Electrolysis for Energy Storage & Grid Balancing in West Denmark A possible first step toward the creation of a transport hydrogen Infrastructure in West Denmark Report of the Work Group
CONTENTS 1. Executive Summary & Recommendations Summary 3 Summary. fuel security 6 SWOT Analysis 8 Recommendations 9 2. Strategic Considerations (Strategisk teknologiudvikling ved afslutningen af den billge oilies æra) 11 3. Danish Wind Carpet Behaviour, Challenges & Solutions 16 4. Electrolysis at West Denmark s Decentral Power Stations (incl. Stationary Fuel Cells) 24 5. Economic Assessment 30 6. Other Methods for Storing Energy 34 Page Work Method & Acknowledgements This project was studied and written up between mid-march and mid-august, 2004 The work has been a collaborative effort between the original stakeholders who were, Dansk Fjenrvarmeværkers Forening (DFF), Norsk Hydro Energy, Norsk Hydro Electrolysers, Naturgas MidtNord, Ringkøbing Fjernvarmværk (RFV), IRD A/S, Dr Klaus Illum and Incoteco (Denmark) ApS. Incoteco s Hugh Sharman has been responsible for the project coordination and editing of the report and is grateful to the writers who have written up the most specialised sections. It is important to mention that other companies and institutions, although not originally nor officially partners in the project, have shown great interest and contributed with their valuable time, ideas, advice and experience. These are, ELTRA, ELSAM, Wärtsila OY, H2 LOGIC ApS, Markedskraft, Vindenergi Danmark, Danmarks Vindmølleforening, Dansk Gasteknisk Center a/s, AGA-Linde, Hollensen Energi and Ringkøbing Amt. The project was conducted in five main stages. At the end of the first four stages, the stakeholders and guests gathered to meet each other and to present their findings and/or insights. The project diary is as follows: 1. Preparation, mid-march to mid-april 2. Kick-off (stakeholders meeting at DFF, Kolding, 14 April, 2004) 3. Mid-point stakeholders meeting at Ringkøbing Amt, 25 May, 2004 4. Concluding stakeholders meeting at DFF, Kolding, 1 st July, 2004 5. Final Analysis, Report preparation, review of drafts, agreement and report submission, mid August. Special thanks are due to DFF s Viktor Jensen and Kurt Risager, whose help, guidance, hard work and hospitality, has made the report possible. Thanks must also go to the personnel at Norsk Hydro in Oslo and Notodden, whose deep knowledge of hydrogen technologies and unstinting support with time and money under-writes the credibility of the conclusions and recommendations for action. The work was supported and sponsored by Energistyrelsen (Danish Energy Authority), Amaliegade 44, 1256 Copenhagen K www.ens.dk 2
1. Executive Summary & Recommendations 1.1 Summary West Denmark has a large endowment of modern wind turbines, amounting to 2,374 MW capacity (2003), while peak winter load during 2003 was 3,746 MW. The Danish Government is committed to extend this capacity before 2010, to about 2,700 MW. High wind power output often occurs out of phase with demand and often unpredictably. Wind power output also ramps up and down continuously, sometimes by large amounts. The resulting imbalance is most often handled across West Denmark s inter-connections with Sweden (150 TWh), Norway (120 TWh) and Germany (500 TWh), all three systems being many times larger than West Denmark s (20 TWh). In addition, because half of Sweden s and all of Norway s power plants are hydro, there is an excellent match between wind and fast responding hydro, from an overall operating and grid balancing point of view. However, when built, the wind capacity in 2008-2010, will be roughly equivalent to the export capacity of all West Denmark s inter-connectors. These may become bottlenecked at times of high wind turbine output. The inter-connectors themselves, cannot be relied upon all the time. There was an extended, 5-month outage of the 500 MW Skagerrak 3 inter-connector during 2003 (July thro December), preceded by another failure in one of the older Konti-skan connectors to Sweden in the winter of 2002-2003. Measures are already being taken to reduce further risk of bottle-necking by changing the conditions under which the decentralized power stations operate and amending the law that forbids the use of electricity for heating at these power stations. Denmark s well functioning, district heating generation plants (CHPs) are in almost every town and village (1,656 MW in 560 units). Provided that the right market conditions can be created, West Denmark can use them to develop a transport hydrogen infrastructure, based on using over-flow wind energy, sooner and more economically, than possibly anywhere else on Earth. The high pressure, electrolysers, of the type studied and proposed in this report, can be delivered in unit sizes up to 3.5 MW. They are very fast acting, being capable of a ramping up and down from zero to full load in 200 milli-seconds and are therefore technically attractive to the power regulating market. This is expected to grow as wind capacity is added. Built in sufficiently large numbers, soon enough, these can partly address the foreseen inter-connector bottle-necking, and assist grid balancing and grid stabilisation. To develop an infrastructure that can reduce Denmark s total dependence on hydrocarbons for transport, which consumes 200 PJ per year, and produces about 11.5 million t/y of CO 2 emissions 1, is an enormous task, requiring decades of development time and still uncalculated but very large amounts of money. Energistyrelsen s terms of reference 2 required us to investigate the economy of constructing electrolyser systems at these decentralized power plants. The hydrogen would be stored and spiked into the natural gas that fuels the engines and turbines. The electrolysers would be upgraded to hydrogen filling stations as vehicles became available, locally, which are fueled by hydrogen. In the first instance, these are foreseen as local fleets, with high rates of utilization, such as buses, taxis, ambulances, delivery vans, etc. The use of hydrogen as a natural gas substitute in the power plants is envisaged as an intermediate application, prior to its adoption as a transport fuel. 1. http://www.dst.dk/ (Danmarks Statistik) 2 EFP04 Journalnr.: 33030-0034 3
Around 5.5 TWh of wind energy will be produced in 2008-2010 from West Denmark. If all of this were used to manufacture hydrogen, it would produce 1.3 billion Nm 3 of hydrogen with an LCV of 14 PJ. From this, it can be seen that existing wind energy can deliver a substantial fraction of West Denmark s transport needs when hydrogenpowered vehicles become available. The construction and development of an electrolyser system at Ringkøbing Fjernvarmværk, was pre-engineered and priced to test whether the intermediate use of hydrogen, as a natural gas substitute, could justify building and operating the electrolyser plants commercially, under present day market conditions. The calculations tested various ways to ensure that the hydrogen that would be generated would be from renewable energy sources and thus would not cause any incremental CO 2 emissions. In this case, special fiscal treatment might be justified. One reliable way to ensure this, is to document that the consumption of renewable electricity, by way of tradable "Renewable Energy Certificates" 3. When the European (CO 2 ) Emissions Trading System (ETS) begins next year, 2005 environmental externalities will be partly internalized in the electricity