Stakeholder expectation WÄRTSILÄ CORPORATION ENTSOG 4th Workshop on the European Ten Year Network Development plan September 29, 2011 Juhani Hupli, Vice President, Ship Power Technology Wärtsilä Corporation 1 Wärtsilä
This is Wärtsilä SHIP POWER POWER PLANTS 4,6 billion EUR 17 000 employees 160 locations in 70 countries R&D expenditure >140 MEUR SERVICES 2 Wärtsilä Corporate Presentation
Power Plants world leader in selected niche markets References - Power Plants Flexible Base load Power Generation Installed base 27,2 GW in 1664 Power Plants Grid stability and Peaking Installed base 7,0 GW in 1047 Power Plants Industrial self-generation and Oil & Gas Installed base 14,5 GW in 1883 Power Plants Total 49 GW in 4600 Power Plants of which gas-fuelled: 10,0 GW in 648 Power Plants 3 Wärtsilä
LNG applications Marine References Merchant Offshore Cruise and Ferry LNGC 87 vessels >300 engines 950 000 rh Conversion 1 Chem. Tanker 2 engines conv. Complete gas train Complete design OSVs/FPSOs 78 engines Online from 1994 LNG ferries 1+1 vessels 4 engines per vessel Complete gas train 2800 passengers In service in 2013 3 segments 130 installations > 1 500 000 running hours The leading ship designer in LNG-fuelled Offshore Supply Vessels 4 May 2011
Why is Wärtsilä engaging with the EU and ENTSOG? Gas is fuel for the future! Power Plants - Smart Power Generation To enable renewable energy production and reduction CO 2 emissions Energy security Ship Power - Sustainable Shipping Low emissions High efficiency Fuel flexibility 5 Wärtsilä
EU Energy Policy The Challenges of Decarbonising Power Production Technical challenges of decarbonising the electricity sector: Intermittency of renewable energy Grid stability and balancing Sufficient dynamic and flexible power plants Availability of gas resources 6 Wärtsilä
Typical Daily Load Profile for 100 GW Peak-load Power System Current Capacity Mix Future Capacity Mix The power systems consist mainly of steam power plants, which are inelastic and starting and stopping of which is difficult and time-consuming During low load periods these plants are operating on partload, bringing first the higher marginal cost CCGT plants to minimum load, and then balancing with coal-fired plants. This leads to low efficiency and high GHG emissions. Low carbon base load is produced by hydro, nuclear and steam plants with CCS, if available. Base load capacity covers the portion of the load where it can be operated constantly with high to full-load. In future energy system even small wind speed changes cause major fluctuations to thermal power generation. Flexible capacity is needed to supplement the base load and renewables, balancing the system. It is based on hydropower and gas-fired plants. 7 Wärtsilä 04 October 2011 Corporate Presentation
The Future Energy System Flexible Power Plants Obstacle Electricity markets need to be re-structured to make balancing plants commercially attractive Benefits of Flexible Power Plants Base load production Load following Peaking Wind chasing Ultra-fast activation System balancing High efficiency over broad load range Obstacle Gas markets need to be reconfigured so that non-base load and irregular users are not discriminated. Needs good quality gas Reliable, Affordable and Sustainable Power System 8 Wärtsilä
Requests to ENTSOG and regulatory bodies To achieve European flexible Smart Power Generation the following is needed A market structure for flexible use of gas Smart regulation: Capacity fees and network charges should not discriminate non-base load, peaking and ancillary service power generations The gas network and infra structure should be as flexible as possible, able to deliver gas at short notice and accommodate irregular patterns of consumptions Gas specification and quality require harmonisation: Wobbe index, methane number Gas composition has an direct impact on the flue gas and exhaust gas emissions 9 Wärtsilä
We bring to the marine market Drivers for customer Operational Excellence Fuel cost and availability CUSTOMER Environmental Efficiency Sustainable shipping Emissions and legislation Fuel Flexibility Total cost of ownership 10 Wärtsilä 04 October 2011 Ship Power Update
Maritime Transport Policy The Challenges The challenge - Emissions Greenhouse gases (GHG) Global warming Competitiveness Ships efficiency improvements (ship design / machinery / propulsion / operation) NO x Engine technology Exhaust abatement (Catalysts) GAS SO x (& PM) Low sulphur fuels Exhaust abatement (Scrubbers) Emissions Pollution of the air Competiveness Ships environmental performance (ship design / machinery / propulsion / emission control/ operation 11 Wärtsilä
The Benefits of Natural Gas As Marine fuel Reduced emissions Simpler machinery Fuel flexibility IMO TIER III Compliant -20-30% Emission values [%] 100 90 80 70-85% 60 50 40 CO 2-100% 30 NO x SO x -99% 20 10 Particulates Dual-Fuel engine in gas mode Diesel engine 0 12 Wärtsilä
Wärtsilä s Solution LNG Fuelled Vessels F A complete and modularized solution for LNG fuelled ships E A. Storage tanks D A B. Evaporators C B C. Dual-Fuel Main engine D. Dual-Fuel Aux engines E. Bunkering station(s) F. Integrated control system 13 Wärtsilä
European gas how we see it However..... LNG infrastructure missing Rules and regulations for LNG onboard ships are not fully yet there Bunkering rules missing safety procedures existing Courtesy of I.M.S. Nordic LNG Missing links in fuel supply! LNG Terminal LNG Feeder LNG Cont.feeder LNG Ferry LNG Ro-Lo LNG Tug 14 Wärtsilä
Requests to ENTSOG and regulatory bodies The following is needed to make LNG to be the preferred fuel for the Shipping industry A framework for investments into LNG delivery network and infrastructure The needs of the future LNG infrastructure and Gas filling stations for ships should be taken into account via the ENTSOG TYNDP (Ten Year Dev. Plan) The Gas Market should accommodate non-power generation users (e.g. transportation) Regulations and rules for the refuelling, bunkering and loading of LNG needs to be reviewed and in place. This work should be co-ordinated by IMO for global framework. 15 Wärtsilä
European gas how we see it The Role of Natural Gas..... Gas is the best and cleanest fossil fuel to complement the European energy needs Gas fuelled power production is the enabler of Renewable Energy Gas offers great possibilities for cleaner and efficient maritime and inland shipping Affordable, reliable and European gas supply is therefore very much welcomed by appliance and equipment manufacturers and customers Liberalization of the gas market is foreseen and welcome 16 Wärtsilä
Thank you Juhani Hupli juhani.hupli@wartsila.com +39-335-667 4691 www.wartsila.com 17 Wärtsilä