The Development of Cogeneration - The most important by hcj

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									        COGENERATION
A Major Challenge and Opportunity
  for Central and Eastern Europe
          Dr Simon Minett
              Director
          COGEN Europe
                  Qualifications
• Worked in Ukraine, Belarus
• Directed staff working in Russia, Slovenia,
  Poland, Hungary, Romania and Estonia
• Market Prospects for Cogeneration in Poland,
  Hungary and Czech Republic
• Membership for COGEN Europe
   – National Members in Slovenia, Estonia, Hungary, Poland, Croatia
     and Czech Republic
   – ESCOs
   – Links to all the other countries in Region
          COGEN EUROPE
•   European Trade Association for CHP
•   195 Members
•   30 Countries
•   Promotion of Cogeneration
•   Climate Change
•   Reducing Barriers
•   Studies/Literature
                  Coverage
•   Trends
•   The Challenge
•   Hungary
•   Role of ESCOs
•   Getting the Policy Right
•   Be Bold!
                   Trends
• Europe
  – Liberalisation
  – Greater Decentalisation
  – Response to Kyoto
• Central & Eastern Europe and CIS
  – Accession
  – Investment in Infrastructure
  – District Heating versus Point of Use
                       CHP in Europe
                              (% of generation)

             1999 - Coge ne ration as a share of national powe r production

            EU

            UK

       Sw eden

         Spain

       Portugal

The Netherlands

           Italy

        Ireland

        Greece

      Germany

        France

        Finland

       Denmark

        Belgium

        Austria

                   0     10          20         30          40         50     60
                                  Share of CHP in Heat
                                    Production 1994
      80.0


      70.0


      60.0

                                                                      Correction for steam extraction and condensing
      50.0                                                            plants
                                                                      EuroStat values
  %




      40.0


      30.0


      20.0


      10.0


       0.0




                                                                                                                            Austria
                                           Belgium




                                                                      Spain




                                                                                         EU




                                                                                                                                                                    Finland
                                                                                                 Italy
               Greece




                                  France
                        Ireland




                                                                                                                                                 Sweden
                                                                                                                                      Portugal
                                                     United Kingdom




                                                                               Germany




                                                                                                                                                          Denmark
                                                                                                          the Netherlands
Source: Eurostat/1994 Combined Heat and Power Plant Statistics in the EU (Working Paper) and Statistics, Finland
CHP in Transition Countries
 Cogeneration as a share of national power production
 Bulgaria                    13%
 Croatia                  10.1%
 Czech Republic              10%
 Estonia                     39%
 Hungary                     10%
 Latvia                    31% *
 Lithuania                 10% *
 Poland                   15.4%
 Romania                      n.a
 Slovakia                     n.a
 Slovenia                   4.5%

 * Figures correspond to share of installed capacity and not share of
 electricity production.