price. Everything else being equal this will increase the price of electricity to the benefit of renewable energy generators with no CO 2 emissions. However, no account of benefits from such trading could be used in our calculations, due to the lack of any reliable information about special tax treatment or ETS and likely CO 2 price levels. It was assumed that the electrolyser can bid successfully into the downward regulating market, reducing the price paid for energy by the average amount recorded in ELTRA s data base, of each year from 2000 thro 2003. The average, untaxed cost of electricity to the electrolyser, had it been able to bid, successfully, into the downward regulating market during 2000 thro 2003 was as follows Year 2000 2001 2002 2003 Øre per kwh 5.5 10.6 9.5 13.2 In addition, during the last, record, wet year, the average price for West Denmark was 12.2 øre/kwh. Cost of Hydrogen, DKK/GJ (6% IRR Capital Employed) Cost of Hydrogen, DKK/GJ, (12% IRR on Capital Employed) 250.0 200.0 150.0 Electricity cost after downward regulating deduction 2000 2001 2002 2003 250.0 200.0 150.0 Electricity cost after downward regulating deduction 2000 2001 2003 100.0 100.0 2002 50.0 0.0 0 5 10 15 20 25 30 Cost of electricity, øre per kwh Power gas price at 1.5 kr/nm3 + kr 0.78 tax 50.0 0.0 0 5 10 15 20 25 30 Electricity Cost, øre/kwh Power gas price at 1.5 kr/nm3 + kr 0.78 tax LHV GHV LHV GHV The results show that it is not feasible to displace power station gas with hydrogen, even when that gas is taxed and the hydrogen is not. Taxed gas costs the power station DK 57/GJ while tax-free hydrogen needs a sales price in the range of DKK 150/GJ 4. This is more due to the capital costs of plant constrained to run about half the year. On the other hand, Danes are paying (without excessive complaint) DKK 250/GJ for transport fuel when they pay DKK 8 per liter for petrol. Of course, about 75% of this is tax 5. 3 Peter Jørgensen, ELTRA 4. These calculations are explained in the Chapter 5. They are based on a build up of 100 MW of capacity, constructed from 2005 thro 2015, all paid off by 2030, the replacement of cell membranes every ten years and a utilization rate of 4200 h/y. The cost of electricity to the electrolysers is assumed to be tax-free. 5. The price of gasoline at sea, during July, 2004, was about $450/t or about $10/GJ, DKK63/GJ 4
Therefore, if the project is to advance further, on a commercial basis, requiring no public subsidy, the price paid for hydrogen must reflect its value as a high fraction of the price of taxed transport fuel. Special fiscal arrangements will need to be developed to encourage this. This will also probably require that companies experienced in and motivated by the retailing of transport fuel become involved 6. The costs shown demonstrate that its intermediate use as power station fuel will require that the host CHP be compensated for consuming a more expensive fuel. 6. For example, Shell, BP and Total are involved in the ownership of prototype hydrogen filling stations. There are 69 such filling stations listed at http://www.h2cars.de/filling/index.html 5
1.2 Fuel Security Energistyrelesen, 2004 Hydrocarbons are responsible for close to 100% of Danish transport fuel; transport fuel is currently the source of 18%, or 11.5 million t/y of Danish CO 2 emissions and rising. In every other sector, overall Danish CO 2 emissions are falling, although emissions from the power sector rose, during 2002-2003, due to the drought in Scandinavia. Danish oil production is likely to peak in 2005 and decline thereafter. Gas production is seen as stable for some years more but gas resources are also finite. Oil and gas production is already in decline in the UK sector of the North Sea while oil production is also, probably, in permanent decline in the Norwegian sector. Production, Gboe/a 50 NGLs 40 Association for the Study of Polar Oil Peak Oil, 2004 30 Deep Water Heavy 20 Conventional 10 0 1930 1950 1970 1990 2010 2030 2050 Leif Magne Meling, Statoil, presentation to WPC, Dec, 2003 During this decade, Europe will become even more dependent than it already is, on oil and gas from outside Europe, partly alleviated by a modest (by World standards) supply of gas from Norway. After 2020, it is foreseen that almost all of Europe s oil and gas will come from outside its borders. Europe will have to compete with other consumers, especially the USA, the Far East and the fastdeveloping Indian sub-continent, for these supplies, which may become expensive and also subject to disruption. In an unprecedented break with its past, Oil and Gas Journal, the oil industry s most influential source as regards hydrocarbon supply and demand, started in August, 2003 and continues to run, a most interesting (alarming) series of articles on the socalled peak oil debate 7. Critics parody the Peak oil argument as a simplistic claim that we are running out of oil. This indeed is ultimately true, but it is a profound misunderstanding of the case being made. Peak Oil proponents 8 have developed various oil production models based on the fact that the World s oil industry has failed, since 1992, to find new conventional oil in the quantities needed to replace such low cost oil that is being consumed. Using advanced oil field practice, they point to the strong likelihood that unless vast new resources are soon found and quickly developed, World demand will shortly overtake production and that production will decline rapidly and permanently thereafter. 7 Article search at www.pennet.ogj.com for peak oil returned 1000 results on 22 July, 2004 8 Association for the Study of Peak Oil (ASPO), at www.peakoil.net 6
There is only a small difference in the estimated date for when peak oil is likely to occur. So-called pessimists like Colin Campbell, founder of ASPO, may be right in suggesting that the present oil supply bottleneck demonstrates that we are seeing the beginning of the peak, now. Optimists, like Mr. Meling suggest that while there is a scant hope of much new oil being found, better management of existing reserves may enable production to keep on growing for perhaps a further 10 20 years. Although not yet acknowledged publicly by the international agencies, many oil industry executives and insiders 9 are acknowledging that an early peak oil scenario is more realistic than their officials are prepared to admit for the public record. The issue was examined in some detail during December 2003, at a conference organized by the Danish Board of Technology and the Society of Danish Engineers in Copenhagen. Dr Klaus Illum, in the form of a book, wrote the report prepared for the conference 10. Dr. Illum has written the first chapter of this Report. In the short term, the issue will not be the physical supply of hydrocarbons but their cost. We simply do not know what the price of oil and gas will be when demand begins to exceed supply. Demand growth is likely to slow. May be it will decline as it did twice already, in 1973 and 1981, when prices spiked in response to (politically motivated) supply constraints. Since 1981, knowledge about the Earth s hydrocarbon reserves has grown enormously, unimpeded by Iron Curtain politics and aided by oil field techniques that were unimaginable in 1981. It is probably justified to say that such reservoir knowledge, both about frontier areas and especially in mature oil provinces is close to the limit of what can be known. When the energy market realises that there is a pending physical