The role of turbines in the European energy mix

Credit: GE

Gas and steam turbines are crucial for Europe in meeting its decarbonization targets, writes Michael Ladwig

In the post-COP21 era, you may think that steam and gas turbines as suppliers of heat, and as motors to drive turbo generators to produce electricity, are no longer needed; that a decarbonized energy generation may imply the end of the use of turbine technology.

However, this assumption is based on several wrong connections in the logical chain. A decarbonized economy will neither be accomplished in only a few years, nor can it be seen as the end of all fossil fuels. Thermal power generation will be needed for a long time, ensuring a well-functioning, cost-efficient and reliable European energy system.

The largest share of electricity in Europe is still, by far, generated from steam and gas turbine-based power plants, but the amount of energy generated from renewables is growing considerably. The result is overcapacities in power generation – not everywhere, but overall and in several countries.

These overcapacities, together with priority dispatch of renewables and the low price of coal, push combined-cycle power plants to the end of the merit order curve, despite their efficiency, flexibility and power density.

The challenge of the merit order was supposed to be solved by the carbon pricing within the European Emission Trading System (ETS). Unfortunately, so far, the system has failed to provide the right incentives for decarbonization. The low carbon price, together with low coal prices, keep the large fleet of older lignite and hard coal plants still very competitive despite their reduced flexibility and higher emissions.

In the meantime, efficient and far less carbon-intensive newly built gas-fired power plants are not running at all – or only for a limited number of hours – often not covering their variable costs.

The effect is that utilities – struggling with the changing energy landscape and often in a challenging financial situation – are intensively using their existing assets, not thinking about the impact of increased cycling on the lifetime of the plant or even about investments in new, more flexible capacity.

Moreover, most of the steam and gas turbines in the power plant fleet were designed for baseload operations and not for the cycling duty they are used for today.

Policy challenges

The transformation of Europe’s energy system is a ‘work in progress’ and still raises many unanswered questions.

Credit: Ansaldo Energia

The definition of the energy mix is a national competence, not a topic to be decided at EU level. Each Member State may therefore individually decide on the future of coal in its country. At the same time, the reform discussions of the ETS will not result in the adoption of carbon prices high enough to automatically drive coal out of the energy mix of Europe. Against this backdrop, how is it possible to ensure that the EU commitment on the COP21 climate targets is achieved?

There is a growing amount of decentralized generation from renewables, as well as larger offshore wind parks in remote areas. The existing European grid, on the other hand, was built for large-scale central power plants, for which network connection points exist. The adaptation to the new needs is one of the big tasks.

The only way to continue using Europe’s natural resource of coal in the mid- and long term would be in combination with carbon capture and storage or utilization (CCS or CCU). While the importance of CCS and CCU is mentioned in many speeches and papers of the EU, and while the technology is known and available, Europe still has not managed to get at least one large-scale demonstration project up and running. In addition, in a more decentralized system and with low running hours, the costs for the infrastructure are rising further.

Credit: Siemens

A growing amount of renewable energy is coming from the more volatile sources of wind and sun. This volatility is considered by most energy policymakers as one of the key challenges to solve: How to ensure the security of supply and the stability of the system? The answer: flexible backup solutions are urgently needed. This flexibility can be provided by different sources including storage, influencing demand patterns or flexible generation. However, without sufficient flexible backup, the planned further deployment of renewables risks leading to blackouts.

Turbines’ new role

So – with all of this in mind – is there really a future for steam and gas turbines in Europe’s energy mix? The answer is a clear ‘yes’, but the future will be different in many ways.

Gas-fired power plants will be an attractive solution once the majority of European countries have phased out old, inefficient coal-fired power plants. New turbines are a proven technology with high efficiency and they are – if compared to many other flexibility solutions – financially affordable.

An additional role will arise when another flexibility option develops further: the excess of energy generated by wind turbines and photovoltaic installations in times of low demand can be stored as hydrogen or reformed methane and burned, carbon-free, by gas turbines at a later stage. Power-to-gas will be an important technology in a European energy market with a high share of volatile renewables, but also a chance to integrate additional flexibility in thermal power plants.

The role of steam turbines will also change, moving from the traditional large-scale application in coal-fired and nuclear power plants to a variety of applications in combined-cycle plants, as well as in geothermal or concentrated solar power plants. Also, the reuse of waste heat in energy-intensive industries will become a growing application for steam turbines.

Finally, cogeneration will be an important application: storage of heat is one of the easiest energy storage solutions, and industrial cogeneration plants and district heating are among the most efficient and competitive applications. European policymakers underscore more and more often that electricity and heat should be seen in a connected approach.

Main requirements

Turbines – like most other products – were designed to fulfil a certain purpose. They were optimized for steady use as a baseload technology. The new role requires constant adaptation to the changing demand and supply situation.

This can be successfully done with steam and gas turbine technology – but some adaptations are needed. The necessary research needs to be done now in order to be ready for the time without overcapacities, when additional demand cannot be met by the existing fleet. In addition, further deployment of power-to-gas and CCS in large demonstration projects needs to be pushed forward now, to showcase their functioning and abate costs.

The other key requirement is the existence of a market that rewards the investment in new technologies that partner with volatile renewables to stabilize the system. As the new power plants will have fewer running hours, they will need to be able to cover their costs in fewer hours. Uncapped peak prices are an important brick of such a concept. Investors will only invest if they see a chance to earn money by building new turbine-based flexible plants. A suitable market design for the European electricity market is therefore a ‘conditio sine qua non’.

A European market design proposal that seems to go in the right direction is in the works, and R&D efforts to make steam and gas turbines ready for the new challenges are ongoing, but stronger EU support is needed.

I believe that gas and steam turbine technology can help Europe to deliver on its ambitious decarbonization targets.

Michael Ladwig is Director of Scientific Collaboration with GE Power in Baden, Switzerland, and President of EUTurbines

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