency for gas-fired power generation in a country is 10% higher than the weighted average efficiency of the considered countries. The fossil benchmark indicator is based on the average benchmark indicators for coal, gas and oil, and is weighted by power generation output. CESNL14003 24

Performance relative to benchmark 120% 110% 100% 90% 80% 70% Coal Gas Oil Fossil Weighted benchmark Figure 21 Average 2008 2010 performance for coal, gas, oil and fossil for countries relative to respective weighted average benchmark efficiencies. Countries are sorted on the basis of performance relative to the weighted benchmark for fossil fuel-fired power generation. Figure 22 shows the development in time of the benchmark indicators for fossil-fired power generation. On average in the period 2008-2010, the Nordic countries had a 10% higher weighted fossil efficiency, followed by Japan, Germany, the United Kingdom and Ireland and South Korea (all in the range of +7% to +9%) and the United States (+3%). China, Australia and France all perform within 0 to -6% under the benchmark, while the most severe underperformer is India with -21%. CESNL14003 25