limit in the supply of hydrocarbons, at an affordable price, the only reasonable certainty is that prices will be highly unstable, and with time, escalate to a new plateau represented by the much higher cost of producing environmentally and technically acceptable liquid fuels from oil shale, tar sands, bitumen and coal and the delay in reaching that change-over. When this happens, there will be a step-change upward in specific CO 2 emissions. That is also likely to impact price, if global warming remains an international concern. The expected price increase of fossil derived fuels, driven by increased World demand, even affecting coal in 2003-2004, will make alternatives, such as wind power and energy storage more economic. US cents/000 cu ft 1200 1000 800 600 400 200 0 1998 January 1998 March 1998 May Supply unconstrained US Gas Prices, 1998-2003 1998 July 1998 September 1998 November 1999 January 1999 March 1999 May 1999 July 1999 September 1999 November 2000 January 2000 March 2000 May 2000 July EIA, July, 2004 2000 September Power Sector 2000 November 2001 January 2001 March 2001 May 2001 July 2001 September Commercial Sector Supply constrained 2001 November 2002 January 2002 March 2002 May 2002 July 2002 September 2002 November 2003 January 2003 March 2003 May 2003 July 2003 September 2003 November The current behaviour of the US gas market, during recent, relatively mild, supply constraint, gives some guidance about future global energy price volatility when all HC supply becomes physically constrained. Led by the US, there is intensive effort to develop a hydrogen economy. Every major motor manufacturer and most large energy companies are involved in this effort, 9 Leading among these is Matthew Simmons, an energy adviser to President Bush, http://www.simmonsco-intl.com/ 10 Oil-based Technology and Economy - Prospects for the Future Teknologirådet, København og Ingenieur Foreningen 7
A significant fraction of the future vehicles will be energized by hydrogen fuel cells whose ultimate cost will depend on the volume of sales achieved. Most of the World s effort into hydrogen manufacture is based on the gasification of coal or, most often, the reformation of natural gas. The flaw of depending on natural gas should be clear, by now. The feedstock is likely to become both expensive and scarce as the present efforts to rep. Gas reformation produces a mole of CO 2 for every two moles of H 2, requiring that the CO 2 be sequestered in one way or another. The process degrades the original energy resource by up to 20% and the need to sequester the resulting CO 2 is rarely costed, let alone high-lighted by the proponents of gas reformed hydrogen. West Denmark, almost alone in the World, possesses a significant surplus of renewable energy capacity. The investment costs for wind turbines are substantial, but the short-term marginal generation cost of wind energy is close to zero, making electricity generation from wind turbines marginally profitable even in periods with very low electricity prices. The substantial share of non-controllable and only partly predictable wind power results in highly fluctuating electricity spot prices. In this system - if in any - the production and use of hydrogen by electrolysis could become a truly sustainable and competitive option. The whole of Denmark uses roughly 200 PJ of energy per year in its transport system. Of this, about 194 PJ comes from hydrocarbons, the remainder being electricity for trains. If, as widely reported, hydrogen vehicle consume half the specific energy of the internal combustion engine, the energy of the hydrogen needed to replace today s use of hydrocarbons would require roughly 40 TWh of electricity. The output of wind energy from West Denmark s generators during 2003 was 4.4 TWh. This is a small but significant fraction of the long-term goal of achieving an emission-less transport fleet in Denmark. 1.3 SWOT Analysis (strengths, weaknesses, opportunities, threats) Strengths The development of a real hydrogen infrastructure needs to be started well ahead of the coming crisis in the supply of low cost hydrocarbons. This project contains all the features that are needed to address the strategic threat posed by the coming peak oil crisis. Denmark already has already made the investment in surplus renewable energy to generate significant quantities of hydrogen for transport applications. Denmark s investments in widely distributed, decentral, power stations create the possibility for a national infrastructure at locations where the capital cost will be minimized by the already installed distribution equipment... where there is a high qualified staff The renewable power is available and mechanisms are in place to secure that hydrogen will only be generated from this renewable power, whether that is from hydro or wind. At the times when most renewable energy is available, the spot prices are low, ensuring that the energy cost of hydrogen will be minimized. The availability of renewable energy should ensure a capacity utilization of at least 4,200 h/y and this utilization could be better in many years. Built in sufficient numbers, soon enough, the participation of large numbers of electrolysers in the market should have the effect of balancing the grid and off-setting inter-connector congestion. The study has received help and advice from many Danish companies and institutions who generally favour the implementation of its recommendations. It is likely to be a politically popular development Weaknesses The hydrocarbon shortage may not materialize, endangering the quality of the investment West Denmark may have sunk in alternative energy sources. 8
It still might be shown that so-called global warming is not occurring on the scale widely publicized and/or that the Kyoto process is in any case the wrong response, in which case the reduction of CO 2 from the transport sector will cease to be a public objective. Even if both the foregoing objections are discounted, better and cheaper ways may be found for manufacturing hydrogen for the transport sector, taking away the first mover advantage which the scheme s early implementation might otherwise have given Denmark. The transport industry may abandon its quest to develop hydrogen fueled vehicles Opportunities National: If none of the weaknesses materialize, then Denmark has the chance to lead the World in the development of a hydrogen infrastructure, the commercialization of hydrogen fueled vehicles and the development of associated technologies and services. Industrial: The industrial companies involved in the project can benefit from first mover advantage in the development and sale of commercial equipment, ahead of global rivals. Regional: Ringkøbing Amt is already the capital of Danish wind and a focal area for wind generator development. The development of a regional infrastructure for transport hydrogen and its use is likely to attract interest and attention from all over the World, in turn, attracting entrepreneurs, manufacturers and service companies wishing to benefit from the World s first renewables based hydrogen infrastructure. International: Develop links with other pre-commercial hydrogen infrastructures, like the California Fuel Cell Partnership, the Norwegian Hydrogen Council, The European Fuel Cell Technology Platform etc. Threats The first mover advantage may already be lost to the The California Fuel Cell Partnership 11 which is committed to promoting fuel cell vehicle