 The figure on Estonia corresponds to share of production from CHP plants,
 but part of this might not have been produced in a cogeneration mode.
      Scale of the Challenge
• Infrastructure needs massive investment
• Modernisation of industry, bankruptcy and
  markets
• 185 million on District Heating
• Fuel Supply issues
• Political Structures in need of reform
            Scope for Savings
•   District Heating           30-60%
•   Building Energy Use        20-40%
•   Industrial Energy Use      10-30%
•   Electricity Distribution   10-20%
•   Electricity Generation     10-12%
                Potential
•   COGEN Europe’s estimates
•   Poland 15.000 MWe
•   Ukraine 40.000 MWe
•   Hungary 40% of demand = 2.500 MWe
•   Official Forecasts
•   Poland 20-30% (now 10%)
         Focusing on Hungary
•   Dynamic Country in first wave for EU
•   Electricity 7.500 MWe and 30 TWh/yr
•   Gas 12 million cubic metres, 40% of energy
•   District Heating 108 localities, 8.400 MWth
•   Cogeneration currently 11% of electricity
•   Restructured energy sector
Hungary’s Electricity Sector
      Hungary’s Energy Policy
• Goals
  –   reduce import dependence
  –   restrict control to a minimum
  –   improve energy efficiency
  –   liberalise tariffs to reflect economic costs
  –   environmental priorities
  –   move to the market economy
  –   adopt least cost solutions
               Difficulties
• Prices for gas and electricity are
  unfavourable for cogeneration
• No capacity fee
• Partial reform of the energy prices
• Restrictions on the use of gas
• Attitudes to District Heating - old regime
• Non payment of heating bills
                 Potential
•   Cogeneration on DH 1.800 MWe
•   Cogeneration in industry 450 MWe
•   Cogeneration in tertiary sector > 300 MWe
•   Current capacity ~ 800 MWe
•   Potential = 40% of demand
       Poland in Perspective
• 80 years of cogeneration history
• First installed in industry: sugar, chemicals
  and mining
• District Heating growth from 1950,
  especially the large urban areas such as
  Warsaw, Wroclaw and Gdynia
• Now 3.000 MWe in industry and 4.800
  MWe on District Heating
         Cogeneration’s Share
•   Total installed capacity - 33.717 MWe
•   CHP on District Heating - 4.800 MWe
•   CHP in Industry - 3.000 MWe
•   Total CHP - 7.800 MWe = 23%
•   Total production - 142.769 GWh
•   CHP Production - 22.050 GWh = 15%
         Problems with CHP
• Statistics:
   – Industrial CHP is not fully used due to market
   – Some industrial schemes are closing
   – Some of the DH CHP is not full CHP
• True CHP share of market is nearer 10%
• Much of the CHP is coal-fired and not best in
  class
• The investment climate is improving slowly, but...
              Energy Scene
• New Energy Law in place,
• Secondary legislation mostly complete
• Still political interference in tariffs
• Tariffs are not fully cost reflective, but they
  are improving,
• Principles for independent generation in
  place
• Public perception that DH is the past
            New Projects
• Katowice 120 MWe coal cogeneration
  scheme due in November 1999
• Jaworzno III 140 MWe coal cogeneration
  due September 1999
• Gorgow 55 MWe gas CCGT cogeneration
  handed over in January 1999.
               Potential
• Major potential for cogeneration on the
  District Heating through re-powering of DH
  boiler houses.
• Question mark over decentralised CHP.
• As the Polish industry picks up major
  opportunities in this sector too.
• We estimate potential is at least 50% of
  electrical demand = 15.000 MWe
      What Should be Done?
• Set the right frameworks - regulatory and
  legislative
• Address all the issues affecting
  cogeneration
• Encourage and ensure the conditions are
  right for foreign investment
• Develop a strategy and set a target
          Role of ESCOs
•Transfer of technology from west to east
•Financing of energy projects and CHP
•EBRD support
•Players - Honeywell, Landis&Gyr,
 Compagnie Generale de Chauffe and ESCO
 International,
And more….?
              Policy Actions
•   Electricity Regime
•   Heat Regime
•   Planning, Taxation, Environment
•   Investment Climate
•   Reduce Barriers
•   Co-ordinated Promotion
The Next Few Years Are Critical
• Debate between District Heating,
  Decentralised Cogeneration and
  Centralisation of Electricity
• Set Targets
• Get the Investment Climate Right
• Cogeneration has a major role to play in
  changing the economic well being of the
  region
       Boldness is necessary!
• This is not an academic exercise
• Cogeneration is a key part of realising the
  EU’s legally binding commitments made in
  Kyoto
• The Strategy target to double cogeneration
  must therefore be achieved
• We MUST find the will to achieve growth
  in the new liberalised world
                Be Bold
• There are 10 years left to double
  cogeneration’s share of the market.
• This is 60-70.000 MWe in the EU 15
• Plus 20.000 MWe replacement of existing
  plant
• Plus Transition Economies (0 to 30 GWe)
• Thus ~ 100 GWe or 10.000 MWe per year
• Around 4 times current activity

								
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