The “crisis in conventional power generation continues.”
These were the words of Peter Terium, chief executive of German energy company RWE, as he announced this month that the company had suffered a 45 per cent drop in full-year profit.
Nothing highlights the crisis that Terium talks of more than the now-uncertain future of Irsching power plant, a state-of-the-art facility in Bavaria, Germany.
Its operator E.ON is warning that it may have to close due to lack of profitability. Dr Adrian Schaffranietz, Political Affairs and Corporate Communications Officer with E.ON, told PEi: “The economic prospects of the Irsching gas-fired power plant are extremely critical. The changed energy policy environment has marginalized its position in the market to a point where it can hardly recoup its costs. With the market situation having deteriorated further over the last few years, the plant’s continued operation after the end of the present contractual arrangement is at risk.”
That a flagship power plant fitted with cutting edge emissions control technology can find itself on the brink of being obsolete is a sign ” if any were needed ” of the dire straits the conventional power industry is trying to navigate its way out of.
Yet European electricity trade group Eurelectric this month released a paper that stresses the continued importance of thermal power. Eurelectric states that “it is obvious that thermal power has entered a period of fundamental change in which a ‘do nothing strategy’ could be damaging for the sector and indeed for the power system as a whole”.
It argues that thermal generators “must adjust to the new rules of the game by improving their environmental performance, efficiency, flexibility and competitiveness and by providing new services”.
Eurelectric says there are a host of opportunities for thermal operators to make the most of their potential “as a key pillar of the future energy system”. Driving these opportunities are technological advancements that have delivered more efficient thermal units, which can substantially cut emissions.
Eurelectric is calling for “an energy, climate and environment policy that takes a holistic approach to the energy transition and allows thermal generation to play a vital role in this process. Thermal generation is needed to ensure a secure, cost-effective supply of electricity to Europe’s energy customers.”
As traditional power producers continue to adapt to the shifting sands of the transition sweeping the industry, policymakers this month have taken steps to create a new energy landscape.
In a first move toward realizing its newly-announced Energy Union strategy (see news story, p8), the European Commission has launched a €100m initiative aimed at connecting the EU’s power networks.
Under the new Connecting Europe Facility, the Commission has called for proposals aimed at “ending energy isolation, eliminating energy bottlenecks and to complete the European energy market.”
A total of €650m in grants is expected to be made available in 2015, with a second call for proposals planned by the end of the year.
Meanwhile, the role of traditional power is also under the microscope in India, where the need to reliably electrify the country is resulting in a power generation boom, but one that is trying not to lose sight of sustainability amid the race to deliver secure energy.
India’s energy demand can “no longer be met through traditional energy sources alone”, according to Adnan Z Amin, director-general of the International Renewable Energy Agency. Speaking in New Delhi, he said that “developments in India will strongly influence the trajectory of the energy transformation worldwide” (see story, p6).
India is targeting 200 GW of renewable capacity by 2022. Achievable? It is according to the country’s Minister for Power, Coal and New & Renewable Energy, Piyush Goyal.
In an interview on p18 he says: “We have a clear and achievable plan, and very practical ideas that we are implementing on the ground.”
India’s thirst for power and how it quenches it will be under the spotlight at POWER-GEN India, which opens its doors in New Delhi on May 14 (www.indiapowerevents.com).
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