commercialization as a means of moving towards a sustainable energy future, increasing energy efficiency and reducing or eliminating criteria pollutants and greenhouse gas emissions. California does not have a surplus of renewable electricity. Indeed, it has barely enough power for its peak needs. For those genuinely wishing to see that the hydrogen economy will not be developed from a platform of fossil fuel, the Californian effort, simply by being successful and spectacular, may divert attention and resources away from the more serious effort to develop hydrogen from renewable resources. The Danish Treasury obtains a large benefit from the taxation of petrol and electricity. During 2003, the revenues were 12 o Petrol: DKK 10.4 billion o Electricity: DKK 8.3 billion Because the project will require special fiscal treatment to succeed, its success might be misunderstood as endangering important revenues for the Danish Government 13. The development of sufficient renewable energy resources to impact Denmark s almost total dependence upon hydrocarbons for transport may be seen as too ambitious and too large for a small country like Denmark to undertake itself and the project shelved for these reasons. 1.4 Recommendations As the first part of the next stage of this work, we propose that we study the construction of a significantly sized demonstration unit, with an up-grade to a commercially operating hydrogen filling station and the launching of a local, hydrogen transport system. The study will require the active support of vehicle manufacturers and at least one energy company that is motivated by the long term development of the market for delivering transport hydrogen. In order to for the project to attract the considerable investments implied by this ambitious plan, it will be necessary for the Danish Government to ensure that the investing participants will receive sufficient fiscal incentives for the project 11. http://www.cafcp.org/aboutus.html 12. Danmarks Statistik, 2004 13. In fact, the proposed scale of the project, over a period of ten years, would hardly be noticeable to tax revenues. If, because of its success, World events etc. the pace of development were to increase, the Government can always re-impose taxes at a level which would not destroy investor expectations. 9
to succeed commercially. Therefore, prior to the study commencing, Energistyrelsen will need to obtain the willingness of the Danish Government to consider granting the demonstration project such fiscal incentives. If the study shows that these conditions can be met and that a sufficient number of new partners are willing to support the project with the means necessary for its success, we recommend that the 500 kw prototype, high-pressure, unit presently (2004) being tested by Electrolysers A/S be studied as suitable for this purpose. If it is, a negotiation should be opened with Electrolysers A/S to design, cost and install a complete, working, demonstration plant at Ringkøbing Fjernvarmværk. The demonstration would be in two parts. FIRST STAGE (2005) 1. The eventual ability of the electrolysers to bid competitively into the regulating market 2. Using energy purchased with renewable energy certificates 3. Thus proving that a Nation-wide network of electrolysers can deliver hydrogen with low energy costs in the long term 4. The ability of a large network of electrolysers to assist in grid frequency stabilisation 14 5. The use of hydrogen spiked into large gas engines in a manner that is flexible and economic, without derating 15 6. The use of locally available hydrogen to demonstrate a wider use of stationary, PEM fuel cells of the type built by IRD A/S 16. 7. The other, possible synergies obtainable from an electrolyser operating together with a local power plant, including other business 17 SECOND STAGE (2006) 1. The upgrade of the electrolyser to a hydrogen filling station, on a commercial basis 2. The identification of pre-commercial and commercial, hydrogen-powered vehicles suitable for operating in the local area, having a high rate of utilization 3. Assessment of the costs of operating hydrogen powered vehicles, served by a hydrogen filling station on a commercial basis 18 4. Development of fiscal rules for extending the use of hydrogen within Ringkøbing Amt, laying down the foundations for encouraging the development of a hydrogen infrastructure on a Nation-wide basis 19 14. A novel, research related development 15. A novel, research related development 16. A novel, research related development 17. Possible research related developments 18. A novel, research related development 19. A novel, research related development 10
2. Strategisk teknologiudvikling ved afslutningen af den billige olies æra Sålænge produktionen kunne følge med efterspørgslen kunne OPEC - d.e. Saudi Arabien - holde råolieprisen indenfor det tilstræbte bånd på $ 22-28 per tønde. Den nuværende råoliepris omkring $ 40 per tønde betyder, at markedet er anstrengt, og med en forbrugsstigning på mere end 2% om året bliver det ikke mindre anstrengt i de kommende år. Vi er således inde i slutfasen af den billige olies æra. En sammenhængende teknologisk udviklingsstrategi for vores energisystem i dets helhed bør derfor stå højt på den politiske dagsorden. Centralt i udformningen af en sådan strategi står spørgsmålet om, hvorvidt brint som energibærer til transportmidler skal integreres i de nye energisystemer. I december 2003 afholdt Teknologirådet og Ingeniørforeningen i Danmark (IDA) en international konference i København om Oil Demand, Production and Cost - Prospects for the Future. Som baggrundsmateriale for konferencen blev der fremlagt en foreløbig udgave af udredningen Oil-based Technology and Economy - Prospects for the Future. Den endelige udgave, med tilføjelser af yderligere information, som konferencens talere formidlede, blev udgivet af Teknologirådet og IDA i april 2004 (www.tekno.dk og www.ida.dk/oilconference ). Udredningen fremdrager den helt afgørende betydning, olien som et unikt, lethåndterligt brændstof med stor energitæthed har haft for den civil- og militærteknologiske udvikling og dermed for udviklingen af fysiske infrastrukturer og hele den økonomiske udvikling i det 20. århundrede, for på den baggrund at formidle erkendelsen af de altomfattende konsekvenser af en fortsat stigning i det globale olieforbrug lige indtil olieproduktionen topper og derpå begynder at falde. Nye oplysninger, fremkommet i artikler, der er offentliggjort, efter udredningen var færdiggjort, accentuerer den situationsbeskrivelse, der gives i udredningen. Det påpeges i udredningen, at den optimisme, som kommer til udtryk i den hyppigt fremførte sentens, at Stenalderen sluttede ikke på grund af mangel på sten, og olie-alderen vil ikke slutte på grund af mangel på olie (sidst fremført af Institut for Miljøvurderings direktør Bjørn Lomborg i DR1 Søndagsmagasinet d. 16. maj), forudsætter troen på, at nye, ikke-oliebaserede teknologier i stort omfang vil erstatte benzin-, diesel- og jetmotorer såvel som oliefyr før oliemangel bringer verdensøkonomien i krise. Denne tro bestyrkes imidlertid ikke af den kendsgerning, at olieforbruget fortsat stiger, nu langt hurtigere end hidtil forudsat i det Internationale Energi Agenturs (IEA) prognoser. IEA forudsatte i World Energy Investment Outlook 2003 (November 2003) en stigning i det globale forbrug på ca. 1.6% p.a. frem til 2030. IEA forudser nu en global forbrugsstigning på i gennemsnit 2 mio. tønder/dag eller