Long-Term Policy: Concepts, Methods, Industry Practice Berlin Conference on the Human Dimensions of Global Environmental Change 22. Februar 2008 Stefan Ulreich, Upstream/Generation
Uncertainties require adequate portfolio approach E.ON s strategy targets on a diversified generation portfolio Combination of different fuels and technologies Coverage of different geographical regions and countries E.ON s competence delivers key requirements for an efficient portfolio Understanding of commodities and other market relevant aspects Consistent long term market scenarios Risk reducing portfolio design through largely anti-correlated fuels 2
Contents Portfolio approach Clean Coal Renewables Nuclear 3
E.ON is setting itself challenging CO 2 reduction targets E.ON s specific CO 2 emissions Options for future generation 0.72-50 % in t/mwh renewables incl. hydro gas /oil increase share of renewable energy 0.49 ~ 0.36 coal increase efficiency introduce CCS 1990 2006 Target 2030 nuclear maintain share of nuclear 50% reduction of specific CO2 emissions compared to 1990 Until 2030 reduction down to 360 g/kwh generation today Development of new technologies within innovate.on initiative 4
Acquisitions and new build program will deliver E.ON s carbon target of 360 g CO 2 /kwh by 2030. E.ON s portfolio 2007 (51 GW) E.ON s portfolio 2015 1 (90 GW) E.ON s target portfolio 2030 (% inst. capacity) 38% 29% 30% 42% 31% 6% 37% 22% 10% 1% 13% 7% 8% 16% 10% Nuclear Coal Gas Hydro Renewables 1 Including Endesa assets/ Viesgo, transaction still pending, closing of transaction in first half of 2008 expected 5
CO 2 emissions are not a EU but a worldwide issue Global distribution of CO 2 emissions 2003 EU CO 2 emissions by sectors Australia 1,3% S. Korea 1,7% Canada 2,1% Africa 3% S America 3,2% Near East 4,2% India 4,2% Japan 4,7% Others 14,2% approx. 24.000 Mt USA 21,7% EU-25: 14,8% Residential and Commercial Transportation Energy Industries: 37% Rest Asia 4,9% Rusia 5,8% China 14,2% Manufacturing Industries Source: UNFCCC Source: UNFCCC GHG Inventory P The European energy sector contributes with 1,400 Mt CO 2 approx. 6 % to the global CO2 emissions: Task for Europe: Develop technological solutions! Seite 6
Contents Portfolio approach Clean Coal Renewables Nuclear 7
E.ON ensures Capture Readiness for all coal based new built power plants capture ready Capture Readiness = technical feasibility of future CCS retrofit Systems Arrange components to allow later upgrade Ensure additional supply and disposal infra-structure Infrastructure Assign space for future requirement of CO 2 scrubber and compression Ensure cooling requirements CO 2 transport and storage Detailed concept for feasible transport system and long term CO 2 storage P Take final decision on CCS investment once technologies enter the market P Push R&D activities on the way to optimise CCS processes 8
CO 2 capture in fossil power plants Three different technologies in development stage 1. Pre Combustion Capture (IGCC) Coal gasification, CO-shift, hydrogen production and hydrogen combustion in a H 2 gas turbine 2. Oxyfuel Burning fossil fuels with pure oxygen FutureGen 3. Post Combustion Capture CO 2 capture from power plant flue gas (scrubbing process) OxyCoal-AC CASTOR Economic viability will decide about future deployment 9
CO 2 avoidance costs of the main technologies Goal of Zero Emission Platform by 2020 Pre Combustion Capture IGCC with CO shift und CO 2 scrubbing Oxyfuel USC with cryogenic air separation potential Today s forecast 2020 Post Combustion Capture MEA scrubbing 1) and alternative processes 2) 2) 1) 0 10 20 30 40 50 CO 2 -Avoidance Costs [ /t ] Carbon Values of approx. 35 /t lead to economical viability of CCS. Today, it is uncertain which technology will be the leading one. Seite 10
Contents Portfolio approach Coal Renewables Nuclear Seite 11
Huge investments in renewable production Nordik OKG wind 15 MW (2008) Rödsand II 212 MW (2011) Germany North sea: Amrumbank 400 MW (2011) Delta 400 MW (2012+) Baltic sea: Sky 2000 150 MW (2010/11) Arkonabecken 400 MW (2014) UK Several small projects ~ 500 MW (2009+) Robin Rigg 180 MW (2009) London Array* 1000 MW (2010+) Important E.ON Wind projects Diversified Portfolio of On- and Offshore: Currently installed 680 MW Additional plans for 2.580 MW 6,0 Mrd. investments until 2010 Further investments after 2010 Spain / Portugal Installed Capacity 260 MW Development phase 560 MW under construction 90 MW *Consortium mit Shell Wind Energy Ltd and CORE Ltd. Seite 12
Extending grid as a prerequisite for renewable investments Decentral renewable production: Production sites far away from the consumer. Source: UCTE Seite 13
Contents Portfolio approach Coal Renewables Nuclear Seite 14
Nuclear energy maintains key position in global generation Canada Restarting 4 plants since 2003 (18) USA Operating license extended up to 60 years (104) European governments considering new build (UK, BG, CH, SK, RO, TR, PL) France New EPR (59) South Africa Development of new reactor types Finland EPR under construction (Start planned ca. 2010) Netherlands Lifetime extension of Borssele by 20 years until 2033 India (4/1) 9 plants under construction, additional 15 GW until 2020 Russia 6 plants under construction, additional 10-20 GW until 2020 (31) 3 plants under construction, until 2020 additional 17 GW capacity China Japan (56) (9) Increasing capacity by 30 GW until 2020 Source: E.ON Kernkraft (15) Seite 15
Wind Offshore Biomass Gasification 2014 13 Oxyfuel 500 MW Demo-Wind park 12 Bio-Natural Gas 11 10 CO 2- Storage >60 t/h = 70 MWel 09 08 1 5 MW Mikro-CHP Coal 50plus >500 MW Future new Technologies Post-Combustion >30 MW E.ON UK 450 MW E.ON US 275 MW EPR expected CCS-Power Plant 30 MW Nuclear Pre-Combustion Compressed Air Storage Technology Radar research materials and chemicals, test facilities Engineering, site screening, procurement permissions Construction phase Start End Seite 16
Stabilise framework Stepwise auction: No frictions in the current system Give long-term view on CO 2 -goals: At least sign-posting 2030, 2040, 2050 Use technology! Seite 17