ca. 2.6% i indeværende år (New York Times, 14. maj), en stigning som hovedsageligt skyldes et økonomisk opsving i USA og en meget stærk vækst i Kina s forbrug (p.t. 10-20% p.a. imod IEA antagelse om 3% p.a. i gennemsnit frem til 2030). Det betyder, at verdensøkonomien bliver stadigt mere afhængig af tilstrækkelige olietilførsler - i takt med, at reserverne udtømmes. Selvom det er åbenbart, at en krise kun kan afværges ved at sørge for at behovet for olie topper før olieproduktionen topper, er der ingen tegn på politisk erkendelse af denne for verdensøkonomien afgørende betingelse. Tværtimod bliver samfundene overalt i verden mere og mere afhængige af olie - flere benzin- og dieselbiler, mere flytrafik, flere motorveje, flere lufthavne. Problemet vokser sig større og større efterhånden som tiden skrider frem mod det tidspunkt, hvor olieproduktionen ikke længere kan følge med. Den tid, der er tilbage bliver afkortet i takt med den øgede forbrugsstigning. Og der er stadigt flere tegn på, at der er tale om år, ikke årtier. Produktionskapaciteten De meget store fund af lettilgængelige oliefelter i 1960'erne og fundene i Nordsøen i 1970'erne og 1980'erne har hidtil gjort det lukrativt for de nationale og private olieselskaber at øge produktionen i takt med forbruget. Selvom råolieprisen har været svingende, har deres investeringer haft relativt korte tilbagebetalingstider. Reservetilvæksterne har været tilstrækkelige til at kompensere for forbruget, sådan at forholdet mellem reserver og årligt forbrug (R/P forholdet) op igennem 1990'erne har ligget nogenlunde konstant på omkring 40 år. IEA forventer imidlertid, at hvis forbruget stiger med 1.6% p.a. - hvilket som sagt er en betydeligt mindre stigning, end den der i dag er udsigt til - vil R/P forholdet i 2030 vil være faldet til kun 20 år (World Energy Investment Outlook 2003), hvilket indikerer, at produktionen til den tid vil være faldende. Der er således også ifølge IEA med udgangen af 1990'erne sket en drastisk ændring af situationen. Der skal større og større investeringer til for at tilvejebringe den produktionsstigning, der skal til for at dække det voksende forbrug. For at dække en forbrugsstigning på 2% p.a. frem til 2030 skal produktionskapaciteten forøges med 66%. I mange områder, herunder Nordsøen, er produktionen imidlertid allerede i tilbagegang. Produktionen i USA er blevet 11
halveret, efter at den toppede i 1970. I 2002 kom 29% af den globale olieproduktion fra områder, hvor produktionen falder med skønsmæssigt ca. 4% p.a. (Petroleum Review, April 2004). Med en forbrugsstigning i de kommende år på 2% p.a. (0.6% mindre end den forventede stigning i år) betyder dette, at produktionen i de områder, hvor der endnu er mulighed for øget produktion, skal forøges med 4.5% om året, dvs. at deres produktion skal forøges med 57% i løbet af de næste 10 år. Det er overordentligt tvivlsomt, hvor vidt dette kan lade sig gøre. Og hvis det er muligt, er det ikke sikkert, at olieselskaberne i tide vil foretage de investeringer, der skal til for at opnå en så stor vækst i produktionen. De private såvel som de nationale olieselskaber har til formål at tjene penge - ikke at sikre tilstrækkelige forsyninger til at dække en hurtigt voksende efterspørgsel til en lav pris. Mellemøsten Det er en helt afgørende forudsætning for en sådan produktionsstigning, at produktionen fra de gamle, store oliefelter i Mellemøsten - især i Saudi Arabien - kan forøges eller i hvert fald ikke begynder at falde. IEA forudsætter således i World Energy Outlook 2002, at produktionen i OPEC landene i Mellemøsten vokser med 3% p.a. fra 2000 til 2030, sådan produktionen stiger fra 21 mio. tønder/dag i 2000 til 51 mio. tønder/dag i 2030. Der hersker imidlertid begrundet tvivl om, hvorvidt denne forudsætning holder. I oliefeltet Yibal i Oman, hvor trykket i 30 år blev opretholdt ved injektion af vand, og hvor der i 1990 blev udlagt vandrette boringer, indtrådte der i 1997 et helt uventet fald i produktionen, og en kraftig indsats med de nyeste udvindingsteknikker har ikke kunnet bremse faldet (Petroleum Review, April 2004). Der er tegn på, at det samme kan ske i verdens største oliefelt, Ghawar feltet i Saudi Arabien, hvor trykket også opretholdes ved vandinjektion, og der også i stor udstrækning er udlagt vandrette boringer. Da produktionen i Ghawar toppede i 1998 var vandindholdet i den udvundne olie ca. 50%, og er i dag nærmere 60% (ASPO Newsletter, May 2004, www.peakoil.net). Ikke desto mindre udtalte den Saudi Arabiske olieminister i et interview med Oil&Gas Journal (April 5, 2004), at Saudi Arabien er i stand til at forøge sin produktionskapacitet fra den nuværende 10.5 mio. tønder/dag til 15 mio. tønder/dag, og at en kapacitet på 10-15 mio. tønder/dag vil kunne opretholdes i endnu 50 år. Dermed imødegik han den analyse Matthew Simmons, præsident for Simmons&Company, verdens største energi-finansieringsbank, fremlagde på en konference afholdt af Center for Strategic and International Studies, Washington DC, d. 24. februar 2004. Simmons gjorde gældende, at landene Mellemøsten ikke længere vil være i stand til at stabilisere olieprisen ved øge deres produktion, når produktionen i andre lande falder midlertidigt (Venzuela, Irak) eller varigt (Nordsøen bl.a.). Simmons frygter, at vi kan komme til at opleve et fald i Mellemøstens produktionen på 30-40% indenfor de næste tre til fem år. I en artikel i Oil&Gas Journal (April 26, 2004) skriver A.M. Samsam Bakhtiari, Directorate of the Iranian National Oil Company, at hans modelberegninger tyder på, at den globale olieproduktion vil toppe omkring 2006-2007, og han citerer det Saudi Arabiske olieselskab Saudi Aramco s vicepræsident for olieefterforskning, Abdullah Al- Seif, for i December 2003 at sige, at der (i Saudi Arabien) årligt skal tilvejebringes ny produktionskapacitet på 800,000 mio. tønder/dag for at opretholde den nuværende produktion på 10 mio. tønder/dag, idet produktionen i de eksisterende felter falder med 5-12% om året. Der er således flere professionelle analyser, der indikerer en drastisk revision af de hidtidige prognoser for Mellemøstens olieproduktion. Det er ikke sandsynligt, at den af IEA forventede stigning på 3% om året vil blive realiseret. Hvis det kun lykkes at fastholde produktionen på det nuværende niveau, vil den globale efterspørgsel hurtigt overstige den globale produktionskapacitet. Den øvrige verden Der findes stadigt nye oliefelter rundt omkring i verden. I 1993-2003 udgjorde nye fund i gennemsnit ca. 10 mia. tønder/år, medens forbruget androg ca. 27 mia. tønder/år. Der er på dybt vand - ned til 3000 meters dybde - i den Meksikanske Golf, udfor Brasilien, langs Afrikas vestkyst og omkring Australien fundet reserver på 60-70 mia. tønder, og Deutche Bank skrev i en rapport i 2002, at olie på dybt vand er olieindustriens mest lovende reservepotentiale. Danmarks og Grønlands Geologiske Undersøgelser (GEUS) har på grundlag af sandsynlighedsberegninger udført af US Geological Survey udtrykt forventninger om, at der ved Østgrønland kan findes 47 mia. tønder. Spørgsmålet er om og hvornår, der er olieselskaber, som vil investere i efterforskningen. Alt i alt kan reserverne på dybt vand måske komme op på 100-150 mia. tønder i løbet af de næste 10-15 år, svarende til det globale forbrug i 3-5 år. Da det vil tage mange år at frembringe denne oliemængde, vil disse fund ikke væsentligt 12
udskyde det tidspunkt, hvor den globale olieproduktion topper, men kun kunne dæmpe det efterfølgende fald en smule. De centralasiatiske lande omkring det Kaspiske hav er ét område, hvor der måske i de kommende år kan opnås en produktionsstigning svarende til den ovenfor nævnte stigning på gennemsnitligt omkring 4.5% p.a., der skal til for at kompensere for den faldende produktion i andre områder. IEA anslår en stigning på 4.1% p.a. frem til 2030. Men da udgangspunktet i 2000 er relativt lavt, ca. 1.6 mio. tønder/dag, når produktionen under IEA s forudsætninger kun op på 5.4 mio. tønder/dag i 2030. Ifølge IEA s fremskrivninger i World Energy Outlook 2002 vil den samlede olieeksport fra Rusland og de centralasiatiske republikker i 2030 andrage ca. 8 mio. tønder/dag, mod ca. 46 mio. tønder/dag fra Mellemøsten. Rusland og Centralasien vil således ikke kunne kompensere for en stagnation eller et fald i produktionen i Mellemøsten. Ikke-konventionel, syntetisk olieproduktion Hvis den potentielle syntetiske olieproduktion på basis af bitumen fra tjæresand, olieskifer, kul og naturgas medregnes i opgørelsen af verdens oliereserver, vil der være olie nok til at dække et stigende forbrug mange år frem. Et fortsat stigende olieforbrug kombineret med en kraftig forøgelse af CO 2 -udslippet ved syntetisk olieproduktion indebærer imidlertid, at bestræbelserne på at begrænse CO 2 -udslippet definitivt må opgives. Af de store forekomster af tjæresand i Canada og Venezuela kan der udvindes bitumen, som ved hydrolyse med brint fra naturgas kan omdannes til råolie. Det Canadiske potentiale anslås til 174 mia. tønder. For at udvinde denne bitumen og omdanne den til råolie skal der imidlertid bruges en meget stor mængde naturgas - svarende til omkring 80% af de samlede nuværende naturgasreserver i USA og Canada, hvis der bruges naturgas til at dampe bitumen ud af tjæresandet. Under alle omstændigheder andrager energiforbruget til produktionen 25-30% af energien i den udvundne olie. Dertil kommer et meget stort vandforbrug, som sænker grundvandsspejlet i store områder omkring minerne. Ved produktion af syntetisk olie på basis af naturgas (GTL: Gas to Liquids) forbruges ca. 45% af den tilførte naturgas i produktionsprocessen. IEA anslår i World Energy Outlook 2002, at olieproduktion fra tjæresand og naturgas i 2030 vil andrage henholdvis 9.9 og 2.3 mio. tønder/dag, dvs. at den ikke-konventionelle, syntetiske olieproduktion vil udgøre i alt 12.2 mio. tønder/dag eller ca. dobbelt så meget som der i dag produceres i Nordsøen. Ved en forbrugsstigning på 2% p.a. vil denne forøgelse af den ikke-konventionelle produktion kunne dække 22% af forbrugsstigningen. Vel at mærke under den forudsætning, at der ikke gennemføres nogen begrænsninger af CO 2 -udslippet. IEA s fremskrivninger indebærer en forøgelse af det samlede globale CO 2 -udslip på 60-70% frem til 2030. Nye udvindingsteknologier Teoretiske analyser af den fremtidige udvikling af olieproduktionskapaciteten som f.eks. den af EUkommissionen fremlagte rapport World energy, technology and climate policy outlook (WETO, 2003) bygger på den antagelse, at kapaciteten vil blive forøget i takt med den stigning i råolieprisen, som sker, når efterspørgslen overstiger kapaciteten. Ikke så meget fordi øget efterforskning vil føre til flere nye fund, men først og fremmest fordi det bliver økonomisk attraktivt investere i avancerede udviklingsteknologier, som gør det muligt at forøge udvindingsgraden i eksisterende oliefelter. Den amerikanske oliegeolog M. King Hubbert, der opnåede berømmelse ved i 1956 at forudsige, at USA s olieproduktion ville toppe i 1970, hvilket den gjorde, sagde i 1982: If oil had the price of pharmaceuticals and could be sold in unlimited quantities, we probably would get it all out except the smell. I praksis er der imidlertid grænser for, hvor stor en del af olieforekomsten (oil in place), der kan udvindes. Og som nævnt ovenfor (Yemen, Saudi Arabien) kan opretholdelse af produktionen ved hjælp af avanceret udvindingsteknologi (vandrette boringer, opretholdelse af trykket ved vandinjektion) føre til bratte, geologisk bestemte produktionsfald. De teknologier, der anvendes til at forøge udvindingsgraden (under fællesbetegnelsen EOR: Enhanced Oil Recovery), bringes i anvendelse, når produktionen fra et oliefelt begynder at falde. I de fleste tilfælde opnås ikke en forøgelse af produktionskapaciteten, men kun en opbremsning af produktionsfaldet og således en øget produktion over oliefeltets levetid efter at produktionsfaldet er indtrådt - med mindre der som i det ovenfor beskrevne eksempel 13
(Oman) indtræder et uventet, brat produktionsfald. Risikoen for sådanne bratte fald kan imidlertid i almindelighed forventet at være mindre, når trykket opretholdes ved injektion af gas eller CO 2, end når det sker ved injektion af vand. Den gennemsnitlige udvindingsgrad for verdens oliefelter er i dag ca. 30%, varierende over et interval fra 3% til 80%. Francis Harper (Exploration consultant. Former Manager, Reserves and Resources at BP, UK) vurderer på grundlag af hidtidige erfaringer, at det kan være muligt at forøge den gennemsnitlige udvindingsgrad med 1/6% eller højst 1/4% om året. Dvs. at det vil tage mellem 4 og 6 år at forøge den gennemsnitlige udvindingsgrad med 1%, og derved opnå en global reservetilvækst på ca. 33 mia. tønder, svarende til godt ét års forbrug på det nuværende forbrugsniveau. Den reservetilvækst, der kan opnås ved at forøge udvindingsgraden, må derfor forventes at ske i en langsom takt og således at medvirke til at dæmpe det årlige produktionsfald efter at den globale produktion er toppet. Den vil ikke væsentligt udskyde det tidspunkt, hvor produktionen topper. Strategisk teknologiudvikling Det fremgår af det foregående, at vurderinger af olieforsyningssituationen i de kommende år er overordentligt usikker, men at en stagnation i den globale olieproduktionskapacitet efterfulgt af et permanent fald, muligvis afbrudt af kortvarige stigninger, ikke bør komme som en overraskelse. Den seneste stigning i råolieprisen til mere end $ 40 per tønde på det amerikanske marked skyldes dels en mindre formindskelse af OPEC-landenes produktionskvoter, dels genopfyldning af olielagre samtidigt med begyndelsen af den amerikanske feriesæson, hvor benzin- og dieselforbruget stiger. Det kan imidlertid vise sig, at det hurtigt voksende olieforbrug i USA, i Kina og i andre asiatiske lande medfører, at råolieprisen forbliver høj og måske stadigt stigende. Det vil vise sig i løbet af de næste år. Den alvorlige risiko opstår, hvis råolieprisen igen falder til mindre end $ 30 per tønde og forbliver på det niveau i flere år, sådan at de økonomiske vilkår for udvikling af nye teknologier til erstatning af de oliebaserede igen forringes. Sålænge olieprisen er lav bliver den globale økonomi stadigt mere teknologisk afhængig af billig olie. Når olieprisen så igen stiger, måske til $ 50, 75 eller 100 per tønde, bliver den økonomiske recession i de olieimporterende lande endnu kraftigere, end den ville være på det nuværende forbrugsniveau. Et land, som under disse usikre vilkår, hvad angår råolieprisens udsving i de kommende år, formår at udvikle teknologier, som formindsker samfundsøkonomiens olieafhængighed og nedbringer CO 2 -udslippet, vil opnå åbenbare fordele både i kraft af det teknologiske forspring, der således tages, og i kraft af en mindre sårbarhed, når den globale økonomi skal tilpasse sig høje oliepriser. Det bør derfor vække til eftertanke, at forventninger til økonomisk vækst først og fremmest baseres på forventninger til vækst på højteknologiske områder som bioteknologi og IT-teknologi, medens udvikling af de basale energiforsyningsteknologier og infrastrukturer, som udgør grundlaget for samfundets funktioner på alle områder, og som rummer store potentialer for eksport af viden og teknologi, ikke har opnået en tilsvarende høj prioritet. Der kan ikke herske tvivl om, at nye energisystemer, der kan dække samfundets behov med et stærkt reduceret forbrug af fossile brændsler - specielt olie - og dermed ned et væsentligt formindsker CO 2 -udslip, vil være overvejende elektriske og elektrokemiske systemer, hvori transportmidler indgår som integrerede enheder. Disse systemer vil på energikilde- og forsyningssiden være karakteriseret ved relativt store investeringer i infrastrukturkapital (vindmøller, solceller, elektrolyseanlæg til brintproduktion, brintlagrings- og distributionsanlæg til forsyning af køretøjer, naturgasdrevne brændselscelle kraftvarmeværker i små og større størrelser, varmepumpeanlæg, m.fl.) og relativt små variable driftsomkostninger. På forbrugssiden skal der gennemføres omfattende energieffektivitets-forbedringer, både hvad angår bygningers varmeforbrug, el-apparater og transportmidler. Vores nuværende energisystemer er blevet til under økonomiske vilkår, som er bestemt af lave priser på fossile brændsler, især lave olie- og gaspriser. Det nuværende enorme fossile brændselsforbrug er således bestemt af de energiforsyningsteknologier, de bygningskonstruktioner, de el-apparater, de transportmidler og de fysiske infrastrukturer, det under disse omstændigheder har været økonomisk hensigtsmæssigt eller muligt at bringe i anvendelse. Der er ikke tale om at erstatte de mængder af fossile brændsler, der i dag forbruges, med vedvarende energikilder. Det er i praksis umuligt. Der er tale om at udvikle nye energisystemer, som er økologisk og økonomisk bæredygtige under de nye økonomiske vilkår, der bestemmes af fremtidige høje olie- og naturgaspriser. Det kan ikke med nogen sikkerhed forudsiges, hvad råolie- og naturgasprisen vil være om ét, to eller ti år. 14
Men hvis olieprisen forbliver lav indtil den globale olieproduktion topper, hvilket efter al sandsynlighed vil ske inden 2025, så vil de investeringer med lang levetid, der betinget af de lave priser foretages i perioden indtil priserne stiger, være fejlinvesteringer, som yderligere forstærker den økonomiske recession, der afstedkommes af prisstigningerne. I denne slutfase af den billige olies æra bør udformning af en sammenhængende teknologisk udviklingsstrategi for vores energisystem i dets helhed derfor stå højt på den politiske dagsorden. Centralt i udformningen af en sådan strategi står spørgsmålet om, hvorvidt brint som energibærer til transportmidler skal integreres i de nye energisystemer. 15
3. Danish Wind Carpet Behaviour, Challenges & Solutions Recent Wind Development, West Denmark 3.1 Short Analysis 3000 2500 2000 6 5 4 Denmark built its wind capacity in order to substitute fossil fuels and meet its Kyoto obligations. Last year the wind carpet produced a record 4.36 TWh in West Denmark in a year with poor wind resources (77% of normal). MW 1500 1000 500 estimate 3 TWh 2 1 It might be noted that fossil fuel consumption and CO 2 emissions have also risen during the last 2 years, although for different reasons. MWh per h 0 2,500 2,000 1,500 1,000 500 0-500 -1,000-1,500-2,000-2,500-3,000 0 1999 2000 2001 2002 2003 2008 capacity, MW Output, TWh Wind - Net Exchange, January, 2003 1 19 37 55 73 91 109 127 145 163 181 199 217 235 253 271 289 307 325 343 361 379 397 415 433 451 469 487 505 523 541 559 577 595 613 631 649 667 685 703 721 739 Wind production, MWh per h Net exchange, MWh As a consequence of the energy agreement in March, 2004, wind capacity will grow by a further 700 MW from now until 2008, mostly in West Denmark 20. It is axiomatic that wind power is produced when the wind blows, not when power is demanded. In the absence of solutions that can store energy 21, the present arrangement is that the electricity, surplus to the immediate needs of Denmark, flows to the much larger power systems of neighbours. While it is obviously not possible to identify which electrons flowing though the system, originate in particular power plants, it is possible to review the data and look for patterns of system behaviour. 54 charts, such as January 2003, have been drawn between January 2000 and June 2004. Note the almost mirror reflection which occurs in many of these charts. These demonstrate that there is a clear relationship between wind carpet output and net power flows. When wind power enters the Danish system, there is usually a net flow from Denmark to Germany, Sweden and Norway. Some might say, in effect, that wind power is being exported. 20. http://www.ens.dk/sw1079.asp 21 When power flows from West Denmark to Norway and Sweden, if it is not immediately consumed, hydropower production is curtailed. It is not possible to say if it is cheap or not, that depends on the difference in spot prices between periods of storing and retrieving of energy In this way, Danish wind power is stored in the Scandinavian reservoirs and released when demand and price make it attractive for the hydro generator to release water for power production. Obviously the value added of this arrangement is usually enjoyed by the hydro generator. 16
140.0% 120.0% 100.0% 80.0% Wind as % Local Demand - 2003 This is not surprising, as since 2002, quite often, due to wind capacity growth, Danish wind output exceeds Danish demand, often by large amounts. Since November 2002, large wind outputs have often resulted in zero price events, to the detriment of all Danish generators. 60.0% 40.0% 20.0% 0.0% -20.0% 1 207 413 619 825 1031 1237 1443 1649 1855 2061 2267 2473 2679 2885 3091 3297 3503 3709 3915 4121 4327 4533 4739 4945 5151 5357 5563 5769 5975 6181 6387 6593 6799 7005 7211 7417 7623 7829 8035 8241 8447 8653 A dramatic example is shown in the chart (January 2003 Prices), when, despite record high prices in Nordpool, due to the lack of water in the reservoirs, there were frequent zero price events when the interconnectors were congested by excessive output in West Denmark. DKK/MWh 1000 900 800 700 600 500 400 300 200 100 January 2003 Prices Wind power alone was not the only cause of this effect. The conditions under which the decentralized power stations were originally planned and financed encouraged (and subsidized) maximum output, even when the spot price in the market was below the cost of fuel. The combined effect of so much power output at times of high wind output resulted in a deterioration of the generators prices from 2000 thro 2003. 0 DK-West System During 1999 through the early part of 2002, Nordpool and West Denmark prices were well aligned. This is shown in the price duration chart. However, as capacity in both the decentral and wind sectors increased, all West Denmark spot prices declined relative to Nordpool s. 17
DKK per MWh 40.0 30.0 20.0 10.0 - (10.0) (20.0) (30.0) (40.0) MWh Spot Price Development with respect to Nordpool Price 2000 2001 2002 2003 1843 MW 1943 MW 2316 MW 2374 MW Wind Capacity Wind power prices were especially badly affected. The most negative effects of this for Danish windmill owners were disguised by a general rise in the price of power from 2000 2003. But it is in the nature of wind power which is produced according to weather conditions, not power demand, that the market value of wind power will usually be less than the power produced when the market wants it. (50.0) (60.0) (70.0) Central Plant MWh price difference Decentral plant MWh price difference Wind Output MWh price difference This may change when externalities, like CO 2 emissions are internalized in the energy prices when CO 2 emissions begin to be traded in 2005. 3.2 Measures Adopted to Counter Zero Price Events From January, 2005, all decentralized power stations larger than 10 MW, with a collective capacity of 758 MW, will operate according to market conditions. The effect of the decentral power plants going onto the market should result in the following effects: 1. Reduce excessive and wasteful power production 2. thus reduce unnecessary CO 2 emissions.. 3. free up interconnector capacity at times of high wind output, 4. prevent zero and ultra-low power price events Furthermore, on 27 May, 2004, an agreement was made with the Danish Government to change the law that effectively prevents the use of electricity to provide heat at Danish combined heat and power stations 22. 30.0% 25.0% 20.0% Average Load Factor, 2000 thro 2003 This new arrangement is intended to increase the opportunistic use of electricity, at any time when the electricity price is very low. This is often simultaneous with a high wind production and the proposal is to make it attractive for generators to invest in and use resistance heaters and heat pumps at both central and decentralized power stations. 15.0% 10.0% 5.0% 0.0% West Denmark wind turbines Jan Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Therefore, some district heating can now be provided by electricity when power is cheap enough on the spot market to make it attractive to turn off thermal units. The pattern of wind production, during the last four years (Average Load Factor, 2000 2003), shows that most wind is generated in the winter, when heat is most often required 23. 22. Jyllands Post, 28 May, 2004 and widely reported. The proposals for implementing this change are still being studied by the Government of Denmark. 23 From 2000 thro 2003, wind loads were especially high in June when district heating loads are usually very low 18
These two arrangements, combined, are highly cost effective and will almost certainly have a fast and beneficial effect on the so-called wind overflow problem and therefore for Danish Society 24. However, it must also be mentioned that: 1. A fraction of all district heat is lost in its transmission between the power station and its customers, creating an inevitable and significant waste of high tech wind power that might be better used directly by heat consumers. 2. If the heat were instead produced by heat pumps, which deliver 2 4 units of heat for every unit of power consumed, the objection to energy inefficiency is largely removed. However, the capital costs are much greater and their widespread use would have proportionally less effect on soaking up cheap power (MW). 3. There is little requirement for heat during the summer months, when the wind still blows. The average load factor of the West Danish wind carpet during June (2000 2003) is actually equal to the average for the year. Furthermore, while both these simple arrangements may bring about large, short term, economic improvements for those generators not protected by subsidy, they do not address the challenges of pending hydrocarbon fuel shortages nor do they accelerate Denmark s preparation for a post-hydrocarbon economy. The demand for transport fuel, by contrast, is more or less independent of the season, making transport hydrogen from renewable energy an attractive option when hydrogen vehicles become commercially available. Eltra has recommended that the only reliable way to document the consumption of electricity generated from renewable energy is by way of tradable "Renewable Energy Certificates". Clearly, these can only be obtained for power that is truly renewable. In the next section, we assess whether, following the implementation of the measures just described, there will be enough available, CO 2 -free electricity to justify the investment in a hydrogen infrastructure? 24. In 2003, the PSO support for wind generators in West Denmark was DKK 1.8 billion. The value of the power exported during periods of very high wind loads, which can be attributed to wind generation, was DKK 0.78 billion, a negative flow of DKK one billion, paid by Danish consumers. 19
3.3 How much wind for CO 2 -free hydrogen production? MWh per h MWh per h 3000 2500 2000 1500 1000 500 0-500 -1000-1500 -2000 3,000 2,000 1,000 - (1,000) (2,000) (3,000) Load Duration of wind output and net exchange, actual 2000 & likely "2008" Resistance heating takes up most power peaks CO2-free energy for hydrogen production Likely effect of reducing 748 MW of non-economic decentralized production Net Exchange Actual Wind Output, 2000 Wind Output, "2008" 50 per. Mov. Avg. (Net Exchange) Load Duration of wind output and net exchange, actual 2003 & likely "2008" Resistance heating takes up most power peaks Wind production "2008" Wind production, MWh per h CO2 free energy for hydrogen production Likely effect of reducing 748 MW of non-economic decentralized production Net exchange, MWh 50 per. Mov. Avg. (Net exchange, MWh) Based on an equal or similar wind profile to normal wind years, but adjusted according to the higher generation from offshore wind turbines, wind power output will rise from around 4.4 TWh in 2003 to around 5.5 TWh 25, following the planned capacity increase to 2700 MW. Taking into account the proposed changes to install resistance heating, will there be enough wind power to justify such a large investment? In these charts, a (hopefully) realistic forecast for a future, 2008, wind load duration and net system power exchange durations have been drawn for 2 years, being 2000 which was very wet and spot prices were low and 2003, when, due to a shortage of water in the Scandinavian reservoirs, there was a high net export of power to Norway and Sweden and prices were very high. The large, clear area under the wind production curves, and over zero net trade gives a measure of how much wind output coincides with net power exchange. By this measure, it can be said that 84% of the wind output during 2003 was surplus to Denmark s demand at the times it was generated. This amounted to roughly 3.6 TWh. In 2008, given similar net trade as occurred in 2003, most of the power produced by the extra capacity will also be surplus to Denmark s internal requirements, unless a change occurs in the pattern of consumption. From a much smaller wind capacity in 2000, the equivalent figure for wind energy that was surplus to local demand at the time it was produced, was around 44% of the wind power generated, or 1.5 TWh. The predicted load duration profile for a capacity of 2700 MW (2008) shows that had this wind capacity been in place at the time, the proportion of wind (CO 2 -free) energy being available for electrolysis would obviously have been much greater even during a year of almost neutral net power flows. We can therefore conclude that large volumes (MWh) of CO 2 -free wind energy may still be in the system at relatively low electricity prices in 2008. Hydrogen can be manufactured to replace transport hydrocarbons from this. The basis economic model assumes that the electrolysers will be utilised at least 4,200 h/y. This also looks feasible from both the foregoing charts. This is because, when the reservoirs are full, the power from these can also carry renewable energy certificates. 25 Peter Jørgensen, ELTRA 20